New Companies Law to boost UAE listings

05 April 2015

Minimum free float reduced for companies looking to IPO

The UAE’s new Companies Law is expected to encourage more companies to consider listing on the local exchanges.

The legislation, which was announced on 1 April, allows firms to float just 30 per cent of their shares on the exchange, rather than the previously required 55 per cent.

The reduction in the minimum free float could make listing on the Dubai and Abu Dhabi exchanges more appealing for companies and increase the pipeline for regional initial public offerings (IPOs). The move also brings UAE legislation in line with other international exchanges, such as the London Stock Exchange (LSE).

The new law also aims to improve corporate governance standards within UAE companies.

Other elements of the legislation allow individuals to set up a private or limited liability company. Listed companies can also now increase their capital by converting cash debt into equity.

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