The UAE Ministry of Economy (MoE) has launched a new draft federal law on the regulation of commercial agencies allowing public joint-stock companies (PJSC) with at least 51 percent of national capital contribution to act as commercial agents.
The new draft law should provide more business opportunities for UAE citizens and allow new categories of citizens to access the commercial agencies’ business, an advantage which is not provided by the current law which imposes some restrictions on the cancellation of commercial agencies even after the expiry of the contract term.
“Only UAE nationals can act as commercial agents, which is similar to the position under the old law, but the new draft law gives the right for public joint-stock companies and public legal entities with at least 51 percent national capital contribution to register commercial agencies. The core reasoning behind the new law concerns boosting the country’s competitiveness while ensuring alignment with international business standards”
The minister’s remarks follows the reviewing of the new draft law by the Federal National Council (FNC). Now that 40 years have passed since the original law was drafted, only 6,000 commercial agencies have been registered, which is a modest figure considering the current economic potential boasted by the UAE and the conducive business environment in the country, Mr. Touq Al Marri added.
In addition, the new draft law allows for the establishment of various forms of cooperatives in the country to benefit from the economic and development opportunities offered by this vital sector with a view to enhancing its contribution to the GDP.