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

VOL 17, Issue 4 October 2015

From the Managing Partner - U.A.E.

On 1 July 2015 Federal Law No.2 Concerning Commercial Companies came into effect with a one year grace period for companies to bring their constitutional documentation and practices into line. The vast majority of companies in the UAE are Limited Liability Companies (“LLCs”) and an analysis of the new law indicates there could be a significant impact on the way LLCs are run. The reason for this is the existence of three articles – Article 84.2 which states “The provisions that apply to directors of Joint Stock Companies shall apply to a manager of an LLC”, Article 104 which states “Unless stated otherwise, provisions concerning Joint Stock Companies shall apply to LLCs” and Article 102 which states “Auditors shall be elected by the general assembly and the provisions relating to auditors of a Public Joint Stock Company apply to auditors of LLCs”. Significantly, the penalties for non-compliance have now been explicitly included and encompass fines and imprisonment. One is lead to believe that Executive or Ministerial Regulations in connection with the law are yet to be issued and these could well affect the manner in which many of the clauses, in relation to LLCs, are to be interpreted or applied. However it does appear that the Dubai Department of Economic Development are applying the new law to the registration of new LLCs insofar as changes to the Memorandum and Articles of Association are concerned. So for the moment, it is a “wait and watch”. Very recently three Ministerial Regulations in connection with the UAE Labour Law were issued that come into effect on 1 January 2016. These regulations cover a standard work contract, terminating a work contract and granting a new work permit. These new regulations are looked upon as improving the lot of employees and making the workforce more mobile. Whilst some may look upon this as making it more difficult to retain talent, other look upon it as an opportunity to more easily attract talent from the local market place. How do you see it?

We are delighted to feature an interview with one of our well-wishers in the UAE, Mr. Rizwan Sajan, who reminisces about his journey.

We also feature an article on the need for, and the importance of, counselling to meet the psychological needs of employees. An update on the Dubai Design District or d3 is also featured in this issue.

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