How to Successfully Structure Share Capital for Your Dubai Start-Up 

Starting a business in the UAE can be overwhelming. While the UAE government has made business set up relatively easy, there are a few technicalities that need to be understood. Key among them is the need to understand structuring share capital. What is the right capital to start your business venture? Getting this right could mean the difference between a struggling startup or a thriving business.  

This blog breaks down everything you need to know about share capital structure in Dubai, the legal frameworks surrounding share capital, the right capital allocation, and ways to manage growth.  

What is share capital in the UAE? 

Share capital is the total value of the shares issued by your company. 

In simpler terms, it shows: 

• The amount each shareholder owns 

• The total investment put into the business by its owners 

You’ll find it officially documented in your Memorandum of Association (MOA), the blueprint of your company’s structure. 

Here’s the simple rule: In most cases, your initial share capital represents the amount of money the owners have actually invested when the company begins. 

• If you’ve put in AED 10,000, that’s your starting share capital 

• If it’s AED 1,000, that’s fine too especially when you’re just launching 

Good news: It doesn’t have to be a big number right away. Your share capital can grow over time as your business grows. Every time you inject more money into your company, it gets reflected in your balance sheet clean, simple, and traceable. 

In January 2022, the UAE introduced Federal Decree Law No. 32 of 2021, which completely transformed how businesses operate: 

What Changed: 

• Mainland LLCs now have NO minimum capital requirement you decide based on your actual needs 

• 100% foreign ownership allowed (previously you needed a 51% UAE national partner for most businesses) 

• Lower statutory reserve reduced from 10% to 5% of net profits 

This makes Dubai one of the most entrepreneur-friendly cities in the world. 

What are the different types of share capital in Dubai? 

To make better decisions on your business structure, it is important to understand the various types of share capital. 

1. Authorised Capital 

2. Issued Capital  

3. Paid-up Capital  

4. Subscribed and Called-Up Capital 

What are the minimum share capital requirements? 

The amount you need depends entirely on where you set up your company. 

Mainland Companies (LLC) 

• Minimum Required:  No statutory minimum 

• You can start with whatever amount makes sense for your business. 

• Must declare the amount in your MOA. 

• Full UAE market access with no restrictions. 

Free Zone Companies 

Free Zones have different requirements depending on which zone you choose: 

1. Abu Dhabi 

• No minimum capital requirement 

2. KIZAD (Khalifa Industrial Zone Abu Dhabi) 

• Minimum paid-up capital: AED 150,000 for LLC, confirm with KIZAD for your activity. 

3. Dubai Airport Free Zone (DAFZA) 

Minimum share capital: 

• Minimum share capital for non-aviation: AED150,000.  

• For Aviation related activities (Subsidiary) 500,000. For related activities (under Individual) 1,000,000 

• Each share must be in denominations of AED 1,000 

4. DMCC (Dubai Multi Commodities Centre) 

• Minimum: AED 50,000 per company 

• AED 10,000 per shareholder 

• AED 1,000,000 for General Trading License 

5. Hamriyah Free Zone 

• AED 150,000 for FZE (Free Zone Establishment) 

6. DIFC & ADGM (Financial Free Zones) 

• Higher requirements depending on license type 

• Varies based on regulated activities 

Share capital by industry and business type 

Different businesses need different capital levels. Here’s what makes sense: 

• Technology & Digital Services: AED 50,000 – 150,000  

Lower infrastructure costs mean you can start lean. Focus on covering software tools, talent, and marketing for 12-18 months. 

• Trading & E-commerce: AED 150,000 – 500,000  

You’ll need working capital for inventory, supplier deposits, and cash flow management. Banks also prefer seeing stronger capital for trade finance. 

• Professional Services: AED 100,000 – 250,000  

Covers office setup, professional licensing, insurance, and building initial client trust. Examples:  consultancies, law firms, accounting practices. 

• Manufacturing & Industrial: AED 500,000+  

Equipment, facility setup, and regulatory compliance cost serious money. Plan for at least 18 months of runway before breaking even. 

• Financial Services & Real Estate  

Heavily regulated sectors often require AED 1,000,000+, depending on the specific license and authority requirements. 

Looking to start a business in UAE? Find out how much it costs with our cost calculator. Get an estimate for Dubai license prices, small business expenses, and mainland company formation fees. 

How to structure share capital in your Dubai start-up? 

Structuring your share capital effectively involves five critical steps that will set the foundation for your business success: 

Step 1: Determine your capital requirements 

Start with a realistic calculation of how much capital your business actually requires. This ensures you’re financially prepared and aligned with investor and banking expectations. 

