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Wednesday, March 22, 2023

UAE lowers legal age to run a business

UAE lowers legal age to run a business

UAE lowers legal age to run a business

The UAE has lowered the legal age for doing business within its borders.

Under a new law, individuals aged 18 can now engage in business, compared to the previously allowed 21.

The UAE Ministry of Economy (MoE) held a media briefing on January 12 to introduce Federal Decree No. 50 of 2022 on commercial transactions in the UAE.

“The promulgation of this new law, developed by the ministry in cooperation with its partners, replaces previous legislation that had been in force for almost 30 years and forms part of a comprehensive legislative reform undertaken by the UAE government,” said Abdullah Al Saleh, Deputy Minister of Economy. minister.

“The law aims to facilitate the transition to a new economic model and empower a higher level of flexibility and competitiveness in the UAE’s business environment.”

The most salient features of the new law include:

  • Allowing a new age group to engage in business by lowering the age of legal capacity to do business from 21 to 18 (calendar year). This will encourage youth participation in the business sector.
  • Legal reference for establishing commercial transactions for banking institutions to stimulate investment.
  • Increase opportunities for women to participate in economic and business activities.
  • Supporting the Islamic banking sector in the UAE and establishing it as one of the key growth drivers.
  • Revise relevant laws and regulations and provisions on financial market construction.
  • Provide support for businesses related to the technology industry.

The Deputy Minister explained that the decree targets a large segment of society, traders, investors, owners of foreign companies, owners of business projects and companies, banks and financial institutions, and dealers of commercial paper such as checks within the UAE, and contractors who undertake commercial contracts such as transportation and storage activities.

the law also

  • Reduce the maximum interest rate on business loans (if not specified in the contract) to 9% instead of 12%, and ban compound interest. This will improve the investment climate in the country.
  • Banks are obliged to obtain adequate insurance or guarantees in exchange for the loans they make.
  • Reduce the decline of entrepreneurs and individual establishments, as it prevents them from being overburdened with installments disproportionate to their income level, and improves their ability to repay.

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