The Ministry of Economy (MoE) in the United Arab Emirates (UAE) has announced that a new law for commercial agencies will come into effect on 16 June 2023.
Under this law, the business of commercial agencies will be limited to UAE nationals and public joint-stock companies with a minimum of 51% of national capital contribution.
National capital contribution in UAE is the percentage of a company’s ownership or investment held by UAE nationals or joint stock firms.
However, under specific conditions and with the approval of the UAE Cabinet, international companies may still be permitted to serve as commercial agents for their own products.
The purpose of the new proposed law is to assist commercial agencies in expanding and contributing more to the national economy by diversifying their activities and enhancing their performance. In addition, it seeks to improve the investment climate and safeguard the interests of contracting parties.
Abdulla Al Saleh, Undersecretary of Foreign Trade And Industry at the MoE, stated that the law will encourage national investments and foreign direct investment (FDI) in the country.
He also remarked that it will enable commercial agencies to grow and provide consumers with better products and services, as well as provide new job opportunities across the country.
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