Jasem Alanizy focuses on cross-border mergers and acquisitions, private equity and capital markets transactions in the UK and the Middle East. He has represented public and private companies, private equity firms, sovereign wealth funds and venture capitalists in connection with acquisitions, sales, joint ventures, investments and corporate restructurings. Laws on Private Security Companies – Ministry of the Interior The new Companies Act, which entered into force on 2 January 2022, introduces significant changes that provide for two new commercial vehicles, a special purpose vehicle (SPAC) and a special purpose vehicle (SPV). A number of other changes to the new company law will provide greater flexibility in certain aspects, including corporate governance and corporate restructuring in relation to limited liability companies (SARLs) and public joint-stock companies (PJSC). Article 4 of the Legislative Decree mentions the companies that are exempt from its provisions. The definition of SPV is similar to the mandatory companies offered by the Dubai International Financial Centre (“DIFC”), which can be used as investment holding companies in larger transactions, financing or asset management structures. The amendments to the Old Companies Act in 2020, which attracted the greatest interest from investors, were arguably the amendment to Article 10 of the Old Companies Act. This article required that a UAE national or a company wholly owned by UAE nationals own at least fifty-one percent (51%) of the share capital of each UAE company incorporated onshore in the UAE (this requirement did not apply to free economic zones). As part of the 2020 amendments, section 10 was amended to remove this requirement. While the old Companies Act will no longer be in force from 2 January 2022, it should be noted that Article 10 has remained unchanged in the new Companies Act. However, Article 10 states that the threshold required for UAE ownership (if any) should be set by Cabinet on the recommendation of a committee that must determine which activities are considered “strategic impacts” so that foreign investors have the right to hold up to one hundred percent (100%) of the legal ownership of these companies. In recent years, there have been significant changes in the United Arab Emirates` (“UAE”) regulatory system for regulating businesses.

The pace of change continues to accelerate with a major legal reform program launched in 2021 to mark the 50th anniversary of change. To celebrate the anniversary of the founding of the United Arab Emirates. A new company law regime set out in Federal Legislative Decree No. 32 of 2021 on Commercial Companies (“CCL 2021”) is among the latest developments that local companies established on land in the UAE need to understand their management, shareholders and potential investors. The former Companies Act, which was only introduced in 2015 and was provided for in Federal Act No. 2 of 2015 as amended (“CCL 2015”), was repealed and replaced by CCA 2021 with effect from 2 January 2022. While the new company law regime makes relatively conservative adjustments to the CCL 2015 corporate law regime and largely consolidates some recent changes and regulations under the CCL 2015, some new regulations have the potential to bring transformative changes in the structuring of certain types of transactions in the UAE. Management entities must be well informed and prepared to comply with the requirements of the CCA 2021 and, where appropriate, take advantage of opportunities arising from the new regime. The UAE government has already implemented an impressive series of legal reforms in recent years. Groundbreaking reforms have lifted restrictions on foreign investment regimes and allowed foreign investors to fully own local companies subject to federal restrictions to protect strategic sectors (read more…), introduced modernized listing regulations, more robust corporate governance frameworks, and addressed a number of other issues facing businesses, including Security, Bankruptcy and Business Rescue. Taken together, these reforms promise to boost investor confidence in the UAE`s business environment, which is among the most advanced in the Middle East.

Special Purpose Acquisition Companies (SPACs) will also be introduced under the new law (as public joint-stock companies (PJSC)). PSPCs are “shell companies” formed for the purpose of being publicly traded and raising capital for the purpose of acquiring assets (usually shares of private companies). As with VPS, PSCPs are exempt from the requirements of the new legislation, but are subject to regulations published by the FCC. The general commercial laws apply with the exception of Federal Decree-Law No. 32 of 2021 on Commercial Companies. The new Companies Act allows newly created companies to carry out CSRs and set aside profits for these purposes. This removes the restriction imposed in the 2020 amendments, which allowed a CMP to contribute to CSR only if it was established for at least two fiscal years with a cap of two percent (2%) of the average profit of the last two fiscal years. In addition, the new Companies Act requires publication on a company`s website, even if it does not contribute to CSR, which was no longer necessary after the 2020 amendments.

The new Companies Act introduces the concept of a division of a joint-stock company; This division may be: (a) horizontal (i.e. where the same shareholders directly hold the shares of the resulting company in proportion to/similar to their shareholding in the parent company); or (b) vertically (i.e., if any portion of a company`s assets or business activities is disposed of by the formation of a subsidiary to acquire those divested assets or business activities, and that subsidiary is wholly owned by the company). With regard to the procedure for such a division, the board of directors must prepare a “detailed draft division” with the necessary details in accordance with the new law on joint-stock companies and submit it to the general meeting for approval. Upon receipt of such approval, no objection should be sought from the SCA or the UAE Ministry of Economy (as applicable) before the “detailed division project” can be implemented. Omar Momany is a partner at Habib Al Mulla & Partners, a member firm of Baker & McKenzie International, and head of the UAE Corporate/M&A practice. Omar focuses on public and private mergers and acquisitions, corporate restructurings, corporate governance, joint ventures, commercial issues and corporate-shareholder disputes in the UAE and across the region. Omar has over 17 years of experience in the Middle East and has worked for local and regional companies and financial institutions, governments and regulators, multinational corporations, family businesses and royalty.