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DUBAI / Legal Framework

Investment laws, regulations and incentives are continuously improving to encourage further foreign investment.
This includes the introduction of foreign ownership of land and stocks – Dubai became the first emirate within the
UAE to open its property market to foreign ownership, followed by Abu Dhabi.

Company law

On December 4, 2011, the UAE Federal Cabinet has approved a new Company Law that paves the way for more
relaxed foreign ownership above the existing ceiling of 49 percent in the future. In addition, the new law allows for
a simplified process of starting a business in the UAE and strengthens protection of shareholders. A new FDI law is
also in the works and, when announced, will make the investment environment even more attractive.

Some of the main features of the new company law include the following:
  • The existing 49 percent foreign ownership threshold will remain; however, the new law permits the Cabinet to issue a separate resolution specifying the types of businesses that may be majority-owned by foreigners.
  • It is expected that majority foreign ownership will initially be permitted only in business sectors in which the government seeks to increase foreign direct investment.
  • The new law reportedly exempts from its application public joint stock companies wholly owned by a federal or local government, and will likely focus on private joint stock companies and limited liability companies.
  • With respect to minimum capital requirements, the current position remains unchanged as the new law will not require new companies to have a minimum required share capital and this has been the position under the existing law since 2009.
  • One of the many aims of the new legislation is to reduce the length of time required to establish a company.
  • The new law is likely to increase stock subscription amounts for raising capital for newly founded public joint stock companies.
Intellectual property rights

The UAE is a regional leader in the protection of Intellectual Property Rights, with continuous improvements of
copyright, trademark and patent laws. The rate of software piracy in the UAE is regarded as one of the lowest in
the Middle East and Dubai is acknowledged as the best performer.