Dubai: New legislation that consolidates commercial laws and regulations in Dubai will cut red tape for investors and clear the way for companies operating in free zones to open branches in Dubai.
It will also create a unified business registry for the emirate. However, it may not have an immediate impact in boosting investment in the emirate, given the current financial situation and risk-aversion in global markets, analysts suggested.
The new law — number 13 of 2011 — was issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The Department of Economic Development (DED) will be responsible for implementing the legislation.
"The issuance of the new law will strengthen the investment environment of Dubai, promote its competitiveness and underline the city's status as a regional business hub," said Sami Al Qamzi, Director General of DED.
The legislation will help clarify for investors the requirements to set up a business, according to a senior official at the Dubai Chamber of Commerce and Industry (DCCI).
"Dubai is already a thriving global business hub, but this new law will help enhance its positive reputation further.
"It will give clear guidelines to setting up and investing in business in Dubai and is a welcome addition to the city's commercial landscape," Hamad Bu Amim, Director General of the Dubai Chamber, told Gulf News.
The DED will be responsible for regulating and licensing all economic activity outside the free zones. The law also covers grievances regarding DED's decisions. The director general is entitled to form a committee to consider the complaints, and arrive at a decision within 30 days from the date of receiving the grievance.
The law also authorises the DED to manage all issues related to the inspection and control of intellectual property rights and commercial fraud, as well as strengthening the role of the government in consumer protection.
"The law marks a new phase in dealing with all issues related to the rights of consumers," said Omar Hamad Bu Shahab, CEO of the Commercial Compliance and Consumer Protection Division at DED.
The DED will also be responsible for issuing permits to retailers for promotional and marketing activities.
The law also stipulates that a business owner has the right to request the temporary suspension of a licence, without paying the associated fines.
Businesses licensed in the Free Zones can now operate outside these areas, based on agreement and coordination between DED and the Free Zone authorities, the new law states.
Business consultants welcomed the law, especially the creation of a single portal at the DED that investors can use as a one-stop shop to start up their businesses and complete their paperwork.
"It's a very good move by DED, as single window facilities are already successfully implemented in the free zones for years, so why not outside them? It will reduce bureaucracy and red tape in government departments and help encourage further investment in the country, which would otherwise be diverted to other advanced economies such as Singapore and Hong Kong," said Jitendra Gianchandani, Chairman of the Jitendra Consulting Group.
The DED should keep business consultancies updated with new regulations or changes so that they can make informed suggestions to investors, he said.
"At present, the DED doesn't inform or issue circulars to agents or consultants for any changes in the procedures. Every time you visit the DED, they surprise you with a new procedure," he said.
The law is in line with the UAE and Dubai's efforts to make it easier for investors to do business in the country, said Giyas Gokkent, chief economist at the National Bank of Abu Dhabi.
"This new law is definitely a positive and it is my understanding that Abu Dhabi is looking at introducing a similar measure. I do not think the law will have an immediate impact in terms of significantly boosting levels of investment coming into the UAE given the current financial backdrop and the attitude of risk aversion in global markets."
He added that amid the political unrest shaking the region, the new law would help boost Dubai's image as a save haven for businesses.
"Dubai is certainly considered to be a regional hub and it has benefited from the recent political turmoil seen across the region. New laws, such as the one issued this week, will only help strengthen Dubai's image as a place to conduct business with relative ease," he added.
"This law is a vital step in promoting economic growth and consolidating Dubai's position as one of the important commercial and economic centres internationally.
"The unification of the business registry will improve the UAE's rank internationally in terms of ease of doing business, and the use of a unified number for investors in the Free Zones," said Mohammad Shael, CEO, Business Registration and Licensing at DED.
