Commercial agencies draft law still in legislative stage, says ministry of economy

The new law was recently passed from the UAE cabinet to the Federal National Council for discussion

The UAE, the Arab world's second-largest economy, is undertaking various measures to attract more FDI into the country. Khushnum Bhandari/ The National

The UAE’s Ministry of Economy on Monday said the new commercial agencies draft law is still going through the legislative process, in accordance with the mechanism followed in the country for the issuance and approval of laws.

The draft law was “recently passed on from the UAE Cabinet to the Federal National Council, where it will be discussed and subject to further modifications and improvements if necessary, in co-operation between the competent government entities”, the Ministry of Economy said in a brief statement.

The ministry's clarification comes after a Financial Times report said the new law aims to remove the monopoly some of the biggest UAE family businesses have on the sale of imported goods and give foreign companies the opportunity to distribute their own goods, or to change their local agency.

The proposed law must be approved by the UAE leadership and the timing for that remains uncertain, the report said.

The UAE, the Arab world's second-largest economy, is undertaking various measures to attract more foreign direct investment into the country. This year, it unveiled a new industrial strategy to boost the contribution of the industrial sector to Dh300 billion ($81.68bn) in the next 10 years from Dh133bn.

The country overhauled its commercial companies' law last year to attract more foreign capital and annulled the requirement for onshore companies to have an Emirati shareholder.

The UAE also brought in the most extensive legal reforms in the country’s history last month ahead of the Golden Jubilee celebrations of its formation. These include greater protection of personal data, stronger copyright rules and stricter measures to tackle fake news.

Other initiatives include amendments to the law on electronic transactions and trust services that give digital signatures the same weight as a handwritten signature.

The UAE is seeking Dh550bn of inward foreign investment over the next nine years and aims to be among the 10 biggest global investment destinations by 2030, UAE’s Minister of Economy Abdulla bin Touq said earlier this year.

The UAE economy is expected to have grown 2.2 per cent in 2021 and to grow 3 per cent next year, the International Monetary Fund said in its World Economic Outlook in October.