UAE: Minimum capital to open a company in Dubai for foreigners

Abdallah Shahin - | Business

According to UAE laws, foreign investors can open five types of companies in Dubai. Companies can set up permanent ventures, branch offices, companies in the free zones or conclude commercial agency agreements.

The UAE Companies Law requires a company to have one or more national shareholders who own 51% of the company’s share capital. Among the companies in Dubai that require a minimum share capital are limited liability companies, public, and private joint stock companies, and partnerships limited by shares.

With a vast experience in company formation, our agents in Dubai can help local and foreign investors set up companies in this Emirate. You can also address any inquiry related to the minimum share capital for a company, based on the type of structure you are interested in.

Dubai business forms requiring a share capital:

Even if several types of companies can be established in Dubai, not all of them require a minimum share capital. The ones for which the Company Law provides a minimum amount of money to register are:

the private limited liability company which requires a minimum value of one share, and which is also the preferred business form of foreign investors in Dubai;
the public joint stock company which is suitable for large operations completed by investors;
the private joint stock company which is not very often employed, however, it offers various benefits;

the partnership is limited by shares which are subject to several criteria upon registration in Dubai.
Conversely, sole proprietorships are among the business forms that do not require a minimum share capital in Dubai. The same is applicable to general partnerships.

Our company registration advisors in Dubai can offer more information on the requirements related to the minimum share capital requirements imposed by the national legislation in the UAE.

Even if there is no minimum share capital for opening a limited liability company in Dubai, there are a few requirements to be observed in relation to the value of the shares issued by such a company. One of these requirements implies a minimum value of 1,000 AED per share.

The shareholders can decide on the number of shares they want to own in the company and based on that decision, they must contribute to the share capital of the Dubai LLC.

There are also cases in which investors open companies in specific sectors such as tourism where industry authorities impose a minimum share capital. This is the case with travel agencies.

Our Dubai company formation specialists can help foreign investors who want to register limited liability companies in the Emirate.

What is the share capital of a Dubai company?

Share capital is the amount of money each shareholder or founder of a company contributes when setting up a company. Most types of companies in Dubai will require a minimum number of shareholders who will divide the amounts they put in for creating the company into shares. There are several classes of shares the founders of companies in Dubai can have:

ordinary shares,
preference shares.
Shares can also carry different rights such as voting, distribution, redemption, or dividend rights. Foreign investors registering companies in Dubai must know that the share capital requirements depend on the type of structure employed and whether the company is registered in the Emirate or in one of its free zones.

The limited liability company in Dubai:

The Dubai limited liability company is one of the sought types of business structures because it has as minimum requirements: two shareholders and proof of sufficient share capital. The responsibility of the shareholders is limited to their participation in the company’s capital.

Dubai public joint stock companies:

The Dubai public joint stock company must have a minimum number of 10 shareholders and a start-up share capital of 10,000,000 AED. The share capital of a public joint stock company in Dubai can be partitioned into shares and listed on the Stock Exchange.

A public joint stock company must amend its articles of association if they want to take on foreign companies as shareholders. Once part of the company they will be considered founding members, therefore they will be held accountable for the company’s obligations.

The private joint stock company in Dubai:

The private joint stock company in Dubai must have at least 3 shareholders and a share capital of 2,000,000 AED. The start-up share capital must be fully deposited when the company is registered. The private joint stock company may not list its shares on the Stock Exchange. Under some conditions, a private joint stock company may be converted into a public joint stock company.

The partnership is limited by shares in Dubai:

The partnership limited by shares in Dubai is made up of at least two partners. One of the shareholders will be a general partner and he will be held fully liable for the company’s debts and obligations and a limited partner who will be held accountable to the extent of his or her contribution. The minimum share capital for a limited partnership in Dubai is 500,000 AED.

The share capital of free zone companies in Dubai
Dubai is very attractive because of the numerous free zones surrounding it. There are several types of companies that can be established in a free zone, however, each zone has its own authority which provides for particular regulations, including the minimum share capital which must be deposited upon registration.

The main type of company that can be established in a Dubai free zone is the free zone company which takes the form of a private limited liability company that can have a natural person or a corporate shareholder.

It is important to note that some free zone authorities impose a minimum share capital for opening companies, while others do not. Also, where minimum share capital is required, the amount is usually lower than when opening an onshore company in Dubai.

If you are interested in setting up a free zone company and need assistance, our company incorporation representatives in Dubai can help you. We can also guide you on the amount to be deposited even if no requirement is imposed.

Minimum share capital for foreign companies operating in Dubai:

The subsidiary and the branch office are the main business forms that can be employed by foreign companies seeking to establish a presence in Dubai. The minimum share capital for a subsidiary depends on the structure used by the owners and which can be a limited liability company or the joint stock company. Based on this aspect, the minimum share capital will be established and deposited upon incorporation.

In the case of branch offices, there are no minimum share capital requirements.

Our company formation specialists in Dubai can help foreign companies set up both subsidiaries and branch offices here.

How to deposit the share capital of a company in Dubai:

In order to deposit the share capital of a company in Dubai, an investor must complete the following steps:

the Articles of Association of the company must comprise information about the share capital and its distribution among the shareholders;
then, the company representatives are required to open a corporate bank account;
the share capital will be deposited in the bank account and a bank statement indicating the amount deposited will be issued;
the statement will be filed with the Dubai Trade Register together with the other incorporation documents.
Any amendment to the share capital of a company must be notified to the Trade Register. Company owners can increase or decrease the share capital of their businesses.

If you want to open a company and need legal assistance, you can contact our company formation agents in Dubai.

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Abdallah Shahin
Abdallah Shahin
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