UAE Commercial Transactions Law (50) of 2022.  

Get familiar with the UAE Commercial Transactions Law (50) of 2022. Explore essential articles on the definition of a merchant and exclusions from merchant status.

The UAE Commercial Transactions Law (50) of 2022.  

The Federal Decree by Law No. (50) of 2022 Concerning Promulgating the Commercial Transactions Law is a significant legal framework in the United Arab Emirates (UAE) that governs commercial transactions. Let’s explore some essential articles from this law:


Definition of a Merchant (Article 11):

A person or company engaged in commercial activities is considered a merchant.

Criteria for being deemed a merchant:

Working in one’s own name and for one’s own account in commercial activities.

Undertaking a commercial activity, even if it has a civil nature.

Advertising business assets for commerce to the public, regardless of regular occupation.

Practicing trade under a pseudonym or using another person’s name.

Carrying out commercial activities despite specific legal prohibitions1.

Exclusions from Merchant Status (Article 15):

Ministries, federal government authorities, and local government authorities are not considered merchants.

Public benefit organizations, associations, clubs, and self-employed persons not engaged in commercial activities are also excluded.

However, commercial activities by these categories are still governed by the law, except for specific exclusions1.

Capacity of Merchant (Article 16):

The capacity of a merchant is established by this law, except for matters explicitly excluded.

Includes commercial companies owned by the Federal or Local Government and foreign companies’ branches practicing commercial activities in the UAE1.

Small Trades and Simple Vocations (Article 17):

Individuals relying on their work for profit (more than cash capital) are exempt from merchant duties.

They need not keep commercial books or register in the Commercial Register.

The Ministry of Economy determines the maximum number of individuals and capital for small trades1.

Competency to Engage in Trade (Article 18):

Any person aged 18 or older and free of legal impediments can engage in trade.

Minors (aged 15 or older) under guardianship or custody may engage in trade under specific conditions1.

Minors’ Funds in Trade (Article 19):

If a minor (or interdicted person) has funds in trade:

The court may order withdrawal or allow them to remain based on their best interests.

The court can grant an authorization for activities related to the trade.

Withdrawal or restriction of authorization is possible, with protection for bona fide third parties.

Remember that this law significantly impacts commercial practices in the UAE, and seeking legal advice is crucial for compliance and effective business operations.


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