ALERT MEMORANDUM Introduces Requirements for Certain Companies to List Their Shares on its Exchanges

February 7, 2021 On January 26, 2021, the Ruler of Dubai issued Decree No.3 of 2021 (the Decree) requiring public joint stock companies incorporated in Dubai, as well as public joint stock companies incorporated elsewhere in the UAE but with strong ties to Dubai, to list their shares on a Dubai . This comes further to the regulations recently issued by the UAE Securities and Commodities Authority (SCA) on November 2, 2020 permitting companies established in the UAE’s free zones to carry out public offerings and list their shares “onshore”.1 The Decree envisages close coordination with free zone authorities, and its application to free zone companies will depend on the signing of a Memorandum of Understanding between the relevant free zone and the SCA, as provided by the SCA regulations. The practical impact of the Decree is that companies established in Dubai that wish to list their shares, and companies established elsewhere in the UAE with a preponderant presence in Dubai that wish to list their shares, must do so on the Dubai stock exchanges (while preserving the ability to have secondary listings elsewhere). This seems to be a defensive measure to prevent these companies from listing outside the Emirate only. The Decree does not, however, prevent such companies from establishing a holding company outside the UAE that would not be subject to the mandatory listing provisions of the Decree.

The Decree distinguishes between three categories of companies: 1. Joint Stock Companies Incorporated in Dubai All public joint stock companies incorporated in Dubai (including in free zones) must list their shares on the Dubai stock exchanges (including the (DFM) and Nasdaq Dubai). In addition, private joint stock companies incorporated in Dubai (including in free zones) that elect to list their shares must do so on the Dubai stock exchanges. Such companies may also carry out a secondary listing on other stock exchanges in the UAE or abroad. While the Decree does not specify the basis on which free zone companies will be considered public or private joint stock companies, we expect Dubai International Financial Centre (DIFC) public companies limited by shares to be deemed public joint stock companies and DIFC private companies limited by shares to be deemed private joint stock companies. Free zone limited liability companies should not (depending on their characteristics) be considered joint stock companies.

1 Please refer to our Alert Memorandum on the matter for more information

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© Cleary Gottlieb Steen & Hamilton LLP, 2021. All rights reserved. This memorandum was prepared as a service to clients and other friends of Cleary Gottlieb to report on recent developments that may be of interest to them. The information in it is therefore general, and should not be considered or relied on as legal advice. Throughout this memorandum, “Cleary Gottlieb” and the “firm” refer to Cleary Gottlieb Steen & Hamilton LLP and its affiliated entities in certain jurisdictions, and the term “offices” includes offices of those affiliated entities. ALERT MEMORANDUM

2. Public Joint Stock Companies Incorporated in the UAE Outside of Dubai Public joint stock companies incorporated in the UAE outside of Dubai (other than those established pursuant to a federal decree) that have 50% or more of their annual profits or revenues generated from activities in Dubai, or 50% or more of their total assets located in Dubai, must list their shares on the Dubai stock exchanges within a year of reaching such thresholds. Public joint stock companies incorporated in the UAE outside of Dubai that do not meet such thresholds, but that have a branch, assets or activities in Dubai, may still elect to list their shares on a Dubai stock exchange. 3. Foreign Companies Incorporated Outside the UAE Foreign companies incorporated outside the UAE with branches, assets or activities in Dubai may elect to list their shares on the Dubai stock exchanges as a primary or secondary listing. * * * The Decree was published in the Dubai Official Gazette on February 4, 2021. Companies that are required to list their shares pursuant to the Decree must do so within a year of its publication. As a reminder, the minimum free float requirement is 30% for listing on DFM and 25% for listing on Nasdaq Dubai. While a public joint stock company could, theoretically, elect to convert into another legal form to avoid mandatory listing requirements, the conversion process under the UAE Commercial Companies Law is not straightforward and would require regulatory approvals. The diagram below provides a summary guidance on the applicability of listing requirements under the Decree. If you have any questions concerning these latest developments, please feel free to reach out to your regular contacts at the firm.

2 ALERT MEMORANDUM

IS THE COMPANY INCORPORATED IN DUBAI (INCLUDING IN A FREE ZONE)?

YES NO

Is the company incorporated in Is the company a public joint the UAE (other than pursuant to a stock company? federal decree)?

YES NO NO YES

Is the company The company The company a public joint must list its may elect to list stock company shares on a Is the company its shares on a with more Dubai stock a private Dubai stock than 50% of exchange within joint stock exchange as a its profits, a year from the company? primary or revenues or publication of secondary assets in the Decree. listing. Dubai?

NO YES YES NO

If the company The company must No listing intends to list its list its shares on the requirement, but No listing shares, it must Dubai stock the company may requirement. have a primary exchanges within a elect to list its listing on the Dubai year from reaching shares on a Dubai stock exchanges. such thresholds. stock exchange.

In both cases, the company may also carry out secondary listings on other stock exchanges in the UAE or abroad.

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