Chapter of the book UAE
Company Law and Practice deals with the provisions of
the Company Law applicable to foreign companies incorporated
in a jurisdiction outside the UAE
that wish to establish a business presence in that country
through applying for the registration of a company to practice
its main activity in the UAE or to operate a branch office
therein. With the exception of companies incorporated in the
countries of the Arab Gulf Co-ordination Council ("GCC"),
these provisions will apply to companies incorporated in other
Arab countries. It does not apply to companies incorporated,
with a foreign participation, in accordance with the provisions
of the Company Law previously discussed.
Company Law regulates the activities and the registration
of foreign companies intending to establish a presence in
the UAE. This applies to foreign companies that practice
their main activity in the UAE or have their headquarters
therein as well as foreign companies that wish to establish
a registered branch office.
companies intending to register a presence in the UAE have
to ascertain that the activity intended to be practised by
them can be performed by a foreign company. There are specific
activities of which performance is generally restricted either
to wholly-owned national companies or 51% locally owned companies.
General contracting, general trading, company representations
and commercial agencies are restricted to wholly-owned national
companies. The Emirates now tend to encourage trading to be
performed by 51% locally owned companies. While the establishment
of industrial projects is being encouraged in the UAE, ownership
of such projects is restricted to national companies incorporated
in accordance with the applicable laws with a national participation
of at least 51% of the capital. Management of the company
should be by nationals. Alternatively the majority of the
board of directors should be composed of UAE nationals. It
is also important to note that the provisions of this Section
of the Company Law are drafted in very general terms.
companies intending to establish a new presence after the
application of the Company Law and its By-Laws have to conform
to slightly more complex formalities than companies that have
already established a presence in the UAE. By-Law (69) provides
that a Ministerial Decision shall be issued for the formation
of the Foreign Companies Committee at the Ministry ("the Committee")
which will be responsible for:
||Specifying the activities which
foreign companies can practice in the State.
Adopting the rules and conditions
concerning the approval for foreign companies to practice
their main activity or establish branches or offices.
Decisions shall be issued concerning the decision of the Committee
referred to in 1 and 2 above.
Reviewing applications of foreign
companies to practice their main activities in the State.
the By-Laws do not clarify what is meant by the term 'foreign
companies applying to practice their main activity in the
UAE', the procedure stipulated for the registration of such
companies varies slightly from that adopted for the registration
of offices or branches of foreign companies. The application
to practice the main activity should be presented to the Competent
Office of the Ministry in the Emirate where the foreign company
intends to practice the activity. Upon ascertaining that the
application fulfils the requirements of the Company Law and
the By-Laws regulating such activity, the Office of the Ministry
shall refer the application for approval to the Competent
Authority in the Emirate in question. The decision of the
Authority in this regard is considered final.
full text contains further explanation which include:
WITH UAE PRESENCE
PROCEDURAL REQUIREMENTS FOR ESTABLISHING FOREIGN COMPANIES
further information on UAE Company Law and Practice,
it is recommended that the full text be referred to. Click on the link to obtain
a copy. For specific legal advise, please contact Sabah
M A mahmoud or other reputable Law Firm.