By Staff Writer
Dubai announced last week that it will set up a third stock market at the Dubai Future District
Amendments to the UAE Agency Law will extend protection to family-owned businesses in the emirates in a bid to encourage them to list publicly, according to a local law firm.
The UAE Cabinet on Saturday approved the draft law which is expected to enhance the nation’s trade and investment development and drive forward competition in line with international standards and regulations.
The amendments, which apply to UAE nationals, foreign principals, those in the business sector and public shareholding companies, will provide the Emirati family-owned SMEs with the least possible risk in case of defaults, according to Susie Abdel-Nabi, partner in Clyde & Co's Middle East Dispute Resolution team.
“It appears that part of the amendments aim to extend protection to UAE family-owned SME’s and UAE shareholders when they default and to further protect their interests,” Abdel-Nabi said.
"In respect of commercial agencies, such as family-owned SME’s and shareholders will be provided with the ‘least possible risk’ by providing them with protection in cases of termination or non-renewal of agreements without ‘material reasons."
However she said the material reasons will likely remain undefined to protect local companies.
“It remains to be seen whether “material reasons” will be defined in order to provide certainty for contracting parties when termination or non-renewal occurs, however, it is more likely that it will remain undefined so that the position is still ambiguous as to what are considered valid reasons to terminate/not renew,” Abdel-Nabi said.
The new draft law comes just as Dubai announced the setting up of a third stock market at the Dubai Future District.
Family-owned businesses contribute 60% of the UAE’s GDP and 80% of the emirates’ workforce, according to PwC, with $1 trillion believed to be passed down from one generation to the next within a decade.