Pakistan Business Council

Business Related Governing Laws

Federal Commercial Companies Law No. 8

The regulation of Business in UAE is enforced by Federal Commercial Companies Law No. 8, enacted in 1984 and fully enforced in its amended form in January 1989, applies to all companies formed since then. This company's law dictates that UAE national equity of 51% for nationally incorporated companies and 100% for public/private shareholding companies is mandatory.

Foreign companies or individuals must have a local sponsor (or service agent) along with a trade license to conduct business in the UAE. The foreign companies are also required to register with the UAE Ministry of Finance, local Chamber of Commerce and Industry and the Economic Development Department.

Federal Act Number 18 for Commercial Agencies

According to the Federal Act Number 18 of 1981 for Commercial Agencies, an agent or commercial agency must be registered in the Commercial Agents Register kept by the Ministry of Economy; also, the agent or distributor must be an UAE national or a company owned by UAE nationals. A single agent may be appointed for the whole of the UAE or for a particular Emirate pursuant to the terms of the agency agreement.

An agency agreement may be terminated by mutual consent of the parties or by one of them if there is a reasonable cause for termination. Unless the agency is terminated in accordance with the law and cancellation is approved by the Ministry of Economy and Commerce, the agency may not be registered in the name of a new agent.

AGCC Unified Economic Agreement

The AGCC Unified Economic Agreement drawn up on 8 June 1981, directs that products originating in any AGCC state are exempted from customs duty (and other charges having an equivalent effect) in any other AGCC state.

To qualify as national products, the manufacturing unit (factory) must be licensed by the Ministry of Finance and Industry and, the value added ensuing from their production in member states must not be less than 40% of their final value. Also, the share of the member state citizens in the ownership of the producing plant must not be less than 51% unless the ownership is 100% AGCC. A certificate of origin duly authenticated by the appropriate government agency must accompany every item for which exemption is claimed.