Special edition:
The UAE Commercial Companies Law in focus
The new UAE Commercial Companies Law 2015 (the CCL) has now been in force for some 9 months. We thought it an appropriate time to review the key changes under the new law and to summarise our experience to date of its implementation in practice.
Since the CCL came into force, we have been busy advising our clients on its implications for their businesses and corporate structures. We are assisting many LLCs with updating their memoranda of association to reflect the new law and we expect this to continue as the deadline for compliance approaches on 30 June. We are analysing several single-member company structures. We have also registered a pledge over shares in a LLC, under one of the most notable new provisions of the CCL.
At this early stage, however, various aspects of the CCL remain to be fully understood. Article 104 is a prime example. This Article carries over to LLCs the provisions relating to public joint stock companies. How this is intended to work in practical terms is unclear and is generating much market debate, as clearly not every provision which applies to a PJSC is relevant or appropriate for a LLC.
In the sections below, we discuss the key points arising under the new law and how we are dealing with them in practice. We also give our views on some of the more controversial issues.
Looking ahead to future developments, although the sharp drop in oil price has resulted in a deceleration of growth and domestic demand in 2016, the UAE continues to diversify in terms of investment beyond oil. Dubai in particular looks forward to Expo2020 and the opening up of the Iranian market presents new opportunities. From a legal perspective, the CCL is just one part of a suite of new laws at the federal level seeking to modernise the UAE's business environment (see Table 1). The introduction of VAT across the GCC and a UAE federal corporate tax are also anticipated in the near term. There is every reason to retain a positive outlook in terms of growth and development for the UAE going forward.
We hope that you find this special edition a useful and informative read. If you have any feedback or comments please do not hesitate to contact us.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
