The share capital is the amount of money each founder of a company in Dubai or shareholder contributes with when opening a company. The Company Law in UAE requires a company to have one or more local shareholders who own 51% of the company’s share capital. However, this is not applicable for the companies opened in the free zones, where the shareholding can be 100% foreign. Among the structures in Dubai that require a minimum share capital, there are public and private joint stock companies, limited liability companies and partnerships limited by shares.
Our Dubai lawyers can offer relevant information and legal assistance when setting up a company in Dubai.
The necessary share capital for a structure in Dubai
Most types of companies in Dubai will need a minimum number of shareholders who will divide the amounts they introduce in order to create the company into shares. The founders of companies in Dubai can have two kinds of shares: preference shares and ordinary shares. Carrying different rights such as distribution, voting, redemption or dividend rights, shares have an important role in the business.
The foreign investors who register companies in Dubai should be aware of the fact that the share capital requirements depend on the type of structure established. In addition, the share capital amount imposed for companies in Dubai depends on whether the structure is registered in the Emirate or in one of its free zones. For more details regarding the minimum share capital for a company in Dubai, contact our law firm in Dubai.
The share capital according to the type of company in Dubai
A start-up share capital of 10,000,000 AED (United Arab Emirates Dirham – UAE currency) and a minimum number of 10 shareholders are required in the case of a Dubai public joint stock company. The share capital of a public joint stock company in Dubai can be divided into shares and the structure can be listed on the stock exchange. In order to take international companies as shareholders, a public joint stock company must alter its articles of association. After becoming part of the company and being considered founding members, they will respond for the company’s obligations.
The private joint stock company in Dubai must have a share capital of 2,000,000 AED (fully deposited at the company registration time) and at least 3 shareholders The private joint stock company is not allowed to trade its shares on the stock exchange.
The limited liability company in Dubai is one of the most common and successful types of business structures because it has minimum requirements: two shareholders and proof of sufficient share capital. The shareholders’ responsibility will be limited to their participation in the structure’s capital.
The partnership limited by shares in Dubai consists of at least two partners. One of the shareholders will become fully liable for the company’s obligations and debts as a general partner.The other partner, a limited one,will be held accountable depending on the extent of his/her contribution. The minimum share capital for this type of structure is 500,000 AED.
Feel free to contact our lawyers in Dubai if you are in need of more detailed information regarding the minimum share capital for a company in Dubai.