New UAE Commercial Companies Law soon

Abu Dhabi: The new UAE Commercial Companies Law is in the final stage of revision and will be issued soon, according to government officials.

"The draft is already in the final revision stage, and we expect the law to be issued soon," explained Abdullah Al Saleh, the undersecretary at the Ministry of economy.

"The iconic 51 to 49 per cent notion will disappear, and the norm will be liberalising the market and opening up for foreign business," commented Ebrahim Yousuf Mubaydeen, managing partner at Simmons & Simmons.

The new law will replace the existing companies law, which is deemed by many as inconsistent with the robust economic development of the country. However, the new law, which was supposed to see the light by the end of 2006, is still being considered by the authorities.

Legal framework

"The reason for such delay is that this specific law is critical for the country's economic development as it has to deal with ever-changing issues related to the very heart of doing business," Mubaydeen explained.

The law will provide a general legal framework for establishing businesses in the seven emirates, while secondary legislations are to handle the details of the different sectors and geographic locations.

"The law would not set a specific sector to be 100 per cent open for foreign ownership, but it will rather set a general framework that can be built on," he added, explaining that specifying sectors or locations might need to be changed, hence this would affect the stability of the legal framework.

Al Saleh, revealed that the consumer protection department is up and running, and that the hotline is ready. "We are just awaiting the final executive bill for the department to get started, while the staffing has already started, though staffing and training it is an ongoing process," he said.

Other laws are also in the pipeline, including the Competition Law, which will set a healthier economic environment for businesses already operating in the UAE.