In this age of globalization and emerging markets, Dubai’s economic and cultural development is supported by a legal framework that has expanded significantly to support important local and foreign firms in Dubai and is continually evolving. The suitability of the local legal and regulatory environment is a recurrent consideration when deciding where to conduct commercial operations. Dubai’s robust and dynamic legal system is amply demonstrated by the willingness of foreign companies to locate in and operate in Dubai as well as by the success of local enterprises there.
The system’s underlying principles
The governing principles and sources of law in Dubai’s legal system are derived from civil law principles. Dubai’s legal system is characterized by a number of key codes that provide for general legal concepts and a significant amount of supplemental law. The most important and fundamental legal principles of business setup services in Dubai are covered by federal codes of law that are applied in Dubai and the other emirates. As a result, the Ruler of Dubai has passed various laws that deal with issues that are more of a ruling character.
The Legal System
Despite the fact that each emirate in the UAE is permitted to have its own legal body under the federal constitution, all emirates aside from Dubai have consolidated their judicial systems under the UAE Federal Judicial Authority. Due to its independence from the UAE Federal Judicial Authority, Dubai has retained its own independent courts. Court cases in Dubai are heard by one or more judges. Nonetheless, some higher courts deliver judgments that serve as useful examples of how the law will be interpreted and applied in the future.
The courts in Dubai operate in the Arabic language, hence legal representation requires legal counsel who are duly authorized to appear before the courts. The journey of this Arab unity was greatly aided by a strict devotion to the rule of law. It is unheard of anywhere in the world how much businesses, both domestic and foreign, contribute to the development of a country. In addition, the regulatory environment of the nation has increased opportunities for development and primacy in all endeavors, as envisioned by Prime Minister.
Corporate governance is, on a global scale, a compliance concept through a legal framework and best practice guidelines. Several governments have incorporated the best practice principles for Company setup in Dubai into their domestic legislation by making some incorporations required and others optional. The UAE Commercial Companies Law is the primary piece of legislation addressing the important spheres of incorporation governance.
Additionally, the Securities and Commodities Authority of the UAE has published corporate governance regulations 6 that are only relevant to listed UAE public firms. These rules were made possible by Master Law. Since it now falls under Central Bank regulations, the regulation does not apply to banks. The DIFC law No. 2 of 2009 read with the general module regulates the corporate governance of DIFC enterprises. Companies Regulation and Commercial Licensing Regulation of Global Market are the regulatory bodies that apply to companies.
The three main institutions in charge of corporate governance are the Central Bank, the Security and Commodity Authority, and the Department of Economy. The regulatory framework covers the membership, structure, duties, and compensation of the board. Additionally, it includes a mechanism for any applicable corporations to face penalties for breaking corporate governance laws. Corporate governance guidelines are not applicable to non-listed corporations. The existence of a self-regulatory framework with the spirit of contractual duty is a requirement for private enterprises in order to give strength to the efficient functioning of the business under the control of the law.
The future of Dubai’s legal system
The business environment in Dubai has swiftly changed as it becomes a major global hub for investments. Rapid advancement brings difficulties. Due to the wave of innovation that has fundamentally altered how organizations conduct themselves, many of these problems are now global in scope. Local issues, however, are specifics brought on by Dubai’s developing status as an innovator. Focusing on flaws, such as excessive or insufficient regulation, is typical in any jurisdiction. Dubai and its legal system are incredibly flexible and respond very swiftly to shifting business needs. The nation’s standing as a premier international economic center will be strengthened by this agility.
We are one of the players in the Dubai region for business consulting. We offer services to businesses and individuals interested in building their progress in Dubai.