Need more information about the Paoletti Law Group, our people, and our approach to legal representation?

This downloadable material offers an in-depth look into our firm, as well as some of our publications so that you have the information you need before getting in touch with us.

This was a fantastic opportunity  to meet and re-connect with 350+ members who attended, and represented 75+ jurisdictions from all over the world.

Guided by the theme, Shaping the future, we look to how we can better organise for a post pandemic future, and how as leaders we embrace the changes to be a future ready company. As companies face an uncertainty this is the opportunity to learn new tools from the experts to create new modes within your organisation that are more flexible, integrated, inclusive, and resilient.

 

IR GLOBAL  – a multi-disciplinary professional services network that provides legal, accountancy, financial advice to companies and individuals around the world.

 

Here is a brief interview of our Managing Partner Mr. Thomas Paoletti and how IR Global is relevant to him and to his business.

 

 

"class="material with-radius">This was a fantastic opportunity  to meet and re-connect with 350+ members who attended, and represented 75+ jurisdictions from all over the world.

Guided by the theme, Shaping the future, we look to how we can better organise for a post pandemic future, and how as leaders we embrace the changes to be a future ready company. As companies face an uncertainty this is the opportunity to learn new tools from the experts to create new modes within your organisation that are more flexible, integrated, inclusive, and resilient.

 

IR GLOBAL  – a multi-disciplinary professional services network that provides legal, accountancy, financial advice to companies and individuals around the world.

 

Here is a brief interview of our Managing Partner Mr. Thomas Paoletti and how IR Global is relevant to him and to his business.

 

 

">
Thomas Paoletti

Fauzia Khan

"class="material with-radius">Thomas Paoletti

Fauzia Khan

">Fauzia Khan

"class="material with-radius">Fauzia Khan

">ABSTRACT : A case is reported of unlawful reporting against the claimant, the legal representative and sales attorney of a shipbuilding/naval business company, by a banking institution. Compensation is sought for pecuniary and non-pecuniary loss resulting from the unlawful reporting.

The claimant received a registered letter communicating the non-payment of a balance, indicating the possible termination of the contract and the initiation of the reporting procedure at the CAI (Centrale d’allarme interbancaria) after the expiration of the 4-day deadline.

Despite the claimant’s immediate activation in the Bank’s notice to proceed, the claimant learns from the Bank that the activation procedure had already been initiated through an outside agency.

The illegality of the report is subsequently confirmed by the Bank through the acceptance of the complaint proposed by the applicant.
In the event of non-acceptance, an urgent appeal to the Judge can be made, pursuant to Article 700 of the Italian Civil Code. (Italian Civil Procedure Code).
The Bank, in this case, proceeds to cancel the report.

The appellant experiences a number of negative consequences from the unlawful reporting, both as a natural person and as a legal person. In fact, he has his mandate as credit broker by outside entities revoked as a result of the unlawful report. The claimant suffers not only damage in the pecuniary sphere, resulting from the impossibility of access to credit and from the vulnus to his banking credibility, but also damage to his name and the honorability of his person.

The pecuniary damage, derived from the accessory obligations of good faith of the contractual relationship, turns out to be established according to precise compensatory criteria that verify the contraction of income (emergent damage) and loss of earnings (loss of profit).

As for non-pecuniary damage, the Bank does not follow the new guidelines about the illegal signaling procedures (the duty to use a particular prudence and investigations on the solvency of the person to be reported) and causes injury to the image, honor, and reputation of the plaintiff. It is proposed to recognize the right to compensation, even in the absence of objective proof, arising from the damage in re ipsa caused by the banking institution’s failure to take the necessary precautions and care that the case requires.

The consolidation of case law on the subject establishes that the regulations on the Bank’s risk center do not escape the regulations on personality rights (personal data processing and right to image). Therefore, the case is within the Article 2050 of the Civil Code case in question, whereby the compensability of non-pecuniary damage is to be understood in the form of reparation. Damages are to be liquidated equitably through the prudent appreciation of the Judge.

To know more, please contact:

Alberto Bardinimailto:a.bardini@paoletti.com

"class="material with-radius">ABSTRACT : A case is reported of unlawful reporting against the claimant, the legal representative and sales attorney of a shipbuilding/naval business company, by a banking institution. Compensation is sought for pecuniary and non-pecuniary loss resulting from the unlawful reporting.

The claimant received a registered letter communicating the non-payment of a balance, indicating the possible termination of the contract and the initiation of the reporting procedure at the CAI (Centrale d’allarme interbancaria) after the expiration of the 4-day deadline.

Despite the claimant’s immediate activation in the Bank’s notice to proceed, the claimant learns from the Bank that the activation procedure had already been initiated through an outside agency.

The illegality of the report is subsequently confirmed by the Bank through the acceptance of the complaint proposed by the applicant.
In the event of non-acceptance, an urgent appeal to the Judge can be made, pursuant to Article 700 of the Italian Civil Code. (Italian Civil Procedure Code).
The Bank, in this case, proceeds to cancel the report.

The appellant experiences a number of negative consequences from the unlawful reporting, both as a natural person and as a legal person. In fact, he has his mandate as credit broker by outside entities revoked as a result of the unlawful report. The claimant suffers not only damage in the pecuniary sphere, resulting from the impossibility of access to credit and from the vulnus to his banking credibility, but also damage to his name and the honorability of his person.

The pecuniary damage, derived from the accessory obligations of good faith of the contractual relationship, turns out to be established according to precise compensatory criteria that verify the contraction of income (emergent damage) and loss of earnings (loss of profit).

As for non-pecuniary damage, the Bank does not follow the new guidelines about the illegal signaling procedures (the duty to use a particular prudence and investigations on the solvency of the person to be reported) and causes injury to the image, honor, and reputation of the plaintiff. It is proposed to recognize the right to compensation, even in the absence of objective proof, arising from the damage in re ipsa caused by the banking institution’s failure to take the necessary precautions and care that the case requires.

The consolidation of case law on the subject establishes that the regulations on the Bank’s risk center do not escape the regulations on personality rights (personal data processing and right to image). Therefore, the case is within the Article 2050 of the Civil Code case in question, whereby the compensability of non-pecuniary damage is to be understood in the form of reparation. Damages are to be liquidated equitably through the prudent appreciation of the Judge.

To know more, please contact:

Alberto Bardinimailto:a.bardini@paoletti.com

">Alberto Bardini

"class="material with-radius">Alberto Bardini

">Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Thomas Paoletti

Fauzia Khan

 

">Thomas Paoletti

Fauzia Khan

"class="material with-radius">Thomas Paoletti

Fauzia Khan

">

Source – Statista

 

 

e-Commerce sales have been taking constant giant leaps starting from 2020.  Moreover, the year 2020 brought lockdown and social distancing protocols that led to an instant surge in the registration of online business licenses. In just the first few months of that year, the consumer demand for online business services increased a great deal. By 2025, the UAE market’s population is expected to have access to the internet and mobile devices at a rate of about 100 percent, according to the Dubai Chamber of Commerce and Industry.

 

With consumers prioritizing their satisfaction in the products and services they purchase, the e-commerce industry continues to grow faster. Since the pandemic, the use of online payment apps has also increased at many outlets, markets, taxis, theatres, etc. As per the recent data, 30% of the UAE’s population are known as digital natives who have raised the volume of online shopping. The UAE government’s Smart Dubai 2021 initiative to build a robust digital economy is also praiseworthy. UAE is certainly growing at a rapid pace to explore the exclusive potential of the e-Commerce market. 

 

For more information, please contact:

Fauzia Khan

 

 

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Source – Statista

 

 

e-Commerce sales have been taking constant giant leaps starting from 2020.  Moreover, the year 2020 brought lockdown and social distancing protocols that led to an instant surge in the registration of online business licenses. In just the first few months of that year, the consumer demand for online business services increased a great deal. By 2025, the UAE market’s population is expected to have access to the internet and mobile devices at a rate of about 100 percent, according to the Dubai Chamber of Commerce and Industry.

 

With consumers prioritizing their satisfaction in the products and services they purchase, the e-commerce industry continues to grow faster. Since the pandemic, the use of online payment apps has also increased at many outlets, markets, taxis, theatres, etc. As per the recent data, 30% of the UAE’s population are known as digital natives who have raised the volume of online shopping. The UAE government’s Smart Dubai 2021 initiative to build a robust digital economy is also praiseworthy. UAE is certainly growing at a rapid pace to explore the exclusive potential of the e-Commerce market. 

 

For more information, please contact:

Fauzia Khan

 

 

">Thomas Paoletti

Fauzia Khan

 

 

 

"class="material with-radius">Thomas Paoletti

Fauzia Khan

 

 

 

">Prevalence of the conditions indicated on the back of the title, or the supplementary (and pejorative) Act of the ministry?

Comment on Judgment n. 251/2020 publ. on 26/05/2020 RG n. 1615/2019

The Court of Mantua gives reason to the saver.


ABSTRACT: the perimeter of validity of the dictum of the rulings cited below was reiterated in relation to the fact that the discrepancy between the ministerial prescriptions and what is indicated on the bonds offered for subscription (back of the Postal Bond) cannot lead to believe that the negotiation agreement, in which the subscription transaction is substantiated, has a different content from that stated by the securities, what is indicated on the back of the bond prevails (on average, 40/50% more than what is paid by the Post Office). The saver obtained an injunction calculated on the contractual conditions indicated on the back of the bonds.


Italian Post (in its quality as a Bank) opposed (arguing, among other things, lack of passive legitimacy, an objection not accepted).

Italian Post contested the applicability of the conditions stamped on the back of the title for the quantification of interest, (as referred to by the counterparty), invoking instead the provision referred to in Ministerial Act no. 13/6/1986.


The art. 173 of the then “current postal code” already referred to above provided that changes in the interest rate of interest-bearing postal bonds, could also be extended to previously issued bonds.


In the opinion of the Supreme Court of Cassation, a different solution must be reached in the case submitted to it, similar to the present one, in which the issue of the security is subsequent to the decree amending the interest rates: “This, however, does not authorize us to totally devalue the relevance of the wording reported on the bonds themselves even when – as happened in this case – during the course of the relationship no new ministerial decree concerning the interest rate has been made and no changes have therefore occurred with respect to the situation existing at the time of subscription of the bonds “.

The discrepancy between the ministerial prescriptions and what is indicated on the bonds offered for subscription by the office to the applicants can then be relevant for any internal responsibility profiles of the administration, but cannot lead to believe that the negotiation agreement, in which the transaction is still of subscription is substantiated, has had as its object a content diverging from that stated by the same bonds.

This position – for the specific case in question – was indeed indirectly confirmed by another recent ruling made by the Supreme Court.

We are talking about evolving jurisprudence that spares no surprises, both in the judgments, of merit, and in further appeal.


In our opinion, however, given the considerable difference in the calculation of the amounts, (we are talking, for bonds of the years 87/92 of at least 40/50% less, as a liquidation “proposed” by Italian Post, compared to the calculation made according to the negotiation agreement (back of the title), it is worth try the judgment, also for the speed with which injunction can be obtained, often immediately enforceable (in consideration of the nature of the credit).

 

To know more, kindly contact:

Alberto Bardini

Sabrina Pangrazio

 

"class="material with-radius">Prevalence of the conditions indicated on the back of the title, or the supplementary (and pejorative) Act of the ministry?

Comment on Judgment n. 251/2020 publ. on 26/05/2020 RG n. 1615/2019

The Court of Mantua gives reason to the saver.


ABSTRACT: the perimeter of validity of the dictum of the rulings cited below was reiterated in relation to the fact that the discrepancy between the ministerial prescriptions and what is indicated on the bonds offered for subscription (back of the Postal Bond) cannot lead to believe that the negotiation agreement, in which the subscription transaction is substantiated, has a different content from that stated by the securities, what is indicated on the back of the bond prevails (on average, 40/50% more than what is paid by the Post Office). The saver obtained an injunction calculated on the contractual conditions indicated on the back of the bonds.


Italian Post (in its quality as a Bank) opposed (arguing, among other things, lack of passive legitimacy, an objection not accepted).

Italian Post contested the applicability of the conditions stamped on the back of the title for the quantification of interest, (as referred to by the counterparty), invoking instead the provision referred to in Ministerial Act no. 13/6/1986.


The art. 173 of the then “current postal code” already referred to above provided that changes in the interest rate of interest-bearing postal bonds, could also be extended to previously issued bonds.


In the opinion of the Supreme Court of Cassation, a different solution must be reached in the case submitted to it, similar to the present one, in which the issue of the security is subsequent to the decree amending the interest rates: “This, however, does not authorize us to totally devalue the relevance of the wording reported on the bonds themselves even when – as happened in this case – during the course of the relationship no new ministerial decree concerning the interest rate has been made and no changes have therefore occurred with respect to the situation existing at the time of subscription of the bonds “.

The discrepancy between the ministerial prescriptions and what is indicated on the bonds offered for subscription by the office to the applicants can then be relevant for any internal responsibility profiles of the administration, but cannot lead to believe that the negotiation agreement, in which the transaction is still of subscription is substantiated, has had as its object a content diverging from that stated by the same bonds.

This position – for the specific case in question – was indeed indirectly confirmed by another recent ruling made by the Supreme Court.

We are talking about evolving jurisprudence that spares no surprises, both in the judgments, of merit, and in further appeal.


In our opinion, however, given the considerable difference in the calculation of the amounts, (we are talking, for bonds of the years 87/92 of at least 40/50% less, as a liquidation “proposed” by Italian Post, compared to the calculation made according to the negotiation agreement (back of the title), it is worth try the judgment, also for the speed with which injunction can be obtained, often immediately enforceable (in consideration of the nature of the credit).

 

To know more, kindly contact:

Alberto Bardini

Sabrina Pangrazio

 

">Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Thomas Paoletti

Fauzia Khan

 

">

For any further queries related to SPVs please contact us;

Thomas Paoletti

Fauzia Khan

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For any further queries related to SPVs please contact us;

Thomas Paoletti

Fauzia Khan

">Foreign companies can promote their market or business in the United Arab Emirates (UAE) by setting up a representative office. For businesses looking to test the market, the Dubai International Financial Center (DIFC) provides a good low-cost option. The office is defined as a cost-effective parent company, enabling people in business to get the advantage of the no share capital requirements.

Here are the easy steps to opening a representative office in Dubai:

1.   Recognize Local Service Agent

You will need to appoint a Local Service Agent of UAE nationality.

2.   Primary Approval from DED

Once the trade name and business activity are finalized, the firm can seek approval from the Department of Economic Development (DED).

3.   Receive Approval from the Ministry of Economy

Next step is to receive approval from the UAE Ministry of Economy (MOE). While applying, make sure all the documents, including the Memorandum, certification of incorporation, and Article of Association, will have to be translated into Arabic, attested and notarized.

4.   License Issuance by DED

Once the MOE approves the application, you will need to apply to the DED for the license for establishing the representative office.

Advantages of Setting Up a Representative Office in the UAE

  • Lots of tax benefit with 0% corporate tax rates and limited tax liabilities;
  • Low cost of setting up the representative office in the UAE;
  • There is no requirement for minimum share capital to set up a representative office in the UAE;
  • Establishing a representative office in the UAE is simple, quick and easy;
  • Foreign companies can benefit significantly from international expansion and worldwide connections through the representative office in the UAE;

 

To know more, please contact:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Foreign companies can promote their market or business in the United Arab Emirates (UAE) by setting up a representative office. For businesses looking to test the market, the Dubai International Financial Center (DIFC) provides a good low-cost option. The office is defined as a cost-effective parent company, enabling people in business to get the advantage of the no share capital requirements.

