Companies can now issue preference and tiered shares, tailored to specific governance needs
Dubai World Trade Centre Authority (DWTCA) has launched an extensive framework that allows registered companies within the DWTC Free Zone to issue various classes of shares tailored to their strategic objectives. This significant reform enhances flexibility in capital structuring and governance, empowering businesses to expand, attract investment, and foster innovation. It further strengthens Dubai’s position as a global business hub and supports the Dubai Economic Agenda, D33, which aims to double the size of the emirate’s economy by 2033 and establish it among the world’s top three urban economies, according to a statement.
Expanded share class options
Under the new framework, companies registered in the DWTC Free Zone can now issue a wider array of share classes beyond the traditional ordinary shares. This includes preference shares, founder’s shares, restricted shares, and tiered structures such as class A/B/C/D shares. These share structures can be customized through a company’s Memorandum of Association (MOA) to delineate specific rights and restrictions covering dividend entitlements, voting powers, transfer conditions, redemption or conversion options, and protections for minority shareholders. The DWTCA framework also implements robust governance safeguards designed to protect shareholder rights and uphold transparency.
Commenting on the announcement, Abdalla Al Banna, VP of Free Zone Regulatory Operations at DWTC Free Zone, stated: “With this pioneering step, the DWTC Free Zone is setting a new industry standard for capital structuring in the region. By aligning with Dubai’s vision to be among the world’s leading global business hubs, we are creating an environment that empowers companies to scale and attract investment. Today’s founders and investors need flexible and transparent corporate structures to balance control, raise capital and retain talent. This framework is not only a milestone for our Free Zone, but also a catalyst for the wider business community, reinforcing Dubai’s role as a progressive, globally competitive destination for enterprise and innovation.”
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Incentivizing talent with equity
By introducing differentiated share classes, DWTCA is equipping companies with the means to attract investment from stakeholders with varying risk appetites, safeguard founders’ long-term vision, assist family offices with succession planning, and incentivize talent through equity-based compensation. While ordinary shares will continue to serve as the default class for most companies, DWTC Free Zone businesses now enjoy the flexibility to adopt more sophisticated structures that support their sustainable growth and long-term planning.
This announcement builds on recent developments within the DWTC Free Zone, including the 2024 extension of its jurisdiction to One Za’abeel, the iconic sustainable project developed by the Investment Corporation of Dubai. This expansion further enhances the Free Zone’s scale and scope, combining world-class infrastructure with business advantages such as full foreign ownership, simplified licensing, 0 percent corporate tax, and a supportive regulatory environment. Currently, the DWTC Free Zone is home to companies across more than 40 sectors and remains committed to delivering tailored solutions that enable businesses to establish, scale, and succeed with ease.
