In the United Arab Emirates (UAE), the procedure of transferring shares inside Free Zone Establishments (FZEs) and Free Zone Companies (FZCOs) is subject to particular rules that are particular to each free zone. To ensure compliance and enable seamless ownership transitions, it is crucial to comprehend the differences between FZEs and FZCOs as well as the protocols for share transfers in different free zones, such as the Dubai Multi Commodities Centre (DMCC) and Jebel Ali Free Zone (Jafza). This article will clear all the rules related to transfer of ownership in Jabel Ali Free Zone and how IFZA approved auditor, MAF Middle East can help you in share transfer in UAE.
What Is the Difference Between FZE and FZCO Company in Dubai
Within a free zone in the United Arab Emirates, a Free Zone Establishment (FZE) is a legal entity held by a single shareholder, who may be a corporation or an individual. This structure, which offers 100% foreign ownership and limited liability protection, is perfect for sole proprietors or companies looking for total control.
An FZCO, or Free Zone Company, on the other hand, can have a number of shareholders, usually between two and fifty, who may be either people, corporations, or a mix of the two. Partnerships, joint ventures, and companies looking to grow and add more investors can all benefit from this structure. Similar to FZEs, FZCOs offer complete foreign ownership and limited liability protection.
Important Distinctions Between FZE and FZCO
The number of shareholders is the main way that a FZE and a FZCO company Dubai differ from one another:
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FZE: One shareholder, either a person or a business.
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FZCO: A company with two to fifty shareholders that permits joint ownership and decision-making.
This distinction affects the company’s governance, decision-making procedures, and prospects for further growth or investment.
Procedures for DMCC Share Transfer
One of Dubai’s most well-known free zones, the Dubai Multi Commodities Centre (DMCC), provides firms with a strong regulatory framework and a prime location. A DMCC-registered corporation must take many crucial actions in order to transfer shares.
Internal Share Transfer
When shares are moved between current shareholders, this is known as an internal share transfer. The business must make sure that all authorized signatories have activated their e-signatures and that its Memorandum of Association (MOA) is updated in accordance with DMCC standards.
Transfer to a New Individual Shareholder
The following paperwork is needed when a new individual shareholder is introduced:
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A copy of a valid passport that is valid for at least six months
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Copy of a UAE residency visa (if applicable)
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Form for specimen signatures
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Copy of Emirates ID (if applicable)
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Evidence of a valid residence address (within the last six months)
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If applicable, a No Objection Certificate (NOC) from the local sponsor
Transfer to a New Corporate Shareholder
Extra paperwork is required if the shares are going to a corporate body. This paperwork includes:
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A board resolution authorizing the purchase of stock
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A certificate of incumbency or a comparable record
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Valid company license and Certificate of Registration
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MOA or Articles of Association of the parent company
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Ultimate Beneficial Ownership declaration
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Passport copies of the parent company’s directors
It’s crucial to remember that there shouldn’t be any active sanctions against the business, and the license must be current during the share transfer ownership procedure. Additionally, the company must obtain a NOC from the appropriate regulatory body if it participates in regulated activities.
Procedures for Share Transfers in the Jebel Ali Free Zone (Jafza)
Another important free zone in Dubai that provides a favorable atmosphere for enterprises is Jafza. The following steps are included in the Jafza share transfer process:
Start the Procedure
Enter your login credentials, go to “Registration,” and then choose “Registration Amendment – Approval.” Select ‘Share Transfer’ to send in the necessary files.
Documentation Required
For Individual Candidates
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Details about the founder (Curriculum Vitae)
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Signature of the specimen
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Passport copy
For Corporate Applicants
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Certificate of Registration/Formation, notarized and attested by the UAE Embassy
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Certificate of Good Standing, similarly notarized and attested
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MOA and Articles of Association, notarized and attested
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Board Resolution approving the investment in the existing company, notarized and attested
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POA, notarized and attested
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Specimen signature and copy of the POA holder’s passport
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UBO form
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Incumbency Certificate
Fees
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FZCOs: AED 2,000 per share, up to AED 50,000
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FZEs: AED 20,000 per share, up to AED 50,000
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Additional fees apply for new share certificates and amendments to the MOA
The Registrar has the authority to request more documents if needed, and the processing time is normally between six and seven working days.
IFZA Approved Auditors Like MAF Middle East Must Be Chosen for Share Transfer in the Free Zones
To guarantee adherence to regional laws, the International Free Zone Authority (IFZA) requires that an authorized auditor be involved in share transactions. To help companies transfer shares smoothly, FAR Consulting Middle East collaborates closely with auditors who have been approved by IFZA.
Conclusion
Following each free zone’s unique regulations is essential when transferring shares within a FZE or FZCO. FAR Consulting Middle East ensures regulatory compliance and smooth ownership transitions by offering complete support for share transfers within DMCC, Jafza, and IFZA.
Get individualized help with your share transfer procedure by getting in touch with FAR Consulting Middle East, your reliable guide to UAE free zone laws.