Companies established in the Jebel Ali Free Zone (JAFZ) can now apply to list shares on 
NASDAQ Dubai.

Jebel Ali Free Zone Authority (JAFZA) is the largest free zone in the UAE and hosts over 7,300 trade and manufacturing companies. NASDAQ Dubai is an international stock exchange, located in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority (DFSA).

There are currently a number of different companies regulations in JAFZ, pursuant to which different types of entity may be established. However, the various regulations do not provide a legislative framework which enables JAFZ entities to access capital markets, with both restrictions on the maximum number of shareholders permitted and prohibitions on companies offering their shares to the public.

As a result, JAFZ companies have, until now, been unable to come to market in the UAE. Whilst further details of the procedures and amended regulations are yet to be finalised, we understand that the intention of JAFZA is to facilitate listings as soon as possible. JAFZA has stated that it welcomes listings of regional arms of international companies as well as regionally owned businesses, and that it will be identifying companies that may benefit from listing.

It is anticipated that JAFZ companies seeking to list their shares with the DFSA and have them admitted to trading on NASDAQ Dubai will be subject to the same rules and regulations as other entities seeking a NASDAQ Dubai listing. This will include:

  • satisfaction of the listing criteria set out in Chapter 9 of the DFSA's Markets Rules, such as the entity having an expected market capitalisation of US$10 million and a 25% minimum free float; and
  • satisfaction of the criteria for admission to trading set out in the NASDAQ Dubai Business Rules, such as all shares of the relevant class being admitted to trading.

Once listed and admitted to trading JAFZ companies will be required to meet the continuing obligations required of all entities on NASDAQ Dubai, such as disclosure of financial information and compliance with corporate governance standards.

This development provides a new route for companies established in JAFZ to raise capital and is a further indicator of renewed confidence in the UAE's capital markets. With a number of high-profile listings in the pipeline and the recent upgrade by the MSCI from frontier to emerging market status, it is anticipated that the next few years will see a marked increase in capital markets activity across Dubai and Abu Dhabi.