A new benchmark for private capital, asset segregation, and proprietary investment structures

Overview

On 9 February 2026, the Dubai International Financial Centre (the “DIFC”) enacted the Variable Capital Company Regulations 2026 (the “VCC Regulations”). This introduces the first variable capital company (“VCC”) regime in the UAE and a significant development for private capital and asset holding structures in the region.

The VCC is a new corporate form that allows assets and liabilities to be legally segregated within a single umbrella entity, while offering capital flexibility and operational efficiency. For the first time in the UAE, families, investors, and private capital sponsors can achieve formal ring fencing and balance sheet segregation under one umbrella without defaulting into a regulated fund structure.

The DIFC now joins a small group of leading international financial centres offering variable capital and cellular company regimes, while deliberately tailoring the VCC for proprietary use.

Why this matters

The DIFC VCC combines features traditionally associated with fund vehicles with the simplicity and control of a private company. Critically, it is not a regulated vehicle by default.  Where it is used purely as a private holding and structuring vehicle, DFSA authorisation and a licensed fund manager are not required. It may not be used to provide regulated financial services or establish a fund unless expressly permitted by the DFSA.

This makes the VCC particularly attractive for family offices, private investors, and proprietary asset holding structures that require legal segregation, capital flexibility, and restructuring optionality without regulatory complexity. It fills a clear gap between prescribed companies, incorporated cell companies, protected cell companies and full fund platforms, especially where multiple assets, strategies, or risk profiles need to be housed under one structure.

Key features

Structure and segregation

• A VCC may be established as a standalone entity or as an umbrella with either Segregated Cells or Incorporated Cells, but not both.
• Incorporated Cells have separate legal personality. Segregated Cells sit within the VCC and offer cost efficient segregation within a single legal entity.
• Cellular and non cellular assets must be clearly identified and separately accounted for.
• The number of cells is unlimited, and cells may be merged or converted.

Capital flexibility

• Share capital is variable and aligned to net asset value.
• Shares may be issued and redeemed, and distributions may be made from capital, provided solvency and net asset value conditions are satisfied.
• Shareholder and cell level records must be fully segregated.

Accounting records

• The accounting and record keeping requirements for a VCC are broadly aligned with those applicable to a private company under the DIFC Companies Law, subject to additional record segregation and cell level accounting requirements. E.g.:
  • A VCC with Segregated Cells must maintain accounting records for the VCC and ensure clear segregation of records for each cell.
  • A VCC with Incorporated Cells must maintain accounting records and prepare accounts for each Incorporated Cell separately, reflecting their distinct legal personality.
• In all cases, accounting records must be sufficient to show and explain the transactions of the VCC and its cells, and to demonstrate proper segregation of cellular and non cellular assets and liabilities.

Eligibility and administration

A VCC is a form of private company under the DIFC Companies Law 2018. It may be incorporated as a VCC, converted from an existing company, or continued into the DIFC as a VCC, subject to approval by the DIFC Registrar.

Unless it qualifies as an “Exempt VCC”, a VCC must appoint a registered corporate service provider (“CSP”) to act on its behalf and, where applicable, on behalf of any Incorporated Cells. The CSP is responsible for filings with the DIFC Registrar (such as filing for registration of the VCC, filling an annual confirmation statement), maintaining statutory records and providing a registered office to both the VCC itself and each Cell(s), Segregated or Incorporated. The appointment of a CSP is therefore a core condition to establishing and maintaining a VCC where it is not exempt.

An Exempt VCC is one where the controller is a Registered Person, an Authorised Firm, a Government Entity, or a Publicly Listed Entity as defined in the VCC Regulations. Any Incorporated Cell of an Exempt VCC is also treated as exempt.

VCCs, and each underlying Segregated Cell or Incorporated Cell, are only permitted to passively hold assets and cannot employ staff.

What we say

The introduction of the VCC materially strengthens the DIFC’s private capital offering. It provides a modern, flexible alternative to layered SPVs, protected cell companies and regulated fund vehicles, while preserving clear regulatory boundaries.

For families, investors, and proprietary asset holders, the VCC creates new structuring optionality. For the DIFC, it represents a decisive step toward global best practice in private capital structuring.