The UAE has formulated Business laws and regulations that aim to meet the requirements of businesses and regulate them flexibly, in line with the fundamental principles based on justice and respect for the rights of all stakeholders. This page aims to review a set of Business laws and regulations that govern economic establishments and their activities in the UAE.
Importance of Familiarizing Yourself with Business Laws and Regulations
The obligation of the employer in the UAE is to constantly be aware of the Business laws and regulations in order to stay informed of the latest developments and changes that may affect their establishment and to avoid any situations that may have a negative impact on it. These regulations include:
- The regulations governing business activity.
- The systems that protect your rights, as well as the rights of your employees and workers in your establishment.
- Consumer rights and intellectual property rights regulations.
- Health, environment, and safety regulations.
- The regulations specific to the geographic areas in which the business operates, including areas under the jurisdiction of the economic development departments in various emirates of the UAE, as well as regulations specific to free zones or specialized economic zones.
Realistic economic activity systems
Transparency and compliance with tax policies related to actual economic activities. These systems require entities that fall within their scope to submit an annual notification form to the regulatory authority, in addition to a report on actual economic activity within 12 months following the end of the fiscal year, effective January 1, 2019. This is in response to the ongoing commitment to improving the business environment and developing tax and financial policies in the UAE’s Business laws and regulations
Laws regulating companies within the UAE
In general, Federal Decree-Law No. (32) of 2021 regarding Commercial Companies applies to commercial companies whose main headquarters, branches, or offices are established in the UAE. Article 4 of the Companies Decree-Law specifies the companies that are exempted from the provisions of the decree-law.
Laws regulating free zone companies
Economic activities in free zones are subject to the laws and regulations of business applicable in those zones, and these laws and regulations may vary depending on the area in which the commercial activity is conducted. Full compliance with the laws and regulations of the business systems may require adherence to the laws of other government entities that regulate your commercial or industrial activity specifically.
Free zone companies are subject to the laws and regulations governing business and economic activities, with the exception of Federal Decree-Law No. (32) of 2021 regarding commercial companies, which applies only to commercial companies established within the country.
In addition, free zone companies are subject to laws related to the type of economic activity they engage in, property protection, health, safety, and environmental regulations, as well as compliance with applicable instructions within the same free zone.
Bankruptcy Law in the United Arab Emirates
The UAE Bankruptcy Law, issued under Federal Decree Law No. (9) of 2016, regulates various cases of bankruptcy faced by struggling companies in the UAE, with the aim of promoting business stability in the country and increasing confidence in the UAE market for investors. It also provides the necessary legal framework to assist struggling companies in avoiding bankruptcy and liquidating debtor’s assets through a variety of mechanisms, including:
- Financial restructuring processes conducted outside of court
- Preventive Composition
- Financial restructuring
- The possibility of obtaining new loans according to conditions determined by the law.
- The legal framework for converting protective reconciliation procedures into bankruptcy proceedings and liquidating the debtor’s assets.
Bankruptcy law does not apply to natural persons but only to companies as defined by the law, including the following:
- Translation: Companies established in accordance with the provisions of the Commercial Companies Law.
- Companies that are not established under the provisions of the Commercial Companies Law and are wholly or partially owned by the federal or local government and whose legislation provides for their submission to the provisions of Federal Decree Law No. (9) of 2016 on Bankruptcy.
- Companies and establishments established in free zones, which do not have special provisions regulating protective settlement, restructuring and bankruptcy procedures, taking into account the provisions of Federal Law No. (8) of 2004 regarding financial free zones.
- Any merchant who decides to do so is subject to the Commercial Transactions Law.
- Licensed professional civil companies.
AHG is a leading regional audit and legal accounting firm, operating in the Gulf Cooperation Council countries and North Africa. Since 2014, AHG has helped companies operating in the United Arab Emirates to achieve maximum success. We are fully prepared to assist your business in the UAE through a team of trained tax experts to prepare your business for corporate tax in the United Arab Emirates.
AHG-Dubai serves a wide range of clients and multinational companies. This is in light of the company’s strategy to focus on two key pillars: geographical expansion in border markets and leading a positive community culture. By combining our strengths and expertise in the region, we offer our clients the best services in their category designed to maximize their investment goals in a fast-changing environment.