To coincide with celebrations to mark the Golden Jubilee of the creation of the UAE, the federal government introduced amendments across more than 40 existing laws on 27 November to further enhance the openness and competitiveness of the business environment and to accelerate the UAE’s transition towards a new economic model.
The UAE Ministry of Economy said the unprecedented law amendments, which followed a wide-ranging consultation process, to mark the ‘Year of the Fiftieth’ would have a far-reaching positive impact on the business, investment, innovation, environment and intellectual property sectors.
“In total, amendments were made to more than 40 laws with an aim to further enhance the economic environment. The move puts in place proactive legislative frameworks that drive long-term economic growth in the country over the next 50 years of the UAE,” said Ministry of Economy Undersecretary Abdullah bin Ahmed Al Saleh at a media briefing.
The most important UAE laws to have undergone extensive amendment are the Commercial Companies Law (CCL), Commercial Register Law and Trademark law, which represent “key drivers for enhancing the flexibility of the economic climate, stimulating innovation, developing the intellectual property system, and increasing the country’s attractiveness to companies, investors, entrepreneurs, talents and innovators from around the world in vital and strategic sectors.”
A total of 55 amendments were made to the CCL: 51 articles have been replaced, three new articles added and one deleted. The changes are intended to enhance the competitiveness of the UAE economy and the dynamism of its business environment. Several new provisions are also designed to support the shift towards the new economic model in accordance with the principles of economic openness and flexibility, the Ministry of Economy said.
The most significant new provisions and amendments to the CCL include:
- Provision for the establishment of companies for the purposes of acquisition or merger, and
Special Purpose Vehicles (SPVs), and establish a legal framework for these new legal forms that exempts them from some provisions of the Companies Law subject to regulation by the Securities & Commodities Authority (SCA) to ensure their effectiveness and economic feasibility.
- Abolition of a maximum and minimum percentage in respect of a founders’ contribution to the company’s capital at the time of a public offering and the legal limitation of the subscription period. These two matters will be specified in the prospectus.
- Abolition of the requirements in respect of the nationality of the members of the board of directors and instead permit shareholders’ decisions in the election of board members in accordance with the terms and conditions set by the competent authority.
- Provision for a company to transform into a public joint stock company and sell its shares or offer new shares in a public subscription without being restricted to a certain percentage, by following the price-building mechanism of the security.
- Provision for companies to divide and create legal rules governing division operations, therefore enabling companies to diversify their business activities and sectors and increase their opportunities for growth.
- Provision for companies to determine the face value and the percentage of any offering.
- Provision for companies to access financing solutions through the issuance of other types of shares.
- Provision for branches of foreign companies licensed in the UAE to transform into a commercial company with UAE citizenship.
The revisions to the Commercial Register Law aim to make the Economic Register a comprehensive reference for economic activities that will assist investors and companies to develop their businesses based on documented, integrated and accurate information.
In particular, the amendments seek to direct investment towards the knowledge and scientific sectors, advanced technological industries and areas of the new economy, by providing a world-class digital infrastructure and a unified digital platform that provides integrated, easy and fast digital services for all sectors and economic activities.
The most significant new provisions and amendments to the Commercial Register Law include:
- Establishing the Economic Register as the official reference for data and information for establishments with economic activity in the country.
- Enabling the use of a unified Economic Register number as a digital identity for establishments.
- Providing a unified database for all registrants in the Commercial Register, trademark owners, commercial agency activities, etc., and information related to merchants and licensed activities, and any updates or modifications to this data, ensuring its validity, accuracy and updating periodically.
- Providing a comprehensive and reliable digital knowledge base that can be accessed via advanced digital platforms available at any time and from anywhere to serve investors, policy makers, economic researchers, academics, students and all stakeholders.
- Facilitating the provision of official data to economic consultancy, research, classification and evaluation institutions and relevant international organisations, and support analysis and research related to economic activities, market trends and potential opportunities.
- Enabling data sharing between relevant authorities and provide advanced services based on partnership to facilitate customer journey and avoid repetition of submissions.
- Allowing all transactions to be conducted through the unified Economic Registry number, without the need to re-use documents and data across different government entities.
The new Trademark Law is designed to offer integrated protection for trademarks and new mechanisms that will enhance the effectiveness and efficiency of government work and build a more competitive trademark and intellectual property system. This will enhance the UAE’s reputation as an attractive destination for major regional and global companies and brands by reassuring investors that their rights will be preserved in accordance with advanced legal systems that are compatible with ground realities.
The most significant new provisions and amendments to the Trademark Law include:
- Accelerating the issuance of licences and the completion of government approvals and procedures to enhance integration int work of service providers and increasie their supportive contribution to SMEs.
- Determining the procedures for registering a mark locally and internationally, providing it with protection and preventing and addressing infringement with deterrent penalties.
- Providing a comprehensive database of trademarks to be open and free of cost to the public.
- Introducing the option to renew a mark within six months of an expiry period and to extend by a further six months if reasons are accepted by the Ministry of Economy.
- Providing legal protection for non-traditional trademarks, including smell, sound, hologram, tones and others.
- Raising the scale of penalties for violators of the law and its regulations.
- Providing protection for ‘geographical indications’ to strengthen the status of the UAE and its domestic products globally.
- Allowing the submission of multi-category applications that will encourage companies to protect their trademarks.
SCA chief executive Maryam Al Suwaidi said the reforms kept pace with the UAE’s developmental aspirations and were an unprecedented step forward in building the most competitive economy in the world.
“Legislative reforms and the constant development of the legislative structure are necessary to keep pace with global best practices,” she said. “It provides necessary support for various economic sectors and enhances the UAE’s overall competitiveness and position on the map of the future and various global indicators of competitiveness, especially in the field of economy and investment.”