United Arab Emirates: An Outline About The JAFZA Company Regulations

Last Updated: 3 August 2017
Article by Global Business Services DMCC

The Jebel Ali Free Zone (JAFZA) issued new company regulations known as the Jebel Ali Free Zone Companies Implementing Regulations 2016. It was announced on 23 May 2016 and came into action in 24th August 2016. It focuses on development of market which shall provide facilities that are prompt, secure and form the best international practice.

The Regulations constitute major modifications of the JAFZA by repealing and replacing the Free zone Establishment Implementing Regulations No.1 of 1992 and the Free Zone Company Implementing Regulations No.1 of 1999. It brings about some new principles and key legislative changes. Earlier JAFZA had separate set of regulations governing free zone establishments and free zone companies, the changed Regulations 2016 bring all types of companies within JAFZA under one regulation.

Below are few of its features and key changes:


Although the federal laws of the UAE are stated in the Regulations to apply to a company and a branch within JAFZA, the Regulations have excluded Law No.2 of 2015 concerning Commercial Companies from the application to a company or a branch in the free zone. However, according to the Regulations, the company registrar of JAFZA ("Registrar") may apply certain provisions of the UAE Companies Law where the Regulations are silent on a certain matter.


Different entities like the Free Zone Establishment (FZE), the Free Zone Company (FZCO) and the branch of a company were permitted prior to the enactment of the Regulations. Under the new Regulations, Public Listed Companies (PLC) is recognized as a new type of company that can be established within JAFZA. It can have two or more shareholders and may offer its shares to the public in accordance with the market's law of the relevant stock market. Within nine months from the date of incorporation of the PLC, a PLC must list its shares on a stock exchange, unless time frame is extended by the Registrar.

As a further notable change in the Regulations, a civil company that is set up under the rules of the UAE Civil Transactions Law (Federal Law No. 5th of 1985) may be incorporated within the free zone. The Regulations give the Registrar the authority to prescribe guidelines for the incorporation and operation of a civil company in the free zone in addition to the rules that are contained in the UAE Civil Transactions Law. Accordingly, the types of entities that are currently recognized by JAFZA are now expanded and comprise the FZE, FZCO, civil partnership and the branch.


Previously, an FZE within JAFZA was required to have a minimum share capital of AED 1,000,000 and an FZCO AED 500,000. While now, with change under the Regulations, a company must only have a share capital that is sufficient for the activities for which it is licensed. This is conforming to the rules of UAE Commercial Companies Law which also requires a limited liability company to have capital that is sufficient for fulfilling its activities. As for a PLC, it is required to have an amount of a share capital that is either sufficient for the activities permitted under its license or the amount of capital required under the relevant markets law.


As per the previous JAFZA regulations for an FZE or FZCO, the contribution in kind for shares was not recognized. Now, with the new Regulations, shares can be issued in an FZE, FZCO (and PLC) for a noncash consideration unlike before where one could subscribe shares through cash only. This is workable only if a resolution is passed by the shareholders at a general meeting by more than 75 % of the votes of shareholders or any greater majority as may be prescribed by the memorandum of association. An auditor's letter and a resolution are required to support this value of consideration. This auditor's letter must be filed with the Registrar within four days from the date of passing the resolution. This principle gives the business a flexibility as well as options for subscription of shares or increasing the share capital of a company.


Earlier only Dubai International Financial Centre and the Dubai Creative Clusters Free Zone companies were permitting different classes of shares in the UAE. With modifications in the Regulations, different classes of shares are now available for businesses within JAFZA too. Rights attached to the shares may be varied by an amendment to the memorandum of association of the company if approved by a resolution consisting more than 75% of the votes of shareholders or by a resolution of all the shareholders holding the shares of the class whose share is being varied. A PLC may also have different classes of shares in accordance with its memorandum and articles of association.


According to the new Regulations, foreign companies can apply to the Registrar for the continuation of the foreign company as a company within JAFZA, as a FZE or FZCO without establishing a new entity.

In order to transfer the foreign company into JAZFA as an FZE or FZCO, the applicant must include specific information and documents including a resolution of the foreign company resolving the transformation. The free zone will issue the foreign company with a license and a continuation certificate once accepted. The date of the incorporation that will be reflected in the continuation certificate is the date of incorporation of the foreign company in its jurisdiction.

In addition to the above key changes, other changes include the recognition of electronic documents and signature giving an FZCO and PLC the right to purchase its own shares as treasury shares and prohibiting financial assistance to the directors of an FZCO and PLC.


By aligning company's legislation in line with global best practices and standards, the Regulations marked a significant step forward which will benefit JAFZA and empower it to attract foreign business and investments in a better way. However, implementation of some aspects of the Regulations needs to checked; especially the incorporation of a PLC and change of domicile of companies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.