The regulatory body of the world's leading free zone, the Dubai Multi Commodities Centre (DMCC) has implemented a series of changes to its Company Regulations (the "Regulations") to enhance the clarity, control and flexibility afforded to businesses wishing to set up and thrive within the zone.
Since its inception in 2002, the DMCC has engineered a multi award-winning business environment regulated by the Dubai Multi Commodities Centre Authority (DMCCA). Serving as a gateway to global marketplaces, over 15,000 member companies are now registered in the DMCC, with 95% of those companies new to Dubai at the time of registering and ranging in size from large corporations to entrepreneurial start-ups.
In order to remain at the forefront of the Gulf region's business community and more closely aligned with international best practice, on 02 January 2020, the DMCCA introduced a number of changes to the existing DMCC company law framework.
Change for the better
Key changes to the proposed regulations include:
- Articles of association
The revised Regulations have made it easier for shareholders to determine how they wish to set out the rules for their DMCC Company. Companies can now adopt their own non-Standard Articles, giving them flexibility to choose between adopting Articles prescribed by DMCCA (Standard Articles); amending clauses within the Standard Articles; or adopting their own Articles if they meet the required standards and conditions established in the Regulations.
- Share types
The DMCC previously permitted only ordinary shares. However, under the new Regulations different share types such as treasury shares, preference shares, redeemable shares and bonus shares will be allowed. This means companies will have the option to structure their shareholdings in a way most suitable to them.
- Obligation to have a company secretary
Every company must have a secretary and should be appointed by resolution of the Directors. There are a number of qualifying criteria for the secretary to meet in order to be considered legitimate; details can be found in section 54 of the Regulations.
- New dormancy process
The Regulations introduce a dormant company status. This enables the voluntary suspension of a commercial licence. A company would not therefore, have to terminate its commercial licence if it wished to cease operations for a period and remove employees.
- New provisions for migration in and out of DMCC
If authorised by the laws and regulations of the jurisdiction in which it was formed, a non-DMCC entity may make a Continuation Application to the Registrar to continue as a company. Similarly, if authorised by a Special Resolution and the Registrar, a DMCC company may apply to the body of another jurisdiction to transfer its registration and request that the company be continued as a non-DMCC entity.
Among other changes, the Regulations further clarify and adapt existing rulings concerning officeholders, directors and the timeframes for the submission of audited financial statements. It is important to note that each company must adopt the amended articles within 24 months of the date the Regulations came into force (02 January 2020).
A commitment to excellence
The Regulations demonstrate the DMCCA's ongoing commitment to invest in the innovation of its regulatory infrastructure framework, cementing its position as the leading free zone in the Gulf Cooperation Council.
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