There areseveral different layers of the applicable corporate law and regulations for companies registered in UAE, either in Dubai or any other Emirates.
The corporate law and regulations in Dubai and other Emirates are enacted at the federal level, at the level of various Emirates as well as on the level of different Free Trade Zones.
There is also a range of different regulations and circulars issued by various ministries and authorities of Dubai and other Emirates and which are to be followed / fulfilled by the companies. These additional regulations of the ministries and authorities are related first and foremost to all the necessary rules and guidelines that must be followed by companies within the scope of companies services related to the specific requirements for the licenses obtained.
In addition to the aforementioned, there are cases when a totally separate corporate law is applicable, for example, the applicable law in Dubai International Financial Center (DIFC). The applicable commercial /corporate law of the UAE is not applicable in this Free Trade Zone. DIFC has its own distinct law and its own commercial court.
The applicable corporate law for companies registered outside of the Free Trade Zones is the corporate law of UAE — Federal Law N 8 from 1984 and the annexes to it.
The main corporate law for companies registered in Free Trade Zones of Dubai and other Emirates of UAE is the federal law N 8 plus additional corporate law regulations of the relevant Free Trade Zone. Thus, considering that there can be two entirely different types of companies — offshore and onshore – in one Free Trade Zone, there are corporate law regulations within one Free Zone which are different for each type of these companies.
Within the corporate law and regulations of Dubai and other Emirates of UAE, specific attention has to be paid to the concept of companies licenses. In Dubai and UAE as a whole, there are no onshore companies which can perform any type of business, since every company must obtain the relevant license. Those licenses are, for example, consulting license, trading license or commercial license. The company may have several licenses. The obtainment of the majority of licenses is a fairly fast and formal procedure, provided all the necessary requirements are fulfilled. Some of the license types, for example, travel company license, passengers transport license, pharmaceuticals trade license require, in addition to the corporate law regulations, the fulfillment of extra requirements and conditions related to the safety and quality of goods and services provided by the company.
The exceptions are the offshore companies in Dubai and other Emirates. The obtainment of a license for offshore companies registered in UAE is not required as according to the law. These companies, however, may perform business activities only outside of UAE as according to the applicable corporate law and regulations. The offshore companies registered in Jebel Ali Free Zone are partially exempt from this rule since it Is possible to acquire properties in Dubai on these companies. Whereby the licenses for these companies are not required either.
Other areas of law, such as, for example, the UAE Labor Law, is another law component that affects companies business activity in UAE. Taking into account that its structure is comparable to the corporate law, that is, one core Federal Law plus separate legal requirements and annexes in line with particular Free Trade Zones and various Emirates.
Seemingly difficult at first sight, the legal system of Dubai, UAE in the area of the corporate law is quite straight forward and convenient, since it is not overwhelmed by a multitude of different amendments and annexes compared to the corporate law of, for example, the majority of the EU countries. This allows doing business in Dubai efficiently and financially effectively, which is confirmed by the enormous number of companies present in UAE from all kinds of economic sectors and the strong further yearly growth in its numbers.
Our company specializes on companies incorporation and administration of all legal types in UAE. If you have questions related to company incorporation in UAE and the questions related to corporate law – get in touch with our advisors and we would provide you the assistance you may require.