181208 fnc council
The Federal National Council (FNC). FNC on Tuesday amended the 'Agency Law’ that regulates commercial agency and distribution agreements in the country. Image Credit: Ahmed Kutty/Gulf News

Abu Dhabi: Members of the Federal National Council on Tuesday approved a draft law amending certain provisions of the Federal Law no. 18 of 1981, otherwise known as the ‘Agency Law’ that regulates commercial agency and distribution agreements in the country.

Under the law, practicing the business of commercial agencies in the UAE is limited to citizens who are individuals or companies fully owned by citizens. Exempt from this rule are the public shareholding companies established in the UAE, in which the stake of the citizens is not less than (51%) of the company’s capital.

The commercial agency extends to the heirs in the event that the agent dies, according to the new law.

The changes come within the framework to enhance the country’s trade and investment development to boost the UAE’s competitive business climate in line with international standards and regulations.

The draft law aims to enhance the capabilities and continuity of family businesses, as well as to establish rules of governance and protection from defaulting, the Cabinet Secretariat added. The changes further encourage UAE citizens to engage in business activities, and invest in public shareholding companies while protecting their interests.

The amendments saw changes to certain provisions within the Agency Law, particularly concerning the business sector, public shareholding companies, UAE nationals and foreign investors.

The amendments target the aforementioned groups to contribute towards bolstering the UAE economy and increasing investments opportunities through the provision of high-quality services, and allowing family-owned companies the opportunity to turn into public joint stock companies. This, the General Secretariat statement explained, will open up varied opportunities for companies, allowing for continued growth for future generations.