Presentation - Update on UAE Company Law...Update on UAE Company Law − An overview of the most relevant recent developments AHK Legal Network Event, Dubai 06.12.2018 ...
Post on 15-Mar-2020
13 Views
Preview:
Transcript
Update on UAE Company Law −An overview of the most relevant recent developments
AHK Legal Network Event, Dubai 06.12.2018
Christina Mauel
ANDERS LEGAL CONSULTANCY specialises in such areas
of practice important to you as a foreign investor:
• Corporate & Commercial, incl. Business Set Up
• Commercial Agency
• Employment
• Tenancy
• Real Estate
Attorney at Law (Germany) & Legal Consultant
2
ANDERS LEGAL CONSULTANCY
1. Foreign Direct Investment Law
2. Dual License
3. Instant License
4. Update Commercial Companies Law
5. JAFZA Offshore Companies Regulations 2018
6. Conclusion
3
Agenda
Overview
• Federal Decree-Law No. 18 of 2017 and Federal Decree-Law No. 19 of 2018
• Further step to relax rules restricting foreign ownership of UAE companies
• Framework for UAE cabinet to permit foreign shareholders to own up to 100% of shares in
mainland companies active in certain industry sectors
• Establishment of Foreign Direct Investment Register, Foreign Direct Investment Unit and
Foreign Direct Investment Committee
• Conditions and procedures for establishment and renewal of companies to be determined by
competent authorities
• Company name to include suffix for company form and expression "Foreign Direct Investment“
• Sectors eligible for foreign direct investment defined in Negative List and Positive List
• Amendments, specifications and exemptions to both lists can be made anytime
5
1. Foreign Direct Investment Law
Negative List
• Non-comprehensive list of sectors where foreign direct investment is prohibited, e.g.
• Oil
• Banking and financing
• Security and military
• Public services (e.g. water, electricity, post, communication and transport)
• Printing and publishing
• Commercial agency
• Law does not indicate that sectors not included in Negative List are automatically part of
Positive List
6
1. Foreign Direct Investment Law
Positive List
• Still to be issued (expected in first quarter of 2019)
• To include additional conditions apart from sectors, i.e.
• Legal form
• Ownership percentage (100% or less)
• Minimum capital
• Minimum percentage of UAE nationals to be employed
• Granted benefits
• Exemptions from Commercial Companies Law
7
1. Foreign Direct Investment Law
Overview
• Abu Dhabi
• Companies licensed in free zones may extend business to mainland by obtaining license
from Abu Dhabi Department of Economic Development
• No necessity to rent additional office space in Abu Dhabi (office of free zone company can
be shared)
• Approval of free zone authority, undertaking regarding non-existence of branches in
Emirate of Abu Dhabi and, if needed, external approvals required
• License issued within 20 minutes to three days, depending on activities
• Dubai
• Currently only companies licensed in Dubai Airport Freezone and Dubai International
Financial Centre can apply for dual license
• Requirements and procedure similar to those in Abu Dhabi
9
2. Dual License
Considerations
• Advantages
• No need to rent additional office for mainland entity
• Disadvantages
• Additional license fees of mainland authority
• Additional fee of free zone authority for approval of dual license
(e.g. AED 5,000 annually charged by Dubai Airport Freezone Authority)
• Practical implementation unclear, in particular available legal forms, application of import
code and residence visas as well as location of provision of services
10
2. Dual License
Overview
• New procedure to obtain license from Dubai Economy immediately
• Available for LLCs, sole proprietorships and civil companies
• Partners must be natural persons
• Currently only available for license activities that do not require external approvals
• Regular license fees, but market fees fixed at AED 5,000
• Only one appointment needed to obtain trade name reservation, initial approval and license
and to pay all applicable fees
• No lease agreement and EJARI certificate for first year of license validity required
• No Memorandum and Articles of Association (“MoA and AoA”) required for license
issuance
• Option to use template of Dubai Economy or own MoA and AoA
• MoA and AoA and EJARI certificate must be presented for first license renewal
12
3. Instant License
Considerations
• Advantages
• Time and cost-effective option to establish company in Emirate of Dubai
• Beneficial in case legal entity has to be available at short notice
• Beneficial for start-ups to test market and keep costs at minimum
• Disadvantages
• Without office, no sponsoring of residence visas for employees possible (only investor visa
available)
• Without office and MoA and AoA, opening of company bank account and, hence, receipt of
payments challenging
13
3. Instant License
Attestation MoA and AoA and Amendments
• Art. 14 Commercial Companies Law amended by Federal Decree-Law No. 7 of 2018
• MoA and AoA and amendments thereof now to be attested by competent authority of
relevant Emirate (e.g. Dubai Economy), not Notary Public any longer
• Dubai Economy may allow attestation before Notary Public in certain instances
• MoA and AoA and amendments must be drafted in Arabic, otherwise void (bilingual
documents permitted, but Arabic prevailing language)
• Current implementation by Dubai Economy
• For MoA and AoA in case of instant license, either template of Dubai Economy or own
document can be used
• MoA and AoA and amendments can still be signed in front of Notary Public
• Mandatory usage of Dubai Economy templates of MoA and AoA and amendments in
future
15
4. Update Commercial Companies Law
Overview
• Repealing 2003 regulations in their entirety
• Numerous changes, such as
• Clarification of permitted activities
• Possibility to assign different classes of shares if approved by registrar
• Reduction of minimum number of directors
• Possibility to have own address in Jebel Ali Free Zone (“JAFZ”) or freehold area
• No need for registered agent if own office in JAFZ
• Eligibility of shareholders and company officers to apply for residence visas
• Possibility to convert offshore company into JAFZ free zone company
• Clarifications of obligations of registered agents
17
5. JAFZA Offshore Companies Regulations 2018
Considerations
• Advantages
• More flexibility for investors to organise their business structure
• Modernisation of rules
• Disadvantages
• Requirements for office rent and residence visa applications to be waited for
• Practical differences to free zone company remain to be seen
18
5. JAFZA Offshore Companies Regulations 2018
top related