x Abu Dhabi, UAETuesday 23 January 2018

Economic laws set for reform

Officials are to propose changes to laws to help achieve Abu Dhabi Economic Vision 2030.

Officials want to synchronise Abu Dhabi's laws more effectively with the 2030 blueprint.
Officials want to synchronise Abu Dhabi's laws more effectively with the 2030 blueprint.

Abu Dhabi is reviewing its economic laws as the emirate seeks to woo investors and boost growth.

Officials from the Abu Dhabi Department of Economic Development (DED) say reforms are needed to replace outdated rules and reflect international best practice.

"We found the current laws cannot contribute to achieving the Abu Dhabi Economic Vision 2030," said Habib al Wazir, the director of DED's business legislation department.

"There was no harmony around these laws. The UAE has developed in no time and legislation was not matching up with development on the ground."

Officials want to synchronise the emirate's laws more effectively with the 2030 blueprint, which maps out the diversification of Abu Dhabi's economy during the next two decades.

Under the review, the DED surveyed 25 government departments and ministries, government-related companies and nearly 300 private-sector companies, asking them about their views on business laws.

It is already taking action in response to some feedback.

Concerns about high government service fees were raised by respondents from private industry, said Mr al Wazir. As a result, the DED was reviewing licensing and other service charges.

Regulation of the property market was also highlighted as an area that required reform.

In response, a package of property legislation was being planned by the Abu Dhabi Department of Municipal Affairs, Mr al Wazir said.

Final recommendations on policy reform will be presented by the DED to emirate and federal policymakers next month.

Mr al Wazir, a former judge, launched the review in May 2009 in an attempt to boost Abu Dhabi's competitiveness during the global financial crisis.

The department's mandate includes driving economic growth through policy reforms. It has hired the international law company Simmons & Simmons to help gather and analyse information.

"Policymakers are asking the right questions, and it's encouraging that there's a desire to make the local economy more competitive," said Giyas Gokkent, the chief economist at National Bank of Abu Dhabi.

Officials are keen to benchmark the emirate's laws with economies including the UK, France, Singapore and Canada.

The review has taken into account new laws in the pipeline at a federal level. Some respondents surveyed were concerned about companies' foreign ownership limits.

Existing federal laws allow foreigners to own a maximum 49 per cent of businesses, with an Emirati sponsor owning the remainder. The exceptions are free zones, where foreign companies can have 100 per cent ownership. Draft laws to relax foreign ownership restrictions in certain sectors are being discussed by the UAE Cabinet.

The Ministry of Economy is handling about 14 draft laws aimed at boosting business conditions and attracting investment. The legislation covers foreign investment, competition, trade, commercial disputes, intellectual property rights, fraud and corporate governance.

"We are sending our recommendations to the Federal Government as we would like to help fine-tune laws in the UAE as well as Abu Dhabi," Mr al Wazir said.

Governments including the US and EU members are seeking to liberalise their economies to reinvigorate foreign investment.