According to decree no 3 of 2021, the Public Joint Stock Company that have at least half of their assets or profits in Dubai have to list their stocks in any one of the Dubai Financial Markets. In case of existing PJSC which already are established in Dubai must be listed in any local Markets. The aim behind the provisions of the decree is to promote Businesses in Dubai and to break through the capital market by ways of augmenting liquidity as believed by Commercial Lawyers of Dubai.
There is a differentiation enumerated in the decree on the categories of the companies which will be under the scrutiny of different statutes. The three types of companies are:
- PJSC which are established in Dubai or the Free zones also known as the local companies.
- PJSC which are established outside Dubai but within UAE and the branches, assets or profits of such companies shall be in Dubai, namely the Non Local Companies.
- Any foreign company with its branches, assets or activities within Dubai, known as the foreign companies.
In case of a local company, the company has to list their shares in a local market following the requisites mentioned under article 2(a) of the federal legislation. In case the shares are not listed in the local markets, them a one year time period has been provided to compulsorily list the shares in the local market, but according to article 7, any relevant licensing authority can increase this time duration. Lastly, according to article 2(c) dual listing is prohibited in case of a local company.
As far as Non local companies are concerned, according to article 3(a) they will be subjected to mandatory listing if they fulfill the following requisites: (i) if the company gets about 50% of the profit or financial returns from the activities carried out in Dubai or (ii) if their 50% assets are located in Dubai. Further, article 7 as mentioned above, applies to non local companies.
According to article 2(b), the private joint stock companies will also be subjected to mandatory listing. They will have to enlist themselves on second market of DFM or else, they will have to convert themselves into PJSC in order to enlist in first one.
Next, the foreign companies will not have any mandatory requirement of listing. They can voluntarily do so if they want, in a form of primary listing or dual listing, keeping in mind the requisites mentioned by their respective local markets.
While looking at the impacts of listing, in case of local companies it is seen that there will not be much impact, since most of them will already be listed, but in case of future companies, they will have to face the impact as they will have to first fulfill the requirement of the local market. In case of non-local companies, it will be alluring to see how many such companies will come forward to list in DFM and lastly, the foreign companies will have an option to list which will act as an encouragement and not enforcement.
Copyright © of this article is retained by the author and/or other copyright owners. We explicitly grant you permission to download a copy, without any alteration, of this article for personal non-commercial research or study, without prior permission or any charge. This article can be utilized on your website or for marketing, however, we grant you permission to host this article on your website and no other rights. This content should not be altered in any way or sold commercially in any format without prior permission of the copyright holder. During reference of this article, full biographic details entailing the name of the author, his designation, the institute and the publishing date of the article shall be provided.
