The Jebel Ali Free Zone (JAFZA) connects the continents of Asia, Europe and Africa. JAFZA just broke the most exciting news for the investors in the beginning of 2017.
The Free Zone has issued a new set of guidelines Jebel Ali Free Zone Companies Implementing Regulations 2016. Foreign companies no longer need to establish legal entities such as a branch or a new company altogether.
The guidelines aim to simplify the existing regulations for Foreign investors to incorporate new companies, by allowing the foreign companies to easily transfer to the Free Zone instead of setting up branches or subsidiaries for their business. Free Zone Entities and Free Zone Companies will further be allowed under the new regulations to be listed on the stock exchange as Public Listed Companies.
In fact JAFZA has now introduced for the first time a new legal entity type “Public Listed Companies (PLC)”. All legal entities such as the Free Zone Establishment (FZE), Free Zone Company (FZCO) and Branches are brought now under one structure of PLC. Restructuring of businesses from FZE or FZCO to PLC is possible and so is the vice-versa. In doing so, Jafza intends to bolster the business continuity in the Free Zone. Moreover, the foreign companies can easily transfer to the Free Zone whilst all their commitments remain valid. This will ensure international businesses find the Free Zone conducive for foreign investments.
With a more forward approach, Jafza has struck the blanket minimum capital requirement provision. Now, businesses ca be set-up with capital sufficient for the activities applied for. Also, the minimum requirement of shareholders now in an FZCO will be two and maximum will be fifty.
Shares will now be differentiated into various classes. This will provide flexibility to owners to provide voting rights to shares. Owners can now raise equity while retaining management over the company by providing management rights shares to the incumbent management.
Sultan Ahmed bin Sulayem, Group Chairman and Chief Executive Officer of DP World and Chairman of Ports, Customs and Free Zone Corporation, said: “The new regulations streamline all the mandatory legalities related to the registration, administration, legal benefits and obligations of organizations 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.”
The new regulations will allow FZE and FZCO to be listed on the stock exchange as PLC. Thus, these PLCs can now access capital through capital markets subject to relevant Markets Laws in the UAE.
Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts
