The Minimum Share Capital required in opening a company in Dubai
The UAE Companies laws allow foreign investors to open five types of companies in Dubai. These companies can open up permanent ventures, branch offices, virtual offices, companies in the free zones or conclude commercial agency agreements. On the other hand, the Companies Law of the UAE requires a registered company in Dubai to have either one or more national shareholder of the UAE to have at least 51% of the company’s share capital.
The share capital is the monetary contribution of the founders or shareholders or directors of a company. Several companies in Dubai requires the company to have a minimum number of shareholders or directors who will divide their money they invested in creating the company. The money invested is divided into shares of the company in Dubai which can be either ordinary shares or preference shares.
The companies in Dubai that require minimum share capital include the following:
- Limited liability companies,
- Public joint stock companies in Dubai
- Private joint stock Companies in Dubai
- Partnerships limited by shares.
The limited liability company in Dubai
The most commonly registered type of company in Dubai is the limited liability company. This is because it requires only a minimum of two and a maximum of fifty shareholders whose liability is only limited to the extent of their participation in the share capital of the company in Dubai.
At first, 300,000 AED was the minimum share capital for a limited liability company in Dubai. However, at the present, a test of sufficient capital has been introduced by the Department of Economic Development in Dubai, and therefore the department decides the minimum share capital for a limited liability company in Dubai
The public joint stock company in Dubai
According to the companies’ law in Dubai, the public joint stock company in Dubai requires at least ten shareholders with 10,000,000 AED as the minimum share capital. This share capital is divided into shares that can be traded on the stock exchange.
Foreign investors intending to enter a public joint stock company in Dubai must sign its articles of association and therefore will be considered the founding members. This means that the founders will be held accountable for the obligations of the public joint-stock company in Dubai.
The private joint-stock company in Dubai
The private joint-stock company in Dubai is required to have at least three shareholders with 2,000,000 AED as the minimum share capital which must be deposited in full upon incorporation of the private joint stock company in Dubai. The private joint stock company is not allowed by the Companies Law in Dubai to trade its shares on the stock exchange. However, under some conditions, it may be converted into a public joint stock company in Dubai and thus can trade its shares in the stock market.
The partnership limited by shares in Dubai
The partnership limited by shares in Dubai must have at least two partners. One of the shareholders will be a general partner who will fully be liable and responsible for company’s obligations including debts. The other partner will be a limited partner who will be held accountable to the extent of his or her share capital. A limited liability company in Dubai must have a minimum of 500,000 AED as the share capital.
If you intend to open a company in Dubai, you can contact our specialists in Quantum Auditing firm in Dubai for legal assistance and other relevant information.