Made under Articles 132 and 151 of the Companies Law 2018, the Regulations create the Variable Capital Company, a private company with segregated or incorporated cells whose assets and liabilities are ring-fenced from each other; available to registered persons generally and to DFSA-authorised firms only with DFSA permission, except for crowdfunding, fund and family-office asset-holding.
The Variable Capital Company Regulations 2026, in force on 9 February 2026, are made by the Board of Directors of the DIFCA under Articles 132 and 151 of the Companies Law and create a new DIFC vehicle: the Variable Capital Company, a Private Company whose share capital always equals its net asset value and which can ring-fence assets in cells. A VCC may be incorporated, converted from an existing DIFC Private Company or continued into the DIFC (Regulation 2.1.1); the Companies Law, Operating Law and Insolvency Law apply to it as a Private Company, but the 50-shareholder cap and the chapters on capital reduction, financial assistance and distributions do not (Regulation 2.1.4).
A VCC may create Segregated Cells or Incorporated Cells but not both (Regulation 2.1.2). A Segregated Cell is a distinct cell within a single legal person; an Incorporated Cell is deemed a separate Private Company (Regulation 2.2). Unless it is an Exempt VCC, controlled by a DIFC Registered Person, an Authorised Firm, a Government Entity or a Publicly Listed Entity, a VCC must appoint a Corporate Service Provider, meaning a DFSA-registered DNFBP licensed for corporate services in the DIFC (Regulation 3.1). An Authorised Firm may not use a VCC to provide a Financial Service or establish a Fund without DFSA permission, but a VCC may hold assets for a Crowdfunding Structure, a Fund or a Family Office (Regulation 3.2). The licence is restricted to holding-company activity, and names must end with 'VCC Limited' and cells with 'VCC Segregated Cell' or 'VCC Incorporated Cell' (Regulations 4.1 and 4.2). The Articles must state the cell type and tie paid-up capital to net asset value (Regulation 4.3).
Shares are redeemable, issued and redeemed at net asset value and cancelled on redemption; treasury shares are prohibited (Regulations 6.1 and 6.2). Distributions in respect of a cell may be paid only from that cell's assets (Regulation 6.3). Officers must keep cellular assets separate and identify the cell to every counterparty; an officer who knowingly, recklessly or negligently fails to do so is personally liable, with any contrary exculpation void (Regulation 7). No creditor may apply one cell's assets to another cell's liability (Regulation 8).
The registered office is that of the Corporate Service Provider or, for an Exempt VCC, an Affiliate; a VCC may not employ anyone; accounts are kept per Incorporated Cell; and the Confirmation Statement reports active and inactive cells (Regulation 11). The Registrar may suspend or revoke VCC status after notice (Regulation 13), and a VCC cannot be dissolved until every cell is transferred, converted, wound up or struck off (Regulation 14). Appendix 1 fees: USD 100 to incorporate a VCC or Incorporated Cell, USD 1,000 for each licence and renewal, USD 300 to form a Segregated Cell or file a Confirmation Statement and USD 1,000 to continue in or transfer out. Appendix 2 fines run to USD 100,000.
Any person incorporating, converting into or continuing a Variable Capital Company in the DIFC, every VCC and each of its Segregated or Incorporated Cells, their officers, shareholders and creditors, Exempt VCCs controlled by DIFC Registered Persons, Authorised Firms, governments or listed entities, the Corporate Service Providers and Register Keepers they appoint, and the Registrar.
