New Company Law to allow majority foreign ownership
BY BABU DAS AUGUSTINE

24 April 2005

DUBAI — The new UAE Company Law, currently at the draft stage, will in some cases, allow more than 49 per cent foreign ownership in UAE-based companies, Shaikha Lubna Al Qasimi, UAE Minister of Economy and Planning said yesterday.

At present foreign ownership is restricted to 49 per cent. Speaking at the ninth MashreqForum, Shaikha Lubna outlined the main features of the UAE's new Company Law to business leaders. The law to be introduced later this year will address a whole range of issues and for the first time will have an official translation into English in order to reduce uncertainties resulting in interpretation.

An independent authority will be created to regulate the insurance sector. The Federal Cabinet has already approved the creation of such an entity, she said.

The much-awaited Company Law is ready and this will go to all emirates for their concurrence before it is approved by the Cabinet. Currently, the first draft of the laws are being reviewed by associations including the private sector to get their 'buy in' before enactment by the federal government. The new laws will be more flexible and will in some cases permit companies to be more than 49 per cent foreign owned, she said.

The new set of laws will include new laws regarding securities and commodities as well as investments and securities to ensure transparency. There will also be changes in the agency law in order to bring practices more in line with globalisation and WTO regulations, the minister said.

The process of evaluation of companies will be reviewed. On pricing of public issues, she said a market mechanism would be evolved taking into account the concerns of companies. The companies going public will be required to disclose their prospective buy-outs or acquisitions, Shaikha Lubna said referring to the cases of companies without any track record going for IPOs and later on acquiring existing companies.

Mshereq Forum was attended by prominent UAE businessmen across a wide range of sectors. Abdul Aziz Al Ghurair, CEO of Mashreqbank, said Shaikha Lubna, the UAE's first female minister, epitomised the country's dynamism and progressive outlook.

“We are a young country that has already come a long way. The passing of the new company law and other imminent regulations, such as property and the DIFX, will also help to harness the region's capital base and ensure the economic growth we are witnessing today will continue long into the future,” said Al Ghurair.

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