22 June, 2021

How to Establish a Joint Stock Company in Dubai?

open joint stock company in dubai

What is  a Joint Stock Company in Dubai? 

In Dubai, a joint stock company stands as a distinct business entity that mandates a minimum share capital. Depending on the number of founding members, you have two options: opt for a public joint stock company if there are over 10 founding members, or choose a private joint stock company, which requires less share capital.

How to create a joint stock company in Dubai?

Opening a private joint stock company in Dubai involves specific legal requirements to adhere to:

  • Minimum Share Capital: A minimum share capital of 2 million AED is mandatory. These shares must be divided among at least three members and cannot be publicly offered.
  • Local Ownership: At least 51% of the shares must belong to a local member. However, Dubai’s free zones legislation permits 100% foreign ownership.
  • Permitted Activities: Private joint stock companies are suitable for commercial or industrial activities. For professional activities, alternative organisational structures are recommended.

On the other hand, establishing a public joint stock company in Dubai requires a minimum share capital of 10 million AED. Members have the flexibility to negotiate their shares, with individual liability limited to their shareholding.

For expert guidance and legal counsel on setting up a joint stock company in Dubai, our attorneys are available to assist you throughout the process.

Essential Documents for Setting Up a Private Shareholding Company:

  • Feasibility Report: A detailed feasibility study outlining the viability of incorporating the private shareholding company.
  • Founders’ CVs: Curriculum vitae of the founders providing information about their qualifications and experience.
  • Attestation by Founders: Confirmation by the founders that all necessary registration procedures have been completed.
  • Draft Articles of Incorporation: Preliminary document outlining the company’s structure, objectives, and operational framework.
  • Draft Statute: Initial version of the statute governing the internal operations and regulations of the company.
  • Administrative Decision: Approval from competent local authorities confirming the company’s incorporation.
  • Certified Articles of Incorporation: Officially certified documents detailing the establishment of the company.
  • Statute Certification: Certification of the statute by the Chairman of the Board, ensuring compliance with legal requirements.
  • Bank Letter: Documentation from a bank indicating the full deposit of capital required for company formation.

These documents are crucial for initiating the process of setting up a private shareholding company, ensuring legal compliance and smooth establishment procedures.

Reason to Start Joint Stock Company in Dubai?

The joint stock company stands out as the ideal structure for implementing extensive projects or managing substantial assets. This setup consolidates significant funds and shareholders, enhancing the capacity for profitable business ventures in Dubai.

One key advantage of the joint stock company in Dubai is its flexibility in profit distribution. Additionally, this structure simplifies borrowing from banks, granting access to larger financial resources.

Advantages of a Joint Stock Company

1. Increased Capital
2. Limitations of Liability
3. Existence Stability
4. Scale economies
5. Expansion Potential
6. Public Acceptance
7. Professional Management
8. Transferability of Shares
9. Tax Benefits
10. Risk Diffused
11. Social Advantages
12. Increased Borrowing Power
13. Encourages saving and investing
14. Increased Adaptability
15. Increased Accountability
16.Capital and Capability Synergy

Disadvantages of a Joint Stock Company

1. Formation Difficulty
2. An absence of secrecy
3. Economic Power Concentration
4.Delay in Decision Making
5. Personal Interest Deficit
6. Increased Government Restraints
7. Management that is inept and unscrupulous
8. Excessive Speculation in the Company’s Stock
9. A Cold Work Environment
10. Various Rules and Regulations
11. Oligarchic Management
12. Conflict in Interests
13. Insufficient drive and a lack of personal touch
14. Ownership and management are kept separate.
15. False advertising and management
16. Negative consequences of large-scale operations
17. There is a lack of continuity and concealment.

Difference between a public and private joint stock company

A private joint stock company is one in which the members’ ability to transfer their shares, if any, is restricted; the number of its members (not including its workers) is limited to 50; and the public is not invited to subscribe for any shares in, or debentures of, the business.
When a group of persons owns one or more shares in a firm, they are considered as a single entity.
A public corporation is one that has no restrictions on its members’ rights to transfer their shares, if any exist; has no limits on the number of its members; and encourages the public to subscribe for any of the company’s shares or debentures.
Directors must either obtain consent to function as directors, sign a MOA, or enter into a contract for qualifying shares.

Creating a Joint Stock Company in Dubai

Opening a private joint stock company in Dubai has certain legal requirements, including a minimum share capital of 2 million AED. The shares must be distributed among at least three people and cannot be sold to the general public.
Free zones and mainland regulations in Dubai allow for 100% foreign ownership.

There are also certain restrictions on the kind of operations that a private joint stock corporation can engage in. As a result, a private joint stock corporation can be used for commercial or industrial purposes. If you want to do business professionally, you should opt for a different sort of corporation than a private joint stock company.

In Dubai, a public joint stock corporation requires a minimum share capital of 10 million AED and allows its members to bargain their interests in the firm. Each member’s liability is limited to the value of his or her shares in the joint stock firm.

Steps to open a joint stock company in Dubai

  • You’ll need to get a trade name approved if you haven’t already.
  • After that, you’ll need preliminary approval, which is a certificate that allows you to apply for a company license.
  • Depending on the nature of your business activity, you may additionally require authorization from other relevant authorities. For example-If you work in the insurance sector, you may need to apply for authorization from the Insurance Authority. If your company is in the healthcare field, you may need to seek Ministry of Health permission.
  •  You can apply for a business license online or in person at a Department of Economic Development (DED) customer service facility.



By following a few simple steps, you can open a joint stock company in Dubai. A joint stock company has it’s benefits and risks which should be carefully evaluated.It is advised to seek help from professionals when planning for a company registration in UAE.

How RadiantBiz can help you

In matters like business setup in Dubai, people tend to get confused and get in a chaos due to a number of rules and requirements. This is the time when people tend to look for an expert. A lot of chaos can be avoided if guidance is taken from the very beginning. Each venture may have unique requirements like location, customer convenience, logistical feasibility and banking services. Business setup consultants at RadiantBiz strive to understand these unique precepts and provide expert and reliable consultation to our clients with updated laws and governing regulations, awareness of their rights and cost effective business solutions tailored to their business needs and budget.