Here are the easy steps to opening a representative office in Dubai:

1.   Recognize Local Service Agent

You will need to appoint a Local Service Agent of UAE nationality.

2.   Primary Approval from DED

Once the trade name and business activity are finalized, the firm can seek approval from the Department of Economic Development (DED).

3.   Receive Approval from the Ministry of Economy

Next step is to receive approval from the UAE Ministry of Economy (MOE). While applying, make sure all the documents, including the Memorandum, certification of incorporation, and Article of Association, will have to be translated into Arabic, attested and notarized.

4.   License Issuance by DED

Once the MOE approves the application, you will need to apply to the DED for the license for establishing the representative office.

Advantages of Setting Up a Representative Office in the UAE

  • Lots of tax benefit with 0% corporate tax rates and limited tax liabilities;
  • Low cost of setting up the representative office in the UAE;
  • There is no requirement for minimum share capital to set up a representative office in the UAE;
  • Establishing a representative office in the UAE is simple, quick and easy;
  • Foreign companies can benefit significantly from international expansion and worldwide connections through the representative office in the UAE;

 

To know more, please contact:

Thomas Paoletti

Fauzia Khan

 

">We are delighted to share with you our latest contribution to IR Global’s June 2022 Publication, entitled ”Distressed Companies: How to help financially distressed businesses”.

Three questions for our three experts from UAE and Italy with their top tips and legal insight

 

1)With the recent spike in insolvencies across the globe, do you believe that the number of distressed companies will increase in the coming years? How will your firm be assisting?

2)Why is Chapter 11 an attractive tool for international companies and your clients?

3)What are the trends and opportunities regarding distressed businesses in your jurisdiction? What advice are you giving your clients to take advantage of the distressed environment?

To read our contribution kindly click:

"class="material with-radius">We are delighted to share with you our latest contribution to IR Global’s June 2022 Publication, entitled ”Distressed Companies: How to help financially distressed businesses”.

Three questions for our three experts from UAE and Italy with their top tips and legal insight

 

1)With the recent spike in insolvencies across the globe, do you believe that the number of distressed companies will increase in the coming years? How will your firm be assisting?

2)Why is Chapter 11 an attractive tool for international companies and your clients?

3)What are the trends and opportunities regarding distressed businesses in your jurisdiction? What advice are you giving your clients to take advantage of the distressed environment?

To read our contribution kindly click:

">An Increase in FDI inflows to the UAE
According to the World Investment Report 2021, the value of the FDI influxes increased by 2.01 billion (AED 7.38 billion) in 2020, achieving a growth rate of 11.24%. Hence, the United Arab Emirates has progressed 9 ranks to become 15th worldwide in 2020. The total investment of foreign inflows amounted to $19.884 billion in 2020 compared to $17.875 billion.


The UAE attracted a Foreign Direct Investment of $20.7 billion in 2021, according to the Economic Ministry.


UAE Ranked First in West Asian Countries in Terms of FDI Inflows
The UAE ranked 1st in the West Asia region for Foreign Direct Investment, 54.4% of the total region, amounting to $36.547 billion. Compared to the year 2019, the region’s inflow increased by 9.4%.

The United Arab Emirates ranked first in North Africa and the Middle East region, accounting for about 40.2% inflow of the total FDI to the region, increasing to $49.4 billion.


The UAE Indexed First in FDI 2020
The United Arab Emirates succeeded in achieving top ranks in the Middle East, West Asia and North Africa Region in terms of Foreign Direct Investment (FDI). In 2020, it ranked 15th in FDI inflows and 13th globally in FDI outflows.

 

For more information, kindly contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">An Increase in FDI inflows to the UAE
According to the World Investment Report 2021, the value of the FDI influxes increased by 2.01 billion (AED 7.38 billion) in 2020, achieving a growth rate of 11.24%. Hence, the United Arab Emirates has progressed 9 ranks to become 15th worldwide in 2020. The total investment of foreign inflows amounted to $19.884 billion in 2020 compared to $17.875 billion.


The UAE attracted a Foreign Direct Investment of $20.7 billion in 2021, according to the Economic Ministry.


UAE Ranked First in West Asian Countries in Terms of FDI Inflows
The UAE ranked 1st in the West Asia region for Foreign Direct Investment, 54.4% of the total region, amounting to $36.547 billion. Compared to the year 2019, the region’s inflow increased by 9.4%.

The United Arab Emirates ranked first in North Africa and the Middle East region, accounting for about 40.2% inflow of the total FDI to the region, increasing to $49.4 billion.


The UAE Indexed First in FDI 2020
The United Arab Emirates succeeded in achieving top ranks in the Middle East, West Asia and North Africa Region in terms of Foreign Direct Investment (FDI). In 2020, it ranked 15th in FDI inflows and 13th globally in FDI outflows.

 

For more information, kindly contact:

Thomas Paoletti

Fauzia Khan

">‘consultation paper’ for trade guidelines. Financial experts have initiated steps to bring digital assets such as non-fungible tokens (NFTs) under the directory framework. The Free Zone Company and financial hub of Emirates, Abu Dhabi Global Market, released the consultation paper on 21st March, 2022. The paper has more than a page dedicated to NFTs and other virtual assets.


The document proposes that companies holding the license from the financial regulator of a free zone are allowed to do NFT trading. The chief regulator of a free zone, the Financial Services Regulatory Authority (FSRA), describes NFTs and digital assets as intellectual property in the proposal papers.

Moreover, it also suggests that virtual asset custodians and multilateral trading facilities (MTFs) can run the NFT marketplaces. In addition, NFT’s transaction will require parties’ involvement to meet the terms of sanction rules and anti-money laundering.

However, the documents are also clear that at this point, FSRA is not offering a formal regulatory context for NFTs.


Authorities have asked for opinions from stakeholders about the sorts of NFTs that are allowed to trade on MTFs, also the tactics to incorporate the involvement of third parties.


Abu Dhabi- Primary Economic Zone


Abu Dhabi Global Market is the primary economic zone in the UAE with service providers for a virtual asset. In 2018, it became the first to release a regulatory framework for digital assets. In comparison, in the last week of March, the Dubai Multi Commodities Center, another emirate’s economic zone, granted a crypto license for Binance exchange and FTX.


The UAE has also adopted the first law to regulate cryptocurrencies and virtual assets such as NFTs. According to the new law, the UAE will set up a Dubai Virtual Assets Regulatory Authority (VARA) to regulate the assets.


Furthermore, Giants like Binance have been offering their services in West Asia. Recently it has got a license for a crypto service provider in the Gulf market of Bahrain.

 

To know more, kindly contact:

Thomas Paoletti

Fauzia Khan

 

 

"class="material with-radius">‘consultation paper’ for trade guidelines. Financial experts have initiated steps to bring digital assets such as non-fungible tokens (NFTs) under the directory framework. The Free Zone Company and financial hub of Emirates, Abu Dhabi Global Market, released the consultation paper on 21st March, 2022. The paper has more than a page dedicated to NFTs and other virtual assets.


The document proposes that companies holding the license from the financial regulator of a free zone are allowed to do NFT trading. The chief regulator of a free zone, the Financial Services Regulatory Authority (FSRA), describes NFTs and digital assets as intellectual property in the proposal papers.

Moreover, it also suggests that virtual asset custodians and multilateral trading facilities (MTFs) can run the NFT marketplaces. In addition, NFT’s transaction will require parties’ involvement to meet the terms of sanction rules and anti-money laundering.

However, the documents are also clear that at this point, FSRA is not offering a formal regulatory context for NFTs.


Authorities have asked for opinions from stakeholders about the sorts of NFTs that are allowed to trade on MTFs, also the tactics to incorporate the involvement of third parties.


Abu Dhabi- Primary Economic Zone


Abu Dhabi Global Market is the primary economic zone in the UAE with service providers for a virtual asset. In 2018, it became the first to release a regulatory framework for digital assets. In comparison, in the last week of March, the Dubai Multi Commodities Center, another emirate’s economic zone, granted a crypto license for Binance exchange and FTX.


The UAE has also adopted the first law to regulate cryptocurrencies and virtual assets such as NFTs. According to the new law, the UAE will set up a Dubai Virtual Assets Regulatory Authority (VARA) to regulate the assets.


Furthermore, Giants like Binance have been offering their services in West Asia. Recently it has got a license for a crypto service provider in the Gulf market of Bahrain.

 

To know more, kindly contact:

Thomas Paoletti

Fauzia Khan

 

 

">New Law below with the action points for working employees.


Unlimited Contracts Elimination
Under the New Law Article 8, unlimited contracts are replaced with contracts of a fixed term of three years.


Flexible Working Hours
The New Law has introduced flexible working arrangements for part-time and remote working jobs. The Implementing Regulations have clarified that working hours will be reduced by two hours in the Holy month of Ramadan.


Minimum Wage
The New Law has set a minimum wage for the private sector employees, determined by the UAE Cabinet.


Harassment Provisions and Anti-Discrimination
Under the New Law, employers are prohibited discrimination based on race, gender, nationality, color, social origins, and religion or disability.


Women Empowerment
The New Law states equal pay for working women doing the same job as men. The Cabinet will determine the value of the work later.


Annual Leaves
Full-time employers can take 30 days of paid annual leave if the service length is more than one year or two days per month if the service length is between six months and one year.


Conclusion
Undoubtedly, the New Law has considered the best standards of requirement in the working environment and employment practices. It ensures the interest of employees and employers in a balanced manner.

 

To know more information, kindly contact us:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">New Law below with the action points for working employees.


Unlimited Contracts Elimination
Under the New Law Article 8, unlimited contracts are replaced with contracts of a fixed term of three years.


Flexible Working Hours
The New Law has introduced flexible working arrangements for part-time and remote working jobs. The Implementing Regulations have clarified that working hours will be reduced by two hours in the Holy month of Ramadan.


Minimum Wage
The New Law has set a minimum wage for the private sector employees, determined by the UAE Cabinet.


Harassment Provisions and Anti-Discrimination
Under the New Law, employers are prohibited discrimination based on race, gender, nationality, color, social origins, and religion or disability.


Women Empowerment
The New Law states equal pay for working women doing the same job as men. The Cabinet will determine the value of the work later.


Annual Leaves
Full-time employers can take 30 days of paid annual leave if the service length is more than one year or two days per month if the service length is between six months and one year.


Conclusion
Undoubtedly, the New Law has considered the best standards of requirement in the working environment and employment practices. It ensures the interest of employees and employers in a balanced manner.

 

To know more information, kindly contact us:

Thomas Paoletti

Fauzia Khan

">1) DIAC in the DIFC
Under new rules, DIFC holds the new default arbitration seat. This means the disputing parties can now access DIFC courts as their default supervisory courts.

2) Legal Costs
The lack of provision of any award for the legal costs of the parties is resolved in the new rules. Now, the fees of experts and lawyers, along with other costs, are included in the cost of the arbitration.

3) Joinder
The recently published rules allow the consolidation of various claims into one arbitration under the same agreement.

4) Interim Measures
The rules also address exceptional procedures, such as emergency arbitrators or interim measures.

5) Third-party funding
With a proper and authentic disclosure being made to all the parties involved, the new rules of 2022 permit third-party funding arrangements.


Conclusion
The 2022 Rules not only improves the approach to arbitration but also brings the existing rules in line with other international arbitration centers in the world. Now, it is up to the courts to see how these new rules are adopted, executed, and eventually regulated in the judicial setting.

 

For more information, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">1) DIAC in the DIFC
Under new rules, DIFC holds the new default arbitration seat. This means the disputing parties can now access DIFC courts as their default supervisory courts.

2) Legal Costs
The lack of provision of any award for the legal costs of the parties is resolved in the new rules. Now, the fees of experts and lawyers, along with other costs, are included in the cost of the arbitration.

3) Joinder
The recently published rules allow the consolidation of various claims into one arbitration under the same agreement.

4) Interim Measures
The rules also address exceptional procedures, such as emergency arbitrators or interim measures.

5) Third-party funding
With a proper and authentic disclosure being made to all the parties involved, the new rules of 2022 permit third-party funding arrangements.


Conclusion
The 2022 Rules not only improves the approach to arbitration but also brings the existing rules in line with other international arbitration centers in the world. Now, it is up to the courts to see how these new rules are adopted, executed, and eventually regulated in the judicial setting.

 

For more information, please contact:

Thomas Paoletti

Fauzia Khan

">Thomas Paoletti

Fauzia Khan

"class="material with-radius">Thomas Paoletti

Fauzia Khan

">Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Thomas Paoletti

Fauzia Khan

 

">Thomas Paoletti

Fauzia Khan

"class="material with-radius">Thomas Paoletti

Fauzia Khan

">“Non-UAE National Wills”. Dubai for instance has the Dubai International Financial Center (DIFC) which allows expatriates to register their Wills with the center which ensures an effective mechanism providing speed, efficiency, and certainty of judicial enforcement of these Wills.

It is always a good idea to have a Will recorded in the UAE, especially if you have assets here. A locally registered Will guarantees legal certainty for the inheritance of your possessions, as well as the appointment of guardians for minor children, if any.

To know more information, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">“Non-UAE National Wills”. Dubai for instance has the Dubai International Financial Center (DIFC) which allows expatriates to register their Wills with the center which ensures an effective mechanism providing speed, efficiency, and certainty of judicial enforcement of these Wills.

It is always a good idea to have a Will recorded in the UAE, especially if you have assets here. A locally registered Will guarantees legal certainty for the inheritance of your possessions, as well as the appointment of guardians for minor children, if any.

To know more information, please contact:

Thomas Paoletti

Fauzia Khan

">Prenuptial agreement is a type of a written agreement between a couple yet to be married and consists of terms and conditions defining the distribution of the assets of the spouse during their marriage and post their divorce. There are also postnuptial agreements, which are essentially the same as prenuptial agreements but are entered into after the marriage has been solemnized.


Although in the United Arab Emirates (UAE) the property is individually held by the spouse and the concept of common matrimony property does not exist, the concept of Muslim marriage as a contract makes the application of prenuptial agreement a bit complex subject to understand.


The personal law in the UAE like the Personal Status Law (Federal Decree 28 of 2005) is the primary legislation that deals with the matters of marriage, divorce, inheritance, alimony, etc. The application of the law is different as per the nationality and the religion of the person involved.


The UAE has supported the viewpoint that expatriates are free to choose the law of their jurisdiction for its application in the UAE for solving personal disputes. Thus, the legality of pre-nuptial agreements is not questionable if the spouse belongs to a country where such agreements are legal. For instance, if a spouse is a citizen of the United Kingdom, the pre-nuptial agreement between them can be legally enforced as such agreements are considered valid in the UK.


Article 20 of the Personal Status Law lays down that the contract of a marriage cannot legitimize what is illegitimate and cannot ban what is legitimate. Further, a contract of marriage inconsistent with the foundations of the marriage is void. Any condition in the contract which may be consistent with the foundations of the marriage but is illicit as per the law of the UAE is also considered void, while the contract remains valid.


Although Article 20 leaves enough scope for including terms in the marriage contract which could be of the nature of the prenuptial agreement, however, the general consensus is that the terms must not violate the Sharia Law. The post-nuptial agreements can only be considered valid if they are consistent with the conditions of the contract i.e. offer, consideration, and acceptance.


Furthermore, pre/post-nuptial agreements are particularly relevant when it comes to properties based outside the UAE and in countries that recognize and enforce this type of agreement, as long as certain basic conditions are met, such as financial disclosure and separate legal counselling. It is critical to have a contract that governs such properties, especially if the wife is a foreign national.


