Law and regulation of private placement of common stock in Dubai

1. Prospectus requirement

  • Offer of securities to the public.
  • Issue of securities to be listed on a regulated exchange.

2. Prospectus exemptions

Key exemptions

Exempt offers

  • offer to professional clients who are not natural persons;
  • offer in or from the DIFC directed at fewer than 50 persons in any 12 month period, excluding professional clients who are not natural persons;
  • an offer where the total consideration to be paid by a Person to acquire the Securities is at least USD 100,000, or an equivalent amount in another currency;
  • an offer where the total aggregate consideration offered is less than USD 100,000 (or equivalent) calculated over a period of 12 months;

Exempt securities which may be admitted to trading without a prospectus

  • shares representing, over a period of 12 months, less than 10% of the number of shares of the same class already admitted to trading on the same DFSA authorised market institution (being DFSA licenced exchanges and clearing houses);

3. Ability to offer shares to

3.1 Institutional/professional/authorised investors (for example investment funds, insurers, pension funds)

Yes.

3.2 High net worth individuals 

Yes if they meet the requirements for ‘Assessed’ Professional Client which includes individuals who:

  • have net assets of at least USD 1m; and
  • either (i) are, or have been in the previous 2 years, an employee in a professional position at a DFSA authorised firm or other regulated financial services institution; or (ii) appear, on reasonable grounds, to have sufficient experience and understanding of relevant financial markets, products or transactions and any associated risks, or close family member joint account holders of persons meeting the above criteria.

3.3 Retail/public/others

Yes, on the basis of an approved prospectus or subject to the requirements and exemptions referred to in paragraph 2 above.

4. Can the issuer approach potential investors on their own?

Yes, subject to the requirements and exemptions referred to in paragraph 3 above.

5. Can the issuer's financial adviser/ placement agent approach potential investors on their own?

Yes, subject to the requirements and exemptions referred to in paragraph 3 above.

Any advisor or placement agent not licensed in the DIFC must ensure it is not breaching the financial services prohibition and must consider and comply with restrictions on financial promotions.

6. Are there any other exemptions which may be relied on?

Response to genuine unsolicited reverse enquiries.