The Ministry of Economy recently issued Ministerial Resolution 694/2016, which waives the requirement for limited liability companies, joint liability companies and limited partnerships to amend their memoranda of association, as per the new Companies Law. That said, it is advisable for exempt companies to amend their memoranda of association in due course for ease of reference.
Clients often ask how to conduct legal due diligence or background checks on another party in the United Arab Emirates. Unfortunately, there is no straightforward answer. With no centralised company register, and over 40 different free zones, obtaining basic information about UAE free zone companies may pose a daunting challenge. Even so, there are still effective tools available to uncover the necessary information.
International business companies incorporated or proposed to be incorporated in Ras Al Khaimah must note the recent establishment of the Ras Al Khaimah International Corporate Centre which, going forward, will be the sole authority responsible for the incorporation of international business companies. While the existing advantages of incorporating an offshore company in the United Arab Emirates remain, the system is now more flexible and simplified in terms of bureaucracy.
A recent ministerial resolution has sought to clarify some of the ambiguities and uncertainty surrounding the applicability of the Companies Law to limited liability companies (LLCs). While the resolution does not pinpoint the applicability of each joint stock company (JSC) provision to LLCs, it includes a catch-all clause stating that JSC provisions which contradict the nature of LLCs will not apply to LLCs.
The new Commercial Companies Law has finally come into force. Companies incorporated and operating under the old law have only a few months left to comply with the new law. As companies that fail to comply will be considered dissolved, it is paramount that they review the new law, its provisions and obligations and amend their memorandum of associations and articles of associations accordingly within the stipulated timeframe.
A protected cell company is one of the legal forms of company that may be incorporated in the Dubai International Financial Centre (DIFC) consisting of a core and a number of cells, which are legally ring-fenced from each other. Since the number of protected cell companies established in the DIFC is currently very low, the success and feasibility of DIFC protected cell companies in fund structures remains to be determined.
Obligations and liabilities under UAE law arise out of contracts, unilateral acts, acts causing harm (torts), acts conferring benefits and the law itself. Many individuals and corporations frequently use and rely on limitation of liability clauses in all types of contracts in the United Arab Emirates and other jurisdictions without any consideration of the actual validity or enforceability of such clauses.
Corporate governance and the role of directors of publicly listed companies have gained increasing focus in recent times in the United Arab Emirates. Directors of a public company whose securities are traded on the Dubai Financial Market and/or the Abu Dhabi Securities Exchange are subject to additional duties. This update covers the duties of directors of publicly listed companies.
The issue of directors' responsibilities and obligations under UAE law has gained increasing importance for companies incorporated in the United Arab Emirates. This update focuses on the duties of directors under the relevant UAE laws and regulations, and primarily on directors of limited liability companies established in the United Arab Emirates.
The UAE federal government recently published Federal Law 2/2010, which amends certain provisions of the Federal Law Regulating Commercial Agencies. The amending law varies the termination and renewal provisions of the Agencies Law and establishes a committee to hear disputes that arise in respect of commercial agencies.
In 2007 the UAE Securities and Commodities Authority issued a decision concerning a corporate governance code for joint stock companies, thereby introducing a statutory corporate governance regime in the United Arab Emirates. In the past three years the movement towards implementation of a robust corporate governance framework has been gaining momentum.
The Dubai International Financial Centre (DIFC) recently announced amendments to the DIFC Companies Law. Notable amendments include new approval requirements for the adoption of non-prescribed articles of association for all limited liability companies, changes to how shareholders and directors may participate in meetings and new filing requirements for foreign companies.
The federal government has issued a decree amending Article 227 of the Commercial Companies Law, with the effect of abolishing minimum share capital requirements for limited liability companies (LLCs) in the United Arab Emirates. According to the amendment, shareholders have the right to determine the share capital of their LLCs, provided that the LLC has sufficient capital to achieve its objects.
UAE federal laws require nearly all types of foreign-owned company to have at least 51% of their shares owned by a UAE national or a company wholly owned by UAE nationals. The World Bank has identified this statutory requirement for a UAE national partner as an impediment to higher levels of investment. Thus, the government is looking to amend the Companies Law to allow for greater foreign equity participation in UAE companies.
Family businesses are dominant in the Middle East and are the key to long-term economic development, job creation and prosperity. The new Family Office Initiative in the Dubai International Financial Centre will help families to overcome challenges, manage their wealth and plan the succession of their business.
The Special Purpose Company Regulations were recently enacted, allowing special purpose companies (SPCs) to be formed in the Dubai International Financial Centre (DIFC). The apparent intention of the regulations is to provide for a company format which will enable the DIFC to compete with key offshore jurisdictions which allow the formation of SPCs.
The Dubai International Finance Centre (DIFC) has a set of laws which are based on common law. These laws are fairly comprehensive in nature and provide for certainty when applying contract law. This update highlights and briefly discusses the salient features of the DIFC Contract Law and the DIFC Implied Terms in Contracts and Unfair Terms Law.
The Dubai International Financial Centre (DIFC) is one of the fastest-growing financial centres in the world. A unique aspect of company incorporation in the DIFC is that it is possible for foreign companies to migrate to the DIFC and for existing DIFC entities to migrate from the DIFC to another jurisdiction.
Including: Corporate Personality and Shareholders’ Liability; Required Number of Shareholders; UAE Ownership Requirement; Minimum Share Capital; No Bearer Shares or Different Share Classes; Division of Profits and Losses; Management and Board; Statutory Reserve; Pre-emption Rights; Incorporation Documents; Foreign Documents Legalization; and LLC Details on Company Documentation.
The Law on the Combating of Commercial Concealment aims to criminalize the practice of enabling a non-UAE entity to conduct an economic or professional activity which is prohibited by UAE law. Implementation of the law has been postponed to allow for sufficient changes in legislation to provide improved protection for both UAE businesses and foreign investors.