KHALEEJ TIMES, Monday, Aug 31, 2020 | Muharram 12, 1442
New law for Dubai government entities to set up companies
Emirates:
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai
and Chairman of the Dubai Executive Council, said the continuous development
of the emirate's legislative framework is crucial to the achievement of
Dubai's strategic objectives. The enhancement of the legal framework is a
vital element in enhancing the growth prospects of various sectors, he
stressed.
"As part of implementing the directives of His Highness Sheikh Mohammed bin
Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of
Dubai, to accelerate economic development and promote investments, Dubai places
high importance on creating an integrated legislative infrastructure that
facilitates equal opportunities for public and private sectors. We are keen that
the private sector plays a major role in shaping the future of the national
economy and achieving sustainable development. A legislative framework that
protects their interests is critical to their growth and success."
He added: "We do not want to be a competitor to the private sector, but rather
seek to complement it. The partnership between the public and private sectors
adds significant value to Dubai's sustainable development."
Sheikh Hamdan's comments came as he issued Executive Council Resolution No. (23)
of 2020 on the terms, conditions and regulations governing the establishment of
companies by Dubai Government entities. The resolution standardises procedures
for establishing government-owned companies in line with international best
practices. It seeks to encourage investments in various sectors and ensure
strong governance at government-owned companies.
According to the resolution, a government entity is allowed to establish a
company if its main activity falls within the objectives and responsibilities of
the entity. It should also contribute to Dubai's sustainable development plans
and offer products and services of strategic economic importance.
To establish a government-owned enterprise, the government entity must follow
the standardised procedures outlined in the resolution. It should coordinate
with Dubai's Department of Finance to prepare a feasibility study for the new
enterprise and adhere to the articles of the UAE Federal Law No (2) of 2015 on
Commercial Companies. Dubai's Department of Finance, in coordination with the
General Secretariat of The Executive Council, will review the company's
feasibility study, conduct competitor analysis and submit its recommendations to
the Chairman of The Executive Council or the First Deputy Chairman of The
Executive Council for approval.
The newly established company must uphold the principles of fair competition. It
will not enjoy any advantage or receive any financial support from the
government. Government-owned companies should pay all taxes, fees, charges and
tariffs specified by federal and local legislations.
All government-owned companies under the purview of this resolution must abide
by its provisions within two years of the date of its activation. The Director
General of Dubai's Department of Finance will issue all the bylaws required to
implement the resolution.
The new resolution annuls any other legislation that contradicts or challenges
its articles. The resolution will be published in the Official Gazette and will
be effective from the date of publication.
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