UAE Entrepreneur Opens Irish DAC for IP Licensing

UAE Entrepreneur Sets Up Irish DAC for IP Licensing — 12 Working Days, Fully Remote

Background: a content portfolio outgrowing offshore

The client owned trademark rights and digital content licences with revenue distributed across the US, EU and Asia. The portfolio had been held through a free-zone UAE company, but US distributors were beginning to ask for a beneficial owner certificate of tax residency in a treaty jurisdiction. Ireland’s broad treaty network, transparent regulatory regime and 12.5% trading-rate corporation tax (subject to substance tests with Revenue) made it the right next step.

The challenge: DAC vs LTD, and Section 137 again

For an IP holding and licensing entity that wants to ring-fence its objects and present a clean, defined activity to counterparties, an Irish Designated Activity Company (DAC) is preferable to an LTD. A DAC’s constitution lists specific objects, which is a credibility marker for licensees, banks and tax authorities. But the DAC formation pathway under Companies Act 2014 Part 16 is more involved than an LTD: a memorandum of association is required, the constitution cannot be the model LTD constitution, and at least two directors are mandatory — at least one of whom must be EEA-resident under Section 137.

The solution: bespoke DAC, dual director, royalty-ready tax setup

Chern & Co drafted a DAC constitution with specific objects covering the acquisition, holding, exploitation and licensing of IP rights. We appointed an EEA-resident nominee director alongside the founder and lodged the A1 (DAC) form with the CRO. The certificate of incorporation issued on day 12. We then:

• Filed the RBO declaration within 5 months of incorporation
• Registered the company for corporation tax with Revenue and obtained the tax reference
• Drafted a board resolution authorising the IP licensing agreements and a transfer pricing memorandum
• Connected the founder with a Tier-1 EU bank for a euro and US dollar account

The outcome: predictable royalty home with treaty access

Within month two the DAC was receiving its first royalty stream from a US distributor under the Ireland–US double tax treaty. The Revenue tax residency certificate issued in month three. The client’s audit firm confirmed the structure satisfies the relevant substance and transfer pricing requirements, conditional on annual board meetings being held in Ireland — which Chern & Co administers as part of the ongoing company secretarial service.

Why an Irish DAC for IP licensing

The Irish DAC is purpose-built for ring-fenced activities like IP licensing, joint ventures and SPV structures. Its constitution is enforceable as a contract, its objects clause provides legal clarity, and it operates within Ireland’s full EU and OECD treaty network. For non-EU founders, the combination of a DAC, a nominee director arrangement and proper substance — board meetings, registered office, Revenue tax residency — produces a structure that holds up to scrutiny by counterparties, banks and tax authorities.