The UAE stands as a destination synonymous with business, owing to its effective, productive economics, great infrastructure, and business-friendly law. As a follow-up to international standards, the UAE amended its previous Companies Law-Federal Decree-Law No. 32 of 2021, the new UAE Companies Law—CCL 2021, with an intent to encourage further investment.
A new law brings significant changes to businesses on the mainland, in free zones, and offshore. If you are running either an LLC or a PJSC, it is important to know these changes in order to comply and take advantage of the opportunities thrown up. This blog throws some light on what has changed and how a business should adapt, as explained by BSET Dubai.
What is UAE Companies Law?
The UAE Companies Law governs the formation, regulation, and operation of companies in the United Arab Emirates. It outlines requirements for company structures, ownership, management, financial disclosures, and compliance to enhance transparency and attract foreign investment while protecting stakeholders' interests.
It introduced CCL 2021 to simplify and make business transparent for the UAE government. This was intended to lure foreign investments, make business management better, and align business laws of the UAE with global standards.
The changes apply primarily to onshore companies, but free zone and offshore setup businesses could be affected as well. The flexibility companies might have gained with respect to operations and management of the shareholders creates a burden of ensuring compliance with the new rules.
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The law was approved on September 20, 2021 and began to be implemented on January 2, 2022. It superseded the Companies Law (Federal Law No. 2 of 2015) previously. The companies were given time to deal with the new regulation, true, but if your business has yet to make these changes — you really need to start right away.
It is applicable to all businesses in the UAE mainland. Free zone companies may be exempt from such provisions if they exist in special zones such as the Dubai International Financial Centre (DIFC) or Abu Dhabi Global Market (ADGM) which have their own regulations. Offshore companies must also consider whether the new rules apply to them, depending on their business operations.
The law provides a number of updates for PJSC:
In the UAE, LLCs being the most preferred business structure therefore the new law introduces key changes:
Brings down barriers to corporate growth via mergers, IPOs, and SPACs.
All CSR have not been made compulsory by the new law for all companies, yet encouraging them towards the support of social causes is what it has achieved. Many firms have included CSR aspects into their brand strategy including pollution control, education programs, and community-support efforts to boost their acceptability as organizations in the course of meeting national goals toward sustainable development.
Staying updated with the new business law is quite difficult and confusing. But with BSET Dubai, you need not worry. Our experts have their own way of dealing with these changes and leave the world really free for a potential business owner. Here is what we offer:
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The upcoming UAE Companies Law (CCL 2021) is gearing to give a massive boost towards making UAE to be one of the best places for doing business in. The amendments, particularly pertaining to limited liability companies and public joint-stock companies as well mergers provide businesses greater room for maneuvering as well as growth.
These changes imply that there is a new responsibility of compliance. Henceforth, it is important to avail-of the new law by making one's business compliant to avoid penalties that might be incurred as a result of using it.
BSET Dubai has your transition taken care of. Reach Out Us for business structuring, legal compliances and governance support. We can work together to make a legal and business success in the UAE!
It’s a new set of rules that make it easier to do business in the UAE mainland, free zones, and offshore areas. It helps businesses grow and makes things clearer for everyone.
Yes! In most industries, foreigners can now fully own a Limited Liability Company (LLC) in the mainland without needing a local sponsor.
Not much. Free zone companies follow their own rules, but it’s still a good idea to check with your free zone authority.
It makes it easier for companies to merge, expand, and even go public on the stock market, helping businesses grow faster.
We take care of everything—setting up your business, handling legal stuff, and making sure you follow the rules so you can focus on growing your business.
