A Public Shareholding Company also referred to as a Public Joint-Stock Company (PJSC), is a company where the business capital is divided into equal shares. Their respective number of shares limits each shareholder's liability. A PJSC in Dubai is required to have at least ten founding members, and its management should be vested in a board of directors consisting of 3 to 15 persons whose term of office may not exceed three years. The founder members may only hold 35% of the share capital, with the remainder required to be offered to the public. The Chairman and majority of the directors in a public shareholding company must be UAE nationals.
The law stipulates that banking, insurance, or other financial companies should be run as public shareholding companies. However, foreign banks, insurance, and commercial companies can set up in Dubai by opening a branch or representative office.
The minimum capital required to set up a public shareholding company in Dubai is AED 10 million (about $2.7 million) with a nominal face value of AED 1 to 100. For a banking company, the minimum capital required is AED 40 million, and for insurance and investment companies, it is AED 25 million. For establishing a public shareholding company in Dubai, the other prerequisites are preparation of a founders' agreement, a prospectus, or invitation for public subscription supported by an overall business plan or feasibility study and an auditor's certificate, a due diligence survey, a memorandum, and articles of association.
Requirements for Setting up a PJSC in Dubai
- A minimum of 10 company shareholders required for incorporation
- A management board must have 3 to 15 directors
- The term of service for management board must not exceed for more than three years
- Primary shareholders or the founding members are entitled to 35% of share capital, offering the remaining 75% to the public
- The Chairman and the majority of the management board must be a Emirati and 51% of the shares must be owned by the UAE national
- In most cases, local banking, insurance, and financial ventures must be run as a PJSC while international companies practicing the same activities can open a branch or a representative office in Dubai
Procedure to Set up a PJSC in Dubai
The steps to open a Public Shareholding Company in Dubai are -
- Select a trade name for the business
- Get an initial approval from the Department of Management Studies (DED) Dubai
- Submit the required documents for licensing
- Pay fees and obtain the business license
Documents Required to Set up a PJSC in Dubai
- Founder's Agreement with Registration and Licensing Application
- Government Approval for Business Activity
- Prospectus of Invitation for Public Subscription
- UAE Securities and Commodities Authority Approval for public shareholding
- Auditors Certificate
- Resolution from Ministry of Economy for Public 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
- Appointed Board of Manager and Directors Written Declaration accepting appointment
- Original Documents showing Directors Names, Date and Place of Birth, Occupation and Sample Signature
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How many minimum founding members does a public share company require?
A minimum of 10.
How many board members should the Public Joint Stock Company have?
3 to 15 members.
How many shares can the founders of a public share firm hold?
A maximum of 35% and the rest are offered to the public.
What is the minimum capital required for PJSC incorporation?
A minimum of AED 10 million.
What is the tenure of the board member of a public share organisation?
Not more than 3 years.