The Ministry of Economy is in the process of developing new laws as part of modernising the legislative system and enhancing the business environment in line with the UAE strategic vision for 2021.
The new laws will cover Foreign Investment, Competition, Certificate of Origin, Arbitration, Industry Affairs Regulation, Amendment of Industrial Ownership, Anti Commercial Fraud, Auditors Profession Regulation and Companies’ Law. The Competition Law will lay down the mechanisms governing healthy competition in business while the Law of Commercial Arbitration will plug the gaps in the existing one.
The new laws seek to address the existing gaps in commercial regulations and arbitration and promote efficiency, transparency, and investor confidence in the business sector.
“The UAE is revamping its legal system to reflect the changes in the global economic landscape and maintain its competitive edge as a centre of business. It is a thorough process that will fulfill specific conditions and requires a lot of time, research and consensus among all parties involved,” said H.E. Sultan Saeed Al Mansouri, Minister of Economy.
“The Ministry of Economy has its own strategy for strengthening the national economy and retaining the competitive edge of the UAE as a global business centre and investment destination. Our vision complements the UAE Vision 2012 and we work with all stakeholders in formulating policies and guidelines,” he added.
Various other ministries and federal agencies are involved in drafting the laws, with the Ministry of Economy being responsible for specific stages and preparations in the process.
He said passing the laws involves several steps. First, the Ministry will seek the Cabinet’s permission in forming the law, and the first draft will be shared with all concerned parties in the government and private sectors. The Draft Law is then sent to the Cabinet for approval and to the Legal Technical Committee at the Ministry of Justice that amends the draft in coordination with the Ministry of Economy.
The law will then be referred to the Ministerial Legal Committee to be discussed and amended and after that transferred to the Cabinet for revision and approval. It will then go to the Federal National Council for discussions and approval and to the Ministry of Presidential Affairs for issuing it officially.
The proposed foreign investment is envisaged to unify legislations for foreign investments and includes required exemptions and guarantees for investment projects. It is planned to ensure investors the rights in managing their projects. It also reduces cost through customs exemptions rates and the investment window services, which facilitates procedures of licensing, insurance and flexible capital transfer and effective mechanisms for resolving disputes.
The Ministry has already prepared the competition law, which has been finalised by the Ministerial Legal Committee and will now be send to the Cabinet. This law will encourage competition and supports the UAE’s economic development drive. The law will reduce monopoly practices in line with the recommendations of the World Trade Organisation during its last review for the trade policy of the UAE.
The certificate of origin law aims to re organise legislations related to certificates of origin in order to specify the origin of the homeland of the commodity and will allow the Ministry to impose fines and penalties on incorrect documents and data.
The Ministry has also finalised the draft of the Arbitration law in cooperation with a group of legal experts from Abu Dhabi Arbitration Center. The Industry law that the Ministry worked on, will develop the performance of the industrial sector. It will stipulate plans to encourage small and medium industries and enhance the quality of products. It will work to protect UAE products from harmful practices like dumping and will be in line with the standards issued by WTO regarding trade exchange and increasing exports volume.
The amendments to the industrial ownership law which the Ministry worked out prove the UAE’s commitment towards the observations of the International Intellectual Property Rights Organization. The amendments included seven new articles to protect planning designs of integrated departments and six articles to protect non disclosed information.
The Auditors law aims at enhancing and developing the economic infrastructure and competition by strengthening the auditors profession and also contributes to achieving greater transparency and disclosure of the institutions in the UAE.
The Anti-fraud law will preserve the earnings of the UAE as it is considered one of the re exports hubs and will support trade policies. The law is aimed at protecting the UAE’s economic interests, strengthening its negotiating power and supporting the coordination process of drawing economic policies between the federal and local governments.
The new companies law being discussed by the Ministerial Legal Committee, will make it mandatory for companies in the UAE to put a general corporate governance framework to ensure protecting shareholders rights and achieve transparency and disclosure of financial results and reports. The new law reduces the period required to form a shareholding company to 40 days and sets the beginning of the financial year from January 1 to December 31, and excludes the first financial year of the company from this rule.