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Dubai levels the business playing field

Government-owned companies will not enjoy any advantage over private companies


The Government of Dubai has standardized procedures for establishing government-owned companies in line with international best practice. The move seeks to encourage investments in various sectors and ensure strong governance at government-owned companies.

According to Executive Council Resolution No. (23) of 2020 on the terms, conditions, and regulations governing the establishment of companies by Dubai Government entities, a government entity is allowed to establish a company if its main activity falls within the objectives and responsibilities of the entity. It should also contribute to Dubai’s sustainable development plans and offer products and services of strategic economic importance.

Dubai Crown Prince and Chairman of The Executive Council of Dubai H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum said the continuous development of the emirate’s legislative framework is crucial to the achievement of Dubai’s strategic objectives. The enhancement of the legal framework is a vital element in enhancing the growth prospects of various sectors, he stressed.

H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum

"As part of implementing the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to accelerate economic development and promote investment, Dubai places high importance on creating an integrated legislative infrastructure that facilitates equal opportunities for public and private sectors. We are keen that the private sector plays a major role in shaping the future of the national economy and achieving sustainable development. A legislative framework that protects their interests is critical to their growth and success," he said.

"We do not want to be a competitor to the private sector, but rather seek to complement it. The partnership between the public and private sectors adds significant value to Dubai’s sustainable development," he added.

To establish a government-owned enterprise, the government entity must follow the standardized procedures outlined in the Resolution. It should coordinate with Dubai’s Department of Finance to prepare a feasibility study for the new enterprise and adhere to the articles of the UAE Federal Law No. (2) of 2015 on Commercial Companies.

The newly established company must uphold the principles of fair competition. It will not enjoy any advantage or receive any financial support from the government. Government-owned companies should pay all taxes, fees, charges, and tariffs specified by federal and local legislations.

All government-owned companies under the purview of this Resolution must abide by its provisions within two years of the date of its activation. The Director General of Dubai’s Department of Finance will issue all the bylaws required to implement the Resolution.

The new Resolution annuls any other legislation that contradicts or challenges its articles. The Resolution will be published in the Official Gazette and will be effective from the date of publication.