The document provides information about business structures, finding company information, credit checks, contracting, litigation processes, and courts in the United Arab Emirates. The most common business structure is a limited liability company. Company information can be found on chamber of commerce websites. Credit checks and judgments against businesses are available through credit reporting agencies. Litigation requires original documentation and translation to Arabic. Alternative dispute resolution includes arbitration and mediation, with some claims requiring attempted settlement first. Court proceedings involve filing claims through the court system consisting of courts of first instance, appeal, and cassation.

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UNITED ARAB EMIRATES
Business structure. What types of business structures are there?
Sole proprietorship
Civil Company: a business partnership for professionals like doctors,
lawyers, engineers and accountants.
Limited Liability Company (LLC): the most common type of registration in the UAE and is recommended
where the purpose of the entity is to make sales within the region.
Partnership
Private Share Holding Company
Public Share Holding Company
Branches: A branch office has the same legal identity as its parent company and conducts business
under the name of its parent company. A branch office may only be engaged in activities similar to
those of its parent company.
Representative Offices: is limited to promoting its parent company’s activities i.e. gathering
information and soliciting orders and projects to be performed by the company’s head office.
Data sources. Where can I find information about a company?
Corporate information is available at the Directory section of the relevant Chamber of Commerce and
Industry site:
Abu Dhabi:
- Abu Dhabi Chamber of Commerce and Industry: www.abudhabichamber.ae
Ajman:
- Ajman Chamber of Commerce and Industry: www.ajmanchamber.ae
Dubai:
- Dubai Chamber of Commerce and Industry: www.dubaichamber.com
Fujairah:
- Fujairah Chamber of Commerce and Industry: www.iccuae.com
Ras Al Khaimah:
- Ras Al Khaimah Investment Authority: www.rak.ae
Sharjah:
- Sharjah Chamber of Commerce and Industry: www.sharjah.gov.ae
Umm al-Quwain:
- Umm al-Quwain Chamber of Commerce and Industry: www.uaqchamber.ae
Credit Checks. Where can I find financial information about a business?
You can obtain information on the financial state of affairs for companies and industry at the relevant
Chamber of Commerce and Industry site. There are also numerous private reporting agencies offering
credit checks.
Judgment Search. Can I find out if a business already has a judgment against it?
Normally you find this information in a credit report. Credit reports are offered as a service online.

2. Registered Address: Office 7, 35-37 Ludgate Hill, London, EC4M 7JN
Registered Company: 09787114 - www.bakering.global
Contracting. How do businesses contract with each other and which
documents do you need if you have to go to court?
Litigation in the Middle East tends to be almost completely document
focused. There is little oral advocacy, and it is vital that a case can be
proved on paper. In order to substantiate any claim, each stage of the
contract must be evidenced.
In addition, documents must be original, as copies carry far less weight with the court and, if denied by
the defendant, can be ignored by the court.
A claimant is free to choose which evidence it wishes to submit in support of the claim, but as a
minimum, it is advisable to have at least the following available:
- Original contract;
- Original invoices and credit notes;
- Original orders and order confirmation;
- Clear statement of account; and
- Proof of delivery.
Any document submitted to the court will need to be translated into Arabic by a court-approved
translator, for which there will be translation costs. Those costs are generally not recoverable in the
proceedings.
Retention of title
Article 415 of the UAE Civil Code sets out that either party to a contract can retain the things contracted
until they receive the consideration due.
Additionally, the creditor will retain title to the goods if the sales contract sets a deadline for payment
and the debtor does not pay by that date.
The party that retains the property must preserve it for the time being and must give to the debtor any
additional benefit derived from such property (Article 417, UAE Civil Code). However, the right of
retention will be extinguished if possession is lost (Article 419, UAE Civil Code).
PRE-LITIGATION
Letter before action. Do you have to send a demand letter to a debtor before going to court?
Before going to court, and even before filing the claim to the enforcement authority, a warning notice
to the debtor’s registered address is mandatory.
The warning notice should contain:
- The name of the creditor and the basis of the claim
- The total amount of the claim, including any penalty interests
- Prescription on how to transfer the payment, i.e. bank account etc.
- A warning that the claim will be enforced through the enforcement authority in case the
claim is not settled within from the date of the notice
- Information on how the object to the claim if not acknowledged be the debtor.
If this measure has been taken and the payment still has not been made after the two-week notice
period (according to the law), the creditor may file for enforcement.

