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30 September, 2020

Dubai Government Passes Resolution to Set Up Companies

The Executive Council of the Dubai Government, under the leadership of Sheikh Hamdan, passed a resolution on governance related to establishment of companies by Government entities.

One of the key measures taken by the Dubai Government centres around business, governance and fair competition in driving the economy. While private sector companies are high in number, the public sector organizations are also present in key sectors, providing healthy and symbiotic competition.

In adherence to UAE Federal Law No (2) of 2015, the Dubai Government passed an Executive Council Resolution No (23) of 2020, which relates to the governance of Government entities setting up companies. The resolution in particular lays down standardized procedures for setting up entities and operating them.

The resolution further states that all such entities that are setup by Government bodies, will not enjoy any special benefits, and shall be subject to the same equal and fair treatment as private sector companies. Specifically, these companies will also be required to pay all the fees, charges, tariffs and taxes as levied by federal and local Government departments.

The main aspect pertaining to the core business activity of the proposed company to be formed is also covered by the resolution. If that core activity is covered under the objectives and responsibilities of the Government entity, then the entity may form the company. The company is also expected to contribute to the sustainable development plans of Dubai and to offer economically important products and services.

The resolution will come into effect from the date that it is published.

 

Source: Zawya

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