Public Joint Stock Company (PJSC) is defined as an organization whose capital is divided into negotiable shares of equal value and a partner therein shall be liable only to the extent of his share in the capital of the company
in accordance with the UAE Federal Commercial Companies Law (the ‘Law”). The Law requires a minimum share capital of AED 10,000,000 of which a minimum of twenty-five percent (25%) must be settled on subscription. In addition, fifty-one percent (51%) of shares of PJSC shall belong to a UAE national and a minimum of fifty-five percent (55%) of shares must be offered to the general public.
Also, PJSC should have at least 10 setting up members, except in cases where the government entity is involved. Also, any company in which the State or Public Institutions hold any share should be formed as Public Joint Stock Company. The Board of Directors must have a minimum of three and no more than twelve board members. The chairman, as well as a majority of the board, must be UAE nationals.
The year 2013 saw UAE’s federal government passing a new draft for the Commercial Companies Law with certain clemencies being awarded towards the requirements for a public joint stock company. The draft of the new law spells out welcome additions to the existing law as it introduces the provision for sale of pre-emptive rights to a third party or an existing shareholder. The new draft also provides for share capital to be in form of authorized and issued share capital. A notable feature of the new draft is the provision of an employee incentive scheme allowing the employees to subscribe to shares of the company. The draft reduced the number of founding partners to five (5) instead of the previously required ten (10). In the same draft though, the minimum capital requirement for a Public joint stock company UAE was increased to AED 30 million. That being said, the draft law has not been enacted and remains under consideration.
In an initiative to relax the present regulations surrounding the Initial Public Offering and listing of companies on the UAE stock exchanges, the regulatory body for Dubai Financial Market and Abu Dhabi, the Securities and Commodities Authority (SCA) has introduced SCA Board of Directors Decree No. 10 of 2014 Concerning the Regulation of Listing and Trading of Shares of Private Joint Stock Companies (the Decision). The Decision is aimed at encouraging Private Shareholding Companies to be list their shares and increase capital injection and shareholder liquidity.
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What is the Procedure for Company Formation in Dubai
Dubai Mainland is famous for its business friendly infrastructure and facilities. Dubai mainland company formation is still the first preference by most of the establishments when establishing their business in Dubai. Company Formation in Dubai Mainland is very interesting and time consuming task; we provide best PRO services in Dubai offers the best services for Dubai Mainland company setup.
company formation in UAE free zone
The company formation in UAE free zone is not subject to commercial firms Law. Free Zones in Dubai and UAE are considered to be outside the rule of UAE, and are beneath the rules and regulations of concerned free zone. The companies under the Dubai Free Zone are responsible to maintain the rules and regulation of the Dubai Free Zone Authority.
Dubai south free zone
Since the UAE’s first free zone opened its gates in the 1980s, it’s reasonable to say they have been a active success. Free zones are usually recognized as playing a giant part in both the change of the UAE’s economy and the country’s upswing to becoming one of the world’s important business hubs.