| Regulation 2.1 | A Variable Capital Company is a Private Company incorporated, converted or continued under Articles 132 or 140 of the Companies Law; it may create Segregated Cells or Incorporated Cells but not both, and the 50-shareholder cap and the Companies Law chapters on capital reduction, financial assistance and distributions do not apply. |
| Regulation 2.2 | A Segregated Cell is a legally distinct cell within the VCC, which remains a single legal person; an Incorporated Cell is deemed a separate Private Company under Article 132(1) with no parent or subsidiary relationship to the VCC or other cells; the VCC may not hold Cell Shares in its own cells. |
| Regulation 3.1 | Unless it is an Exempt VCC, a VCC must appoint a Corporate Service Provider registered with the DFSA as a DNFBP and licensed for corporate services in the DIFC to act for it and its Incorporated Cells; failure carries a fine of up to USD 20,000. |
| Regulation 3.2 | An Authorised Firm may not use a VCC or cell to provide a Financial Service or establish a Fund unless the DFSA expressly permits, but a VCC or cell may hold assets for a Crowdfunding Structure, a Fund or a Family Office providing Family Office Services; the Companies Law ban on public offers still applies. |
| Regulations 4.1–4.2 | The licence of a VCC and each Incorporated Cell is restricted to holding-company activity; Incorporated Cells share the VCC's registered office and service provider; names must end with 'VCC Limited' or 'VCC Ltd.', and cells with 'VCC Segregated Cell' or 'VCC SC', or 'VCC Incorporated Cell' or 'VCC IC', used in all dealings. |
| Regulations 4.3 and 6.1 | The Articles must state whether cells are segregated or incorporated and provide that paid-up share capital always equals Net Asset Value, determined under the Articles; all shares are redeemable and share capital of the VCC or any cell always equals its net asset value. |
| Regulations 6.2–6.3 | Shares are issued, redeemed and purchased at a price equal to the proportionate net asset value, cancelled on redemption and may not be held as treasury shares; a distribution in respect of a cell may be paid only out of that cell's assets, with fines of up to USD 15,000 and USD 20,000 for breaches. |
| Regulation 7 | Officers must keep cellular assets separate from non-cellular assets and from other cells, and identify to every counterparty which cell is transacting and that only its assets are available; an officer who knowingly, recklessly or negligently fails is personally liable, any Articles or contract provision avoiding that liability is void, and the Court may grant relief. |
| Regulation 8 | No party may use the cellular assets of one cell to satisfy a liability not attributable to that cell; anyone who does must repay the value of the benefit and holds seized assets and proceeds in a fiduciary capacity for the VCC. |
| Regulation 11 | The registered office is that of the Corporate Service Provider or, for an Exempt VCC, an Affiliate; the Operating Law principal-business rule and the Companies Regulations establishment rule do not apply; a VCC may not employ anyone; accounts are kept for each Incorporated Cell; and the Confirmation Statement must confirm Exempt status and report active and inactive Segregated Cells. |
| Regulations 13–14 | The Registrar may suspend, vary or revoke VCC status after a notice stating the grounds, corrective action and period, informing the DFSA where financial services, funds or crowdfunding are involved; a VCC cannot be dissolved until every cell is transferred out, converted, wound up or struck off, and a Segregated Cell is treated as a Registered Person for strike-off. |
| Schedule (Appendix 1) | Fees in USD payable instead of the ordinary ones: 100 to incorporate a VCC or an Incorporated Cell, 1,000 for the grant or renewal of each licence, 300 to form a Segregated Cell, 300 to lodge a Confirmation Statement, 1,000 to continue into the DIFC and 1,000 to transfer incorporation out. |
Appendix 2 sets maximum administrative fines: USD 20,000 for failing to appoint a Corporate Service Provider, USD 15,000 for breaching the share issue, redemption or purchase rules, USD 20,000 for an unlawful distribution, USD 20,000 for a Corporate Service Provider that fails to act with due care or omits material facts in a filing, USD 100,000 for a VCC or Incorporated Cell that fails to make documents and information available to its provider, and USD 2,000 for a provider that fails to give its cessation notice within ten days. Officers who breach the asset-segregation and disclosure duties are personally liable to the VCC and to counterparties (Regulation 7), and the Registrar may suspend or revoke VCC status (Regulation 13).
The VCC gives clients who want several ring-fenced asset pools, such as a property portfolio, a securities account and a venture stake, one DIFC company instead of a chain of SPVs, and we now assess it alongside Prescribed Companies and foundations. The practical conditions are the same as for Prescribed Companies: holding activity only, no employees, and a Corporate Service Provider registered with the DFSA as a DNFBP supplying the registered office. Polaris is not a registered CSP in the DIFC, so we structure the vehicle, draft the Articles to meet Regulation 4.3, prepare the incorporation or conversion application and appoint and coordinate a DFSA-registered provider for the Regulation 3.1 role. The choice between Segregated and Incorporated Cells is the first decision we work through, because it cannot be mixed and it decides whether each pool is a separate legal person with its own accounts. We also brief directors on Regulation 7: failing to name the cell in a contract makes them personally liable.
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