 The recent newspaper report of an amendment to the UAE Commercial Companies Law removing the present minimum share capital requirement (presently AED150,000) for limited liability companies is welcome news since it indicates the UAE’s desire to encourage the growth in the establishment of new businesses. Details of the change are yet to be made public, but there are several related clauses in the law that may need to be addressed. For example, the law requires the minimum par value of a share to be AED1,000. If this remains unchanged it means that for an expatriate to establish a company there would need to be a capital of AED100,000 given that a 51% local shareholding is required. The Dubai Department of Economic Development requires a share capital of AED300,000. As yet we have had no news that they will amend their requirement and, if they do, to what. I am sure these issues and any others, such as the impact on the requirement for a statutory reserve and the triggering event for possible dissolution, will be appropriately addressed.
The International Accounting Standards Board has issued its much-awaited IFRS for Small and Medium-sized Entities. At only about 230 pages it is considerably condensed from the over 2,500 pages of full IFRS. The standard removes and/or simplifies many of the accounting options and has substantially reduced the volume of disclosures. Despite its name, it can be applied by any company that does not, or has not applied to, have its shares listed on any type of public market and does not hold assets in any fiduciary capacity, such as banks, insurance companies, securities brokers/dealers, etc. It will be interesting to see how many companies take up the option to apply this standard rather than full IFRS.
In Abu Dhabi their inaugural Formula 1 event is on the starting grid for November. This, together with the recent high profile investments in English Premier League football clubs and the planned Guggenheim and Louvre museums, should raise the tourism profile of the Emirate and have the consequent ripple effect on other businesses.
We are very pleased to have had the opportunity to interview Mr. Mohammad Al Ansari, Managing Director of Al Ansari Exchange.
In this edition we have articles on the causal dining market in the UAE and on the pitfalls in capital budgeting as well as our updates from Oman and our Offshore and Free Zone team.
Please fee free to write to update@pkfuae.com if you would like to express an opinion on any matter inside.
GRAHAM MARTINS |
