Public Joint Stock Company in Dubai
Posted: Jul 17, 2017
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.
At our Consulting firm; we have the knowledge you required to form your business in the UAE. We will support you to pick the right legal organization and license based on your desires and business objectives. We can also support you in opening your bank account and obtaining placement visas in the UAE. If you are concerned in setting up your industry in the UAE, please contact us for further information.
We are Corporate Advisory firm with a broad range of expertise in business setup in Dubai Offshore company formation, LLC company setup, professional Company Formation and PRO Services.