Three laws introduced in UAE after the biggest-ever amendments

The UAE has introduced three new economic laws, with the government saying these laws underwent the largest legislative amendments of their kind in the history of the country.

Approved last month by Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, the amendments were made to more than 40 laws to enhance the UAE’s economic environment, investment and commercial infrastructures and to support the security and stability of the society, keeping pace with the country’s future growth aspirations, an official statement said.

 The laws are the Commercial Companies Law, Commercial Registry Law and the Trademarks Law. 

Commercial Companies Law

The law allows the establishment of companies for acquisition or merger, and SPVs, and establish a legal framework for these new legal forms and excludes them from some provisions of the Companies Law through a decision issued by the SCA to regulate the work of these forms of companies; ensure their effectiveness and economic feasibility; and enhance growth and positive impact on the business environment.

It abolishes the maximum and minimum percentage of the founders’ contribution to the company’s capital at the time of the public offering, and cancels the legal limitation of the subscription period, and leaves the two matters to what is specified in the prospectus.

It eliminates the requirement for the nationality of the members of the board of directors and upholds the organization shareholders’ decisions in the election of board members, in accordance with the terms and conditions set by the competent authority.

It allows companies 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.

It allows companies to divide and create legal rules governing division operations, thus contributing to diversifying the company’s activities and fields of work and increasing its projects and growth opportunities.

It allows companies to determine the face value, and to determine the percentage of the offering and find financing solutions for companies through the issuance of other types of shares.

It allows branches of foreign companies licensed in the country to transform into commercial companies with UAE citizenship.

The government said the law enhances the openness of the UAE’s business climate in a way that supports the competitiveness of the national economy and the “dynamism of the business environment”. 

The law amendments include the development of financing solutions for companies and restructuring operations and finding solutions to the challenges facing business activities in the country, the government said.

Commercial Register Law

It establishes the economic register as the official reference for data and information for establishments with economic activity in the country.

It also enables the use of the unified economic register number as a digital identity for establishments.

Through the Economic Register, a unified database is provided to all registrants in the Commercial Register, trademark owners, commercial agency activities, etc., and information related to merchants and economic activities licensed in the country, and any updates or modifications to this data, ensuring its validity, accuracy and updating periodically.

The law provides a comprehensive and reliable digital knowledge base that can be accessed via advanced digital platforms available at any time and from anywhere to serve businessmen, investors, policy makers, economic researchers, academics, students and all stakeholders.

It facilitates the provision of official data to economic consultancy, research, classification and evaluation institutions, and relevant international organizations, and supports analysis and research related to economic activities, market trends, and current and promising future opportunities in the country.

It enables data sharing, integrates economic information from the concerned authorities in the country, and provides advanced services based on the partnership to facilitate customer journey. It eliminates the need to submit the same data more than once to more than one party in the country.

It allows 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 government said the registry will serve as a leading platform that accelerates the growth of economic sectors and enhances the position of the UAE as a destination for future investments and innovative ideas in new economic sectors.

It supports the UAE strategy 2021-2025 for digital transformation in terms of providing world-class digital infrastructure and a unified digital platform that provides integrated, easy and fast digital services for all sectors and economic activities in the country, the government said.

Trademark Law

The law allows accelerated issuance of licenses and the completion of government approvals and procedures, which contributes to enhancing integration in the work of service providers and increasing their supportive contribution to SMEs.

It determines the procedures for registering a mark locally and internationally, providing it with protection and preventing and addressing infringement with deterrent penalties.

It provides a comprehensive database of trademarks to be open and free of cost to the public, which was formerly a paid service.

The law introduces the option to renew the mark within six months after the expiry of the period and gives an extension of another six months if provided justifications are accepted by the Ministry of Economy.

It provides legal protection for non-traditional trademarks after developing materials dedicated to these aspects, including smell, sound, hologram, tones and others, which are the latest types of non-traditional trademarks.

The law raises the ceiling of penalties for violators of the Trademarks Law and its executive regulations and introduces new penalties that protect non-traditional trademarks.

It provides protection for “geographical indications”, which encourages research in local geographical indications and presents them to the world, such as “types of date crops” or trees and water and contributes to strengthening the status of the country and its local products globally.

The law allows the submission of multi-category applications, which will encourage companies to protect their trademarks.

The government said the law contributes to increasing the momentum and competitiveness in the country’s markets and enhancing the reputation of the national economy as an attractive destination for major regional and global companies and brands.