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Can you claim interest and collection costs from customers if their
payment is late?
The chief justice of the Supreme Court in a suit filed by a bank for
recovery ruled that ‘ordering the borrower to pay interest for late
payments can be considered as damages, which is compliant with
both UAE law and Sharia’s, however, from a cultural point of view and in practice, debtors in the UAE
do not pay interest on delayed payments.
LITIGATION
Limitation period. How much time do you have before you must start legal proceedings?
Law No. 5 of 1985 regarding civil transactions (Civil Code) contains general rules relating to limitation
periods. In general, a claim is time-barred after 15 years, unless a specific provision states otherwise.
However, there are many exceptions to the general rule. Several statutes contain specific limitation
periods for different types of dispute. In addition, there are several specific provisions dealing with time
bars under Law No. 18 of 1993 regarding commercial procedure (Commercial Code).
Subject to the exceptions, the limitation periods are generally:
- 15 years for contract disputes.
- Three years for disputes relating to cheques.
- Three years for insurance disputes.
- Ten years for building contracts (defects).
- One year for carriage of goods by sea.
There is no single rule as to what triggers a limitation period. In some instances (such as claims under a
bill of lading), the limitation period is triggered by the cause of action. In other instances (such as
employment matters and charterparties), the limitation period commences from the end or
termination of the relevant contract.
ADR. What forms of Alternative Dispute Resolution are available and are they compulsory?
Commercial disputes in the United Arab Emirates (UAE) are generally resolved through litigation or
arbitration. Arbitration is a popular way to resolve disputes. The UAE is a signatory to the UN
Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York
Convention).
Conciliation and Mediation are less common. In the Emirate of Dubai, a Centre for the Amicable
Settlement of Disputes was established in 2009. Disputes of a certain nature (such as claims under AED
100,000) must be referred to the Centre to attempt settlement before litigation can commence.
Disputing parties can also elect to approach the Centre before instituting court proceedings.
The UAE (save for courts established in certain free zones) has a civil law system, and an inquisitorial
approach is taken by the bench. Litigation is entirely court-driven, and the courts have control over
scheduling of hearings, appointment of experts and so on. The UAE courts do not adhere to the
traditional common law standards of proof such as the "balance of probability" test in civil claims or
the "beyond all reasonable doubt" test in criminal matters. The final decision in any case is at the
discretion of the judge(s) hearing the case.

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Court Proceedings. What forms of court proceedings are available,
and do you need legal representation?
In order to commence legal action in the UAE, a claim will have to be
filed at the relevant court (i.e. the court that has the jurisdiction to
hear the dispute). The claim needs to set out the basis of the dispute
and the remedies sought.
The legal system in the UAE is based on the Constitution of the United Arab Emirates 1971
(Constitution). The federation has sovereignty in all matters assigned to it under the Constitution. The
individual member Emirates have sovereignty over their own territories in all matters not in the
exclusive jurisdiction of the federation, as set out in the Constitution.
In addition, each Emirate has a hereditary ruler who exercises considerable sovereignty over his own
Emirate. The seven rulers, as members of the Supreme Council, collectively exercise sovereignty over
the UAE.
The civil law system and the Sharia are the main sources of legislation (Constitution).
All member Emirates, except for Abu Dhabi, Dubai and Ras Al Khaimah, are part of a federal judicial
system.
Dubai and Ras Al Khaimah have independent judicial systems.
In every Emirate, the court system consists of the:
- Court of First Instance.
- Court of Appeal.
- Court of Cassation. In the federal judicial system, the final appeal is to the Union Supreme
Court seated in Abu Dhabi. (Ras Al Khaimah does not have a Court of Cassation)
Civil Law System
The UAE (save for courts established in certain free zones) operates under a civil law system and
statutes are the primary source of law. Judgments of the higher courts are not binding on the lower
courts (although they can be a useful guide). Each case is decided on its own merits and facts.
All court proceedings are in Arabic.
The judicial system (save for courts established in certain free zones) in the UAE is essentially
inquisitorial in nature. In each case, the judge will investigate the facts and apply the law to the facts in
reaching his or her judgment. There is no concept of a jury trial.
All proceedings in UAE civil matters are based on the written pleadings of the parties, supported by
documentary evidence. In general, there is no oral hearing in civil cases. There is a widespread practice
for both the federal and the Dubai courts to refer matters to court-appointed experts for findings of
fact in a variety of areas, including:
- Finance.
- Accounting.
- Other technical matters.
Experts' reports are not binding and can be challenged by the parties, but they are usually considered
persuasive by the courts. Oral evidence can only be given to establish a fact in a civil case with the
permission of the court and the right to cross-examine witnesses is severely restricted.
The Sharia
Broadly, the Sharia is a body of religious, ethical and legal rules. The fundamental roots of Islamic Sharia
are:

