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UAE announces significant changes to Commercial Companies Law

February 23, 2022by Kate Williams0

The UAE government has announced new rules in the Commercial Companies Law sector. The new rules will increase the scrutiny on its management and activities. These reforms aim to prevent corruption and improve transparency in the commercial sector.

In this article, you will learn everything about the Commercial Companies Law. Here, we will cover what to do if you are faced with any questions.

1. How does this new law affect companies in the UAE?

Commercial Companies Law

The Commercial Companies Law will remove the requirement for commercial companies to have a significant UAE national shareholder or agent. This is a new era of competition in the UAE, and it will bring about more innovation and development in the country.

The UAE is one of the fastest-growing countries in terms of economic growth. Subsequently, the government has been expanding its liberal policies over the past few years, which has led to an increase in foreign investment and tourism, resulting in increased employment opportunities for locals.

The new law in the United Arab Emirates allows foreigners to own 100% of onshore companies.

Commercial Companies Law

2. Can you use a foreign agent?

The Commercial Companies Law has been amended to remove the requirement for companies to have a UAE national agent. This change will allow small and medium-sized enterprises to be represented by their employees without the need for a third party.

The change in the law is significant because it will allow more local businesses to function without an agent. The law is also helpful to companies who want to outsource their human resources; it removes restrictions on foreign ownership of companies and enables international companies based in the UAE to do business in other countries through their local offices.

This amendment aims to encourage more local entrepreneurship and reduce costs for businesses, especially SMEs. It is an excellent way to get started with the UAE commercial company’s law in 2022.

3. What are the advantages of having a foreign agent?

Foreign agents have a lot of advantages in the UAE. To sum up, they can help you with your business, find new opportunities, and make sure that you are compliant with the local laws. Here are some other benefits:

3.1 They have experience

The UAE is a country that is constantly growing and changing. In other words, this means that navigating the market can be difficult for people who do not know the language. A foreign agent can help you navigate this market by providing information about the UAE and its culture.

To clarify, a foreign agent is an individual who can help you understand the opportunities and restrictions in the UAE so that you can work to grow your business. They find out what opportunities are available to you and help you decide what opportunities are not viable for your business.

They also help make your strategy clear so that it will be easier for you to bring in new clients and increase your profits.

3.2 They can help you create a global brand

Foreign agents, sometimes called international agents, act as intermediaries between companies, brands, or countries to facilitate trades. Therefore, they will provide insights into how people in these markets think and behave, which is invaluable for any company looking to expand into new territories.

On the other hand, a foreign agent in the UAE can create a global brand for your company. For example, they can help you comprehend the market and better understand the local culture and traditions.

3.3 They can be helpful to connect with people from different countries and cultures

Above all, the UAE is a diverse country with people from all over the world. The government has been able to connect with people from different cultures and countries by hiring foreign agents who can speak the languages of these countries and help their clients connect with them.

Nowadays, the UAE is a hub of international culture; it has been home to many expatriates who have made their home here. It is now one of the most multicultural nations in the world. In the same vein, foreign agents can help you connect with people from different countries and cultures, which will allow you to learn about their cultures and traditions.

A foreign agent in Dubai, for example, can help you reach out to potential clients in China or India. In other words, they can also help you find new business opportunities in these countries or introduce you to potential partners interested in your services.

Likewise, the use of a foreign agent has helped the UAE become one of the most sought-after places for expats, both local and international. It is an essential step towards achieving your goals as an expat in this region.

3.4 They know how to attract global clients and investors

If you know how to hire a professional service, foreign agents have been a popular option for companies to attract investments. In short, they can help you get the attention of potential investors, who may be in different countries and time zones.

On the other hand, many companies have found success in the United Arab Emirates by focusing on a specific area of specialization and offering high-quality services that appeal to particular demographics.

When it comes to attracting new investors, having a foreign agent is one of the most effective strategies. In short, they can help you get the attention of potential investors from all over the world who may not know about your business or industry yet.