To sum up, when drafting a pre/post-nuptial agreement to protect rights to matrimonial assets, it is critical to seek legal advice so that, in the case of UAE nationals, the scope of such conditions does not conflict with Sharia principles, and in the case of expatriates, whether Muslim or non-Muslim, there is no bias toward one party.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">Prenuptial agreement is a type of a written agreement between a couple yet to be married and consists of terms and conditions defining the distribution of the assets of the spouse during their marriage and post their divorce. There are also postnuptial agreements, which are essentially the same as prenuptial agreements but are entered into after the marriage has been solemnized.


Although in the United Arab Emirates (UAE) the property is individually held by the spouse and the concept of common matrimony property does not exist, the concept of Muslim marriage as a contract makes the application of prenuptial agreement a bit complex subject to understand.


The personal law in the UAE like the Personal Status Law (Federal Decree 28 of 2005) is the primary legislation that deals with the matters of marriage, divorce, inheritance, alimony, etc. The application of the law is different as per the nationality and the religion of the person involved.


The UAE has supported the viewpoint that expatriates are free to choose the law of their jurisdiction for its application in the UAE for solving personal disputes. Thus, the legality of pre-nuptial agreements is not questionable if the spouse belongs to a country where such agreements are legal. For instance, if a spouse is a citizen of the United Kingdom, the pre-nuptial agreement between them can be legally enforced as such agreements are considered valid in the UK.


Article 20 of the Personal Status Law lays down that the contract of a marriage cannot legitimize what is illegitimate and cannot ban what is legitimate. Further, a contract of marriage inconsistent with the foundations of the marriage is void. Any condition in the contract which may be consistent with the foundations of the marriage but is illicit as per the law of the UAE is also considered void, while the contract remains valid.


Although Article 20 leaves enough scope for including terms in the marriage contract which could be of the nature of the prenuptial agreement, however, the general consensus is that the terms must not violate the Sharia Law. The post-nuptial agreements can only be considered valid if they are consistent with the conditions of the contract i.e. offer, consideration, and acceptance.


Furthermore, pre/post-nuptial agreements are particularly relevant when it comes to properties based outside the UAE and in countries that recognize and enforce this type of agreement, as long as certain basic conditions are met, such as financial disclosure and separate legal counselling. It is critical to have a contract that governs such properties, especially if the wife is a foreign national.


To sum up, when drafting a pre/post-nuptial agreement to protect rights to matrimonial assets, it is critical to seek legal advice so that, in the case of UAE nationals, the scope of such conditions does not conflict with Sharia principles, and in the case of expatriates, whether Muslim or non-Muslim, there is no bias toward one party.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

">Federal Corporate Tax on business profits. Measures have been undertaken to incorporate the global best practices and reduce the compliance burden on the UAE businesses. The Corporate Tax is a type of direct tax placed on a corporation’s or other business’s net income or profit, and it will apply to all UAE enterprises. The UAE Corporate Tax shall be applicable from next year on the financial years beginning on or after 1 June 2023 and the Federal Tax Authority will be responsible for the administration, collection, and enforcement of UAE Corporate Tax.

Although the actual legislation and regulation are yet to be introduced, initial information points out that a standard 9% statutory tax will be applicable on businesses with net profits above AED 375,000. A 0% tax rate shall however be applicable to businesses making profits up to AED 375,000 which will ensure UAE’s commitment of continuous support towards startups and small businesses across the nation. Furthermore, a different tax rate will be applicable to large multinational enterprises.

The tax regulations which will be introduced in future laws shall aim at achieving the several objectives which are necessary for the growth of the nation. This new tax regime is designed for UAE’s alignment with global tax standards and will help the nation fulfill its commitment to the international efforts on tax transparency and countering harmful tax practices. While taxing the big businesses the policy will ensure that small and micro businesses operate hurdle-free with its 0% Corporate Tax policies for profits below AED 375,000. Only businesses that extract natural resources will continue to be subject to the Emirate corporate taxation and will be exempted from the UAE Corporate Tax. More information relating to other UAE Corporate Tax exemptions and exclusions will be provided in the comprehensive legislation to be passed in the future.

The Corporate Tax however is not to be confused with a personal income tax which is usually applicable on individuals on their salary, dividends, capital gains, or income from real estate holdings. The Corporate Tax is only applicable to the profits or income generated from the business or commercial activities undertaken by individuals. The UAE will still remain free from income tax imposed on individuals.

The Corporate Tax policy does not aim at imposing a withholding tax on domestic or cross-border transactions. Corporate Tax shall also not be imposed on capital gains and dividend distribution under certain conditions which are yet to be made clear. Free zone businesses will also be subject to UAE Corporate Tax, however the UAE Corporate Tax regime will maintain the Corporate Tax benefits currently available to free zone enterprises that meet all the regulatory criteria and do not conduct any business with mainland UAE.

The UAE Ministry of Foreign Affairs intends to release further information on the Corporate Tax regime by the middle of 2022.

For clarifications, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">Federal Corporate Tax on business profits. Measures have been undertaken to incorporate the global best practices and reduce the compliance burden on the UAE businesses. The Corporate Tax is a type of direct tax placed on a corporation’s or other business’s net income or profit, and it will apply to all UAE enterprises. The UAE Corporate Tax shall be applicable from next year on the financial years beginning on or after 1 June 2023 and the Federal Tax Authority will be responsible for the administration, collection, and enforcement of UAE Corporate Tax.

Although the actual legislation and regulation are yet to be introduced, initial information points out that a standard 9% statutory tax will be applicable on businesses with net profits above AED 375,000. A 0% tax rate shall however be applicable to businesses making profits up to AED 375,000 which will ensure UAE’s commitment of continuous support towards startups and small businesses across the nation. Furthermore, a different tax rate will be applicable to large multinational enterprises.

The tax regulations which will be introduced in future laws shall aim at achieving the several objectives which are necessary for the growth of the nation. This new tax regime is designed for UAE’s alignment with global tax standards and will help the nation fulfill its commitment to the international efforts on tax transparency and countering harmful tax practices. While taxing the big businesses the policy will ensure that small and micro businesses operate hurdle-free with its 0% Corporate Tax policies for profits below AED 375,000. Only businesses that extract natural resources will continue to be subject to the Emirate corporate taxation and will be exempted from the UAE Corporate Tax. More information relating to other UAE Corporate Tax exemptions and exclusions will be provided in the comprehensive legislation to be passed in the future.

The Corporate Tax however is not to be confused with a personal income tax which is usually applicable on individuals on their salary, dividends, capital gains, or income from real estate holdings. The Corporate Tax is only applicable to the profits or income generated from the business or commercial activities undertaken by individuals. The UAE will still remain free from income tax imposed on individuals.

The Corporate Tax policy does not aim at imposing a withholding tax on domestic or cross-border transactions. Corporate Tax shall also not be imposed on capital gains and dividend distribution under certain conditions which are yet to be made clear. Free zone businesses will also be subject to UAE Corporate Tax, however the UAE Corporate Tax regime will maintain the Corporate Tax benefits currently available to free zone enterprises that meet all the regulatory criteria and do not conduct any business with mainland UAE.

The UAE Ministry of Foreign Affairs intends to release further information on the Corporate Tax regime by the middle of 2022.

For clarifications, please contact:

Thomas Paoletti

Fauzia Khan

">The Federal Law No. 6 of 2018 on Arbitration is the primary legislation regulating Arbitration across the country. Article 52 of the law states that every arbitral award issued according to the present law shall be binding and enforceable like a court order. Article 55 requires a person to submit a request for recognition of arbitral award and issuance of enforcement order to the president of the court. The party requesting enforcement shall also submit the original award or its certified copy, a copy of the arbitration agreement, an Arabic translation of the arbitral award, and a copy of the minutes of deposit of the award in the court.  

The president of the court or any other delegated judge is bound to order the recognition and enforcement of the award within 60 days of the request unless a case is made for nullification of the arbitral award.  

Article 53 lays down a variety of objections that can be raised against the arbitral award by lodging an action in nullity or during the examination of the arbitral award for enforcement. Article 53 provides eight grounds for which proof has to be provided to seek an annulment. A few of the grounds are that (1) there was no arbitration agreement or the agreement was null and void, (2) A party was incapacitated at the time of conclusion of the arbitration agreement. (3) there was a violation of natural justice (4) the law applied by the arbitral award is not the one agreed by the parties.  

Importantly, the court can also on its initiative refuse to enforce an award if it finds that the subject matter of the dispute was not capable of arbitration or if the arbitral award was in conflict with the public order and the public morality of the state.  

Nullification of the arbitral award shall result in termination of the award in whole or in part. The court may stay the nullification process to enable the Arbitral Tribunal to correct the error which might lead to the annulment of the arbitral award. An order of nullity issued by a court is considered final and may only be subject to appeal by cassation, which is an extraordinary remedy.  

The court examining the actions of nullity may order to stay the enforcement of an arbitral award if an application of annulment is based on serious grounds, however, it is not obligated to do so.  

For more information, please contact:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">The Federal Law No. 6 of 2018 on Arbitration is the primary legislation regulating Arbitration across the country. Article 52 of the law states that every arbitral award issued according to the present law shall be binding and enforceable like a court order. Article 55 requires a person to submit a request for recognition of arbitral award and issuance of enforcement order to the president of the court. The party requesting enforcement shall also submit the original award or its certified copy, a copy of the arbitration agreement, an Arabic translation of the arbitral award, and a copy of the minutes of deposit of the award in the court.  

The president of the court or any other delegated judge is bound to order the recognition and enforcement of the award within 60 days of the request unless a case is made for nullification of the arbitral award.  

Article 53 lays down a variety of objections that can be raised against the arbitral award by lodging an action in nullity or during the examination of the arbitral award for enforcement. Article 53 provides eight grounds for which proof has to be provided to seek an annulment. A few of the grounds are that (1) there was no arbitration agreement or the agreement was null and void, (2) A party was incapacitated at the time of conclusion of the arbitration agreement. (3) there was a violation of natural justice (4) the law applied by the arbitral award is not the one agreed by the parties.  

Importantly, the court can also on its initiative refuse to enforce an award if it finds that the subject matter of the dispute was not capable of arbitration or if the arbitral award was in conflict with the public order and the public morality of the state.  

Nullification of the arbitral award shall result in termination of the award in whole or in part. The court may stay the nullification process to enable the Arbitral Tribunal to correct the error which might lead to the annulment of the arbitral award. An order of nullity issued by a court is considered final and may only be subject to appeal by cassation, which is an extraordinary remedy.  

The court examining the actions of nullity may order to stay the enforcement of an arbitral award if an application of annulment is based on serious grounds, however, it is not obligated to do so.  

For more information, please contact:

Thomas Paoletti

Fauzia Khan

 

">(1) ask their banks to deny payment of a cheque (with exceptions), (2) withdraw funds or close their account with an aim to deny payment (3) deliberately sign a cheque in a manner to make it unpayable. The individual could be punished for 6 months to 2 years imprisonment in addition to being fined for 10% of the cheque value or 5,000 AED.  The new amendments have removed the penal provisions for drawing or endorsing a cheque of an account with insufficient funds. The penalty for repeat offenders shall be double.

Financial Institutions or the cheque drawers will also be subjected to a penalty of 10% of the cheque or a minimum of AED 5,000, in cases where they wrongfully reject the bearers’ demand for full or partial payment of the cheque in bad faith and deny to the bearer the original cheque with the certificate of partial payment. The banks or the employees once convicted would also be subjected to the policies of name and shame as the judgments will be published in two widely read newspapers of the UAE.

As per these amendments, if a person is convicted of the offence of cheque bounce, his checkbook could be withdrawn and he may also be prevented from obtaining a new checkbook for five years. Other repercussions include a financial fine, suspension of license of a business for six months, and punishment of dissolution of business license for repeat offenders. Any bank not complying with the above orders could be subjected to the penalty of AED 100,000- 200,000.

The law has been amended to allow for partial payment of the value of the cheque if the entire amount is not in the account of the drawer. The bank shall also provide a certificate to the effect that the cheque has only been partially encashed while returning the original cheque to the bearer. The certificate validates the right of the bearer to the rest of the payment. If a bank stamps a cheque as non-paid, then the cheque could act as an executive instrument capable of being enforced wholly or partially.  

Banks have been now mandated to submit information to the Central Bank of the account holders who indulges in any of the cases, (1) where the account had no sufficient and usable fund at the time of the maturity of the cheque, (2) where drawer had withdrawn the funds to disable the encashment of cheque, and (3) where partial payment has been made and certificate is issued by the bank as stated above.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">(1) ask their banks to deny payment of a cheque (with exceptions), (2) withdraw funds or close their account with an aim to deny payment (3) deliberately sign a cheque in a manner to make it unpayable. The individual could be punished for 6 months to 2 years imprisonment in addition to being fined for 10% of the cheque value or 5,000 AED.  The new amendments have removed the penal provisions for drawing or endorsing a cheque of an account with insufficient funds. The penalty for repeat offenders shall be double.

Financial Institutions or the cheque drawers will also be subjected to a penalty of 10% of the cheque or a minimum of AED 5,000, in cases where they wrongfully reject the bearers’ demand for full or partial payment of the cheque in bad faith and deny to the bearer the original cheque with the certificate of partial payment. The banks or the employees once convicted would also be subjected to the policies of name and shame as the judgments will be published in two widely read newspapers of the UAE.

As per these amendments, if a person is convicted of the offence of cheque bounce, his checkbook could be withdrawn and he may also be prevented from obtaining a new checkbook for five years. Other repercussions include a financial fine, suspension of license of a business for six months, and punishment of dissolution of business license for repeat offenders. Any bank not complying with the above orders could be subjected to the penalty of AED 100,000- 200,000.

The law has been amended to allow for partial payment of the value of the cheque if the entire amount is not in the account of the drawer. The bank shall also provide a certificate to the effect that the cheque has only been partially encashed while returning the original cheque to the bearer. The certificate validates the right of the bearer to the rest of the payment. If a bank stamps a cheque as non-paid, then the cheque could act as an executive instrument capable of being enforced wholly or partially.  

Banks have been now mandated to submit information to the Central Bank of the account holders who indulges in any of the cases, (1) where the account had no sufficient and usable fund at the time of the maturity of the cheque, (2) where drawer had withdrawn the funds to disable the encashment of cheque, and (3) where partial payment has been made and certificate is issued by the bank as stated above.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

">Thomas Paoletti

Alessio Masala

"class="material with-radius">Thomas Paoletti

Alessio Masala

">The Commercial Company Law of the United Arab Emirates (UAE) deals with the Mergers of companies across the nation.

Article 283 of the Federal Law No. (2) of 2015 on Commercial Companies, allows a company with a special resolution passed by the General Assembly to merge with another company through the conclusion of a ‘Merger Contract’. The provision allows even a company under liquidation to merge with another company.

Article 284 of the law then lays down the necessary clauses which the merger contract needs to demonstrate. The merger contract shall lay down the Memorandum of Association (MOA) and Articles of Association (AOA) of the acquirer company or the new company to be formed as a result of the merger. The contract also needs to state the name and addresses of the board members and proposed managers of the company being created by the merger. Lastly, the contract needs to lay down the method of transferring the stocks or shares of the target company into the new company.

This draft merger contract needs to be submitted before the General Assembly of both the companies getting merged which needs its approval equivalent to the one required to amend the MOA of that company. When the proposal of the merger is presented before the General Assembly, it is necessary to present the merger contract. The merger contract shall make the shareholders clear that shareholders having more than 20% stake in the company can challenge the merger in a competent court within 30 days from the date of approval of the General Assembly.

