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In a big boost for family-owned businesses the UAE Cabinet has approved a draft law amending provisions within the nation's Federal Law No.18 of 1981, that regulates commercial agency and distribution agreements within the country.
According to a statement released on Saturday by the UAE Cabinet General Secretariat, the amendments come within the framework to enhance the country's trade and investment development to boost the UAE's competitive business climate in line with international standards and regulations.
According to the Secretariat, the new proposed law will provide for the transformation of family-owned businesses to join the country's financial markets, and encourages UAE nationals to engage in business activities and invest in public shareholding companies and their commercial agencies with the "least possible risk" in investment, particularly for small shareholders and owners of SMEs, granting them the necessary statutory protections in cases of termination or non-renewal of agreements without "material reasons."
The amendments in law which otherwise known as the 'Agency Law' will see changes to certain provisions within the Agency Law, particularly concerning the business sector, public shareholding companies, UAE nationals and foreign investors.
The amendments target the aforementioned groups to contribute towards bolstering the UAE economy and increasing investments opportunities through the provision of high-quality services, and allowing family-owned companies the opportunity to turn into public joint stock companies. This, the General Secretariat statement explained, will open up varied opportunities for companies, allowing for continued growth for future generations.
It aims to enhance the capabilities and continuity of family businesses, as well as to establish rules of governance and protection from defaulting, the Cabinet Secretariat added.
The statement noted that such changes will further encourage UAE nationals to engage in business activities, and invest in public shareholding companies while protecting their interests.WAM
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