How to calculate: 

• Estimate 12-18 months of operating expenses (licences, rent, salaries, utilities, marketing). 

• Add a 50% buffer for unexpected costs or opportunities. 

• Review industry standards so your capital matches market expectations. 

• Consider banking thresholds, many UAE banks prefer companies with AED 50,000-300,000 in capital or balances. 

Step 2: Choose your business setup structure 

One of your first major decisions will be choosing between establishing your company in a Dubai Free Zone or on the mainland. This decision will significantly impact both share capital requirements and how the business can operate in the UAE market. 

Free Zone	Mainland
Set authorised capital based on zone requirements	No legal minimum capital requirement
Plan for capital deposit requirements	Focus on practical banking and credibility needs
Flexibility in share structure within zone regulations	No restrictions on business location within the UAE
Consider market access limitations	Plan for full UAE market access benefits
Documents Required: Free Zone application Draft Memorandum of Association (MOA) Passport copies of shareholders	Documents Required: Trade name reservation & initial approval certificate MOA and Articles of Association (AOA) Ejari (lease contract) Passport copies of shareholders

Ready to find the best setup for your business? Stratrich provides solutions for UAE Free Zone and mainland company formation. Get expert guidance by our UAE Specialist. 

Step 3: Structure equity and ownership 

After determining the amount of capital, decide how to divide it among the founders, employees, and future investors. 

• Founders: Fair division of equity according to amount invested, skills and dedication. 

• Vesting: Protect the company by using a 4-year vesting schedule with 1-year cliff. 

• ESOP: Reserve 10-15% for employee stock options to attract and retain talent. 

• Future investors: Authorise more shares than initially issued to allow easy fundraising. 

• Investor protections: Use anti-dilution and pre-emption rights in agreements. 

Main documents: 

• Shareholder Agreement 

• Cap Table (ownership breakdown) 

• ESOP Policy (if applicable) 

Step 4: Legal documentation and registration 

Your capital structure must be legally documented and registered with the relevant authority. The essential documents are: 

• Memorandum & Articles of Association (MOA/AOA): Defines share capital, shareholders, and company purpose. 

• Shareholder Agreement: Sets rules, rights, and responsibilities. 

• Share Certificates & Register: Official record of ownership. 

• Corporate Governance Policies: Board powers, voting rights, and decision-making rules. 

Registration process: 

1. Reserve your trade name and get initial approval. 

2. Draft and notarize MOA/AOA with share capital details. 

3. Submit incorporation documents to Free Zone authority or Dubai Economy (for mainland). 

4. Obtain your trade licence. 

5. Open a corporate bank account. 

6. Deposit paid-up capital (if required by your Free Zone). 

Step 5: Implement ongoing capital management 

Managing share capital is not a single one-time activity because it requires constant management in order to remain in compliance and prepared to expand. 

What to maintain: 

• Updated shareholders register and share certificates. 

• Accurate cap table using digital tools. 

• Board and shareholder resolutions for any ownership/capital changes. 

• Compliance with Free Zone or DED reporting requirements. 

• Annual financial reports and income tax returns (Note: 0% corporate tax on profits of up to AED 375,000, and 9% higher than that unless the exemption as a qualifying Free Zone entity).  

Growth planning: 

• Track dilution during funding rounds. 

• Update agreements and governance documents as the business evolves. 

• Keep investor and employee shareholding transparent and well-documented. 

The strategic approach to capital planning 

Instead of just trying to meet the minimum requirements, consider the overall strategy of your capital structure: 

• Estimate or project your initial 6-month operating expenses (rent, salaries, utilities, marketing). 

• Add a 50% buffer for unexpected costs and opportunities. 

• Consider your industry’s credibility expectations. 

• Plan for growth capital needs till the business becomes profitable. 

• Factor in banking and regulatory preferences. 

Conclusion 

UAE presents unique opportunities for entrepreneurs eager to navigate its business environment carefully. Your startup’s capital structure is the building block on which your whole business will be constructed. It will influence everything from day-to-day operations to exiting someday in the future. 

The regulatory climate has never been better for global entrepreneurs, with lower entry barriers, more foreign ownership rights, and strong government promotion of innovation and business growth. Yet, success of a startup still depends on meticulous planning, effective execution, and continuous compliance management. 

The question isn’t whether Dubai is the appropriate location for your start-up – it’s whether you’re prepared to capitalise on the opportunities available. 

With proper share capital structuring and the right professional support of Stratrich Consulting, your Dubai start-up can be positioned for both immediate success and sustainable long-term growth.