Article 287 allows partners of a company (except joint-stock company) objecting to the merger to restore the value of their shares.

The law also provid

es for the merging of holding and subsidiary companies and allows their mergers without the conclusion of a merger contract. The subsidiary company(s) merely needs to pass the special decision with the majority enumerated for amending the MOA.

The merging companies also need to notify their creditors of the decision within 10 days of approval by their General Assembly. The company shall deal with the objections of the creditors, and shareholders and any failure to settle such claims shall entitle the objectors to challenge the merger in the court, where they can seek the merger’s suspension. If no objection is raised to the merger, it shall constitute as implied consent to the merger decision. Once the Ministry’s or Security and Commodities Authority’s approval is received, it shall result in termination of the corporate entity of the target company.

For any more information please feel free to contact us.

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The Commercial Company Law of the United Arab Emirates (UAE) deals with the Mergers of companies across the nation.

Article 283 of the Federal Law No. (2) of 2015 on Commercial Companies, allows a company with a special resolution passed by the General Assembly to merge with another company through the conclusion of a ‘Merger Contract’. The provision allows even a company under liquidation to merge with another company.

Article 284 of the law then lays down the necessary clauses which the merger contract needs to demonstrate. The merger contract shall lay down the Memorandum of Association (MOA) and Articles of Association (AOA) of the acquirer company or the new company to be formed as a result of the merger. The contract also needs to state the name and addresses of the board members and proposed managers of the company being created by the merger. Lastly, the contract needs to lay down the method of transferring the stocks or shares of the target company into the new company.

This draft merger contract needs to be submitted before the General Assembly of both the companies getting merged which needs its approval equivalent to the one required to amend the MOA of that company. When the proposal of the merger is presented before the General Assembly, it is necessary to present the merger contract. The merger contract shall make the shareholders clear that shareholders having more than 20% stake in the company can challenge the merger in a competent court within 30 days from the date of approval of the General Assembly.

Article 287 allows partners of a company (except joint-stock company) objecting to the merger to restore the value of their shares.

The law also provid

es for the merging of holding and subsidiary companies and allows their mergers without the conclusion of a merger contract. The subsidiary company(s) merely needs to pass the special decision with the majority enumerated for amending the MOA.

The merging companies also need to notify their creditors of the decision within 10 days of approval by their General Assembly. The company shall deal with the objections of the creditors, and shareholders and any failure to settle such claims shall entitle the objectors to challenge the merger in the court, where they can seek the merger’s suspension. If no objection is raised to the merger, it shall constitute as implied consent to the merger decision. Once the Ministry’s or Security and Commodities Authority’s approval is received, it shall result in termination of the corporate entity of the target company.

For any more information please feel free to contact us.

Thomas Paoletti

Fauzia Khan

">Dubai International Arbitration Centre (DIAC). The Decree has abolished both ‘the Emirate Maritime Arbitration Centre’ as well as the ‘the Dubai International Financial Centre Arbitration Institute’ and has transferred their employees, assets, rights, and obligations to the DIAC.

All the agreements which had set the jurisdiction of the above-mentioned abolished arbitration centres still stand valid and the arbitration in disputes surrounding such agreements shall now be done by the DIAC. The ongoing arbitration proceedings will continue and shall be supervised by the DIAC.

The DIAC was established in 2004 to provide efficient and impartial administration of commercial disputes. The DIAC aims at reaching out to other international or regional arbitration centres through the exchange of expertise, arbitrators, and other resources to achieve the objectives of the centre. Other functions include ensuring the enforcement of arbitration orders through MOUs with various national and international courts. These functions in totality aim at achieving the objectives of the DIAC to promote ADR as the primary method of dispute resolution for financial and commercial disputes.

The Decree sets the DIAC as the primary centre for conducting arbitration proceedings if parties have not specifically mentioned any other place. The decree-law also provides for arbitration through other electronic and modern technological methods.

The DIAC will have a board of directors with a total of 9 members including a Chairman and Vice-Chairman. The Board will function to achieve the objectives of the DIAC along with the creation of rules and by-laws on the lines of best international policies to regulate the arbitration proceedings. Further, the board is responsible for administrative responsibilities of the centre including approval of the annual budget and deciding remuneration of employees. The Board is further responsible to propose future policies by conducting studies on the functioning of arbitration, conciliation, and other ADR methods.

The Decree establishes an Arbitration Court with a total of 13 members including a president and vice president. The objective of the Arbitration Court is to undertake general supervision of the ADR methods offered by the DIAC and ensure its proper and timely use. The members shall be appointed pursuant to the resolution of the board of directors. The court shall have the power to ensure effective implementation of the provision of this law and the rules adopted by the DIAC and the parties to the disputes. The court is also responsible for appointing arbitration tribunal and conciliation panels.

Further, the Arbitration Court is also responsible for determining fees for services provided by DIAC like arbitration, conciliation, and others.

To know more, kindly contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">Dubai International Arbitration Centre (DIAC). The Decree has abolished both ‘the Emirate Maritime Arbitration Centre’ as well as the ‘the Dubai International Financial Centre Arbitration Institute’ and has transferred their employees, assets, rights, and obligations to the DIAC.

All the agreements which had set the jurisdiction of the above-mentioned abolished arbitration centres still stand valid and the arbitration in disputes surrounding such agreements shall now be done by the DIAC. The ongoing arbitration proceedings will continue and shall be supervised by the DIAC.

The DIAC was established in 2004 to provide efficient and impartial administration of commercial disputes. The DIAC aims at reaching out to other international or regional arbitration centres through the exchange of expertise, arbitrators, and other resources to achieve the objectives of the centre. Other functions include ensuring the enforcement of arbitration orders through MOUs with various national and international courts. These functions in totality aim at achieving the objectives of the DIAC to promote ADR as the primary method of dispute resolution for financial and commercial disputes.

The Decree sets the DIAC as the primary centre for conducting arbitration proceedings if parties have not specifically mentioned any other place. The decree-law also provides for arbitration through other electronic and modern technological methods.

The DIAC will have a board of directors with a total of 9 members including a Chairman and Vice-Chairman. The Board will function to achieve the objectives of the DIAC along with the creation of rules and by-laws on the lines of best international policies to regulate the arbitration proceedings. Further, the board is responsible for administrative responsibilities of the centre including approval of the annual budget and deciding remuneration of employees. The Board is further responsible to propose future policies by conducting studies on the functioning of arbitration, conciliation, and other ADR methods.

The Decree establishes an Arbitration Court with a total of 13 members including a president and vice president. The objective of the Arbitration Court is to undertake general supervision of the ADR methods offered by the DIAC and ensure its proper and timely use. The members shall be appointed pursuant to the resolution of the board of directors. The court shall have the power to ensure effective implementation of the provision of this law and the rules adopted by the DIAC and the parties to the disputes. The court is also responsible for appointing arbitration tribunal and conciliation panels.

Further, the Arbitration Court is also responsible for determining fees for services provided by DIAC like arbitration, conciliation, and others.

To know more, kindly contact:

Thomas Paoletti

Fauzia Khan

">Dubai International Financial Center (DIFC) was established in 2004 as a financial free zone having independent legal and regulatory framework aiming to foster growth and economic progress in the nation. DIFC has its unique and independent legal as well as regulatory framework in the United Arab Emirates (UAE). Special DIFC court have been created for the free zone dealing with all claims and disputes arising from or within the DIFC.

The DIFC courts in collaboration with the government of Dubai started a joint initiative of DIFC courts Wills Service for the non-Muslims of the UAE.  The service was introduced in the year 2014 through DIFC’s resolution and was reaffirmed by the Dubai government in 2017 through its law No 15 of 2017. The detailed law and rules provide for effective mechanism providing speed, efficiency, and certainty of judicial enforcement of these wills.

The aim of the service is to provide testamentary freedom to non-Muslims residing in the UAE. In absence of this service the property of such individuals was devolved in accordance with the Sharia law upon the death of the individual and not in accordance with his or her wish.

The DIFC wills gives non-Muslims an option to pass their assets or appoint guardians of the children below 21 years residing in Dubai. Non-Muslims investing in the UAE or having assets in the country can prepare the DIFC will. The DIFC wills can be prepared only by the draftsman registered with DIFC courts Wills Service. The registration of the will takes place at the designated DIFC office, and it is mandatory for the testator to be present at the same office.

The Wills Services include registration of a Full Will, Property Will, Financial Assets Will, Business Owner Will and Guardianship Will. In case where an individual wants to distribute his assets and wishes to appoint a guardian of the children, he or she can register a Full Will instead of two separate Property and Guardianship wills. The Business Owner Will can encompass up to five separate shareholdings in any company incorporate in the UAE.  The Financial Assets Will can encompass up to ten separate accounts or joint accounts in banks which are registered and situated in the UAE. The Property Will can encompass up to five real estate properties situated in the UAE.

In response to the challenges posed by Covid-19, DIFC Wills Services Centre has allowed the facility of online video conferencing to register a DIFC Will remotely.

References

  1. https://www.legalinz.com/blog/what-is-a-difc-will/
  2. https://www2.deloitte.com/xe/en/pages/tax/articles/DIFC-Wills-Probate-Registry.html
  3. https://www.difccourts.ae/difc-courts/services
  4. https://www.shlegal.com/news/registration-of-difc-wills-now-available-for-uae-residents
  5. https://www.difccourts.ae/difc-courts-wills/services/business-owners-will
  6. https://www.difccourts.ae/difc-courts-wills/services/financial-assets-will
  7. https://www.difccourts.ae/difc-courts/services#wills_service

Kindly contact us, to know more:

Thomas Paoletti

Fauzia Khan 

"class="material with-radius">Dubai International Financial Center (DIFC) was established in 2004 as a financial free zone having independent legal and regulatory framework aiming to foster growth and economic progress in the nation. DIFC has its unique and independent legal as well as regulatory framework in the United Arab Emirates (UAE). Special DIFC court have been created for the free zone dealing with all claims and disputes arising from or within the DIFC.

The DIFC courts in collaboration with the government of Dubai started a joint initiative of DIFC courts Wills Service for the non-Muslims of the UAE.  The service was introduced in the year 2014 through DIFC’s resolution and was reaffirmed by the Dubai government in 2017 through its law No 15 of 2017. The detailed law and rules provide for effective mechanism providing speed, efficiency, and certainty of judicial enforcement of these wills.

The aim of the service is to provide testamentary freedom to non-Muslims residing in the UAE. In absence of this service the property of such individuals was devolved in accordance with the Sharia law upon the death of the individual and not in accordance with his or her wish.

The DIFC wills gives non-Muslims an option to pass their assets or appoint guardians of the children below 21 years residing in Dubai. Non-Muslims investing in the UAE or having assets in the country can prepare the DIFC will. The DIFC wills can be prepared only by the draftsman registered with DIFC courts Wills Service. The registration of the will takes place at the designated DIFC office, and it is mandatory for the testator to be present at the same office.

The Wills Services include registration of a Full Will, Property Will, Financial Assets Will, Business Owner Will and Guardianship Will. In case where an individual wants to distribute his assets and wishes to appoint a guardian of the children, he or she can register a Full Will instead of two separate Property and Guardianship wills. The Business Owner Will can encompass up to five separate shareholdings in any company incorporate in the UAE.  The Financial Assets Will can encompass up to ten separate accounts or joint accounts in banks which are registered and situated in the UAE. The Property Will can encompass up to five real estate properties situated in the UAE.

In response to the challenges posed by Covid-19, DIFC Wills Services Centre has allowed the facility of online video conferencing to register a DIFC Will remotely.

References

  1. https://www.legalinz.com/blog/what-is-a-difc-will/
  2. https://www2.deloitte.com/xe/en/pages/tax/articles/DIFC-Wills-Probate-Registry.html
  3. https://www.difccourts.ae/difc-courts/services
  4. https://www.shlegal.com/news/registration-of-difc-wills-now-available-for-uae-residents
  5. https://www.difccourts.ae/difc-courts-wills/services/business-owners-will
  6. https://www.difccourts.ae/difc-courts-wills/services/financial-assets-will
  7. https://www.difccourts.ae/difc-courts/services#wills_service

Kindly contact us, to know more:

Thomas Paoletti

Fauzia Khan 

">The Data Protection Law is set to go into force at the beginning of 2022, and is being designed keeping in view the objective of protecting the privacy of the people and institutions and limiting the private companies from generating profits out of personal data.

All firms operating in the UAE, along with those firms outside of the UAE processing personal data of the UAE residents, will need to evaluate their activities and make changes to comply with the new Data Protection Law.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

 

 

"class="material with-radius">The Data Protection Law is set to go into force at the beginning of 2022, and is being designed keeping in view the objective of protecting the privacy of the people and institutions and limiting the private companies from generating profits out of personal data.

All firms operating in the UAE, along with those firms outside of the UAE processing personal data of the UAE residents, will need to evaluate their activities and make changes to comply with the new Data Protection Law.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

 

 

">Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Thomas Paoletti

Fauzia Khan

 

">Thomas Paoletti

Fauzia Khan

"class="material with-radius">Thomas Paoletti

Fauzia Khan

">We are happy to share with you our latest publication on IR Global November 2021 issue on  ”How external counsel can help you explore and secure market entry opportunities”.

Members from different jurisdictions with diverse expertise on various fields have contributed on this publication.

Thomas Paoletti the founder and Managing Partner of Paoletti Legal Consultants LLP

has shared his insights and expertise on below questions.

 

QUESTION ONE:

What are the most important steps to identifying commercial opportunities before entering a new market in the UAE – and what are the most common commercial mistakes you have seen businesses make?

The UAE has a long and proud history of trade and finances, which makes it simultaneously an open space for entrepreneurship and a difficult and competitive market; for this reason, any company that seeks to engage in the UAE’s market first has to secure a sizable initial capital to spend in the first stages of its business, independently of the specific trade or business that it wishes to conduct, to deal with the country’s high competition. The UAE is also a very diverse country (more than 89% of its population being expats) with a very diverse economy, so the key to successful market entry has less to do with investment and marketing, and more to do with adaptation to the local cultural landscape. Some mistakes that should be avoided by investors and businesses when introducing their brands, products and services in the UAE are related to:


• investing in a product that sells poorly in a particular UAE social and cultural context.
• compliance with local laws, rules and regulations such as registration of businesses and economic substance which can result in fines and closure of companies.
• Underestimation of the influence of culture and tradition of the market and its rules.

QUESTION TWO

Local market intelligence is vital to exploring commercial viability in a new market. How has Covid impacted access to this information, and how can businesses make fully informed market entry decisions as Covid disruptions continue?

Local market intelligence is necessary to gather authentic information for market research and strategy formulation. Market intelligence analysts used this information to help businesses avoid investment risks by identifying potential threats and opportunities. With the advent of Covid-19, the physical ability of people to reach markets was affected, which made the traditional method of data collection impossible. Generally speaking, all global open markets have been hit hard by the Covid-19 pandemic, especially financial markets, since these are supported by complex networks of information and delicate infrastructures that have been effectively shut down by the various governments and institutions of the world as a safety measure to avoid economic collapse and recession. This unexpected turn of events has led to a drop in investment from foreign capital and entrepreneurs, leading thus
to a reduction of the market itself in the UAE; nevertheless, the UAE’s government has successfully implemented measures to
sustain the economy, such as:
• A series of record-breaking stimulus packages for existing businesses in the UAE and the foreign direct investments in the country.
• A gradual re-opening of the financial infrastructures and centres. Added to this, there is much that companies and businesses can do to support the economic recovery and even end up with benefits from the restructuring of the market; to this end, it is recommended that businesses invest in digital technology and Fourth Generation industries such as space technology, Artificial Intelligence, cyber security, and Biometric databases. This last point is crucial to regain the capacity to gather and process data related to the various segments of the market, since Biodata is the cutting-edge technology that is being used to create large databases of information about the consumers and their habits, ideas, expectations, etc.

