With the recent enactment of DIFC Variable Capital Company (“VCC”) Regulations 2026, one may wonder if the existing DIFC entities could benefit from the VCC regime.
What if the VCC model suits the existing structure better than the current one?
We share this alert to help you better understand the conversion process into a VCC, the key steps and requirements.
Why Convert to a VCC?
A DIFC fixed capital holding company may wish to convert to a VCC for several reasons. The VCC framework offers greater flexibility in capital structuring, the ability to establish sub-pillars through incorporated cells or segregated cells, and a corporate form increasingly favoured for investment holding and fund management structures. Conversion may also be prompted by a company ceasing to qualify under the prescribed company regime, in which case re-registration as a VCC provides a compliant alternative within the DIFC.
The Conversion Process
The conversion from a fixed capital holding company to a VCC involves two principal phases: a notice period and a DIFC portal submission.
Phase 1: Notice Requirements (30 Days Prior to Application)
Before submitting a conversion application to the Registrar of Companies, the PC must issue thirty (30) days’ notice of its intention to apply to the Registrar for conversion to each of its creditors and to all persons with whom it has an outstanding contract. In addition, it must publish a notice in an Appointed Publication of its intention to convert. This publication must be made at least thirty (30) days but not more than forty-five (45) days prior to submitting the application to the Registrar.
Phase 2: Application Submission (After 30 Days but Before 45 Days of the Published Notice)
Once the notice period has elapsed (but within the forty-five-day window from publication), the company should apply to convert from a private fixed capital company to a VCC, via the DIFC Portal.
It will be required to file the following, the with DIFC:
- Proposed Articles of Association (reflecting the VCC structure);
- A Special Resolution approving the conversion;
- A copy of the notice issued to creditors;
- A copy of the notice published in an Appointed Publication; and
- A copy of a corporate service provider appointment letter.
Outcome of Conversion
Upon approval of the application by the Registrar, the company will become a VCC.
The share capital records will be revised, and the company name will be amended to end with “VCC Limited” or “VCC Ltd”.
The Registrar will issue a conversion certificate and an updated commercial licence.
How Al Tamimi Can Help
Al Tamimi & Company’s Corporate team has extensive experience advising on DIFC law matters and is well-placed to guide clients through every stage of the conversion process — from preparing the requisite notices and Special Resolution, to drafting the proposed VCC Articles of Association and liaising with the DIFC Registrar on behalf of the applicant.
For further information, please contact: Izabella Szadkowska, Noff Al Khafaji, Sabeeha Moolla, or any member of the corporate team.
Key Contacts
Izabella Szadkowska, Partner, i.szadkowska@tamimi.com
Noff Al Khafaji, Of Counsel, n.alkhafaji@tamimi.com
Sabeeha Moolla, Senior Knowledge Lawyer, S.Moolla@tamimi.com