Transferring shares in a UAE free zone company — whether selling to a new investor, gifting to a family member, or restructuring ownership — requires free zone authority approval. Here is the process.
Steps for Share Transfer in a UAE Free Zone
Step 1: Board/Shareholder Resolution. Pass a resolution of existing shareholders approving the transfer of shares. The resolution must specify: transferor (selling shareholder), transferee (buying shareholder), number of shares being transferred, and transfer price (or nil consideration for gifting).
Step 2: Share Transfer Agreement. Prepare a Share Transfer Agreement signed by both parties specifying the same details as the resolution. Some free zones have standard templates; others accept any legally valid agreement.
Step 3: KYC for New Shareholder. Submit KYC documents for the incoming shareholder: valid passport, proof of address (utility bill or bank statement), source of funds declaration (for transfers involving cash consideration), and no-objection letter from current employer (if the new shareholder is employed in UAE and this is a second visa sponsorship).
Step 4: Submit Application to Free Zone. Submit: board resolution, share transfer agreement, new shareholder KYC, current trade licence copy, and updated shareholder register to the free zone authority via the client portal.
Step 5: Free Zone Approval. The free zone reviews the application and issues an updated trade licence and MOA reflecting the new shareholding structure. Processing: 5–15 working days. Share transfer fee: AED 500–3,000 depending on the free zone.
Tax Implications of Share Transfers
Under UAE Corporate Tax, a share transfer is generally not a taxable event for the company itself. The individual seller of shares in a UAE company is not subject to capital gains tax in the UAE. However, for shares in listed UAE companies, a securities transfer tax of 0.15% applies at the point of transfer.