4. Law created to give more power to local authorities

The Commercial Companies Law will grant more power to relevant local authorities figures and establish more restrictions on foreign firms to improve the country’s domestic business results.

However, this is not only a common private Commercial Companies Law; it is set to guide the way companies conduct their business in the country. Besides, it aims to create a more transparent and competitive environment for businesses by encouraging them to establish a local presence in the UAE.

On the other hand, the Dubai Land Department has also begun the registration of commercial real estate brokers intending to improve the competitiveness of local brokers in the property market. This will be useful if you get used to the UAE commercial company’s law.

Commercial Companies Law

5. How does this change benefit the UAE?

The Commercial Companies Law is a significant step towards a more open and transparent market. To sum up, it will allow the UAE Cabinet to propose activities of strategic impact for companies, ensure that the country’s interests are safeguarded, and grant companies operating in the country several benefits.

Above all, entrepreneurship and innovation are at the heart of every modern economy. The new legislation in the country is opening up doors for entrepreneurs to explore new sectors, making it easier for them to start businesses in the country.

Besides, in a country like the UAE, where there is a high rate of innovation in robotics and advanced engineering, it is imperative to use a government commercial companies law to protect local inventors working hard to develop new and groundbreaking technologies. The new legislation ensures that these innovators are not mistreated and that they can continue to receive complete protection and benefits for their inventions.

6. Is this law going to allow for electronic voting?

Commercial Companies Law

The Commercial Companies Law allows for electronic voting at general assembly meetings, which is becoming more and more popular among companies of all sizes.

Electronic voting is casting votes electronically by transmitting them to a central computer or server. In other words, voters can use the system for elections and referendums.

7. Can this protect companies against fraud?

With the new corporate and commercial law, the company can appoint board members unrelated to the founder or shareholders. To do this, it can be helpful to hire experts related to banking services.

The law also allows for the appointment of professional board members. It means that companies can avoid fraud by appointing people with a good reputation and relevant experience.

8. How can you protect your company against legal troubles?

The most common way that companies get into trouble is by not knowing their rights. This is why companies need to be aware of their responsibilities as employers.

8.1 Make sure to understand your business

Firstly, the critical task of the business owner is to be aware of the day-to-day operations and make sure that they are running smoothly. Company owners should delegate tasks to their employees and focus on their core responsibilities.

A business owner should also make sure that they have a clear understanding of who is responsible for what and what needs to be done. This will help them decide which tasks they should delegate and which ones to take care of themselves.

On the other hand, the person in charge of the day-to-day operations will need to ensure that they are not overstepping their boundaries and should not be doing more than they can. They should also ensure that they are keeping up with new developments, especially technology.

8.2 Understand the risks associated with your company’s products

There are many risks associated with your company’s products or services. To summarize, some of them are related to the quality of the product, others to the legal implications, and some to the impact on your business.

The most important thing for a business is to know how to mitigate these risks. It would be best to have a plan in place before launching a product or service. This helps you avoid any potential problems that might arise from it.

8.3 Be prepared

With the increasing number of lawsuits against companies, businesses need a consultancy service to protect themselves. In other words, to understand the new business and commercial law, companies need to hire an attorney with experience in this field.

9. How can Connect Middle East help you learn more about this law?

UAE organizations will be affected by these new requirements. It will require companies to comply with several new requirements and regulations outlined in this law. With this new amendment, businesses need to understand their responsibilities to manage their operations accordingly.

The lawyers of Connect Middle East are here to help you with your legal problems. Whether you need help with a contract dispute or an employment dispute, you need to check our packages to discover how they can help you find the solution that works for you.

Our lawyers are experts of corporate legal work troubles related to the new Commercial Companies Law. They have a lot of experience working with attorneys and understanding how the law works from the inside out.

Would you like to learn more about this law? Remember to call us at +97143316688 or send us an email at

Kate Williams

Kate is the Global Strategy Director at Connect Group. She is specialized in business setup in dubai , international business expansion and employee relocation. She studied in Southampton (United Kingdom) and moved to the UAE in 2014.

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