Stalled discussions to push through the revised 'most critical' companies law will resume next week, Sultan Al Mansouri said. While foreign ownership will not form part of those talks, the issue is not dead.
Increased expat ownership of UAE companies remains open to debate, says Minister of Economy
Stalled discussions about the revised companies law will resume next week, the UAE Minister of Economy Sultan Al Mansourisaid yesterday as the ministry aims to push through one of "the most critical laws" for the economy.
But decisions about raising foreign ownership limits, a much-anticipated clause that was stripped out of the original companies law, remained "open", he said.
"The companies law is one of the most important, critical for us," he told reporters in Dubai yesterday. "It was discussed thoroughly in February of this year during four meetings with the Federal National Council and we have completed 380 articles. We are going back on the 28th [of May] to fine-tune one or two articles and that will also be moving."
Mr Al Mansouri said the ministry was overseeing the passage of 11 new rules at various stages of fruition.
The most recent legislation to pass was the competition law, which was approved in February. The law aims to safeguard against the risk of monopolies over commodities in a bid to help protect consumers.
But the companies law is deemed one of the most important planks in the country's economic reforms, setting out a framework for how companies should be run and also containing rules on corporate social responsibility and voting rights.
In a move that disappointed lawyers and prospective foreign investors, members of the FNC, the government advisory body, decided in February that an easing of the existing 49 per cent restriction on foreign ownership should instead be part of the investment law, which is not due to be discussed until after the summer break. Currently, at least 51 per cent of a business has to be owned by an Emirati if it is located outside a free zone.
Since then planned discussions over the revised companies law by the FNC have been delayed on several occasions without a reason given to members.
"The regulation on foreign partnership was rejected by the FNC. But they highlighted the foreign investment law and whether we can add something through a clear framework that the foreign ownership could increase in investment in the UAE from 49 per cent," said Mr Al Mansouri. "This is still open as we will go back and discuss this first with the Cabinet and then the committee responsible for this with the Ministry of Justice."
He said a law for small and medium-sized enterprises was also waiting to be discussed by the FNC.
"This is a very important law for us and we need to finish it as soon as possible," he said. "It includes a lot of support for UAE nationals to be more open and go into SME [small and medium-sized enterprises] and provides a framework for how to start somewhere rather than go to work for the government."