How private-company secondary shares work in the UAE

What a secondary is

A secondary transaction is the sale of existing shares from one holder to another. Unlike a funding round, the money goes to the selling shareholder, not the company. In the UAE, secondaries can involve founders, employees with vested equity, angels and early funds.

Why shareholders sell

Exits can take a long time. A founder may want partial liquidity to reduce personal risk, an employee may want to realise part of their equity, and an early investor may want to return capital. Buyers may see a chance to join a company they could not otherwise access.

Transfer restrictions

Private shares are rarely freely transferable. Common restrictions include:

• Board or shareholder approval required for any transfer
• Pre-emption or right-of-first-refusal rights for existing shareholders
• Lock-ups, vesting conditions and employee share plan rules
• Requirements in the articles of association or free-zone regulations

Pricing

There is usually no market price. Secondary sales are often negotiated at a discount or premium to the latest funding round, depending on the company’s performance, the type of shares and demand. Common shares held by employees may carry different rights from preferred shares held by investors.

How a sale typically happens

A seller checks what their documents allow, finds a suitable buyer, agrees terms, obtains any required approvals and completes the legal transfer, which may include updating the share register with the relevant authority. Each step needs proper legal advice.

Where SUMMIT fits today

SUMMIT is exploring demand for private-company secondaries during Early Access. Registering a holding is private and non-binding. There is no guaranteed buyer, price or timeline, and transaction execution is not live.