UAE law has been dynamic to help attract international investors and support its rapidly growing economy.
The UAE has a diverse range of business law principles that are derived from various legal sources and aim to create favorable conditions for both domestic and foreign fi rms. UAE Civil Code, Commercial Companies Law, and Federal Law No. are the key regulations governing businesses. 2. Important aspects of UAE business law.
1. Commercial Companies Law
The UAE Commercial Companies Law outlines the steps for creating, managing, and dissolving a company. It outlines different business models, such as:
In the UAE, an LLC is a prevalent business type that mandates two shareholders at least, but it limits its size to 50. Newly revised regulations in certain industries permit foreign investors to possess 100% of an LLC’s assets.eu.
Private and Joint Stock Companies (PJSCs and PrJSC) are larger companies that divide their ownership into shares and can be publicly traded. PJSCs can be used to raise funds through public offerings. This is the case for many companies.
2. Foreign Ownership and Investment.
Foreign ownership is a significant concern in UAE business law. Conventionally, outside of free zones, a foreigner was required to have ‘a local partner’ owning 51% of the business. Despite this, the UAE has been permitted to have 100% foreign ownership in various fields due to the implementation of the Foreign Direct Investment Law of 2018 and amendments in 2020. This step is aimed at diversifying the economy and drawing in more international companies, rather than just those dependent on oil.
3.Free Zones
Free zones, which are controlled by their respective regulatory bodies, are available in the UAE with advantages such as 100% ownership by foreign entities, tax exemptions, and customs benefits. Free zones such as DiFC, ADGM, and JAFZA can be found. Various free zones have their regulations, and some off er financial incentives to specific industries like technology or trade, finance, or media.
4. Employment Law
The Labour Law of the UAE as per the Federal Law No.).?… 8. Working hours, wages, safety measures, and termination procedures. Etc A ree is regulated by law. While free zones may have their employment laws, all are subject to the general provisions of UAE labor law.
5. Taxation
The UAE has a reputation as one of the world’s most business-friendly countries, with zero personal income tax for individuals and low corporate income taxes on profits. 2018 saw the UAE implement a 5% Value-Added Tax (VAT) on most goods and services. This is significant. With the introduction of VAT, the UAE remains a favorable location for companies to establish and maintain their businesses due to its low overall tax burden.
6. Dispute Resolution
The UAE has a comprehensive legal system in place for dealing with commercial disputes. Companies have the option to dispute issues through the courts or arbitration in the UAE. Among the reasons for this popularity, arbitration is highly efficient and confidential, with organizations like DICA (Dubai Exhibition of Arbitration) or ADCCAC (National Centre of Mediation and Research in Communications and Administration) providing commercial dispute resolution services.
7. Intellectual Property (IP) Laws.
Intellectual property rights are a top priority for the UAE. Why? In the UAE, IP laws encompass trademarks and patents as well as copyrights or industrial designs. By adhering to international treaties such as the Paris Convention for the Protection of Industrial Property and also the Berne Convention, UAE’s IP regime is more in line with international law.
Recent Developments in UAE Business Law ?
The UAE has been actively enhancing its legal system to ensure it remains competitive in the global market. For example, the Bankruptcy Law of the UAE (Federal Law No.) provides an example: 1. 9. Moreover, the latest Corporate Tax Law (Federal Decree-Law No. 47