A Quarterly Newsletter from UAE and Oman member firms of the PKF International Ltd.

VOL 12, Issue 3 July 2010

From the Managing Partner’s Desk

I have seen the headlined “Full Foreign Ownership Law” to be issued by year end. Whilst this has been doing the rounds for a number of years, the statement to this effect by the UAE Minister of Economy, Sultan Bin Saeed Al Mansouri, is much more substantive. However, more recent statements from the Department of Economic Development indicate only a majority rather than 100% ownership. Whatever the change, this will be an added incentive for foreign companies to enter the market and will increase commercial structuring opportunities so increasing inbound investment. There could well be terms attaching to this but it will still be a major shift in policy on the part of the country.

April 2010 will see the introduction of a range of corporate governance rules for listed companies the UAE. These rules will require the boards of directors to institute internal control systems and urge companies to implement principles of good corporate governance and establish frameworks for the protection of shareholder rights, fair treatment of shareholders, transparency and for the duties of the company’s directors. This is not a recent event as the rules were originally promulgated some three years ago but is a timely reminder of the responsibility that public company directors have towards their shareholders and the public at large. Time will see as to whether the requirements, or versions of them, will filter down to private joint stock companies or, indeed, limited liability companies or other forms of commercial companies.

The recent decree granting freehold commercial land ownership to nationals who will be permitted to take foreign partners in joint ventures will create a more stable basis for development of commercial and industrial projects as establishing manufacturing units on rented land or land subject to restrictions came along with added risks. This will redirect inbound investment in a very beneficial manner for the long term economic outlook.

In this edition we have an article on Masdar City, Abu Dhabi, a bold commitment on renewable energy and sustainable technology.

We are very pleased to have had the opportunity to interview Mr. Ken Swan, General Manager of Al Moherbie Clearance & Transport Est and Al Moherbie International Freight Est.

Please fee free to write to update@pkfuae.com if you would like to express an opinion on any matter inside.

GRAHAM MARTINS