From Foundations to the Future: Dubai’s Journey
From Foundations to the Future: Dubai’s Journey
Later this month, my colleagues and I will be participating in the Legal 500 Middle East Corporate, Commercial and M&A Summit 2023. The event will feature a panel of private practice lawyers and in-house counsels who will discuss some of the current hot topics in corporate/commercial law in the UAE, including the introduction of Corporate Tax, foreign direct investment (FDI) trends and regional M&A activity.
I find these events to be a valuable opportunity to assess the current state of the Dubai economy and reflect on its progress to date. Having practiced law in the UAE for over a decade, I have witnessed significant changes in the laws that impact our businesses and personal lives. This year, Galadari Advocates is also celebrating its 40th anniversary as a Dubai headquartered law firm, which is a remarkable achievement in a city renowned for its modernity and futuristic vision.
The UAE economy has shown remarkable resilience in the face of recent economic challenges, including the impact of COVID and the inflationary pressures stemming from the conflict in Ukraine. Despite these obstacles, the UAE economy has not only resisted such challenges, but has thrived, with The UAE Minister of State for Foreign Trade announcing earlier this month that the country’s non-oil foreign trade has reached record highs in 2022, including robust growth in hydrocarbon foreign trade.
There is a lot of commentary available on why the Dubai economy has experienced such a sudden and positive upturn, but it’s worth considering the role of legislation in creating a solid foundation for success in these buoyant times.
The UAE, specifically in Dubai, has been highly effective in attracting foreign direct investment (FDI), whether in real estate or business. The FDI is driven by the UAE’s dynamic legislative framework, which has become attractive to foreign investors due to its stability, predictability, and security to foreign investors, contributing to the development and growth of the country.
An example of legislation supporting FDI would be the regulations introduced in the real estate sector for the sale of off-plan properties to safeguard the interests of buyers. This includes mandatory use of escrow accounts by developers and compliance with other regulations. In the business sphere, Dubai and Abu Dhabi have allowed wholly foreign-owned onshore companies to carry out a range of activities, eliminating the previous requirement for a local sponsor to hold 51% of such entities.
It is worth noting that the legislation related to FDI has progressively become more robust. The recent development of allowing foreigners to own 100% of an onshore company since mid-2021 is an example of this trend. previous laws existed on this subject, but the most recent law has removed the ambiguities observed in previous iterations.
This progressive stability of the economy is reflected in various aspects of doing business in the UAE, such as the availability of Golden Visas, and the clear process for handling succession matters for non-Muslims at the Dubai International Financial Centre (DIFC) Wills Service Centre.
So, what are we seeing just now in terms of the latest legal developments? The upcoming event will feature the topic of r Artificial Intelligence, among many others, as it is a significant aspect of the high technology society that we live in.
The UAE has already taken a proactive approach in introducing legislation related to cutting-edge technology sectors, such as cryptocurrency and blockchain. It has also placed an emphasis on growing the investment ecosystems supporting such innovations. DIFC and the Abu Dhabi Global Market (ADGM), two Financial Free Zones in the UAE, have played a crucial role in promoting technological advancements and investment opportunities.
The world and the economy are ever evolving, and it is impossible to predict the future challenges and opportunities. However, it can be said, with great confidence, that Dubai is well-prepared and equipped to face the future with a strong foundation and a successful approach.
The authors of this article are Gerry Rogers and Paula Villegas Guevara. As part of the Legal 500 Middle East Corporate, Commercial and M&A Summit, Galadari Advocates & Legal Consultants will be hosting a panel on the impact of new FDI Laws and Corporate Restructuring in the UAE on February 28, 2023. Gerry Rogers and Paula Villegas Guevara will delve into the impact of these changes across different sectors in the UAE to bring unique assessments on the topic, and a distinct view on how the market is considering these changes and planning ahead.
Galadari Advocates & Legal Consultants’ market-leading Commercial and Corporate team have lawyers dedicated to providing tailored and sensitive legal advice on corporate and commercial matters in the UAE. We will be happy to discuss any queries you may have.
|Paula Villegas Guevara