The Dubai International Financial Centre (DIFC) has reinforced its position as one of the world’s top financial and business centres, introducing changes to its companies regime and enhancing the ease of doing business in the centre. On 12 November 2018, the DIFC has issued amongst other laws and regulations, the DIFC Companies Law No. 5 of 2018 (Companies Law 2018), repealing the previous Companies Law No. 2 of 2009 (Previous Law). The changes are anticipated to provide greater flexibility for small and medium-sized private companies and reinforce corporate governance requirements for all DIFC companies.
What has changed?
- Companies recognized in the DIFC
The Companies Law 2018 no longer recognizes companies limited by shares (LTDs) and limited liability companies (LLCs). It instead introduces public company and private company as the types of companies recognized under the new law. In addition, the “recognized company”, which refers to a branch of a foreign company, remains as a legal form under the new law.
The DIFC Registrar of Companies (ROC) will automatically convert LLCs to private companies, and LTDs to either private or public companies, depending on their share capital, public listing status and number of shareholders.
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