The President of the United Arab Emirates, His Highness Shaikh Khalifa bin Zayed Al Nahyan, has issued a decree abolishing the minimum capital requirement for setting up a limited liability company in the UAE.

Summary of the new law

The decree amends Article 227 of Federal Law No.8 of 1984 (UAE Companies Law) which provided that the minimum share capital of a limited liability company must be no less than AED 150,000 divided into equal shares of minimum value of AED 1,000 each.

Under the amended law, prospective business partners seeking to establish a limited liability company will have the freedom to determine the capital requirements of their new company and there will be no minimum par value for the company’s shares. The law provides that the limited liability company must have a “sufficient capital … to achieve the object of incorporation”.

The amended law will come into effect on publication of the decree in the UAE Gazette, but will apply retrospectively to companies established on or after 1 June 2009.

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