The Economic Register Law

Along with other significant legal frameworks, Federal Law Decree No. 37 of 2021 Concerning The Commercial Register regulates the usage of Commercial and Economic Registers in the UAE. This law introduces a single database of traders and licensed economic activities in the country. The Economic Register comprises an accurate and up-to-date information base within this framework to support economic activities, aiming to achieve the highest levels of transparency and efficiency in the business environment.

Objectives of the Law

Among the main purposes of this decree are:

Registers Control: To regulate the use of Commercial and Economic Registers within the UAE to enable all economic activities to be documented and followed up properly.
Unified Database: The integrated database shall provide accurate data on all traders and licensed economic activities and their updates and changes. This contributes to the provision of one source of reliable information to interested parties (stakeholders) in general.

Applicability

The provisions of this law shall apply to all entities practicing economic activities within the UAE. It shall cover:

Companies Coming Under the Law of Commercial Companies: All companies that fall under the ambit of the Commercial Companies Law must satisfy the requirements of registration.
Civil Companies with the Legal Form of a Commercial Company: Civil companies that operate as commercial entities are also mandated to register.
Government-Established Companies: Any company formed by the Federal or Local Governments, or any company in which the government has an equity share, must be registered.
Professional Activities: Firms and companies that engage in professional activities, like consultancy firms, legal practices, and all other professional services, need to be registered.
Special Law Companies: Companies established under a specific law or decree for commercial activities must also comply with this registration requirement.

Creation of the Economic Register

The Economic Register is the database maintained and developed by the Ministry of Economy, which includes the list of names and particulars of the individuals and entities falling under this law in the Commercial Register. The Economic Register Number is an identification number given to establishments practicing economic activities upon recording their names in the e Economic Register at the Ministry. The establishment shall use such number in its procedures and dealings with government entities in the State. Furthermore, the Ministry shall use the Economic Register Number in the data it exchanges with government entities.

Registration Process

Entities conducting economic activities must apply for registration in the Economic Register. The steps to be followed in the application are as follows:

Submission of Documents: The entities must submit the documents and information required before the competent authority. The nature of the information includes data about the entity, the owners, and a description of the economic activity.
Verification: The competent authority shall verify that the information provided is accurate and complete.
Economic Register Number Assignment: Following the verification of the information, the particular entity gets an assigned Economic Register Number. This number act as a unique identifier for the entity within the register.

Publishing Data of the Economic Register

The Ministry and the Competent Authority, as the case may be, may publish on its website the following data of the Economic Register:

Economic Register Number;
Trade name in both Arabic and English;
Date of incorporation of the establishment;
Phone number and email address;
License number, and issuance and expiry date;
License Status, to verify the license validity and whether it is suspended or placed under liquidation or deregistered;
Type of the License, including commercial, industrial, professional, craft, or other licenses;
Legal Form of the establishment;
Amount of the establishment’s capital, the number of shares or stocks and their nominal value (if any);
Address of the establishment;
The Branch’s License (if any);
The Branch’s Name in both Arabic and English;
Local License Number;
License Number of the parent establishment;
Date of any change and modification to the establishment’s data;
and name of the economic activity; and
Name of the manager or the chairman of the board of directors, as the case may be.

Renewal and Deregistration

All entities shall undertake periodic renewal as required by law. Periodic renewal aims at ensuring information kept in the register is up-to-date and correct at any given moment in time. The law further provides mechanisms for deregistration and re-registration:

Deregistration: Economic entities that are no longer practicing economic activities or those that fail to fulfill the requirements of registration from the Economic Register must be deregistered from the Economic Register.
Re-registration: Those entities that resume economic activities or again meet the requirements of registration are required to apply for re-registration.

Access to Data

Any person or stakeholder interested may apply to the Ministry or the Competent Authority, seeking an extract of data.
Applications of the government entities for access or to obtain an extract of, the registration data entered in the Commercial Register or the Economic Register shall be submitted to the Ministry or the Competent Authority, according to the procedures applied in this regard, provided that the application contains an indication to the nature of the data for which the application is made.

Legal Implications

Data in the Economic Register has legal importance. It is mainly used for reference regarding the legality of certain economic activities or entities. All court judgments and other legal annotations related to the registered entities are also recorded in the register, ensuring the completeness and accuracy of all entries on the register for legal purposes.

Compliance and Enforcement

The law requires strict observance with regard to the requirements of registration and data management. A failure to properly observe the decisions issued in application shall be subject to the administrative penalties to be issued by the competent authority in this regard. The rules are enforced through competent authorities that ensure all entities observe the provisions of the law. This also involves periodic auditing and inspection to ensure compliance.

Benefits of the Economic Register

The Economic Register offers several benefits:

Transparency: It increases the level of transparency of economic activities by availing information that is more accurate and easily accessible. This will instill confidence among various stakeholders and promote a fair business environment.
Efficiency: The process of verification and management of data about economic activities is simplified. It reduces the administrative burden and improves the efficiency of regulatory processes.
Support for Investors: It helps in ensuring that the decisions of investors and enterprises are made based on facts through reliable data. The register provides a good source for determining the credibility and legitimacy of potential business partners.
Regulatory Oversight: Ensures regulatory oversight to ensure compliance with requirements under the law, facilitating integrity within the business environment and protecting the interests of all stakeholders.

Conclusion

Federal Law Decree No. 37 of 2021 Concerning The Commercial Register has an important role in the country’s business activities. The Economic Register, therefore, represents a unified and comprehensive structure that allows transparency, efficiency, and compliance. As per the provision of an entity’s legality, compliance enhances the general country’s economic progress. While the law enhances the regulatory framework, it also manifests itself as one that is non-discriminatory and transparent in nature for a business to prosper and develop the economy at large in the UAE.