Amendments to UAE Companies Law

The majority of close-held firms in the United Arab Emirates are owned by UAE national families, and over the years the larger of these family-owned businesses have grown into substantial international business groups. One reason for this growth is the agency legislation which requires domestic distributors to be wholly owned by UAE nationals or by corporate entities that are wholly owned by UAE nationals, thus requiring foreign companies that wish to establish distributorships in the United Arab Emirates to appoint a UAE national or wholly owned UAE entity as distributor. Some of the largest unlisted businesses in the United Arab Emirates are family owned.

Pursuant to the UAE Commercial Companies Law (Federal Law 8/1984, as amended), if a UAE family-owned business wishes to convert to a public company and list its shares on a stock exchange in the United Arab Emirates, it must sell a minimum of 55% of its shares to the public, thus effectively losing control of the business.

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