U.A.E Scraps Minimum Investment Requirements for LLCs

The United Arab Emirates scrapped a law that required limited liability companies to invest at least 150,000 dirhams ($40,800) as start-up capital in a bid to boost growth in the second-biggest Arab economy.

Partners in limited liability companies “will determine sufficient capital requirements” for setting up their companies, state-run WAM news agency reported, citing a decree issued by President Sheikh Khalifa bin Zayed Al Nahyan. The change will help reduce the cost of setting up new businesses, it said.

The move reflects the government’s aim of boosting investment and will improve competitiveness of the U.A.E. economy, as investors won’t need to produce bank certificates for minimum capital requirement, WAM said. “The small and medium business sector will be a great beneficiary from this” amendment, it added.

The U.A.E. economy will probably contract this year after growing by 7.4 percent last year, Central Bank Governor Sultan Bin Nasser al-Suwaidi said July 15. The government has taken several steps to help the economy since the onset of the global credit crisis, including cutting interest rates and making 120 billion dirhams ($32.6 billion) available to banks in a bid to boost lending.END