QUESTION THREE

How can businesses identify and evade barriers to commercial success in a new market – from cultural and language differences to competitors and other new market entrants?

It is paramount for commercial success that companies integrate themselves into the local customs, mores, traditions and idiosyncrasy of the consumers, so as to “become” part of the community. To counter this, it is important to show cooperation and respect to the local consumers by engaging in social welfare activities and campaigns that help establish a connection between the business and the people. Finally, in this cultural setting, it is of the utmost importance and relevance that companies and investors take a risk on segments of the market that are underdeveloped in some of the emirates, and avoid the common mistake of clustering in the financial centres, where the competition is most rife and accelerated; this will help open up new venues of the economy, contributing to the economic growth of the rest of the federation, and establishing a firm position in the market. Challenges posed by competitors and new market entrants could be dealt with by professional consultants that can help identify structural problems and provide personalised and objective steps to tackle competitors and new market entrants. With more than 15 years of experience in the UAE and 25 years in the international market, our team provides companies and investors with the market analysis and strategy along with incorporating business strategy appropriate to navigate in the constantly evolving UAE business world.

 

To read the full publication, kindly click here.

"class="material with-radius">We are happy to share with you our latest publication on IR Global November 2021 issue on  ”How external counsel can help you explore and secure market entry opportunities”.

Members from different jurisdictions with diverse expertise on various fields have contributed on this publication.

Thomas Paoletti the founder and Managing Partner of Paoletti Legal Consultants LLP

has shared his insights and expertise on below questions.

 

QUESTION ONE:

What are the most important steps to identifying commercial opportunities before entering a new market in the UAE – and what are the most common commercial mistakes you have seen businesses make?

The UAE has a long and proud history of trade and finances, which makes it simultaneously an open space for entrepreneurship and a difficult and competitive market; for this reason, any company that seeks to engage in the UAE’s market first has to secure a sizable initial capital to spend in the first stages of its business, independently of the specific trade or business that it wishes to conduct, to deal with the country’s high competition. The UAE is also a very diverse country (more than 89% of its population being expats) with a very diverse economy, so the key to successful market entry has less to do with investment and marketing, and more to do with adaptation to the local cultural landscape. Some mistakes that should be avoided by investors and businesses when introducing their brands, products and services in the UAE are related to:


• investing in a product that sells poorly in a particular UAE social and cultural context.
• compliance with local laws, rules and regulations such as registration of businesses and economic substance which can result in fines and closure of companies.
• Underestimation of the influence of culture and tradition of the market and its rules.

QUESTION TWO

Local market intelligence is vital to exploring commercial viability in a new market. How has Covid impacted access to this information, and how can businesses make fully informed market entry decisions as Covid disruptions continue?

Local market intelligence is necessary to gather authentic information for market research and strategy formulation. Market intelligence analysts used this information to help businesses avoid investment risks by identifying potential threats and opportunities. With the advent of Covid-19, the physical ability of people to reach markets was affected, which made the traditional method of data collection impossible. Generally speaking, all global open markets have been hit hard by the Covid-19 pandemic, especially financial markets, since these are supported by complex networks of information and delicate infrastructures that have been effectively shut down by the various governments and institutions of the world as a safety measure to avoid economic collapse and recession. This unexpected turn of events has led to a drop in investment from foreign capital and entrepreneurs, leading thus
to a reduction of the market itself in the UAE; nevertheless, the UAE’s government has successfully implemented measures to
sustain the economy, such as:
• A series of record-breaking stimulus packages for existing businesses in the UAE and the foreign direct investments in the country.
• A gradual re-opening of the financial infrastructures and centres. Added to this, there is much that companies and businesses can do to support the economic recovery and even end up with benefits from the restructuring of the market; to this end, it is recommended that businesses invest in digital technology and Fourth Generation industries such as space technology, Artificial Intelligence, cyber security, and Biometric databases. This last point is crucial to regain the capacity to gather and process data related to the various segments of the market, since Biodata is the cutting-edge technology that is being used to create large databases of information about the consumers and their habits, ideas, expectations, etc.

QUESTION THREE

How can businesses identify and evade barriers to commercial success in a new market – from cultural and language differences to competitors and other new market entrants?

It is paramount for commercial success that companies integrate themselves into the local customs, mores, traditions and idiosyncrasy of the consumers, so as to “become” part of the community. To counter this, it is important to show cooperation and respect to the local consumers by engaging in social welfare activities and campaigns that help establish a connection between the business and the people. Finally, in this cultural setting, it is of the utmost importance and relevance that companies and investors take a risk on segments of the market that are underdeveloped in some of the emirates, and avoid the common mistake of clustering in the financial centres, where the competition is most rife and accelerated; this will help open up new venues of the economy, contributing to the economic growth of the rest of the federation, and establishing a firm position in the market. Challenges posed by competitors and new market entrants could be dealt with by professional consultants that can help identify structural problems and provide personalised and objective steps to tackle competitors and new market entrants. With more than 15 years of experience in the UAE and 25 years in the international market, our team provides companies and investors with the market analysis and strategy along with incorporating business strategy appropriate to navigate in the constantly evolving UAE business world.

 

To read the full publication, kindly click here.

">The UAE government has introduced some massive changes to labor laws of the nation through the new Federal Decree Law No 33 of 2021. The new law which will take effect from February 2022, is aimed at enhancing elasticity, resilience, and sustainability of the nation’s labor market and to promote flexible and competitive business environment for the next 50 years.

Along with provisions prohibiting discrimination, forced labor, harassment and bullying, some of the other new development in the labor laws which shall apply to private sector employees have been listed below:


1. It is now allowed for juveniles above 15 years of age to work for 6 hours a day with requisite permissions and subject to few limitations.


2. Temporary and Flexible work models have been introduced to allow flexible hiring and working practices for the employees.


3. Detailed provisions have been introduced in relation to probation workers. The probation period is still fixed to 6 months, but now according to the new law the employer shall have to give a 14-day written notice before terminating any employee while the employee shall have to submit a 30-day notice if they want to submit their resignation during the probation period.


4. Minimum wage will be set for employees in the private sector.


5. The law grants protection and support to employees by making it illegal for an employer to withhold the employee’s documents such as passport.


6. Certain obligation have been laid on employers which includes providing accommodation, training and other means to ensure safety and welfare of the employees through insurance, healthcare costs and other entitlements to the employee’s family upon his or her death.


7. The legislation provides for detailed provisions relating to maternity leave of the female employees. A provision of 45 day fully paid leave and a 15 day of half paid leaves have been provided along with several other rights.


8. The law provides for comprehensive mechanisms and provisions for reprimanding an employee which include giving warnings, deduction of wage, temporary suspension, dismissal with severance pay and other such measures. Separate provisions have been provided for serious cases of wrongs where an employee could be dismissed without a notice.


9. Employees or their heirs have been exempted from paying any judicial fee if their legal claims against the employer falls under or upto AED 100,000.


10. The law prohibits an employee from competing or participating in any competing project in the same business for two years from the date of expiry of their employment contract.


11. The law also prohibits indefinite periods of employment contract and has limited the period of the contract to three years which can be renewed upon expiration. Existing unlimited employment contracts are to be converted into fixed term employment contracts within one year of enforcement of the law.

To know more about this information, contact us at:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The UAE government has introduced some massive changes to labor laws of the nation through the new Federal Decree Law No 33 of 2021. The new law which will take effect from February 2022, is aimed at enhancing elasticity, resilience, and sustainability of the nation’s labor market and to promote flexible and competitive business environment for the next 50 years.

Along with provisions prohibiting discrimination, forced labor, harassment and bullying, some of the other new development in the labor laws which shall apply to private sector employees have been listed below:


1. It is now allowed for juveniles above 15 years of age to work for 6 hours a day with requisite permissions and subject to few limitations.


2. Temporary and Flexible work models have been introduced to allow flexible hiring and working practices for the employees.


3. Detailed provisions have been introduced in relation to probation workers. The probation period is still fixed to 6 months, but now according to the new law the employer shall have to give a 14-day written notice before terminating any employee while the employee shall have to submit a 30-day notice if they want to submit their resignation during the probation period.


4. Minimum wage will be set for employees in the private sector.


5. The law grants protection and support to employees by making it illegal for an employer to withhold the employee’s documents such as passport.


6. Certain obligation have been laid on employers which includes providing accommodation, training and other means to ensure safety and welfare of the employees through insurance, healthcare costs and other entitlements to the employee’s family upon his or her death.


7. The legislation provides for detailed provisions relating to maternity leave of the female employees. A provision of 45 day fully paid leave and a 15 day of half paid leaves have been provided along with several other rights.


8. The law provides for comprehensive mechanisms and provisions for reprimanding an employee which include giving warnings, deduction of wage, temporary suspension, dismissal with severance pay and other such measures. Separate provisions have been provided for serious cases of wrongs where an employee could be dismissed without a notice.


9. Employees or their heirs have been exempted from paying any judicial fee if their legal claims against the employer falls under or upto AED 100,000.


10. The law prohibits an employee from competing or participating in any competing project in the same business for two years from the date of expiry of their employment contract.


11. The law also prohibits indefinite periods of employment contract and has limited the period of the contract to three years which can be renewed upon expiration. Existing unlimited employment contracts are to be converted into fixed term employment contracts within one year of enforcement of the law.

To know more about this information, contact us at:

Thomas Paoletti

Fauzia Khan

">IR GLOBAL  a multi-disciplinary professional services network that provides legal, accountancy, financial advice to companies and individuals around the world.

After the pandemic, the team has finally welcomed its members back to London for the annual conference and celebrated its 10th (11) year anniversary!

Paoletti Law Group was honored to be a Headline sponsor for #IRGlobal’s 10th year annual conference held in London last 23 October to 26 October 2021.

Here is a brief interview of our Managing Partner Mr. Thomas Paoletti.

"class="material with-radius">IR GLOBAL  a multi-disciplinary professional services network that provides legal, accountancy, financial advice to companies and individuals around the world.

After the pandemic, the team has finally welcomed its members back to London for the annual conference and celebrated its 10th (11) year anniversary!

Paoletti Law Group was honored to be a Headline sponsor for #IRGlobal’s 10th year annual conference held in London last 23 October to 26 October 2021.

Here is a brief interview of our Managing Partner Mr. Thomas Paoletti.

">
all onshore and FTZ companies (Licensee or Exempted Licensee), including other types of businesses, must present a yearly form, declaring their activities, partners, and all relevant information pertaining to their economic impact and contribution; this is what is often called the Economic Substance of the company.


This form must contain information regarding the relevant activities that the company as engaged in each year, starting from January 1st 2019, proceeding according to the fiscal year of the company; however, companies are not obliged to present the form if, in a given fiscal year, they have not obtained any income from the relevant activity mentioned above.


The ultimate administrative authority under the Resolutions is the National Assessing Authority (NAA), whose function is to file and gather all the forms received by the respective regulatory authorities of each RA, as defined by the Law; after this process has finished, the NAA examines and evaluates each form and decides which companies have successfully fulfill their obligations.


If a company or individual does not comply with the Regulations and presents the aforementioned form, then they will be subject to administrative, tributary and/or penal sanctions, such as up to 50,000 Dirhams fine for not presenting the form and/or failing the Economic Substance Test; another example of the penalties expressed in article 14 of the Cabinet Resolution N 57 of 2020, is a fine of 400,000 Dirhams for failing to present the Economic Substance Report (ESR) and/or failing the Economic Substance Test (EST) for a second consecutive fiscal year. There are also penalties for providing inaccurate information in the ESR; finally, if the decision of the NAA is unfavorable for the Licensee or Exempted Licensee, they have the right to appeal the sentence directly to the NAA administration.

To know more about this regulation, please contact:

Thomas Paoletti

Fauzia Khan

Farooq Nasir

 

"class="material with-radius">all onshore and FTZ companies (Licensee or Exempted Licensee), including other types of businesses, must present a yearly form, declaring their activities, partners, and all relevant information pertaining to their economic impact and contribution; this is what is often called the Economic Substance of the company.


This form must contain information regarding the relevant activities that the company as engaged in each year, starting from January 1st 2019, proceeding according to the fiscal year of the company; however, companies are not obliged to present the form if, in a given fiscal year, they have not obtained any income from the relevant activity mentioned above.


The ultimate administrative authority under the Resolutions is the National Assessing Authority (NAA), whose function is to file and gather all the forms received by the respective regulatory authorities of each RA, as defined by the Law; after this process has finished, the NAA examines and evaluates each form and decides which companies have successfully fulfill their obligations.


If a company or individual does not comply with the Regulations and presents the aforementioned form, then they will be subject to administrative, tributary and/or penal sanctions, such as up to 50,000 Dirhams fine for not presenting the form and/or failing the Economic Substance Test; another example of the penalties expressed in article 14 of the Cabinet Resolution N 57 of 2020, is a fine of 400,000 Dirhams for failing to present the Economic Substance Report (ESR) and/or failing the Economic Substance Test (EST) for a second consecutive fiscal year. There are also penalties for providing inaccurate information in the ESR; finally, if the decision of the NAA is unfavorable for the Licensee or Exempted Licensee, they have the right to appeal the sentence directly to the NAA administration.

To know more about this regulation, please contact:

Thomas Paoletti

Fauzia Khan

Farooq Nasir

 

">On October 15 came into force the obligation under DL No. 127/2021, for employers to check the possession of the Green Pass obtained as a result of vaccination or the negative outcome of an antigenic or molecular swab to all employees, as well as suppliers and consultants called to work within the company. The text of the DL had also found the approval of the Data Protection Authority already on October 12 in all its aspects.

But what are the ways of control of the green certificate?


Currently, the possibilities are limited to the exhibition of the paper format, the control of the photo, eventually kept on the Smartphone of the green certificate and the scanning through App C19 of the QR Code associated with the Green Pass.

Recently introduced is the Greeenpass50+ system, which can be used through the INPS platform, thanks to which, by querying the National DGC Platform, which in this case acts as an intermediary, it is possible to verify Green Passes starting from the tax codes of employees known to the institute.


It is important to emphasize that the verification activities should be carried out only against employees actually in service and for whom it is therefore expected to have real access to the workplace at the time of the check.

The use of the Greeenpass50+ service involves three distinct phases:

The accreditation phase, in which the employers will have to register the company and appoint the verifiers, i.e. the individuals who will proceed to the green pass verifications;

The second phase will be the elaborative one, in which it will be the INPS itself by accessing the national platform DGC to retrieve information on the possession of the green pass of the employees;

And finally, the third phase, that of verification, is in which the previously appointed verifiers will access the service to control and verify the possession of the green pass of the employees of accredited companies after selecting the names for which to verify the possession of certification.

It is good to clarify that these methods will not be, or at least we hope, the only ones to be used.

In fact, further control methods are being studied that can also be adopted by Public Administrations, and specifically, we are talking about:

Open-source packages released by the Ministry of Health;

The creation of a special section of the NoiPA website for the control of the green certificate of the public employees adhering to the platform;

and finally, a system of connection between offices that can manage the control of the validity of the green certificate for PAs with more than 1000 employees.

Having clarified what are, or will be, the methods and modalities of control, the question we must ask ourselves is: “What will the verification consist of?”

