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Will the UAE’s new law change business?
The country has scrapped the AED150,000 minimum requirement for a company to start a business here. According to analysts, more has to be done.
August 11, 2009 12:16 by Aarti Nagraj
The decree announcing that companies will no longer need a minimum of AED150,000 to begin operations in the UAE was announced on Sunday, by the UAE President, Sheikh Khalifa bin Zayed Al Nahyan. The federal corporate law was amended to reduce the cost of setting up new businesses in the country, said the UAE’s official news agency WAM.
The new decree hopes to reduce bureaucratic procedures, decrease the process time to set up private businesses in the country, and therefore attract more foreign money to the UAE, says the report.
But will the decree manage to have a huge impact in the country?
“The amendment is very timely and will boost business confidence in the economy,” says
Samir Pradhan, senior researcher of the GCC Economics & Gulf-Asia program at the Gulf Research Center.
“In the long run, this would add value to the overall economic diversification with long term stability in terms of declining dependence on cyclic economic sectors such as real estate and construction. Moreover, this would encourage young Emirati entrepreneurs to actively participate in the country’s economic development,” he adds.
The UAE, especially Dubai, has been hit hard by the financial crisis, and many private companies, especially in the real estate sector, have been forced to reduce investments and close projects. But according to Pradhan, the decree has not necessarily been prompted by the slowdown.
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