Corporate Law at United Arab Emirates
Are you looking for information about Corporate Law in the United Arab Emirates (UAE)? Here’s an overview to get you started:
Corporate Law in the UAE: Overview
Corporate Law in the UAE governs the formation, operation, and regulation of companies and business entities within the country. It is a key legal framework that facilitates business activities and investment.
Key Elements of UAE Corporate Law
Legal Framework:
The primary legislation is the UAE Federal Law No. 2 of 2015 on Commercial Companies (also known as the Commercial Companies Law or CCL).
This law regulates companies, shareholders’ rights, corporate governance, mergers, acquisitions, and liquidation.
Different free zones within the UAE also have their own regulations governing companies registered there.
Types of Companies:
Limited Liability Company (LLC): The most common company form for foreign investors; requires a local partner holding 51% in mainland UAE (with exceptions).
Joint Stock Company: Suitable for larger businesses, with shares traded publicly or privately.
Sole Establishment: Owned by a single individual.
Branch of a Foreign Company: Allows foreign companies to operate in the UAE.
Free zone companies, which allow 100% foreign ownership under specific zones.
Foreign Ownership Rules:
Traditionally, mainland companies require 51% UAE national ownership.
Recent reforms allow 100% foreign ownership in certain sectors and activities.
Free zones offer 100% foreign ownership, but business activities are restricted to the free zone or outside the UAE unless a local agent is appointed.
Corporate Governance:
Companies must adhere to corporate governance rules laid down in the Commercial Companies Law.
Disclosure, transparency, and shareholder rights protections are mandated.
Registration and Licensing:
Companies must register with the Department of Economic Development (DED) in their respective emirate.
Free zone companies register within their specific free zone authorities.
Recent Developments:
The UAE has introduced Federal Decree-Law No. 26 of 2020 to regulate corporate governance and the activities of joint-stock companies.
New insolvency laws and amendments to commercial companies laws aim to enhance business environment and investor protection.
Practical Considerations
Business setup in UAE is attractive due to tax benefits, strategic location, and business-friendly laws.
Legal advice is crucial when navigating ownership structures, licenses, and compliance with local regulations.
Companies in the UAE must also comply with other relevant laws, such as tax, labor, and anti-money laundering regulations.
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