And it was precisely the Data Protection Authority to answer this question, stating that: “The verification activity shall not involve the collection of data of the interested party in any form, except those strictly necessary, in the work environment, to the application of the measures resulting from the lack of possession of the certification. The system used for the verification of the Green Pass shall not store the QR code of the green certifications subject

to verification, nor extract, consult, record or otherwise process for other purposes the information detected”.

The indications of the Data Protection Authority are, therefore very clear, NO to the storage of the QR code, NO to the extraction of information for purposes other than those related to knowing if you are in possession of green certification or if you should apply the measures resulting from the lack of possession of the same.

Based on the above, what will those who want to be in compliance with current regulations have to do?

The first step will certainly be to provide adequate training to the staff in charge of control; this must be appointed by the owner of the company with a specific letter of appointment and will have a crucial role since it will be entrusted not only with the mere control of the Green Pass, but also with the rejection of all proposals, and there will be some, of those who will propose: “I’ll leave you a copy”, “take a picture of it” or even worse “take note of the data and the deadline”.
Another activity will be the adjustment of the privacy register in which it will be necessary to make a note of the control activity of the Green Pass and also of the fact that the data will not be treated for purposes other than knowing whether or not the certification itself has been issued.

The same applies to the information in which, as recommended by authoritative voices, it will be advisable to provide broad formulas but at the same time the specific indication that no data relating to green certification will be processed for different purposes.

A final mention concerns the consent forms, which also need to be revised in a broad form, without prejudice to the impossibility of processing.

What sanctions are foreseen in case of non-compliance with the regulations both on the employer side and of the workers?


On the employer’s side, the applicable sanctions will be both an administrative fine for an amount between € 400.00 and € 1000.00 and a fine established by the Privacy Code, up to 10 million euros.


Any other breaches will be sanctioned according to art. 83 par. 3 and 4, which specifically states “administrative fines up to 10 000 000 euros, or for companies, up to 2% of the total annual worldwide turnover of the previous year……”.

On the employee’s side, on the other hand, we will find not only the sanction of suspension from work but also salary, but also the administrative sanction from € 600,00 to € 1500,00 imposed based on the communication that the employer will have to forward to the police Prefect’s office and finally the sanctions provided for by the collective agreement of the sector will be applied.
A particular case is that of the dismissal of the employee who refuses the vaccine, a circumstance on which more normative references would be necessary.

The Paoletti Law Group will be able to assist you in all of the obligations relating to the Privacy Law both in the drafting phase of the DPIA (Data Protection Impact Assessment) and the PIA (Privacy Impact Assessment) and in the adaptation phase to the changes introduced by DL n. 127/2021 as well as in all of the practices relating to the adaptation of the Privacy Law necessary for companies that intend to operate in the EU market and beyond.

 

To know more, please contact:

Thomas Paoletti

Alessio Masala

"class="material with-radius">On October 15 came into force the obligation under DL No. 127/2021, for employers to check the possession of the Green Pass obtained as a result of vaccination or the negative outcome of an antigenic or molecular swab to all employees, as well as suppliers and consultants called to work within the company. The text of the DL had also found the approval of the Data Protection Authority already on October 12 in all its aspects.

But what are the ways of control of the green certificate?


Currently, the possibilities are limited to the exhibition of the paper format, the control of the photo, eventually kept on the Smartphone of the green certificate and the scanning through App C19 of the QR Code associated with the Green Pass.

Recently introduced is the Greeenpass50+ system, which can be used through the INPS platform, thanks to which, by querying the National DGC Platform, which in this case acts as an intermediary, it is possible to verify Green Passes starting from the tax codes of employees known to the institute.


It is important to emphasize that the verification activities should be carried out only against employees actually in service and for whom it is therefore expected to have real access to the workplace at the time of the check.

The use of the Greeenpass50+ service involves three distinct phases:

The accreditation phase, in which the employers will have to register the company and appoint the verifiers, i.e. the individuals who will proceed to the green pass verifications;

The second phase will be the elaborative one, in which it will be the INPS itself by accessing the national platform DGC to retrieve information on the possession of the green pass of the employees;

And finally, the third phase, that of verification, is in which the previously appointed verifiers will access the service to control and verify the possession of the green pass of the employees of accredited companies after selecting the names for which to verify the possession of certification.

It is good to clarify that these methods will not be, or at least we hope, the only ones to be used.

In fact, further control methods are being studied that can also be adopted by Public Administrations, and specifically, we are talking about:

Open-source packages released by the Ministry of Health;

The creation of a special section of the NoiPA website for the control of the green certificate of the public employees adhering to the platform;

and finally, a system of connection between offices that can manage the control of the validity of the green certificate for PAs with more than 1000 employees.

Having clarified what are, or will be, the methods and modalities of control, the question we must ask ourselves is: “What will the verification consist of?”

And it was precisely the Data Protection Authority to answer this question, stating that: “The verification activity shall not involve the collection of data of the interested party in any form, except those strictly necessary, in the work environment, to the application of the measures resulting from the lack of possession of the certification. The system used for the verification of the Green Pass shall not store the QR code of the green certifications subject

to verification, nor extract, consult, record or otherwise process for other purposes the information detected”.

The indications of the Data Protection Authority are, therefore very clear, NO to the storage of the QR code, NO to the extraction of information for purposes other than those related to knowing if you are in possession of green certification or if you should apply the measures resulting from the lack of possession of the same.

Based on the above, what will those who want to be in compliance with current regulations have to do?

The first step will certainly be to provide adequate training to the staff in charge of control; this must be appointed by the owner of the company with a specific letter of appointment and will have a crucial role since it will be entrusted not only with the mere control of the Green Pass, but also with the rejection of all proposals, and there will be some, of those who will propose: “I’ll leave you a copy”, “take a picture of it” or even worse “take note of the data and the deadline”.
Another activity will be the adjustment of the privacy register in which it will be necessary to make a note of the control activity of the Green Pass and also of the fact that the data will not be treated for purposes other than knowing whether or not the certification itself has been issued.

The same applies to the information in which, as recommended by authoritative voices, it will be advisable to provide broad formulas but at the same time the specific indication that no data relating to green certification will be processed for different purposes.

A final mention concerns the consent forms, which also need to be revised in a broad form, without prejudice to the impossibility of processing.

What sanctions are foreseen in case of non-compliance with the regulations both on the employer side and of the workers?


On the employer’s side, the applicable sanctions will be both an administrative fine for an amount between € 400.00 and € 1000.00 and a fine established by the Privacy Code, up to 10 million euros.


Any other breaches will be sanctioned according to art. 83 par. 3 and 4, which specifically states “administrative fines up to 10 000 000 euros, or for companies, up to 2% of the total annual worldwide turnover of the previous year……”.

On the employee’s side, on the other hand, we will find not only the sanction of suspension from work but also salary, but also the administrative sanction from € 600,00 to € 1500,00 imposed based on the communication that the employer will have to forward to the police Prefect’s office and finally the sanctions provided for by the collective agreement of the sector will be applied.
A particular case is that of the dismissal of the employee who refuses the vaccine, a circumstance on which more normative references would be necessary.

The Paoletti Law Group will be able to assist you in all of the obligations relating to the Privacy Law both in the drafting phase of the DPIA (Data Protection Impact Assessment) and the PIA (Privacy Impact Assessment) and in the adaptation phase to the changes introduced by DL n. 127/2021 as well as in all of the practices relating to the adaptation of the Privacy Law necessary for companies that intend to operate in the EU market and beyond.

 

To know more, please contact:

Thomas Paoletti

Alessio Masala

">In the legal system of the United Arab Emirates, the issue of employment and industrial relations is guided by a common law structure similar to that of the medieval Lex Mercatoria in Europe, in which the employers, employees and competitors could resolve their disputes through arbitration and mediation; the advantage of this system is that it provides a less constrictive or monolithic legal body, which in turns allows for simple solutions to individual cases, that build up to become accepted customs for the rest of the market.


Nevertheless, to truly understand this legal system, it is important to address the deeper origins of the UAE´s concept of employment and work; these origins lie in the beginnings of Islam, and the value system that derives from this faith, that has guided the law and social traditions of the UAE since its founding.


Unlike both the Liberal and Marxist views on work as a necessary evil, typical of western society, Islamic tradition upholds a positive and empowering view of work and effort; sloth and laziness are not only frowned upon, but outright rejected by Islamic jurisprudence as a path to damnation.
Being a mostly Muslim country, the UAE promotes this concept of work, not only as a necessity, but a blessing and a privilege, and therefore, an aspect of society that must be encouraged and protected; this mindset, coupled with the unique geopolitical position of the United Arab Emirates, forms the basis for the economic, industrial and financial policies of the UAE´s government.


In this context of promoting work and protecting employment, as well as guaranteeing a free market open for foreign investment (critical for UAE economy), the UAE´s government has created since 2002 a space for free exchange and development of foreign capital, as well as a common law system to settle disputes peacefully, known as the Dubai International Financial Center or DIFC for short.
Legally and judicially speaking, the DIFC is independent from the government and has its own well-defined jurisdiction in matters pertaining financial controversies within the business center of the Dubai Emirate.


The DIFC holds a specialized court named the Small Claims Tribunal, in charge of mediating disputes between employers and employees within the DIFC jurisdiction; the court itself is simple, acting as an arbiter instead of a judge, allowing the parties to resolve their issue through public communication rather than adversarial trial.


The requirements for a case to be taken by the SCT are three:

  1. That the amount disputed does not exceed 500,000 Dirhams; or
  2.  That the claim is related to employment or former employment and the parties agree in writing that the claim be heard by the SCT (there is no value limit for the SCT’s elective jurisdiction in the context of employment claims); or
  3. That the claim, if not employment related, does not exceed 1,000,000 Dirhams, and that the parties have agreed in writing that the claim be heard by the SCT (preferably contained in the text of the contract).

To know more, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">In the legal system of the United Arab Emirates, the issue of employment and industrial relations is guided by a common law structure similar to that of the medieval Lex Mercatoria in Europe, in which the employers, employees and competitors could resolve their disputes through arbitration and mediation; the advantage of this system is that it provides a less constrictive or monolithic legal body, which in turns allows for simple solutions to individual cases, that build up to become accepted customs for the rest of the market.


Nevertheless, to truly understand this legal system, it is important to address the deeper origins of the UAE´s concept of employment and work; these origins lie in the beginnings of Islam, and the value system that derives from this faith, that has guided the law and social traditions of the UAE since its founding.


Unlike both the Liberal and Marxist views on work as a necessary evil, typical of western society, Islamic tradition upholds a positive and empowering view of work and effort; sloth and laziness are not only frowned upon, but outright rejected by Islamic jurisprudence as a path to damnation.
Being a mostly Muslim country, the UAE promotes this concept of work, not only as a necessity, but a blessing and a privilege, and therefore, an aspect of society that must be encouraged and protected; this mindset, coupled with the unique geopolitical position of the United Arab Emirates, forms the basis for the economic, industrial and financial policies of the UAE´s government.


In this context of promoting work and protecting employment, as well as guaranteeing a free market open for foreign investment (critical for UAE economy), the UAE´s government has created since 2002 a space for free exchange and development of foreign capital, as well as a common law system to settle disputes peacefully, known as the Dubai International Financial Center or DIFC for short.
Legally and judicially speaking, the DIFC is independent from the government and has its own well-defined jurisdiction in matters pertaining financial controversies within the business center of the Dubai Emirate.


The DIFC holds a specialized court named the Small Claims Tribunal, in charge of mediating disputes between employers and employees within the DIFC jurisdiction; the court itself is simple, acting as an arbiter instead of a judge, allowing the parties to resolve their issue through public communication rather than adversarial trial.


The requirements for a case to be taken by the SCT are three:

  1. That the amount disputed does not exceed 500,000 Dirhams; or
  2.  That the claim is related to employment or former employment and the parties agree in writing that the claim be heard by the SCT (there is no value limit for the SCT’s elective jurisdiction in the context of employment claims); or
  3. That the claim, if not employment related, does not exceed 1,000,000 Dirhams, and that the parties have agreed in writing that the claim be heard by the SCT (preferably contained in the text of the contract).

To know more, please contact:

Thomas Paoletti

Fauzia Khan

">The judicial process in the United Arab Emirates is fairly like most other countries, with one important difference:


This has to do with the fact that instead of an accusatory system, it is an inquisitorial system.

 

For this reason, it is understandable that most investors, workers, and citizens in general prefer a more conciliatory approach to their situation, making arbitration the most popular form of conflict resolution in the federation.

Additionally, there is a socio-economic necessity in the country for easier and more efficient ways of solving disputes, because of the inherent symbiotic relationship between the UAE and international trade and commerce.


To understand this, it is important to talk about the demographics of the federation, in which, there is a stark disparity between the 20% Emirati citizens, and the 80% expatriates; this makes legislation and judicial process overly complicated, since this vast majority of the country belong to foreign cultures and have different customs and conduct than the native Arab population.

To solve this issue, the UAE government has created a two-part legislative program, that consists in the establishment of specified Free Trade Zones that are ruled by independent jurisdictions with faculties to arbiter all contractual and maritime controversies in its area.


The first of these FTZs was the industrial complex of Jebel Ali built in 1985, followed by 9 others in recent years; to support this new legal structure, there are specialized jurisdictions that manage all contractual disputes within them, being the two most prominent the DIFC (Dubai International Financial Center) and the ADGM (Abu Dhabi Global Market).


In these jurisdictions, arbitration is a mandatory procedure that all parties must attend before going to an adversarial trial, provided that the value of the dispute is less than a 100,000 Dirhams.


Nevertheless, independently of the jurisdiction or the court that manages the case, most of these disputes have common universal characteristics that make the process almost homogeneous across the federation; among these common traits are:

– First and foremost, that the dispute arises from a pre-existing contract or agreement between the parties, and that the contradiction has to do with the interpretation of the document contained in said contract.


– Second, in the case of arbitration procedures, that the contract or an independent document signed by the parties, contains an “arbitration clause”, in which the parties agree in writing to submit the matter to arbitration.


– Finally, that the matter of the dispute is limited to the letter of the contract itself, and does not relate to a matter of public interest, i.e., a criminal action.

Based on these common traits, it is important to make the distinction between the contractual disputes that can be “amicably resolved”, and those that cannot; those that can be resolved through amicable settlement or arbitration are, for example:


• Disputes arising from a breach of contract related to commercial obligations, like providing a service or delivering a product.


• Rental disputes in the Abu Dhabi Emirate, only if they are related to agricultural lands, government owned residential buildings, or the Abu Dhabi National Oil Company (ADNOC).


• Any disputes arising within the jurisdiction of the Free Trade Zones, and that pertains to actions performed within said jurisdiction; in this case, an international arbitration court might be permitted if agreed upon by the parties.


• Contractual disputes related to debt collection, as long as it is an original debt and does not relate of a deferred payment or paid through a secondary debt.


• In the case of the Dubai International Financial Center, all contractual disputes related to employment, can be taken to the Small Claims Tribunal of the DIFC.


To conclude, contractual disputes in the UAE are a matter of highly complex interpretation and jurisprudence, since it can be resolved in many different ways, through many different legal traditions, and have many different procedures, thanks to the demographical complexity of the United Arab Emirates.


Having said this, it is also paramount to point out, that the general attitude within the UAE government towards contractual disputes, is that they must be resolved peacefully and amicably if possible, trying to use the judicial process in a minimalist way; this policy not only creates an open and friendly environment for the population, but also promotes and incentivizes trade and investment.

 

For more information; kindly contact us:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The judicial process in the United Arab Emirates is fairly like most other countries, with one important difference:


This has to do with the fact that instead of an accusatory system, it is an inquisitorial system.

