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Capital Market Regulations in Dubai

Capital Market Regulations in Dubai

Dubai is known as a very developed financial center, with capital markets playing a major role in its evolution. Once the Companies Law was amended and new amendments related to joint stock companies listing their shares on the Dubai Financial Market were added, the Emirate became even more attractive from this point of view. The main law providing for the regulations applicable to capital markets in Dubai is the Securities and Commodities Exchange Law which was enabled in 2000. All companies seeking to list financial instruments on the Dubai Stock Exchange must obtain a license form the Securities and Commodities Authority (SCA). Foreign investors must attention to the fact that free zones apply different regulations related to capital markets.

Requirements to list a company in Dubai

The SCA provides for the main requirements a Dubai company must fulfill in order to have its shares or other financial instruments listed on the capital markets. In order to trade on the primary capital markets of the Dubai Stock Exchange, a company must:

  • –          be registered for at least 2 years prior to the application;
  • –          have issued financial statements every year;
  • –          have held its general meeting every year.

Dubai company must have paid at least 35% of its subscribed capital or 30 million AED (whichever is higher), while foreign companies seeking to list on the primary capital markets in Dubai must have paid 40 million AED of its total share capital. Under the new Companies Law, a company must list at least 30% of its shares, compared to the 55% required until 2015.

Our lawyers in Dubai can offer more information about the 2015 Commercial Law. We invite you to watch this video about capital market regulations in Dubai

The Initial Public Offering in Dubai

In order to be allowed to trade on the Dubai capital markets, a company must submit an Initial Public Offering with the SCA. The following documents must be provided upon the submission of the IPO:

  • –          a listing application form;
  • –          the company’s Memorandum and Articles of Association;
  • –          a feasibility study;
  • –          a valuation report;
  • –          the receipt of the paid application fee.

The issuer must also submit a prospectus which must be in Arabic if the company will be listed on the primary capital markets or in English if the company will be listed on the secondary markets in Dubai free zones.

If you want to set up a joint stock company or if you need more information about listing requirements, do not hesitate to contact our law firm in Dubai.