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Legal support order form on consultation on company incorporation in the UAE

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Because of its contribution to the growth and diversification of the UAE’s economy, registering SMEs in the UAE was and still is a top priority for its government. To ensure further development of SMEs, it has implemented several initiatives aimed at making SMEs more successful.

For those interested in setting up a large enterprise in the United Arab Emirates accessing capital market through IPOs in the UAE should be the best option. In addition to attracting funds from investors, IPO creates more lending opportunities & raises the level of business internationally.

However, launching an IPO in the UAE may prove to be costly & require a lot of effort, especially if a company tries to attract a significant share of capital.

The share of capital SMEs can raise is comparatively small, which is why preparing for entering the market of IPO in the UAE will be cheaper.

Please note that the list of services provided by IQ Decision UK includes preparation for entry in the market of IPO in the UAE.

Changing Market Realities

Last year, DFSA issued a special directive whereby SMEs will have a significantly easier time accessing capital markets. This has been achieved due to the reduction of costs and simplification of certain IPO criteria. 

Registration of SMEs in Dubai is now pivotal on regularly updated legislative framework. Launching a new segment of SMEs is scheduled to take place in the 4th quarter of 2020. The general expectation is that it’ll be operating in parallel with the existing market before eventually transitioning into it.

Major Changes

Opening a business in Dubai and gaining access to NASDAQ DUBAI is possible for foreign businesses as well. Since they’ll be considered SMEs, requirements for their market capitalization will also be far less stringent before and after IPO. However, if it exceeds five hundred million dollars, they will be expected to comply with certain requirements.

Here’s what SMEs intending to undertake an ICO will be exempted from:

  • Registering SMEs in the UAE now requires no compliance with market capitalization quotas, nor stakeholder regulations.
  • SMEs won’t need to designate a bank to enter the IPO market. Instead, they are required to only appoint a compliance consultant. 
  • Only an annual financial report is required. 
  • There is currently a 1-year lock-in requirement for all SME stakeholders, which protects investors and helps retain essential personnel & senior managers.
  • There is currently a 2-year limitation prohibiting SMEs from re-buying their own stakes. It is assumed that this limitation will provide capital protection for the development of SMEs and help ensure alignment of the interests of current & potential investment-oriented entities.
  • A fee of fifteen thousand dollars & an annual fee of twenty thousand dollar are only required to launch an ICO in the UAE.

Establishing SMEs & entering the market of IPO in the UAE implies compliance with different kinds of requirements, both domestic & international ones. The aforementioned changes in SME-related legislation are meant to help SMEs at early stages of their life cycle, as well as provide their managers and investors with an additional chance to raise capital.

Legal Advice

 

IQ Decision UK can help you register a small and medium-sized enterprise in the UAE, provide recommendations on acquiring control over SMEs, and give legal advice on entering the IPO market in the United Arab Emirates.