Dubai’s Jebel Ali Free Zone Authority (JAFZA) has announced new guidelines allowing companies more freedom when setting up and restructuring their operations as well as listing on the local stock market.
Under the new rules, Free Zone Establishment (FZE), Free Zone Company (FZCO) and Branches will be brought under one regulation allowing them to rearrange or convert their operations to one of the other categories.
Foreign firms will also be able to transfer to the free zone with all of their commitments.
Other amendments will allow businesses to setup in the free zone with capital sufficient for their activities and change the minimum and maximum shareholder requirements for FZCOs to two and 50 respectively.
Previously FZEs needed a single shareholder with a minimum capital of Dhs1m and FZCOs two to five shareholders with a minimum capital of Dhs500,000.
“The concept of different classes of shares provides flexibility to owners to offer different voting rights to shares. This could allow structures with management rights shares providing flexibility to owners for raising equity while retaining management rights over the company,” the free zone authority said.
Finally, JAFZA has introduced a new Public Listed Company (PLC) definition allowing existing FZE and FZCO entities to list on the stock exchange.
The new category follows a business framework introduced by JAFZA in 2014 allowing companies to apply directly to the regulator to list shares on the Nasdaq Dubai Exchange.
The relevant markets laws in the UAE will apply to the PLC.
“The new regulations streamline all the mandatory legalities related to the registration, administration, legal benefits and obligations of organisations in the free zone. These changes reflect the needs of an ever evolving market in terms of providing facilities that are prompt, secure and form the best international practice,” said Sultan Ahmed bin Sulayem, group chairman and CEO of DP World and chairman of ports, customs and Free Zone Corporation.