Business Law in the UAE
February 12, 2010 § Leave a comment
A couple of days ago I attended a lecture on campus on business law in the UAE. It was an interesting, albeit visceral, look at the way commercial transactions law works in the UAE. As I am largely unfamiliar with business law on the whole so I can’t exactly compare it to anything else, but it was interesting in and of itself.
Below are some of the main take-home points I took from the lecture:
Civil vs Common Law: UAE has a civil law system which, unlike common law, is not based on judicial precedent. So a judge’s decision is not binding for all following judges, but because of the way the judicial system is set up, senior judges most often abide by certain principles which bring cohesion to the system of law.
Different types of companies: UAE law outlines 7 types of companies, all of which have varying types of liabilities and thereby are held to different standards under different laws.
Future changes: since the UAE is such a young country, its only appropriate that it will be going through changes as it makes it way out of its embryonic stages. One of the major changes upcoming is the possibility of 100% ownership for expatriates. This is as a result of some mounting international pressure (WTO etc) that are calling for UAE to allow for more foreign investments (especially outside the free zones, which already have high rates of foreign investment)
Currently, 50% ownership with an Emirati citizen is required. In the same breath, there is no path to citizenship in the country. So only UAE nationals qualify as citizens, and they only account for about 10% of the population here in Dubai. So you can do the math for yourself, 10% of the population required to fulfill that 50% ownership statute can create somewhat of a hurdle for new businesses.
Since business culture and practices are so closely tied to the very fabric of this country, it was interesting to learn about the legal aspects of commercial entities. I’m sure as I spend more time talking to more people, I will continue to learn more about business and the strong hold it has in the Emirates.