 

For this reason, it is understandable that most investors, workers, and citizens in general prefer a more conciliatory approach to their situation, making arbitration the most popular form of conflict resolution in the federation.

Additionally, there is a socio-economic necessity in the country for easier and more efficient ways of solving disputes, because of the inherent symbiotic relationship between the UAE and international trade and commerce.


To understand this, it is important to talk about the demographics of the federation, in which, there is a stark disparity between the 20% Emirati citizens, and the 80% expatriates; this makes legislation and judicial process overly complicated, since this vast majority of the country belong to foreign cultures and have different customs and conduct than the native Arab population.

To solve this issue, the UAE government has created a two-part legislative program, that consists in the establishment of specified Free Trade Zones that are ruled by independent jurisdictions with faculties to arbiter all contractual and maritime controversies in its area.


The first of these FTZs was the industrial complex of Jebel Ali built in 1985, followed by 9 others in recent years; to support this new legal structure, there are specialized jurisdictions that manage all contractual disputes within them, being the two most prominent the DIFC (Dubai International Financial Center) and the ADGM (Abu Dhabi Global Market).


In these jurisdictions, arbitration is a mandatory procedure that all parties must attend before going to an adversarial trial, provided that the value of the dispute is less than a 100,000 Dirhams.


Nevertheless, independently of the jurisdiction or the court that manages the case, most of these disputes have common universal characteristics that make the process almost homogeneous across the federation; among these common traits are:

– First and foremost, that the dispute arises from a pre-existing contract or agreement between the parties, and that the contradiction has to do with the interpretation of the document contained in said contract.


– Second, in the case of arbitration procedures, that the contract or an independent document signed by the parties, contains an “arbitration clause”, in which the parties agree in writing to submit the matter to arbitration.


– Finally, that the matter of the dispute is limited to the letter of the contract itself, and does not relate to a matter of public interest, i.e., a criminal action.

Based on these common traits, it is important to make the distinction between the contractual disputes that can be “amicably resolved”, and those that cannot; those that can be resolved through amicable settlement or arbitration are, for example:


• Disputes arising from a breach of contract related to commercial obligations, like providing a service or delivering a product.


• Rental disputes in the Abu Dhabi Emirate, only if they are related to agricultural lands, government owned residential buildings, or the Abu Dhabi National Oil Company (ADNOC).


• Any disputes arising within the jurisdiction of the Free Trade Zones, and that pertains to actions performed within said jurisdiction; in this case, an international arbitration court might be permitted if agreed upon by the parties.


• Contractual disputes related to debt collection, as long as it is an original debt and does not relate of a deferred payment or paid through a secondary debt.


• In the case of the Dubai International Financial Center, all contractual disputes related to employment, can be taken to the Small Claims Tribunal of the DIFC.


To conclude, contractual disputes in the UAE are a matter of highly complex interpretation and jurisprudence, since it can be resolved in many different ways, through many different legal traditions, and have many different procedures, thanks to the demographical complexity of the United Arab Emirates.


Having said this, it is also paramount to point out, that the general attitude within the UAE government towards contractual disputes, is that they must be resolved peacefully and amicably if possible, trying to use the judicial process in a minimalist way; this policy not only creates an open and friendly environment for the population, but also promotes and incentivizes trade and investment.

 

For more information; kindly contact us:

Thomas Paoletti

Fauzia Khan

">Intending to curb money laundering, financial fraud, tax evasion, and terror finance, the UAE government is taking steps to ensure financial transparency. Many individuals take the advantage of the complex corporate ownership structures and indulge in such activities harming the interests of governments across the world. One important step to curb such activities is recognizing the ultimate beneficial owners of each entity and set responsibility on them.

The cabinet decision no. 58 of 2020, has created a mechanism to recognize the Ultimate Beneficiary Owners (UBOs) of an entity. UBOs are (1) individuals who have control or ownership (direct/indirect) or have the right to vote with a minimum 25% shareholding in a company or the individuals who have the right to appoint or dismiss the majority of the directors/managers. (2) If any natural person fails to satisfy the above conditions then UBO will be such an individual who exercises indirect control over the entity. (3) If conditions in (1) and (2) do not provide a clear UBO, then the individual responsible for senior management of the company shall be deemed as the Ultimate Beneficiary Owner of that entity.

A UBO is essentially a natural person i.e. a human being. A company or group of companies cannot claim this status. For instance, if one company owns the majority of shares of another company, then the natural person who owns the former will be recognized as UBO of the latter company too.

The cabinet decision requires the entities to maintain adequate and up-to-date information about their shareholders and the ultimate beneficiary owners. The organizations are required to file a register of UBOs, shareholders, nominee board members, and other supporting documents to the relevant licensing authority. These registers shall include the personal information of such individuals, including names, residential address, passport details, country of origin, and the date on which the person became UBO or ceased to become so.

The provision of the decision applies to the registrar and the licensed or registered legal person in the UAE including Commercial Free Zones.

As per Article 17 of the decision, companies might be subjected to administrative penalties up to AED 100,000 in cases of non-compliance with the UBO regulations.

To know more, please contact us at:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">Intending to curb money laundering, financial fraud, tax evasion, and terror finance, the UAE government is taking steps to ensure financial transparency. Many individuals take the advantage of the complex corporate ownership structures and indulge in such activities harming the interests of governments across the world. One important step to curb such activities is recognizing the ultimate beneficial owners of each entity and set responsibility on them.

The cabinet decision no. 58 of 2020, has created a mechanism to recognize the Ultimate Beneficiary Owners (UBOs) of an entity. UBOs are (1) individuals who have control or ownership (direct/indirect) or have the right to vote with a minimum 25% shareholding in a company or the individuals who have the right to appoint or dismiss the majority of the directors/managers. (2) If any natural person fails to satisfy the above conditions then UBO will be such an individual who exercises indirect control over the entity. (3) If conditions in (1) and (2) do not provide a clear UBO, then the individual responsible for senior management of the company shall be deemed as the Ultimate Beneficiary Owner of that entity.

A UBO is essentially a natural person i.e. a human being. A company or group of companies cannot claim this status. For instance, if one company owns the majority of shares of another company, then the natural person who owns the former will be recognized as UBO of the latter company too.

The cabinet decision requires the entities to maintain adequate and up-to-date information about their shareholders and the ultimate beneficiary owners. The organizations are required to file a register of UBOs, shareholders, nominee board members, and other supporting documents to the relevant licensing authority. These registers shall include the personal information of such individuals, including names, residential address, passport details, country of origin, and the date on which the person became UBO or ceased to become so.

The provision of the decision applies to the registrar and the licensed or registered legal person in the UAE including Commercial Free Zones.

As per Article 17 of the decision, companies might be subjected to administrative penalties up to AED 100,000 in cases of non-compliance with the UBO regulations.

To know more, please contact us at:

Thomas Paoletti

Fauzia Khan

">In the year 2015, the United Arab Emirates (UAE) government established a federal entity by the name of Gender Balance Council to develop and implement the gender balance agenda in the country. The council aimed at increasing female participation in decision-making positions. The overall objective was to position the UAE as a model for gender equality across the globe. In 2018, the president of the UAE passed a decree to ensure 50% women representation in the Federal National Council, a constitutional body responsible for passing, amending, or rejecting federal draft laws and having several other important powers.

In 2019, the UAE also introduced legal provisions to curb domestic violence acts, imposing a punishment of up to six months or a fine of AED 5000 or both. The abuse includes not just acts of physical violence but also sexual, economic, and emotional abuse of the spouse. The law also provides for obtaining restraining orders to disable the abusive individual from making untoward efforts to meet the complainant or the children. Breaching the restraining order carries a three-month jail sentence or/and fine between AED 1000 to 10,000.

In 2020, the UAE government introduced changes to its Federal Law No 8 of 1980. Newly introduced Article 32 provided for an equal wage for equal work to a female worker. The amendment is an important step for reducing the wage gap between men and women performing the same work or work of equal value.

Additionally, the UAE in 2020 removed the separate provision dealing with honor killings in its penal code. Earlier such honor killings were punished with term punishment, which shall now be covered under the provisions of murder in the penal code. Use of threat, coercion, or deceit to commit sexual molestation shall be subject to imprisonment. Sexual molestation of a victim below the age of 14 years or a person with lunacy or insanity would also attract punishment. In case the culprit is an ascendant, custodian, servant or in charge of the victim then the punishment could be extended to life imprisonment.

Kindly contact us to know more information

Thomas Paoletti

Fauzia Khan

"class="material with-radius">In the year 2015, the United Arab Emirates (UAE) government established a federal entity by the name of Gender Balance Council to develop and implement the gender balance agenda in the country. The council aimed at increasing female participation in decision-making positions. The overall objective was to position the UAE as a model for gender equality across the globe. In 2018, the president of the UAE passed a decree to ensure 50% women representation in the Federal National Council, a constitutional body responsible for passing, amending, or rejecting federal draft laws and having several other important powers.

In 2019, the UAE also introduced legal provisions to curb domestic violence acts, imposing a punishment of up to six months or a fine of AED 5000 or both. The abuse includes not just acts of physical violence but also sexual, economic, and emotional abuse of the spouse. The law also provides for obtaining restraining orders to disable the abusive individual from making untoward efforts to meet the complainant or the children. Breaching the restraining order carries a three-month jail sentence or/and fine between AED 1000 to 10,000.

In 2020, the UAE government introduced changes to its Federal Law No 8 of 1980. Newly introduced Article 32 provided for an equal wage for equal work to a female worker. The amendment is an important step for reducing the wage gap between men and women performing the same work or work of equal value.

Additionally, the UAE in 2020 removed the separate provision dealing with honor killings in its penal code. Earlier such honor killings were punished with term punishment, which shall now be covered under the provisions of murder in the penal code. Use of threat, coercion, or deceit to commit sexual molestation shall be subject to imprisonment. Sexual molestation of a victim below the age of 14 years or a person with lunacy or insanity would also attract punishment. In case the culprit is an ascendant, custodian, servant or in charge of the victim then the punishment could be extended to life imprisonment.

Kindly contact us to know more information

Thomas Paoletti

Fauzia Khan

">The United Arab Emirates (UAE) with its exotic shopping malls is a prime attraction point for shoppers. If tourists buy products from a shop participating in the ‘Tax Refund for Tourists Scheme’ they can claim refunds for the Value Added Tax paid on the products. This scheme is only available for individuals leaving the country within 90 days of buying such products. The tourists can claim the refund at the airports by submitting the invoices along with copies of their credit card and passport. A refund can be claimed either in cash or on the credit card itself.  

To attract tourists, the UAE government has come up with a ‘five-year multiple-entry tourist visa’. A five-year-long visa would enable individuals to keep visiting the UAE without the hassle of going through the visa process. However, tourists cannot work on this visa and shall have to apply for a work or employment visa if they wish to work. Any violation could result in deportation and fines. However, individuals can look for jobs while on a visit visa and can apply for a work visa through their employers in case they secure a job.

The impressive public transport in the UAE is used extensively by locals and tourists. However, not many are aware that an individual caught eating or drinking while using public transport could be fined up to AED 100.

Swearing in public causing harm to the honor or dignity of an individual could also result in a fine up to AED 20,000 or imprisonment up to one year. The punishment for addressing such insults to a public servant could result in a fine of up to AED 50,000 along with the punishment of up to two years.

Taking pictures of an individual without his or her permission is considered a serious issue of invasion of privacy and the law provides for a punishment of up to 1 year and a fine of up to AED 500,000. Sharing pictures of a road accident on social media is also considered a serious crime. Both these acts could also result in the deportation of the individual.  

For more information, contact us at:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The United Arab Emirates (UAE) with its exotic shopping malls is a prime attraction point for shoppers. If tourists buy products from a shop participating in the ‘Tax Refund for Tourists Scheme’ they can claim refunds for the Value Added Tax paid on the products. This scheme is only available for individuals leaving the country within 90 days of buying such products. The tourists can claim the refund at the airports by submitting the invoices along with copies of their credit card and passport. A refund can be claimed either in cash or on the credit card itself.  

To attract tourists, the UAE government has come up with a ‘five-year multiple-entry tourist visa’. A five-year-long visa would enable individuals to keep visiting the UAE without the hassle of going through the visa process. However, tourists cannot work on this visa and shall have to apply for a work or employment visa if they wish to work. Any violation could result in deportation and fines. However, individuals can look for jobs while on a visit visa and can apply for a work visa through their employers in case they secure a job.

The impressive public transport in the UAE is used extensively by locals and tourists. However, not many are aware that an individual caught eating or drinking while using public transport could be fined up to AED 100.

Swearing in public causing harm to the honor or dignity of an individual could also result in a fine up to AED 20,000 or imprisonment up to one year. The punishment for addressing such insults to a public servant could result in a fine of up to AED 50,000 along with the punishment of up to two years.

Taking pictures of an individual without his or her permission is considered a serious issue of invasion of privacy and the law provides for a punishment of up to 1 year and a fine of up to AED 500,000. Sharing pictures of a road accident on social media is also considered a serious crime. Both these acts could also result in the deportation of the individual.  

For more information, contact us at:

Thomas Paoletti

Fauzia Khan

">The United Arab Emirates (UAE) had made the necessary changes to its anti-fraud provision by bringing in Federal Law No. 19 of 2016 to especially deal with commercial fraud cases. This law applies to the entire territory of the UAE along with the free zones across the UAE.

Commercial fraud has been defined as an act of deception of a customer by changing the goods or their material description including its origin, pricing, or fitness. It also includes the acts of presenting false or misleading information for the products or services being promoted. The act of commercial fraud includes (1) fictitious price reduction advertisement (2) manufacturing, selling, importing, exporting, possession, or commercial advertisement of fraudulent or counterfeit goods (3) offering, presenting, or promoting fake commercial services.

Higher Committee for Combating Commercial fraud has been constituted to study commercial fraud reports and to take decisions and propose strategies to combat them. A sub-committee has been formed in every emirate having various duties including warning the offenders or closing down their establishments for up to 2 weeks. Further, the sub-committee can destroy, recycle or return the questionable goods. The sub-committee has been given the power of conciliation of offences.

Offenders who commit commercial fraud could be sentenced for up to two years, and/or a fine could be imposed ranging from AED 50,000 to AED 250,000. Punishment of up to one year and/or fine ranging from 10,000 to 100,000 could be levied for attempting to commit commercial fraud.

Further as per Article 14 of the law, if the subject of commercial crime is food for human or animal, medical drugs, or agricultural products or organic food products, then the attempt or the commission of the offense is punishable with up to two years imprisonment and/or a fine ranging from AED 250,000 to AED 1,000,000. The court could also order suspending the business for up to 6 months and the goods shall either be confiscated or destroyed. The business license could also be canceled for repeat offenders.

The offender gets an option of conciliating for his crimes if the sub-committee agrees. Conciliation is not allowed for offenses covered under Article 14.

To know more, please contact us:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">The United Arab Emirates (UAE) had made the necessary changes to its anti-fraud provision by bringing in Federal Law No. 19 of 2016 to especially deal with commercial fraud cases. This law applies to the entire territory of the UAE along with the free zones across the UAE.

Commercial fraud has been defined as an act of deception of a customer by changing the goods or their material description including its origin, pricing, or fitness. It also includes the acts of presenting false or misleading information for the products or services being promoted. The act of commercial fraud includes (1) fictitious price reduction advertisement (2) manufacturing, selling, importing, exporting, possession, or commercial advertisement of fraudulent or counterfeit goods (3) offering, presenting, or promoting fake commercial services.

