The regional real estate, construction and hospitality sectors have been turned upside down over the last two years, with Covid-19 bringing these sectors to a halt. The impact of the pandemic remains, however, the resurrection of these vital sectors across the region is a welcome relief because they support the development of modern cities, which in turn have attracted commerce and tourism to the Middle East and North Africa.
This latest edition of Law Update, provides vital insights, updates and commentary on the latest trends taking shape across the real estate, construction, hotels and leisure sectors. The articles within this edition cover a broad range of topics, from what’s next for real estate in Dubai, to commentary on Saudi real estate, a market that is set to become the main bedrock of the region for years ahead. You will find articles on reforming real estate laws in Qatar, foreign investment and ownership in Oman, and mitigating risks on hotel construction projects and the lessons learnt from Covid.Read the full report
On Tuesday 28th June 2022, the Council of Ministers has approved the long-awaited new Companies’ Law (“New Law”). The New Law was enacted by Cabinet Resolution No. 678, dated 29/11/1443H (corresponding to 28th June 2022) and ratified by Royal Decree No. (M/132), dated 01/12/1443H (corresponding to 30th June 2022), and consists of (281) articles. The New Law, which is in line with the Kingdom’s 2030 Vision, introduces new changes, allows greater flexibility, safeguards businesses’ interests, empowers the private sector and follows the best international practices.
The Companies Law of 1437H (2015) and the Professional Companies Law of 1441H (2019) will be repealed, and any other provisions (in any other law in force) which are in conflict with the New Law will be overridden by the New Law, once it comes into effect, (180) days following its publication in the Official Gazette.
The New Law regulates commercial companies, non-profit companies and professional companies, and it enables investors to incorporate any of the following types of companies: (1) Joint Liability Company (2) Limited Partnership Company (3) Joint Stock Company (4) Simple Joint Stock Company and (5) Limited Liability Company.
The New Law has, specifically, introduced a new form of company – the “Simple Joint Stock Company” (“SJSC”). The SJSC will be able to accommodate the entrepreneurship and venture capital rising demands. It is a flexible corporate entity, which can be established by one or more persons, issue several classes of shares, can be managed by one or more managers, or board of directors. It may also act as a vehicle for investments and enable non-profit companies to enter the private sector.
In addition, article 11 of the New Law allows for the introduction of binding (provided it does not conflict with the law, articles or the bylaws) joint venture agreements and family charter in the company’s articles of association to regulate family owned businesses, their governance and administration policy, the employment of family members and the family business’ profits.
The SJSC will be able to accommodate the entrepreneurship and venture capital rising demands. It is a flexible corporate entity, which can be established by one or more persons, issue several classes of shares, can be managed by one or more managers, or board of directors.
In summary, the New Law increases business sustainability, encourages investments in small and micro companies, simplifies procedures and regulatory requirements, increases market diversity by introducing new company types, protects shareholders and reduces potential disputes.
Please contact our Saudi based corporate team for any queries and we would be delighted to assist.