The UAE has reduced the official age to practice business within its borders.
Individuals aged 18 years are now permitted to practice business, compared to the erstwhile permissible age of 21, according to a new law.
The UAE’s Ministry of Economy (MoE) held a media briefing on January 12, to introduce the Federal Decree Law No. 50 of 2022 on Commercial Transactions in the UAE.
“The issuance of this new law, developed by the Ministry in cooperation with its partners, replaces the previous legislation that remained in effect for nearly 30 years, and forms part of the comprehensive legislative reform undertaken by the UAE government,”
said Abdullah Al Saleh, Undersecretary of the Ministry of Economy.
“The law aims to advance the transition to the new economic model and impart increased levels of flexibility and competitiveness to the UAE’s business climate.”
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The most prominent features of the new law include:
- Allowing new age groups to practice business by reducing the age of legal capacity from 21 to 18 (Gregorian years) to practice business. This will encourage youth participation in the business sector.
- Establishing a legal reference for commercial transactions for banking institutions to stimulate investment.
- Enhancing opportunities for women to participate in economic and commercial activities.
- Offering support to Islamic banking in the UAE and establishing it as one of the main growth drivers.
- Amending the provisions related to regulations and the establishment of financial markets.
- Offering support to businesses related to the tech sector.
The Undersecretary explained that the decree-law targets a large segment of society, traders, investors, owners of foreign companies, owners of commercial projects and companies, banks and financial institutions, dealers in commercial papers such as checks within the UAE, and contractors who take up commercial contracts such as transportation and storage activities.
The law also
- Reduces the maximum interest rate on a commercial loan, if not stipulated in the contract, to 9 per cent instead of 12 per cent, and prohibits compound interest. This will enhance the investment environment in the country.
- Obligates banks to obtain sufficient insurance or guarantees in return for the loans they provide.
- Reduces the decline of entrepreneurs and individual institutions as it prevents overburdening them with installments that are disproportionate to their income levels and increases their ability to pay back.
News Source: Gulf Business