The UAE sustains a high degree of specialized economic activity regulated by individual emirates as well as the Federal Government. While the mixture of diverse sectors and distinct legal forms for company setup have allowed Dubai to nurture an open-ended economy, the authorities have deliberately sought to create an investment ecosystem remains well ordered and unduly restrictive. Through due diligence of UAE government, Dubai now ranks in World’s most prestigious and desired business environments that are liberal, rewarding and fun to live in.
Shareholding Companies in Dubai
As there are many options for international businesses to invest and set up a credible company formation in Dubai, many investors are often subject to conflict with the variety of legal forms/structures of incorporation. Businesses interest in finding unique advantages, having an on-the-spot presence, liberty of researching and re-considering market prospects, customizing contracts, liaising with government bodies, managing first-hand transactions, trading shares, and enjoying a premier office space to conduct operations. Among the many company structures that offer these benefits, Shareholding Companies in Dubai hold a special preference between foreign investors.
Public Shareholding
Fundamentally a public shareholding company is a corporate establishment where the business capital is divided into equal shares distributed between shareholders, limiting the liability by the respective number of shares they own. A Public Shareholding company is often referred to as Public Joint Stock Company or PJSC.
Documentation Requirements
- Founder’s Agreement with Registration and Licensing Application
- Government Approval for Business Activity
- Prospectus of Invitation for Public Subscription
- UAE Securities and Commodities Authority Approval for public shareholding
- Auditors Certificate
- Resolution from Ministry of Economy for Public Shareholding
- Due Diligence Survey
- 2 copies of the Project’s Feasibility Study
- 4 copies of Memorandum and Articles of Association authenticated by Notary Public
- Photocopies of Office Space Contract and Registered Plot Number
- Appointed Board of Manager and Directors Written Declaration accepting appointment
- Original Documents showing Directors Names, Date and Place of Birth, Occupation and Sample Signature
Incorporation Requirements
A Public Shareholding Company formation requires at least 10 shareholders to incorporate with a management board consisting of 3 to 15 directors. The term of service for the management board cannot exceed for more than 3 years, and the primary shareholders or founding members are entitled to 35% of share capital, offering the remainder 75% to the public. The law also stipulates that the Chairman of the PJSC and the majority of management board must be Emirati and 51% of the shares must be owned by UAE nationals.
In most cases, a local banking, financial or insurance ventures should be run as a PJSC while international companies practicing the same activities can open as branch or representative office in Dubai. The minimum capital threshold for setting up a public shareholding company in Dubai is AED 10 million. The capital may vary depending on the business activity, for example, an insurance and investment company will require minimum capital of AED 25 million while a banking firm will incorporate under a capital threshold of AED 40 million
Private Shareholding
In accordance with the UAE’s Commercial Companies Law, a Private Shareholding Company is characterized by ownership of a non-governmental organization (NGO) with share capital divided into negotiable shares of equal value limited to a fewer number of shareholders who are restricted to trade stocks with public.
Documentation Requirements
- Founder’s Agreement with Registration and Licensing Application
- Government Approval for Business Activity
- UAE Securities and Commodities Authority Approval for Private Shareholding
- Auditors Certificate
- Resolution from Ministry of Economy for Private Shareholding
- Due Diligence Survey
- 2 copies of the Project’s Feasibility Study
- 4 copies of Memorandum and Articles of Association authenticated by Notary Public
- Photocopies of Office Space Contract and Registered Plot Number
- Appointed Board of Manager and Directors Written Declaration accepting appointment
- Original Documents showing Directors Names, Date and Place of Birth, Occupation and Sample Signature
Incorporation Requirements
A Private Stock holding Company requires a minimum of 3 shareholders with a minimum share capital of AED 2 million. Aside from the distinct features, the number of shareholders, share capital, and restriction on selling of stocks in public trading markets, the documentation and the rest of the incorporation conditions remain unchanged as of a public shareholding company. A Private Joint Stock Company is ideally structured for investors seeking prospects in commercial or industrial business activities with the option to convert it into a PJSC after 2 complete years of incorporation and fulfillment of certain conditions apply.
Private Shareholding Company serves as a sound platform for investors to offer, own and exchange stocks privately and unquoted while maintaining shares with founders, their families, and heirs by the specific group of investors
How IBG Can Help
Setting up your Public or Private Shareholding Company with IBG consulting comes with a fair share of benefits. Through years of experience and prompt compliance standards with the UAE government, IBG has mastered the art of company setup, specializing in preparation of detailed corporate documents, bank account opening and verification, visa and manpower provisions, management protocols, arrangement of reliable sponsors, office space solutions, PROs services, all offered with free consultation so you only have to decide which option is better. Call our dedicated consultant now or visit our website ibgme.com to learn more about Public and Private Shareholding Company formation.
