FEDERAL DECREE-LAW NO. 50
OF 2022 ISSUING THE COMMERCIAL
TRANSACTIONS LAW

HIGHLIGHTS OF LAW NO. 50 OF 2022 ON COMMERCIAL TRANSACTIONS

The legislation is a significant legislation achievement in the UAE and is part of a larger series of changes aimed at ensuring that the UAE maintains its position as a leading market for Islamic finance by providing a legal framework that supports businesses and stimulates investment.

The Commercial Transactions Law mainly applies to Islamic financing organisations. An Islamic financial institution is defined as any entity that says in its Articles or Memorandum of Association that it would conduct its business or operations in line with Islamic Sharia regulations. This covers financial institutions that conduct portions of their operations according to Islamic Sharia. As a result, conventional banks with Islamic subsidiaries, branches, or windows selling Sharia-compliant products and services will be subject to the Commercial Transactions Law’s applicable regulations.

ISSUER OF LAW NO. 50 OF 2022 ON COMMERCIAL TRANSACTIONS

The Commercial Transactions Law in the UAE is issued by the UAE federal government. Specifically, it is promulgated at the federal level by the UAE Ministry of Economy.

WHO IS SUBJECT TO THE ‘COMMERCIAL TRANSACTIONS LAW’?

The Commercial Transactions Law applies to:

• Businesses operating in the UAE, including sole proprietorships, partnerships, Limited Liability Companies, and Joint Stock Companies. It governs various aspects of their commercial transactions, contracts, and trade practices.
• Entrepreneurs and investors looking to establish or invest in businesses within the UAE.
• Lawyers, legal advisors, and consultants who assist clients with commercial transactions and contractual matters.
• The UAE government authorities are responsible for regulating and overseeing commercial activities within the country.