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UAE scraps minimum capital for LLCs
11/08/2009
Nadim Kawach on Tuesday, August 11, 2009
Investors no longer require a minimum Dh150,000 capital to start small companies in the UAE, according to a new decree issued by President His Highness Sheikh Khalifa bin Zayed Al Nahyan, Ruler of Abu Dhabi, yesterday.
The decree allows founders of limited-liability companies (LLCs) to decide capital that will be sufficient to achieve its objectives, Wam reported.
Welcoming the decree, Minister of Economy Sultan bin Saeed Al Mansouri described it as a "positive step to encourage investment in the UAE". "This decree illustrates the insight and strategy of our leadership to develop the investment environment in the country and support diversification plans to ensure economic prosperity for all citizens and residents."
The new decree, which modified the 1984 federal corporate law governing limited-liability establishments, is intended to reduce the costs of establishing such ventures to encourage investment.
"The new law is also designed to cut bureaucratic red tape for the establishment of new firms as investors are no longer required to have bank certificates or related documents to create such entities," Wam reported.
"Our leadership is committed to strengthening the performance of SMEs, which are a major contributor to the UAE's GDP," Mansouri said last month.
Ministry figures showed SMEs contribute 46 per cent of the GDP and form around 80 per cent of the total projects worldwide. "There are many challenges facing SMEs in the UAE, including lack of training, financing, high operation costs, expatriate labour, absence of marketing network to promote national products and procedural obstacles," Mansouri said.
"We should exert efforts to tackle these challenges, by developing SMEs across the UAE. We will also work to facilitate procedures of registrations and financing and to conduct training programmes."