Country Background -

Formed on 2 December 1971, the UAE is a federal state of seven emirates comprising Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain.

The UAE federal constitution provides the legal framework for the federation and is the basis of all legislation promulgated at the federal and emirate level. Pursuant to the constitution, the federal government has exclusive jurisdiction in various substantive matters, including foreign policy, defense and security. Legislation passed at the federal level has primacy over the local laws of each emirate. The local government of each emirate is, however, permitted under Article 122 of the constitution to regulate all local matters which are not subject to federal legislation or matters which are not expressly reserved in the constitution to the federal government (examples of such federal matters being foreign affairs, defense and health). As such, the governments of each individual emirate retain substantial powers to regulate commercial activities, issue trade licences and effect the incorporation of corporate entities to the extent that such activity is not regulated under federal legislation.