5. Registered Address: Office 7, 35-37 Ludgate Hill, London, EC4M 7JN
Registered Company: 09787114 - www.bakering.global
- The Koran. This is a collection of divinely ordained rules.
- The Sunna. This consists of the precepts and sayings of the
Prophet (Hadith), and an account of his actions.
Sharia is founded on familiar concepts of justice and equity, and the
practical result in commercial matters is often the same as would be
reached under Western law. For example, Sharia strives to give effect to the intention of the parties in
matters of contract. However, the parties' intention may be differently construed by jurists in the two
systems. For example, one scholar has argued persuasively that in many cases traditional Sharia would
release the parties to a contract from performance for reasons of changed circumstances or frustration
of purpose, where English law would bind the parties to their contract.
Time frame. How long does it take before you can get a judgment against a debtor?
The average duration of legal action before the court of first instance is between 12 and 16 months,
depending on the complexity of the case and the availability of the judge and the lawyers on both sides.
How much does it cost to go to Court?
The court fee depends on the value of the claim, and has a maximum cap. Generally, the court fee is:
- In Dubai: 6.0% of the claim value, subject to a maximum of AED 20,000 if the claim value is
less than AED 500,000, a maximum of AED 30,000 if the claim value is between AED 500,000
and AED 1,000,000 or a maximum of AED 40,000 if the claim value is more than AED 1,000,000.
If provisional orders are sought, a further fee of 50.0% of the initial filing fee is payable, subject
to a maximum of AED 10,000 if the claim value is less than AED 500,000, a maximum of AED
15,000 if the claim value is between AED 500,000 and AED 1,000,000, or a maximum of AED
20,000 if the claim value is more than AED 1,000,000.
- In the federal courts: 4.0% of the claim for the first AED 100,000 and 5.0% of the amount over
AED 100,000 (up to a maximum of AED 30,000). This fee is payable either on an application for
provisional relief, or on filing the substantive suit.
- In Abu Dhabi: the court fee for civil or commercial claims is 5.0% of the claim value (up to a
maximum of AED 40,000).
Enforcement of a court judgment. How do you enforce domestic/overseas judgments?
The main ways to enforce a local judgment are through:
- Attachment and sale of the debtor's property (movables).
- Attachment of stocks, bonds and shares.
- Attachment and sale of real estate.
- Bankruptcy proceedings (this was unusual, but with the recent adoption of a new Bankruptcy
Law, there may be more bankruptcy proceedings being filed).
- In exceptional circumstances, imprisonment of the defaulting debtor.
Enforcement is sought before an execution judge, who is assisted by court officials to enforce the court
order.

6. Registered Address: Office 7, 35-37 Ludgate Hill, London, EC4M 7JN
Registered Company: 09787114 - www.bakering.global
Insolvency
The UAE’s federal laws provide a framework for the reorganisation,
liquidation and bankruptcy of insolvent companies and individuals.
The UAE bankruptcy regime is set out in Book Five of the Commercial
Transaction Law (Federal Law No. 18 of 1993). The UAE government
have issued Federal Decree Law No. 9 of 2016 on Bankruptcy (the New Law). The New Law was
published in the Official Gazette with the publication date of 29th September 2016 and came into force
on 29th December 2016.
The creditors of a company acting on their own initiative may seek a declaration of bankruptcy in
respect of the company. For a creditor’s petition to succeed, the court must be satisfied that the
company has ceased to pay their debts as a result of financial difficulties.
After a bankruptcy application is submitted, the court must take steps to preserve the company’s
assets. The court will conduct investigations into the financial affairs of the company and the reasons
behind their failure to pay the debts. After concluding their investigations and resolving any preliminary
disputes, the court will fix a date of bankruptcy hearing. The court will order that all creditors must
notify the court of any debts prior to the hearing.
At the hearing, the court may declare the company bankrupt and it may appoint a trustee to assume
control of the company’s assets for distribution amongst their approved creditors. Creditors are
prohibited from pursuing claims against the company after the declaration of bankruptcy, except for
secured creditors who may be permitted to enforce their security interests, notwithstanding a
declaration of bankruptcy.
The average duration of bankruptcy proceedings is between two and three years and varies on a case-
by-case basis.
The information in this document is accurate to our knowledge as of July 2019.
The know-how in this fact sheet is not intended to constitute a definitive or complete statement of the law, nor is it intended
to constitute legal advice for any specific situation. We do not accept any responsibility for action taken as a result of
information provided by us. It is your responsibility to take specific advice when dealing with specific situations. The fact sheet
is intended as educational in nature and may not reflect all recent legal developments and may not apply to the facts and
circumstances of individual transactions and cases.
Nothing in this fact sheet shall be construed or relied on as providing any legal representation, advice or opinion whatsoever
on behalf of us or our staff.