Sultan bin Sulayem: Changes reflect needs of an ever evolving market
Dubai, United Arab Emirates, 10 January, 2017: Jebel Ali Free Zone (Jafza), a DP World Company, and the UAE’s flagship trade and logistics hub for the Middle East region and Africa, has issued a new set of guidelines for the Jebel Ali Free Zone Companies Implementing Regulations 2016 that enables foreign companies to transfer and continue operations in the free zone without the need to open a branch or establish a new company.
For the first time, Jafza has brought together all the legal entities such as the Free Zone Establishment (FZE), Free Zone Company (FZCO) and Branches under one regulation and has introduced a new legal definition such as Public Listed Companies (PLC). Companies can restructure and rearrange their operations by converting from an FZE or FZCO to a PLC and vice-versa, enabling continuity of businesses in the free zone. Foreign companies will also be able to transfer to the free zone keeping intact all their commitments so attracting international businesses to Jafza.
In another amendment, businesses can now be set-up with capital sufficient for the activities applied for in place of the existing regulation that mandates a minimum amount of capital. This leaves owners to decide the adequacy of their capital for their business. Meanwhile, the number of shareholders in a FZCO will now be set at a minimum of two and a maximum of 50.
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.
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 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.”
Under the new regulations, the current FZE and FZCO type of entities will let customers list their company on the stock exchange by establishing a new legal definition namely the Public Listed Company. This will allow PLCs incorporated in the free zone to access capital through capital markets. The relevant Markets Laws in the UAE apply to a PLC.