The United Arab Emirates (UAE) distinguishes itself with its central position in global trade activities. Therefore, it is committed to developing its commercial laws in line with international standards and the rapid economic growth within the country.
Article 1 of Federal Law No. 18 of 1993, regulating commercial transactions and amended by Federal Decree-Law No. 50 of 2022, stipulates that the provisions of this law apply to traders and all real or virtual commercial activities conducted in technical environments or through modern technological means by any person, even if not a trader. Commercial activities and agreements between the contracting parties are subject to the law unless their agreement contradicts a mandatory commercial provision.
Commercial activities encompass:
- Buying and selling goods and tangible or intangible property for profit.
- Banking operations, stock market activities, investment companies, credit funds, financial institutions, and other financial brokerage operations.
- Shipping and unloading operations.
- Establishment of companies.
- Tourism, hospitality, restaurants, cinemas, theaters, and stadiums.
- Water, electricity, and gas distribution activities.
The UAE Commercial Transactions Law is applied by the Ministry of Economy and the federal and local courts. The Ministry of Economy ensures companies’ compliance with the law and resolves disputes between parties. Federal and local courts are responsible for adjudicating disputes between parties.
Article 23 of the Commercial Transactions Law prohibits certain categories from engaging in trade, including:
a. Traders declared bankrupt unless rehabilitated.
b. Individuals not permitted to engage in trade under the country’s prevailing laws.
c. Those convicted of crimes such as bankruptcy fraud, commercial deception, theft, fraud, breach of trust, forgery, or use of forged documents, unless rehabilitated.
Violation of the prohibition mentioned in paragraph (1) of this article is punishable by a fine of no less than AED 10,000 and no more than AED 200,000, along with the closure of the commercial establishment under all circumstances.
For more information about the UAE Commercial Transactions Law, please contact us. We are fully prepared to assist you in your case, and you can now request a consultation, present your case, or request to engage with the best commercial lawyer in the UAE by reaching out to us.