Questions & Answers
UAE companies' governance and compliance
How companies in the UAE ensure corporate governance and compliance with UAE laws without a mandatory company secretary as in India?
Dear questioner,
In accordance with Article 6 of the Federal Law No. 2 of 2015 On Commercial Companies, Subsection 2 states: "The board of directors of a company or its managers, depending on the circumstance, shall be responsible for the application of the rules and criteria of governance."
Mainly, there are three types of companies that small to medium size businesses normally opt for:
Limited Liability Company Incorporated in the mainland:
In this type of company, there must be a UAE local who must hold a minimum of 51% shareholding in the company. The company will run and manage its operations by appointing a manager who may or may not be a shareholder of the company.
Civil Company:
It is a single owner company in which one Local Services Agent is appointed and will be responsible for the government liaison only and the rest of all the operations will be managed by the owner of the company.
Free zone companies:
They are regulated as per the laws and rules of each respected free zone authority.
This is just a brief about the entities and their corporate governance.
For further assistance, kindly contact us via phone or email.
Best Regards,
Khubaib Naeem
