ABU DHABI // Legislation that would allow expatriates to own more than 49 per cent of a business has been delayed.
The Government had planned to include the legislation as part of the Companies Law being discussed at a two-day session of the Federal National Council.
However, the Minister of Economy, Sultan Al Mansouri, agreed with council members today that it should instead be part of the Investors Law – which is not due to be discussed by the council until after the summer break.
"We have decided with agreement to move it to the Investment Law," said Mr Al Mansouri.
He said this would give members a better chance to review the proposal "because in [the Companies Law] it is only a summary".
The agreement by the ministry followed a two-hour debate by council members, many of whom argued the Companies Law should focus on Emirati business rather than foreign investment.
One FNC official said as the Companies Law focused on Emirati business, it was natural to move the legislation to the Investors Law.
The Investors Law, which focuses on foreign investment, is under review by the technical committee at the Ministry of Justice.
"By June it should be referred to the FNC," said the minister.
The minister also talked about possible limitations to any legislation that allowed expatriates to own more than 49 per cent of a business.
He said the Government would take into account the company's capital, how much the business would benefit strategic investments and the national economy, whether it would create jobs for Emiratis and whether it would pose direct competition to existing companies.
Mr Al Mansouri said that another law, the Small and Medium Enterprises (SME) Law, would be discussed after the Companies Law, but before the Investors Law, and that the ministry was also contemplating changes to the Consumer Protection Law.
In the council's afternoon session, members continued to discuss the Companies Law, suggesting further changes to its articles.
One of these changes was to Article 75, which states that limited liability companies must be formed of a minimum of two partners and a maximum of 75.
Some members argued that the maximum number should be lowered to 50 to guard against companies having too many expatriate partners, which would detract from Emiratisation efforts.
But Ahmad Al Shamsi, Ajman, argued: "If the cap is limited to 50 and the company has 49 expat partners and one national then that won't solve the problem."
He suggested that instead, the law should require the number of local partners to exceed the number of expatriate partners.
After a long argument on the issue between at least five members, the speaker asked the minister for his thoughts.
"If you want the cap to be 50 we don't mind, but that won't solve the problems you all mentioned a while ago," said the minister.
He added that the decision was not his to make, as a specialised legal committee would be needed to decide.
Members agreed to suggest reducing the cap to 50 and the debate will continue on Tuesday.