Dubai’s IPO Surge: Capitalizing on Market Reforms and Investor Influx
Dubai IPO boom is expected with privatization, family business listings and tech start-ups.
4 min
Dubai’s growing IPO sector is fueled by a robust investment environment, supported by an increasing pool of High-Net-Worth Individuals (HNWIs) eager to capitalize on emerging opportunities.
This upswing is highlighted by the Dubai International Financial Centre (DIFC), a premier global financial hub in the MEASA region, which recently published a comprehensive report titled “Regional Outlook for Banking and Capital Markets” in collaboration with LSEG Data and Analytics.
The report outlines the expected growth of regional IPOs, which is anticipated to occur in three distinct phases: the continued privatization of state-related entities, listings by family-owned businesses, and the entry of FinTech and tech-enabled startups into the market.
Arif Amiri, CEO of the DIFC Authority, emphasizes that this increase in IPO activities is part of a broader expansion across the MENA region’s capital markets. This growth is largely attributed to reforms designed to improve market infrastructure and attract more foreign and regional investment.
“With its strategic initiatives and robust regulatory framework, DIFC plays a pivotal role in driving innovation and stimulating growth within the financial sector.
“Dubai’s IPO boom underscores the city’s status as a thriving hub for capital markets, and DIFC’s role in enabling this acceleration through the firms that drive capital markets and provide advisory services for IPOs will continue to contribute to the dynamic evolution of global finance.”
After a period of modest IPO activity, 2024 is poised for a revival, driven by postponed deals from 2023 that are now expected to benefit from improved market conditions. According to data from EY, 51 IPOs were launched in 2022, collectively raising $22 billion. The momentum is supported by both family-run businesses and public sector entities, contributing to greater economic diversity and liquidity in the private sector.
As of March 2024, Dubai had followed through on six out of the ten government entities it plans to take public, including Parkin, which was 165 times covered and attracted $71bn in orders – a new record for the emirate.
Another recent example includes the November 2023 listing of Dubai Taxi Co., a unit of Dubai’s Roads and Transport Authority (RTA), which raised $315m and was 130 times oversubscribed, while Saudi Arabia’s wider plans to privatize $55bn in assets by 2025 reinforce the increasing regional trend towards privatization.
From the private sector, the listing of family-owned companies is helping to drive business growth, succession planning and enhanced governance and transparency.
For example, Al Ansari Financial Services, one of the UAE’s largest remittance and foreign currency exchange companies, owned by a local family group raised $210m from its 2023 IPO, while Spinney’s (Spinneys 1961 Holding PLC), which was incorporated in DIFC to list its shares on DFM, thereby benefiting from its extensive laws, regulations, and stability, listed in April 2024.
Spurred on by the momentum of other, highly anticipated listings, such as Lulu’s forthcoming IPO, there is now an ever-growing list of demonstrable incentives for other family businesses to follow suit.
The wave of FinTech and technology-driven startups entering the IPO scene is also creating new industry sectors with high growth potential, thereby attracting a significant amount of investor interest, and providing substantial exit opportunities for venture capitalists.
Through increased IPO activity, banks, investment banks, brokerage firms and law firms within DIFC’s ecosystem also benefitted significantly from the privatization of state enterprises, with fees for MENA deals alone exceeding $1.2bn and proceeds from MENA equity and equity-related deals exceeding $13bn in 2023.
The DIFC, home to over 230 investment banks, is instrumental in driving these developments, with the region’s capital markets maturing under its stringent regulatory framework and commitment to fostering innovation.
Deepening of Dubai’s capital markets and market reforms, aligned with best practice have helped create greater opportunities for investors in different themes of the economy.
As outlined in the report by John Wilkinson, Head of Emerging Markets Equity Capital Markets and Managing Director, Goldman Sachs, DIFC is driving this growth as an attractive jurisdiction for incorporation, through its business-friendly approach towards the rule of law, and how the Centre has grown as a venue for global investors.
The region is home to a vast range of potential investors. Notably, these include family businesses, and wealthy individuals who are represented by the influx of wealth of asset management firms.
According to recent data, the UAE attracted a record-breaking number of High-Net-Worth Individuals (HNWIs) in 2022, which continued into 2023 and beyond.
Currently, there are an estimated 109,900 resident HNWIs, including 298 centi-millionaires and 20 billionaires, prompting DIFC’s estimated 370 asset managers to strengthen their presence in the emirate.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Compliance with these deadlines is crucial to avoid administrative penalties.
2 min
The UAE’s Federal Tax Authority (FTA) is urging Corporate Taxpayers to adhere to submission deadlines to avoid fines. Specifically, Resident Juridical Persons with licenses issued in May (regardless of the year) must submit their Corporate Tax registration applications by July 31, 2024, in line with Federal Tax Authority Decision No. 3 of 2024.
This decision aligns with the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments, effective from March 1, 2024. The FTA stresses the importance of meeting these registration deadlines, which have been communicated through various media channels and direct outreach to registered company owners in the UAE.
Utilizing the EmaraTax Platform
Compliance with these deadlines is crucial to avoid administrative penalties. The deadlines apply to both juridical and natural persons, including Resident and Non-Resident Persons in the UAE. Detailed information on these deadlines and other relevant issuances can be found on the FTA’s official website.
According to the FTA’s Public Clarification, Resident Juridical Persons established or recognized before March 1, 2024, must submit their tax registration applications based on the month their license was issued. Those with expired licenses as of March 1, 2024, should submit their applications based on the original issuance month. For those holding multiple licenses, the earliest issuance date applies.
Administrative penalties for corporate tax violations have been in effect since August 1, 2023. To facilitate the registration process, taxpayers must use the “EmaraTax” digital platform, available 24/7, or seek assistance from accredited tax agents and government service centers.
The FTA has also emphasized the importance of providing accurate information and submitting updated supporting documents correctly with the electronic registration application, noting that registering for Corporate Tax for a juridical person requires uploading various documents, including the commercial license, the Emirates ID card, the passport of the authorized signatory, and proof of authorization for the authorized signatory.
A comprehensive video explaining the registration process through the “EmaraTax” platform is available on the FTA’s website. This platform, designed according to international best practices, aims to streamline the registration journey, submission of periodic returns, and payment of due taxes for all UAE taxpayers.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
