Understanding the New UAE Commercial Companies Law: What You Need to Know
The UAE Commercial Companies Law is a set of regulations that governs the formation, management, and operation of companies in the United Arab Emirates (UAE). The law applies to all types of commercial companies, including limited liability companies, joint stock companies, and partnerships.
It outlines the legal requirements and obligations that companies must comply with in order to operate in the UAE, including the minimum capital requirements, the roles of shareholders and directors, and the reporting and accounting standards that must be followed. The law was recently amended in 2020 to reflect the changing needs of the country’s economy and to promote foreign investment.
The UAE Commercial Companies Law was recently amended and updated to reflect the changing needs of the country’s rapidly growing economy.
✔️ It is now possible to establish a single-person company: The new law allows for the establishment of a company by a single person, with no requirement for a minimum share capital. This is a significant change from the previous law, which required at least two shareholders to establish a company.
✔️ Foreign investors can own 100% of a company: Previously, foreign investors were required to have a local partner who owned at least 51% of the company. However, the new law allows foreign investors to own 100% of a company, except in specific industries where a local partner is required for national security reasons.
✔️ More protection for minority shareholders: The new law gives minority shareholders more protection, like the right to look at company records and the right to sue the company’s directors if they do anything that hurts the company’s interests.
✔️ More freedom in how companies are run: The new law gives companies more freedom in how they are run. For example, non-board members can be appointed as company directors, and board meetings can be held electronically.
✔️ Changes to corporate governance requirements: The new law makes a number of changes to corporate governance requirements, such as requiring companies to set up an audit committee and requiring larger companies to appoint an independent board member.
The UAE Commercial Companies Law is important for several reasons:
✔️ It sets out the legal framework for companies operating in the UAE: The law provides a clear set of rules and regulations that companies must follow when establishing and operating a business in the UAE. This helps to ensure that companies operate in a transparent and legal manner, which is essential for building trust and confidence in the business environment.
✔️ It encourages foreign investment: The law has recently been changed to make it easier for foreign investors to set up and run businesses in the UAE. This has helped to attract more foreign investment, which is essential for the continued growth and development of the UAE’s economy.
✔️ It protects the rights of shareholders and stakeholders: The law includes provisions that protect the rights of minority shareholders and stakeholders, including the right to inspect company records and the right to sue the company’s directors for any actions that harm the interests of the company. This helps to ensure that companies operate in a fair and transparent manner and that the interests of all stakeholders are protected.
✔️ It promotes good corporate governance: The law includes provisions that promote good corporate governance, including the requirement for companies to establish an audit committee and the requirement for larger companies to appoint an independent board member. This helps to ensure that companies are well-managed and operate in a responsible and ethical manner.
The UAE Commercial Companies Law is a set of rules that govern the formation, management, and operation of businesses in the UAE. The law provides a legal framework for companies to operate in a transparent and legal manner, which is essential for building trust and confidence in the business environment.
Recent changes to the law have made it easier for foreign investors to set up and run businesses in the UAE. This encourages foreign investment and helps the UAE’s economy continue to grow and improve. The law also protects the rights of shareholders and other stakeholders, promotes good corporate governance, and ensures that companies operate in a fair and ethical manner. Required to provide Certificate attestation. Overall, the UAE Commercial Companies Law is an important factor in creating a business-friendly environment that supports the success and sustainability of companies operating in the UAE.