DMCC Issues New Regulations – Action Required for those operating in DMCC
The Dubai Multi Commodities Centre (“DMCC”) has issued new Companies Regulations 2020 (“New Regulations”), along with Employment Rules, Licensing Rules, Officers Rules, Community Regulations and Health, Safety And Environment Regulations which came into effect on 2 January 2020.
The New Regulations require existing DMCC companies to undertake certain actions in order to comply whilst offering them new opportunities for their company structure. The New Regulations also make DMCC even more appealing to small and medium-sized private companies or investors.
The New Regulations replace the DMCC Company Regulations 2003 and rules and regulations issued thereunder (“2003 Regulations”).
Key Differences Between the 2003 Regulations and the New Regulations
There are a number of significant differences between the New Regulations and the 2003 Regulations. The New Regulations:
- provide the option to have different classes of shares;
- removes minimum capital requirements except in case of few activities;
- permits re-domiciliation of companies to and from the DMCC;
- introduces the concept of voluntary suspension of a license (Dormancy);
- prescribes latest standard Articles of Association to be adopted by existing companies in order to be aligned with the New Regulations;
- allows the flexibility to make changes to the Articles of Association to reflect the shareholder requirements;
- introduces “Officer Rules” to address the roles and responsibilities for directors, manager and secretary;
- provides comprehensive provisions for regulating branches and issuance of an establishment certificate for new and existing branches;
- provides greater flexibility in conducting shareholder’s meetings;
- prescribes mandatory appointment of company secretary;
- prescribes maintenance of company registers; and
- introduces different methods of winding up a company.
Who Would be Interested?
The New Regulations apply to all entities currently operating in the DMCC and are of particular interest to those who wish to take advantage of the introductions made in order to re-examine the structure of their companies, as well as those who are considering operating in the Free Zone. These include small and medium-sized private companies or investors currently exploring the option of operating in DMCC.
Immediate Steps Required
DMCC mandatorily requires existing companies to undertake the following actions in order to comply with the New Regulations:
- amend existing articles of association of the company to the extent these are contrary to the New Regulations;
- appointment of a company secretary for companies that have not appointed one; and
- prepare and maintain company registers.
How we can Help
Our team would be delighted to assist you with the below:
- amend the articles of association of your company to comply with the legislative changes;
- drafting new articles of association in order to reflect shareholder’s specific requirements and providing the necessary legal opinion required by DMCC in this case;
- appointment of company secretary (if applicable);
- preparation and maintenance of company registers;
- advising and assisting you with setting up or changing the domicile of a company in DMCC;
- advising on how companies can take advantage of the “dormancy” if required for their business; and
- advising on the role and responsibilities of the officers of the company.