Predictions 2017: Dr Habib Al Mulla, Baker & McKenzie Habib Al Mulla chairman

The economic horizon in 2016 has not been very optimistic. With the fall in oil prices and the global economic slowdown, the world economy has not been in its best shape, as reflected in the UAE and GCC markets.

However, the UAE continued to stimulate its economy with the launch of various projects in real estate, hospitality and entertainment. It is expected that this trend will continue, as we are getting closer to Expo 2020 and all the potential opportunities that it will provide.

The UAE has one of the most dynamic and advanced economies in the region. An economy of this nature needs equally a dynamic and an advanced legal framework to properly serve it.

In 2015, the long awaited Commercial Companies Law was enacted. The new law introduced some new features and approaches intended to raise the levels of good corporate governance, increase the protection of minority shareholders, facilitate IPOs and promote the social responsibility of companies. However, the essential features of the previous law were maintained, particularly the foreign ownership restriction of 49 per cent.

In 2016, the UAE introduced the much-needed Federal Bankruptcy Law. The law has indeed brought a level of modernisation and reform, although it has its shortfalls. However, real assessment of the successful impact of these laws will depend on how they are used and how much they will improve the business and investment climate in the UAE.

Looking ahead to 2017, it is expected that the UAE will continue to evolve in modernising its commercial laws. The UAE is still in need of a modern arbitration law, a standalone capital markets law, a banking law and a data protection law, to name but a few. What the UAE also needs to do is to take a bold approach to address the issues that hinder the business community, rather than the cosmetic approach that has been the trend so far.

As the laws have been changing, so too has our legal practice over the course of 2016. Not only have we expanded our dispute resolution, employment and maritime teams in the UAE in response to our clients’ needs, but we have also achieved recognition for our cross-border mergers and acquisitions practice, winning back-to-back industry awards over the past year.

One area that we are exploring is tax. The UAE has announced that it will introduce VAT in 2018, and we would like to make Baker & McKenzie’s extensive tax expertise available to our local and regional clientele, particularly if the proposed VAT regime was to expand into a corporate or income tax.

We at Baker & McKenzie Habib Al Mulla believe in the UAE market. We continue to keep a close eye on legal developments and the economic environment and aim to stay ahead of the curve to ensure that we are making our local and global expertise available to our clients, supporting their strategic and operational objectives in the Middle East, as we have been doing for over 30 years.