Global عربي
KSA عربي
Global عربي
Over the past decades the UAE has established itself as a hub for commerce and investment in the MENA region.
One of the main ways it has managed to achieve this is through legislation and regulations that encourage and protect investment.
Today, we will look at some of the most important pieces of legislation and regulation that protect investments for locals and foreigners in the UAE.
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The Federal Decree-Law No. 19 of 2018 (more widely known as the FDI Law) is among the most important laws governing investment in the country.
It introduced a number of reforms designed to encourage and protect foreign investors. The law does this through a number of key ways, including:
- The FDI law allows for up to 100% foreign ownership in businesses operating in a number of sectors, ending the 51% limit of foreign ownership.
-The law guarantees foreign investors are treated equally with nationals under the law, ensuring non-discriminatory treatment.
- In certain cases, the law grants access to foreign investors to benefits and incentives afforded to nationals.
- It guarantees that foreign investors are protected against expropriation, which can only take place in the national interest and with the appropriate compensation.
- It allows for the repatriation of profits and capital.
- It also provides mechanisms for dispute resolution, including international arbitration.
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The Federal Decree Law No. 32 of 2021 (or the Commercial Companies Law) generally governs how businesses and companies are formed, how they operate within the UAE, and their dissolution.
It contains a number of articles that are designed to encourage and protect investments, including:
-The law allows for the establishment of a number of legal entities, including limited liability companies (or LLCs). This protects the personal assets of the shareholders from debts incurred by the company.
- As with the FDI Law, the Commercial Companies Law enshrines regulations that allow for up to 100% foreign ownership of companies, this time for LLCs in the mainland UAE.
-The Commercial Companies Law sets out corporate governance regulations designed to allow for better management and more transparency,
including having a board of directors answerable to shareholders as well as shareholder meetings and assemblies that give shareholders a say in the management of the company.
-The law also includes provisions for the protection of minority shareholders rights, preventing majority shareholders from making decisions that harm the former,
including by establishing mandatory tender offers and requirements to inform all shareholders of major decisions.
- The law also provides mechanisms for resolution of disputes between shareholders.
Protecting intellectual property (IP) rights is among the most crucial protections a company or investor will need to ensure that their trademark, IP, unique methods and procedures aren’t being exploited by another actor.
The UAE has no less than eight crucial pieces of legislation and regulations aimed at protecting IP rights. Key among these is the Federal Decree Law No. 36 of 2021 on Trademark.
Its provisions, which provides a number of protections against copyright infringement and fraud, include:
- Setting out stringent financial and other penalties for violators.
- Provides foreign and local investors an easy path to register a company trademark, name, and logo.
- It provides trademark protections of up to 10 years, which can be easily renewed within six months from the expiration.
Another key law when it comes to protecting IP rights is the Federal Law No. 38 of 2021 on Copyrights and Neighboring Rights,
which protects any original work in the areas of literature, arts or science, whatever its description, form of expression, significance or purpose.
The law defines what IPs fall under its protections as well as establishing the Ministry of Economy as the government entity responsible for enforcing IP rights in the UAE.
To improve its standing in the international investing community and to encourage foreign trade, the UAE has signed a number of international and bilateral treaties as well as being a signatory to a number of global trade and finance agreements and organizations,
such as UNCTAD and the WTO. The UAE has signed around 112 agreements with international trading partners to encourage and protect investments, according to the UAE’s Ministry of Economy. General articles and provisions in these agreements include:
- Allowing the citizens of these trading partners to establish investments in the UAE and guarantees the licensing of such investments.
-The agreements also aim to protect investments from all non-commercial risks like nationalization, expropriation, sequestration and freezing.
- These agreements also confirm the free transfer of profits and other returns in a freely transferable currency.
- Provides access to international arbitration, including the International Centre for Settlement of Investment Disputes and the United Nations Commission on International Trade Law.
- - The UAE has also signed More than 140 double taxation agreements with other countries that protect investors from dual taxation in the UAE and in their home countries.
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Disclamer:
This post is for educational purposes only, and does not constitute investment advice or a solicitation to take any financial action. It should not be relied upon when making investment or financing decisions.
