Private Shareholding Company Formation in Dubai

Dubai constantly adapts to create commercial chances with a range of options. In Dubai, there are several legal ways to start a business. The type of business the firm may do is specified in a legal document. 

By investing in a Private Shareholding Company, one may share in Dubai's prosperous worldwide economy.

Learn more about one such company that you can open. 

What is a Private Shareholding Company

In the United Arab Emirates, a private shareholding company must be formed by at least three people. It is a corporation that at least three people founded. For a business of this type to be able to issue its shares to the public, the founding shareholders must fully subscribe to the paid-up capital, which cannot be less than one million dirham. Therefore, at the very least, a private shareholding business must have three shareholders. 

The Features of a Private Shareholding Company

The qualities of a private shareholding business in Dubai are as follows:

  • In the UAE, a private shareholding firm must have three owners minimum.
  • AED (5.000.000) in the capital needs to be fully paid (100%) to the company.
  • No more than (200) founders/shareholders may be private firm shareholders.
  • A private shareholding firm must have at least 51% of its shares owned by UAE nationals; the remaining 49% may be held by either foreigners or residents of the country.
  • A private shareholding corporation in Dubai must have a minimum capital of AED 2 million.
  • The shares' nominal value must be at least AED 1 and no more than AED 100.

Conditions for Opening a Private Shareholding Company in Dubai

  • Approval from the Ministry of Economy must be obtained to establish a private shareholding company.
  • Any commercial or industrial business is eligible for creating a Private Joint-Stock Company. Professional activities do not complement this legal form.
  • Partners of any nationality can own a private shareholding company following DED business regulations.
  • UAE nationals own at least 51% of a Private Shareholding Company (Private Joint-Stock Company), and GCC nationals can hold up to 100%.​
  • The trade name should be pertinent to the commercial activity of the firm. Therefore, trade names must include one or more of the partners’ names and be annexed by the phrase “Private Shareholding Company.”
  • ​​​An appointed manager is mandatory per DED business regulations for a private partnership company.

Capital Requirements for Opening Private Shareholding Company 

  • The partners must invest a minimum capital of AED 5,000,000 in the business.
  • The nominal value of the issued shares is fully paid up
  • A period of not less than two financial years has expired
  • During the two years preceding the application for conversion, the company achieved net profits distributable to the shareholders, the average value of which is not less than 10% of the capital
  • A resolution of the extraordinary assembly for the company's conversion is adopted by most shareholders representing at least three-quarters of the company's capital.

How to Set up a Private Shareholding Company in Dubai

There is a specific process for opening a private shareholding company which is discussed below:

1. Finalize the Company Name

Decide a suitable name for your business by maintaining all the regulations determined by the government authority. 

2. Obtain the Initial Approval

Obtain initial clearance from the Department of Economic Development (DED) Dubai, along with consent from the other stakeholders by the nature of the project.

3. Decide the Business Activity

Finalize the business activities you want to proceed with and get approval from the Ministry.

4. Apply for the License

Submit all the documents to apply for the business license.

5. Pay the Fees

Clear the required amount payable for the business registration and license approval. 

The Required Documents for Opening a Private Shareholding Company in Dubai

You have to submit some documents for opening a private shareholding company in Dubai, which are as follows:

  • Original copies of the Directors' Names, Date and Place of Birth, Occupation, and Sample Signature
  • Appointed Board of Manager and Directors Written Declaration accepting appointment
  • Founder’s Agreement with Registration and Licensing Application
  • Government Approval for Business Activity
  • UAE Securities and Commodities Authority Approval for Private Shareholding
  • Auditors Certificate
  • Resolution from Ministry of Economy for Private Shareholding
  • Due Diligence Survey
  • Two copies of the Project’s Feasibility Study
  • Four copies of Memorandum and Articles of Association authenticated by Notary Public.
  • Photocopies of Office Space Contract and Registered Plot Number

The Process of Converting a Business from Private to Public Shareholding Company

Private shareholding company shares cannot be offered to a Public Shareholding Company. A business can be converted to a public company after a minimum of two years of company formation. ​Individual shareholding companies' branches can be sold and waived to any party or company. The new owner(s) can change its legal form according to DED procedures.

Our Role

Business Setup Worldwide may assist you in starting your business. Through professional solutions and services, we help establish your business, from incorporation, registration, and licensing to setting up your office space. In addition, our clients rely on our counseling, in which we evaluate each client's business progress. 

To manage your business as efficiently as possible, our specialists can advise you on the best legal form to use when forming a company in Dubai. Please feel free to contact us with any questions you may have about the company establishment; we would be pleased to help.

FAQs

1. How many shareholders may be in a private share company at one time?

Not more than 200.

2. What is the number of the minimum number of shareholding members?

Minimum of 3 shareholders.

3. Are there any regulations regarding the director of the private shareholding company in the UAE?

In a private shareholding firm, the Chairman and the majority of the Directors must be UAE citizens.

4. What is a general partnership?

A privately held corporation is referred to as a general partnership if there are two proprietors.