To mark the occasion of the UAE’s 50th anniversary, the UAE has embarked upon the largest legislative reform in the country’s history, with the aim of advancing the country’s legal framework and bolstering economic growth.
As part of this major reform, Federal Law by Decree No 32 of 2021 (the „New Commercial Companies Law„) has been introduced. The New Commercial Companies Law is intended to repeal and replace the existing Federal Law No 2 of 2015 (as amended) (the „Existing Commercial Companies Law„) and will come into force on 2 January 2022.
The Key Changes are:
- Abu Dhabi and Dubai economic departments has published a long list of activities permitted for the purpose of 100% ownership for more than 1,000 commercial and industrial activities, including contracting activities, oil & gas activities, various trading activities, agricultural activities and manufacturing activities.
- Corporate Governance and Compliance requirements
- Inclusion of SPACs and SPVs
- M&A and financing transactions
- Public Joint Stock Companies (PJSC)
Companies incorporated at the date of commencement of the CCL 2021 , that is, 2nd January 2022, will be permitted a period of 12 months from that date to amend their memorandum and articles of associations, such that they are not inconsistent with the provisions of the CCL 2021. Failure to do so can result in a company’s liquidation and exposure to fines that may be prescribed by Cabinet in this regard.