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Article by Trench & Associates...
Q & A with Cynthia Trench
Cynthia Trench, a Hong Kong national, had never envisaged working in the Middle East previously. “Once I arrived in 1989 and settled down, I decided to stay,” says Cynthia. After a few years, she then set up her practice and became UAE's first expatriate woman to obtain a licence from the Rulers Office of the Government of Dubai to practise as legal consultant. Twelve years since landing in Dubai, she has acquired an in-depth knowledge of U.A.E. laws and the business practices in the region. As owner of the Dubai-based corporate law firm, Trench & Associates, she and her associates are in a position to apply the years of experience and the extensive contacts with government departments and federal agencies to provide a whole range of legal services to the Dubai's bustling corporate world. “We provide a whole range of legal services to businesses in the UAE. Among the most commonly sought-after services are legal support for the establishment of entities in the UAE including the Free Zones and acquisitions”. (For a detailed list of services provided by Trench & Associates, visit http://www.trenchlaw.com/main/our_services.asp). Cynthia Trench answered some of our general queries about UAE's Corporate Law and how her company can help businesses in the region. Is Corporate law based on the Sharia? If not fully, what aspects of the Corporate law are? When you refer to the Corporate Law, I would assume you mean the UAE Federal Commercial Companies Law no. 8 of 1984 as amended. This is taken from the French Civil Code historically. In such countries which adopt the codified civil laws, legislation plays an extremely important role. Under its Constitution, UAE has adopted Islamic Shari'a law as its main source for legislation in the UAE. Henceforth, two main principles apply :- a. In areas covered by legislation specifically, no discretionary interpretation is allowed, that is, the legislation must be applied; b. In the absence of any legislation, the courts would apply the general precepts of Islamic jurisprudence and justice. How would you rate UAE corporate law when compared to the same in other developed nations? It is relatively straightforward and is more open in its interpretations of laws than the other Middle Eastern countries. What are the popular misconceptions that overseas businessmen have of the legal aspects of setting up businesses in the UAE? In our experience, the common misconceptions which foreigners have are as follows :- a. That UAE lacks a set of laws to provide protection - as pointed out above, this is wrong, since the UAE has sufficient legislation, rules and regulations covering most aspects. UAE is also a member of the WTO. b. That UAE requires a majority interest of the UAE nationals in all businesses – a popular misconception which is clarified in the following question. For a non-GCC national to set up business in Dubai, the controlling interest must rest with the UAE national - is that right? How are the interests of the non-GCC national protected? The 51% shareholding has to be with a UAE national only in respect of trading or manufacturing companies established with the UAE (and not the Free Zones). Foreigners can be 100% owners in professional consultancies, representative offices, branches and in the Free Zones. The interests of the foreign national can be protected through many different ways, for example :- a. Assets Ownership & Leasing Agreement - The assets if they belong to the foreigner, would remain under the ownership of the foreigner, and leased to the UAE Company; b. Management Agreement - the foreigners can have 100% control of the board and full management of the Company; c. Shareholders' meetings - even if the UAE nationals have 51% shareholding, 100% vote of the Shareholders are required at all meetings of Shareholders. · While your work is mostly within corporate offices, can your office represent a client in a UAE court? No, we are not Advocates. We are licensed only as legal consultants. In this regard, we appoint Arab Advocates to appear before the courts on behalf of our Clients. We would take instructions from our Clients, prepare all documentation, instruct the Advocates, review their Pleadings, strategise with the Advocates and so on. · Why would a business start-up need you? All persons entering into a situation where they require legal clarity should consult a lawyer, especially in the beginning and not when a dispute arises. Prevention is better than cure.

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