Telephone Numbers
Telephone Numbers
For detailed information +90 542 381 3868'Call.
With 100% foreign ownership, a strong financial infrastructure and a competitive tax regime, Dubai is a strategic base for companies that want to grow. As your business expands, a share capital increase becomes relevant to attract new investment, boost credibility or widen your licence scope. This guide explains step by step how to increase share capital in a Dubai company, the legal basis, required documents, timeline, costs and tax, all aligned with the current 2026 framework.
A capital increase is the process of raising a company's registered (authorised) capital by decision of its shareholders. In Dubai, mainland and free zone companies handle this before different authorities, but the core logic is the same: shareholders pass a resolution, the memorandum of association is updated, and the change is registered. In most free zones there is no mandatory minimum paid-up capital at incorporation; the capital is declared in the documents. A capital increase therefore often means formally raising the declared capital.
A capital increase is not just a change in a number; it is a formal expression of your company's growth strategy. Used to bring in new partners, raise existing partners' contributions or capitalise internal resources such as retained earnings, it strengthens both the legal and financial position of the company when handled correctly. In a competitive market like Dubai, a strong and transparent capital structure is an important element of trust for banks and investors.
Each of these reasons carries different weight depending on your company's stage. For an early-stage venture, a capital increase is usually tied to funding rounds, whereas for a mature company, expansion or reputation management comes to the fore. Whatever the reason, the timing and structure of the increase should be planned to align with your long-term goals.
For mainland companies, capital increases are governed by Federal Decree-Law No. 32 of 2021 on Commercial Companies and by Federal Decree-Law No. 20 of 2025, which amends it. The 20/2025 amendment entered into force in January 2026 and introduced significant flexibility in capital structuring.
| Step | Stage | Description |
|---|---|---|
| 1 | Shareholder Resolution | A special resolution is passed with a 75% majority and minuted. |
| 2 | Valuation | Independent valuation is done for any in-kind capital. |
| 3 | MoA Amendment | The new capital is recorded in the MoA and notarised/approved. |
| 4 | Authority Approval | Application to DED (mainland) or the relevant free zone authority. |
| 5 | Registration & Update | Trade licence and register are updated; the bank is notified. |
Before the increase, the current ownership structure, MoA and licence type are reviewed, and the target capital and share allocation are defined.
The shareholders' general meeting passes the special resolution. DED approves for mainland companies; the relevant free zone authority approves for free zone companies.
After approval, the trade licence and register are updated, and the bank and relevant institutions are notified if required.
| Item | Indicative Value | Note |
|---|---|---|
| Authority / amendment fees | Varies by company type | Based on DED / free zone tariff |
| Corporate tax | 0% (up to AED 375,000) / 9% (above) | 15% minimum (DMTT) for large MNEs |
| VAT | 5% standard rate | Mandatory registration threshold AED 375,000 |
| Processing time | Usually a few business days | Depends on completeness of documents |
Note: A capital increase itself is not "income", so it is not subject to corporate tax; however, the company's overall tax obligations (corporate tax, VAT) may change. Tax planning before the increase is therefore important.
How a capital increase works in Dubai depends on whether your company is a mainland or a free zone entity. For mainland companies, the process runs directly before the Dubai Department of Economic Development (DED), and the federal rules under Law 32/2021 and Law 20/2025 apply in full. Because these reforms now allow mainland LLCs to create different share classes, it is possible to build flexible capital structures with tailored voting and dividend rights for investors. This flexibility is a real advantage for venture capital and strategic funding rounds.
For free zone companies, the capital increase follows the internal procedures of the free zone authority where the company is registered. Each free zone (for example DMCC, IFZA, Meydan or JAFZA) has its own application forms, fee schedules and approval timelines. As a rule, most free zones require no mandatory paid-up capital at incorporation, but the new declared capital may need to be documented, and some zones may request bank confirmation. Confirming the relevant free zone's current requirements before starting is therefore essential.
Because a capital increase is a technical procedure, even small omissions can lead to rejection or delay. The most common mistakes include failing to pass the shareholder resolution correctly, drafting the MoA amendment incompletely or inaccurately, and neglecting the independent valuation report for in-kind capital. Failing to reflect the new share allocation in bank and accounting records on time can also create problems during later tax and audit processes.
Another key point is to handle the capital increase together with tax planning. While the increase itself is not a revenue item, the company's growing activity may affect corporate tax and VAT obligations. Working with an accountant or tax advisor before the transaction reduces compliance risk and makes potential costs predictable.
In practice, the most successful capital increases are those that combine legal precision with strategic clarity. Before you begin, define exactly why you are raising capital, how the new shares will be allocated, and what each shareholder expects in return. This upfront clarity prevents disputes, speeds up authority approval and ensures the updated structure genuinely supports your next phase of growth in the UAE.
Assuming the process is complete once the increase is registered is a common misconception. The new capital amount must be correctly recorded in the updated trade licence and company register. Authority and limit details on the company's bank accounts are then updated to reflect the change in ownership structure. Companies with international shareholders may also need to report capital movements in line with the regulations of the relevant countries.
Finally, keeping the updated MoA and resolution minutes properly archived greatly simplifies any future audit, new funding round or potential exit. A transparent and up-to-date corporate record structure directly enhances your company's credibility and investor confidence.
When planning the move from incorporation to capital management, our guides on setting up a company in Dubai and Dubai mainland company formation will also help.
World Company Setup manages the entire Dubai capital increase process end to end: drafting the special resolution, amending the MoA, valuing in-kind capital, submitting to the authority and completing registration. Our expert team ensures the process is fast, compliant and cost-effective.
Setting realistic expectations about timing is also important. If your documents are complete and accurate, DED approval for mainland companies and free zone authority processing are usually completed within a few business days. However, this can take longer when in-kind valuation, notarisation or additional signatures in multi-shareholder structures are required. At World Company Setup, we plan every step in advance to avoid delays and complete your capital increase without disrupting operations.
Most free zones have no mandatory minimum paid-up capital; capital is declared in the documents. Mainland requirements can vary by activity, so confirm the current position with the relevant authority.
If documents are complete, the process usually finishes within a few business days. It can take longer when an in-kind valuation is required.
The capital increase itself is not income and is not subject to corporate tax. However, the company's overall obligations (9% corporate tax, 5% VAT) may be affected.
Yes. Under Law 20/2025, mainland LLCs may add in-kind contributions such as real estate, equipment or IP to capital under Ministry of Economy valuation rules.
Under Laws 32/2021 and 20/2025, a capital increase requires a special resolution passed by shareholders holding at least 75% of the shares represented.
+90 542 381 3868
+971 58 5204103