UAE companies reform fails to deliver

Author: Lizzie Meager | Published: 14 Jul 2015

Local lawyers have identified significant shortcomings in the UAE’s Commercial Companies Law, which came into effect on July 1.

Although it has been positively received overall, its lack of clarity and failure to address the pressing issue of foreign direct investment has drawn criticism.

"Unfortunately the new law hasn’t brought the watershed changes we were expecting," said Warren Thomson, partner at Hogan Lovells.

"It’s been in gestation in one form or another for over 10 years, and in a way it came as a bit of a disappointment that the restrictions on foreign ownership weren't relaxed, as many had hoped," he added.

The law’s various changes include a simplified process for pledging shares and removal of the five-person limit on the number of managers. It also prohibits companies from providing any...