One of the main reasons foreign investors come to Dubai is the variety of types of companies they are allowed to set up in the Emirate. From the simplest form of sole proprietorship to more complex types of structures and free zone companies, Dubai provides for one the most flexible legislation for starting a business. A great number of entrepreneurs reaching success with a small business are inclined to change company type in order to further develop their business. The Dubai Commercial Code allows for business transformation, but only in certain cases. One of the most common is going from sole trader to limited liability company.
For information about the Company Law on changing types of business structures, you may refer to our law firm in Dubai.
How to change company type in Dubai?
The procedure for transforming a company into a different type of structure in Dubai is quite simple, as it implies a shareholders’ agreement and amending the business license. However, one must pay attention to the fact that certain limited liability companies in Dubai cannot change their structures because of the limitations imposed on foreign ownership. In this case, starting a new business is required. Private companies, on the other hand, can change their status to public or joint stock companies in order to be listed on the Stock Exchange.
All changes brought to a company’s structure must be recorded with the Department for Economic Development (DED) in Dubai.
What changes can be brought to a Dubai company?
A Dubai company can undergo the following transformations:
- – ownership-related changes,
- – business activity-related changes,
- – changing of company name,
- – capital increases or reductions.
All these changes may occur once the company’s Memorandum and Articles of Association have been amended. Also, once the company has changed its status, all assets and liabilities will be passed on to the new company.
Steps to change company status in Dubai
The following steps must be completed in order to change company type in Dubai:
- – submitting the changes with the Dubai Trade Register,
- – obtaining all approvals related to the changes brought to the company,
- – amending the company’s incorporation documents,
- – submitting all updated documents with the Trade Register.
For assistance in changing company types, do not hesitate to contact our lawyers in Dubai.