«Economy»: It will enter into force next December .. and allows the establishment of branches and listing in the financial markets

A new law on “cooperatives” allows membership of non-citizens, with the exception of “consumer ones”

Abdullah Al Saleh during a briefing for the Ministry of Economy.

From the source

Yesterday, the Ministry of Economy announced the start of implementing the new "cooperatives" law, which was issued by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the State, with effect from December 2022, provided that the executive regulations of the law will be issued within six months.

In a media briefing for the ministry, the Undersecretary of the Ministry of Economy, Abdullah Al Saleh, revealed that the new law allows for the first time the membership of non-citizens in cooperative societies in the country, with the exception of “consumer cooperatives” whose membership is limited to citizens of the state.

The new law also allows "cooperatives", for the first time as well, to establish branches in any emirate in the country, regardless of its geographical scope, while allowing the inclusion and trading of "cooperatives" in the state's financial markets.

strategic partner

Al Saleh explained that the law supports the expansion of the activities of “cooperatives” and the provision of financial, technical and operational support to them, by allowing the entry of a “strategic partner” in “cooperatives”, noting that government agencies, in addition to “private”, can be a strategic partner, According to a decision of the "cooperative".

He added that the new law allows "cooperatives" to establish all forms of companies, as well as the right to acquire shares in other companies and cooperatives, in addition to allocating the "cooperative" a percentage of its annual profits to "social responsibility."

digital economy

Al Saleh stressed that the new law supports the strength of the national digital economy, by allowing the establishment of new “cooperatives” in the digital fields, and the expansion of modern technological activities.

He revealed that the "cooperatives" in the country will have more space to diversify their activities and expand in the country's markets, while providing full protection for shareholders' rights, and supporting the launch of pioneering Emirati "cooperatives" in new sectors, most notably the new economy, in addition to the fields of health, education, and tourism. , and financial services.

Mergers and Acquisitions

Al Saleh expected that the coming period would witness the inclusion of a number of “cooperatives” in the country’s capital market, as well as mergers and acquisitions from large cooperative societies on small “cooperatives.”

He stressed that the ministry aims that the law will contribute to increasing the percentage of "cooperatives"' contribution to the non-oil GDP to 5% by 2031, compared to the current contribution rate that does not exceed 1%, and increasing the contributing members in cooperative societies to about 500,000 contributing members compared to 100 thousand members now.

He pointed out that the number of "cooperatives" currently in existence amounts to 43 cooperative societies, with a total capital of three billion dirhams, and all of them are concentrated in only three areas: consumer cooperatives, "fishermen" and "agricultural" cooperatives.

cooperative union

Samah Al-Hajri, Director of the Department of Cooperatives and Strategic Inventory at the Ministry of Economy, said that the new law allows the establishment of a cooperative society of at least 10 individuals, and also allows “cooperatives” of the same type to establish a “cooperative union” among them.

She revealed that the law sets penalties and fines for violators, the most prominent of which is a fine of no less than 100,000 dirhams and not more than one million dirhams, for anyone who unlawfully uses a name or slogan that appears to the public that it is a cooperative work, and whoever uses a cooperative slogan incorrectly.

She stated that the law clarified that the distribution of profits is in the form of returns on transactions, granted to each member according to the volume of his dealings with "cooperatives", and returns on shares for members, according to the percentage approved by the General Assembly. 

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