Dubai has successfully gone from being an economy reliant majorly on oil to a diversified, service-powered global fiscal epicenter. For established businesses as well as institutional investors searching to scale their operations, lock in immense capital, set up an empowering regional footprint, transitioning to or setting up a public entity is a very strategic maneuver.
To set up a public joint stock company in Dubai (generally referred to as a PJSC or Public Shareholding Company) is to adapt to a corporate structure that permits a business entity to divide its total or partial capital into equal shares, which then get trade PSEs (Public Stock Exchanges). Our in-depth guide offers a highly-definitive overview of the regulatory framework, requirements for capital, as well as the elaborate incorporation process for a PJSC.
Understanding What a Public Joint Stock Company (PJSC) Is
A Public Joint Stock Company refers to a distinct legal & corporate entity where the capital gets divided into multiple negotiable shares, each of the same value. The main characteristic of this business structure is that the shareholders are held liable only to the extent of their company’s share capital.
Running a PJSC in the United Arab Emirates means strictly abiding by the UAE Commercial Companies Law as the UAE Federal Decree – Law No. 32 of 2021. Because of the investment’s public nature, these entities get subjected to highly-rigorous oversight by the DET (Department of Economy & Tourism), the SCA (Securities and Commodities Authority), and the Ministry of Economy.
The Strategic Advantages of Setting Up a PJSC in Dubai, UAE
- Acquisition of Capital: A PJSC can raise a substantial amount of capital by officially issuing shares to the common public, and in turn, finance major expansions or tactical acquisitions.
- Market Liquidity: Listing their shares on major exchanges such as the DFM (Dubai Financial Market) or NASDAQ Dubai provides shareholders exceptional liquidity, permitting them to purchase and sell shares in a dynamic manner as per the conditions of the market.
- Credibility & Transparency: The compulsory fiscal audits, disclosures, and robustly rigid governance standards inherently constructs immense trust with foreign investors and the public.
- Limited Liability: The personal assets of a shareholder remain completely protected from the financial debts and liabilities of the company.
Key Prerequisites & Regulatory Requirements
Setting up a PJSC in Dubai mandates strict adherence to the pre-established federal mandates. Xpert Advisory’s premier Corporate Governance & Compliance professionals ensure that every foundational need is meticulously met before the process begins. Here is an overview of the main prerequisites:
- Founding Members: At least 10 founding members are needed to set up a PJSC in Dubai.
- Board of Directors: The firm must be under the management of a board of 3-15 members. Their service term cannot go beyond 3 years.
- Nationality Mandates: The board’s Chairman, in addition to the vast majority of directors, must be citizens of the UAE. Furthermore, UAE nationals must mandatorily hold at least 51% of the company’s total shares.
- Distribution of Shares: The founding members are allowed to hold between 35%-45% of the entire share capital. The remaining amount of shares (at least 55%) must necessarily be offered to the general public through a public subscription or IPO (Initial Public Offering).
Minimum Capital Requirements
The fiscal threshold of a PJSC is much higher than the other corporate structures for ensuring market stability. Here is a glance at the minimum capital requirements:
- General PJSC: Share capital of at least AED 10 million* (approx. 2.7 million USD) is compulsory.
- Insurance & Investment Companies: A capital of at least AED 25 million* is required.
- Banking Institutions: The minimum amount of share capital is raised to AED 40 million*.
- Value of Shares: The shares’ nominal face value must necessarily range between AED 1* to AED 100*.
Documents Required for Setting Up a PJSC in Dubai, UAE
Thorough and precise documentation is deemed a successful application’s bedrock. Utilizing leading Document Drafting & Attestation services ensures that every aspect of your submission is flawless.
- A properly complete Founders’ Agreement.
- A Prospectus of Invitation (for Public Subscription).
- Two photocopies of an in-depth Project Feasibility Study.
- Four photocopies of the MoA (Memorandum of Association) and AoA (Articles of Association), both approved by a UAE Public Notary.
- An Auditor’s Certificate along with Due Diligence Survey.
- Written declarations from the employed Board of Directors accepting their respective role.
- Original documents highlighting the names of the directors, their birth dates, occupation, as well as sample signatures.
- Office spaces contract and plot number copies, both of which should be Ejari-registered.
- Notarized & legal Arabic translations of every foreign document.
Step-by-Step Process to Set Up a Public Joint Stock Company (PJSC) in Dubai
Navigating the challenging jurisdictional landscape demands exceptional precision. Here is the complete operational roadmap for Company Formation of a PJSC in Dubai, UAE:
- Business Planning & Obtaining Initial Approvals: The very first phase of PJSC company formation is crafting a meticulous business plan. With tour expert Business Planning and Feasibility Studies divisions, we solidify your operational gameplan before applying for the DET’s initial “No Objection” approval.
- Registration of Trade Name: Obtain a trade name that perfectly reflects or aligns with your business activities and concludes with the acronym “PJSC”.
- Drafting & Submission: The founders are required to draft the AoA, MoA, as well as the public prospectus.
- SCA & MInistry Approvals: The prospectus as well as all the fiscal data must necessarily be submitted to the SCA (Securities and Commodities Authority) as well as the Ministry of Economy to obtain approval for the public shareholding offering.
- IPO (Public Subscription): Once the approval is obtained, the company formally launches to the public its share offering.
- Constitutes General Assembly: Every shareholder must convene in order to finalize the Board of Directors’ as well as the official auditors’ appointment.
- Final Licensing: With our top-notch Government Liaison and DED Licensing teams backing you up, the final documents as well as the official Ejari lease are submitted to the DET for obtaining the commercial trade license along with the Certificate of Incorporation.
Private Joint Stock Company vs. Public Joint Stock Company: The Main Differences
| Feature | Private Joint Stock Company | Public Joint Stock Company |
| Board of Directors | At least 2 directors | At least 3 directors |
| Offering of Public Share | Strictly not permitted. | Permitted and required. |
| Minimum Capital | AED 5 million* | AED 10 million* |
| Regulatory Oversight | DED (DET) | DET, SCA, Ministry of Economy |
Elevate Your Corporate Vision By Partnering With Xpert Advisory
The pathway to publicly getting your company listed is lined with complicated regulatory thresholds along with uncompromising legal scrutiny. Teaming up Xpert Advisory ensures that your transition into the public markets is executed with finesse.
Right from initial Strategy Consulting,to finalizing your registration on the UAE Mainland, our elite team of seasoned consultants will govern the entire process, protecting your assets in addition to accelerating your market entry.
Get in touch with Xpert Advisory to schedule a private consultation session and smartly command your fiscal future!
Frequently Asked Questions (FAQs)
Q. Can foreign investors be share owners in a Dubai PJSC?
A. Yes, both foreign investors as well as corporations are legally allowed to own shares in a Public Joint Stock Company that is Dubai-based.
Q. What is the maximum term limit for a PJSC Board Director?
A. The maximum service term for board member/director in a Dubai PJSC must not go beyond 3 consecutive years.
Q. What particular business activities mandate a PJSC structure?
A. As per the law of the UAE, any business enterprise indulging in banking, insurance, or funds’ investment on third parties’ behalf is legally required to operate as a PJSC.
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Meta Title: Set Up a Public Joint Stock Company in Dubai, UAE
Meta Description: Explore the ultimate guide to set up a public joint stock company in Dubai, UAE. Explore legal frameworks, capital needs, and IPO steps with Xpert Advisory.