Higher Committee for Combating Commercial fraud has been constituted to study commercial fraud reports and to take decisions and propose strategies to combat them. A sub-committee has been formed in every emirate having various duties including warning the offenders or closing down their establishments for up to 2 weeks. Further, the sub-committee can destroy, recycle or return the questionable goods. The sub-committee has been given the power of conciliation of offences.

Offenders who commit commercial fraud could be sentenced for up to two years, and/or a fine could be imposed ranging from AED 50,000 to AED 250,000. Punishment of up to one year and/or fine ranging from 10,000 to 100,000 could be levied for attempting to commit commercial fraud.

Further as per Article 14 of the law, if the subject of commercial crime is food for human or animal, medical drugs, or agricultural products or organic food products, then the attempt or the commission of the offense is punishable with up to two years imprisonment and/or a fine ranging from AED 250,000 to AED 1,000,000. The court could also order suspending the business for up to 6 months and the goods shall either be confiscated or destroyed. The business license could also be canceled for repeat offenders.

The offender gets an option of conciliating for his crimes if the sub-committee agrees. Conciliation is not allowed for offenses covered under Article 14.

To know more, please contact us:

Thomas Paoletti

Fauzia Khan

 

">Can my Employer Retain my Passport?

There have been numerous instances in the past where individuals have complained of their passports being retained by their employers. The vulnerable position of an expatriate worker further deteriorates when the employer takes away his or her passport. Holding of a passport by an employer discourages an individual from changing his job to another and puts him in a position where he might be subjected to forcible work.

The International Labour Organization’s convention on the abolition of forced labour denounces forcible work. The United Arab Emirates (UAE) being a signatory to the convention has provisions in its legal system, which the employer could be subjected to.  

Ministry of Interior published circular no. 267 of 2002, which explicitly prohibited employers from confiscating the passport of their employees and declared the same as illegal. As a passport validates the identity of an individual before the government authorities, the law obliges its owner to keep it with himself. The circular stated that only government authorities have the power of confiscating the passport of any individuals in accordance with the provisions of the law.

Further, even if the employer holds the passport of the employee, it is illegal for the employer to hold the same against the will of the employee, i.e. the employee cannot be denied the passport if he demands it back. Article 404 of the UAE penal code declares it illegal for any person to embezzle the movable property of another which is submitted to the person as a deposit. The employer could be sentenced to imprisonment or fined a monetary penalty.

Employment in the mainland UAE is regulated by Federal Law No. 8 of 1980 regarding the Organization of Labour Relations. Article 122 of the law prohibits an employer from terminating the services of the employee for reasons irrelevant to the work. Hence if an employer threatens to terminate or terminates the employee for the reason of not submitting the passport, then such termination is arbitrary and invalid as per the law. The employee if facing the issue could file a complaint against the employer with the Ministry of Labour.

The passports of employees could be held by the employer if the employee wishes the same. As many expatriate workers live in shared accommodations, some employers may keep the passports of employees to keep them safe. The employee can demand the passport back from the employer whenever he wishes.

For more queries, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">Can my Employer Retain my Passport?

There have been numerous instances in the past where individuals have complained of their passports being retained by their employers. The vulnerable position of an expatriate worker further deteriorates when the employer takes away his or her passport. Holding of a passport by an employer discourages an individual from changing his job to another and puts him in a position where he might be subjected to forcible work.

The International Labour Organization’s convention on the abolition of forced labour denounces forcible work. The United Arab Emirates (UAE) being a signatory to the convention has provisions in its legal system, which the employer could be subjected to.  

Ministry of Interior published circular no. 267 of 2002, which explicitly prohibited employers from confiscating the passport of their employees and declared the same as illegal. As a passport validates the identity of an individual before the government authorities, the law obliges its owner to keep it with himself. The circular stated that only government authorities have the power of confiscating the passport of any individuals in accordance with the provisions of the law.

Further, even if the employer holds the passport of the employee, it is illegal for the employer to hold the same against the will of the employee, i.e. the employee cannot be denied the passport if he demands it back. Article 404 of the UAE penal code declares it illegal for any person to embezzle the movable property of another which is submitted to the person as a deposit. The employer could be sentenced to imprisonment or fined a monetary penalty.

Employment in the mainland UAE is regulated by Federal Law No. 8 of 1980 regarding the Organization of Labour Relations. Article 122 of the law prohibits an employer from terminating the services of the employee for reasons irrelevant to the work. Hence if an employer threatens to terminate or terminates the employee for the reason of not submitting the passport, then such termination is arbitrary and invalid as per the law. The employee if facing the issue could file a complaint against the employer with the Ministry of Labour.

The passports of employees could be held by the employer if the employee wishes the same. As many expatriate workers live in shared accommodations, some employers may keep the passports of employees to keep them safe. The employee can demand the passport back from the employer whenever he wishes.

For more queries, please contact:

Thomas Paoletti

Fauzia Khan

">The recent amendments to the Commercial Company Law in 2020, allowed 100% foreign ownership for a business established in the mainland UAE. This amendment to the Commercial Company law allows 100% foreign investment without the requirement of having an Emirati as 51% owner for registration of an Onshore Company in the United Arab Emirates (UAE).

These changes have made a new development to the Mainland versus Freezone debate:

For establishing a company in mainland, permits have to be taken from the Department of Economic Development (DED) of the respective Emirate and other bodies like Dubai Municipality, Ministry of Labor and Ministry of Immigration. Further, there might be business-specific permissions that need to be taken as per the nature of your business. Whereas establishing a company in a free zone gives the benefit of only taking approvals from the authorities which govern the free zone.

The establishment of a company in the mainland necessitates an office space of 200 square feet. On the other hand, a company in a free zone can be established without the requirement of having an office space but on the downside puts a restriction on the number of visas the company can sponsor. Visas are given based on the office space which needs to be increased to sponsor visas of employees.

For a mainland company, the minimum capital requirement may vary as per the business activity and the Emirate one wishes to function in. For instance, setting up a joint-stock company requires a minimum capital of AED 30,000,000 whereas a private joint-stock company requires a minimum capital of AED 5,000,000. Similarly, the minimum share capital for setting up a company in a free zone varies as per the free zone. In Dubai Silicon Oasis a minimum of AED 100,000 is required as minimum share capital whereas in RAKEZ a minimum share capital of AED 10,000 is required for forming a Limited Liability Company (FZ-LLC).

A company in the mainland can do business throughout the United Arab Emirates (UAE) whereas the free zone companies are only allowed to do business within the free zone they are established and outside of the UAE. If a free zone company wishes to do business in the mainland it would require a local distributor and he will charge a certain fee on their products and services.

The companies in the mainland can set up several branches across the mainland, which a free zone company cannot.

Mainland businesses are allowed to contract with government authorities while free zone companies are not. On the other hand, freezone companies have to pay 0% corporate and personal tax and are also exempted from paying import and export taxes.

For more information, you may contact:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">The recent amendments to the Commercial Company Law in 2020, allowed 100% foreign ownership for a business established in the mainland UAE. This amendment to the Commercial Company law allows 100% foreign investment without the requirement of having an Emirati as 51% owner for registration of an Onshore Company in the United Arab Emirates (UAE).

These changes have made a new development to the Mainland versus Freezone debate:

For establishing a company in mainland, permits have to be taken from the Department of Economic Development (DED) of the respective Emirate and other bodies like Dubai Municipality, Ministry of Labor and Ministry of Immigration. Further, there might be business-specific permissions that need to be taken as per the nature of your business. Whereas establishing a company in a free zone gives the benefit of only taking approvals from the authorities which govern the free zone.

The establishment of a company in the mainland necessitates an office space of 200 square feet. On the other hand, a company in a free zone can be established without the requirement of having an office space but on the downside puts a restriction on the number of visas the company can sponsor. Visas are given based on the office space which needs to be increased to sponsor visas of employees.

For a mainland company, the minimum capital requirement may vary as per the business activity and the Emirate one wishes to function in. For instance, setting up a joint-stock company requires a minimum capital of AED 30,000,000 whereas a private joint-stock company requires a minimum capital of AED 5,000,000. Similarly, the minimum share capital for setting up a company in a free zone varies as per the free zone. In Dubai Silicon Oasis a minimum of AED 100,000 is required as minimum share capital whereas in RAKEZ a minimum share capital of AED 10,000 is required for forming a Limited Liability Company (FZ-LLC).

A company in the mainland can do business throughout the United Arab Emirates (UAE) whereas the free zone companies are only allowed to do business within the free zone they are established and outside of the UAE. If a free zone company wishes to do business in the mainland it would require a local distributor and he will charge a certain fee on their products and services.

The companies in the mainland can set up several branches across the mainland, which a free zone company cannot.

Mainland businesses are allowed to contract with government authorities while free zone companies are not. On the other hand, freezone companies have to pay 0% corporate and personal tax and are also exempted from paying import and export taxes.

For more information, you may contact:

Thomas Paoletti

Fauzia Khan

 

">Abu Dhabi Global Market (ADGM) established in 2013 by the Abu Dhabi Chamber of Commerce, is an international financial center and a free zone, located in Al Maryah Island in Abu Dhabi, UAE. It became fully operational in 2015.

ADGM aims to promote Abu Dhabi as a global financial center and an effective contributor to the international financial services industry. ADGM was given the powers to make regulations for conducting its work and to achieve its objectives. There are three authorities regulating its functioning: The Financial Services Regulatory Authority (FSRA); The Registration Authority (RA); The ADGM Courts.

The Data Protection Regulations were enacted on 11th February 2021 by the Board of Directors of ADGM which replaced the earlier regulations of 2015.

The regulations are derived from European Unions’ General Data Protection Regulation of 2018. They aim at increasing the protection of personal data processed in ADGM. An independent office of Data Protection was established under the new frame work, headed by a Commissioner of Data Protection. The transition period was set at 12 months for current establishments & at 6 months for new establishments, commencing from 14th February 2021.

The Data Protection Regulations of 2021 were formulated by the ADGM with multiple objectives to, (1) promote the protection of personal data of an individual, (2) promote lawful, fair and transparent processing of personal data, and (3) create an effective complaint mechanism in cases of infringement of related rights of an individual.

The regulations provide for collection of personal data for specified, explicit and legitimate purposes only. It prohibits processing of any data that is incompatible with those purposes. The Controller is to be held responsible for any shortfalls in these provisions.

On 25th July 2021, Abu Dhabi Global Market (ADGM) announced addition of two new rules to its Data Protection Regulations 2021. The rules were enacted on 18th July 2021 by the Board of Directors of the ADGM. Concerned with fees and fine payments on data protection the rules are titled:

  1. Data Protection Regulations (Fees) Rules 2021
  2. Data Protection Regulations (Fines) Rules 2021

Section 24 of the regulations requires the controller of the data to pay a data protection fee of USD 300 to the Commissioner of Data Protection and USD 300 renewal fee thereafter every year.

If the controller fails to pay the data protection fee as specified above section 56 of the regulations provide for a fine of up to USD 750. The failure to pay the renewal fee would result in fine of USD 250.

Contact us to know more:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Abu Dhabi Global Market (ADGM) established in 2013 by the Abu Dhabi Chamber of Commerce, is an international financial center and a free zone, located in Al Maryah Island in Abu Dhabi, UAE. It became fully operational in 2015.

ADGM aims to promote Abu Dhabi as a global financial center and an effective contributor to the international financial services industry. ADGM was given the powers to make regulations for conducting its work and to achieve its objectives. There are three authorities regulating its functioning: The Financial Services Regulatory Authority (FSRA); The Registration Authority (RA); The ADGM Courts.

The Data Protection Regulations were enacted on 11th February 2021 by the Board of Directors of ADGM which replaced the earlier regulations of 2015.

The regulations are derived from European Unions’ General Data Protection Regulation of 2018. They aim at increasing the protection of personal data processed in ADGM. An independent office of Data Protection was established under the new frame work, headed by a Commissioner of Data Protection. The transition period was set at 12 months for current establishments & at 6 months for new establishments, commencing from 14th February 2021.

The Data Protection Regulations of 2021 were formulated by the ADGM with multiple objectives to, (1) promote the protection of personal data of an individual, (2) promote lawful, fair and transparent processing of personal data, and (3) create an effective complaint mechanism in cases of infringement of related rights of an individual.

The regulations provide for collection of personal data for specified, explicit and legitimate purposes only. It prohibits processing of any data that is incompatible with those purposes. The Controller is to be held responsible for any shortfalls in these provisions.

On 25th July 2021, Abu Dhabi Global Market (ADGM) announced addition of two new rules to its Data Protection Regulations 2021. The rules were enacted on 18th July 2021 by the Board of Directors of the ADGM. Concerned with fees and fine payments on data protection the rules are titled:

  1. Data Protection Regulations (Fees) Rules 2021
  2. Data Protection Regulations (Fines) Rules 2021

Section 24 of the regulations requires the controller of the data to pay a data protection fee of USD 300 to the Commissioner of Data Protection and USD 300 renewal fee thereafter every year.

If the controller fails to pay the data protection fee as specified above section 56 of the regulations provide for a fine of up to USD 750. The failure to pay the renewal fee would result in fine of USD 250.

Contact us to know more:

Thomas Paoletti

Fauzia Khan

 

">The United Arab Emirates (UAE) introduced Value Added Tax (VAT) through Federal Law no (8) of 2017, to generate a new source of income to fund the nation’s high quality public services. The new tax was implemented to decrease the nation’s dependence on natural resources like oil and petroleum. VAT is imposed on every value addition to the product or service that takes place in the supply chain till it reaches the final consumer. Federal Tax Authority (FTA) is given the responsibility for the effective implementation of this tax.

The end burden of the tax is on consumer and the tax paid by the manufacturer and others is credited or settled later through the system of input tax deduction. Products and services have been classified in three categories, whereon first, a five percent VAT is applicable, the second are the zero rated supplies and the third are the exempt supplies.

Crude oil and natural gas are taxed at zero percent whereas oil and gas products at the pumps are charged at five percent rate. Sale and rent of commercial buildings have been taxed at five percent. On the other hand the sale and rent of residential buildings is rated at zero percent. VAT on food and beverages, telecommunication services, hotels, etc are being charged at five percent. While private and public schooling is taxed at zero percent, the higher education by private institutions is taxed at five percent.

Interest on forms of lending (loans, credit cards, finance leasing) and issue, allotment or transfer of an equity and debt security are exempted from VAT. Sovereign activities not in competition with the private sector are outside the purview of VAT, while other government activities in competition with the private sector is being charged at a rate depending upon the product or service. Tourists can claim refund on the VAT, paid by them on purchases they made during their stay, while exiting the country at the airport.

Companies with annual turnover above Dh 375,000 are obligated to register for VAT while companies having more than Dh 187,500 can register voluntarily.  Taxable businesses will then have to keep a record of all the supplies and imports of goods and services and other such records where VAT is either paid or received which helps in deciding the tax liability and claiming the input tax credit. Returns should be filed either monthly or quarterly by businesses depending on their size. The registration for VAT can be done at the e-registration portal of Federal Tax Authority (FTA). FTA has also released comprehensive guides to clarify to the businesses their tax obligations. 

To know more about this regulation, please contact:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">The United Arab Emirates (UAE) introduced Value Added Tax (VAT) through Federal Law no (8) of 2017, to generate a new source of income to fund the nation’s high quality public services. The new tax was implemented to decrease the nation’s dependence on natural resources like oil and petroleum. VAT is imposed on every value addition to the product or service that takes place in the supply chain till it reaches the final consumer. Federal Tax Authority (FTA) is given the responsibility for the effective implementation of this tax.

The end burden of the tax is on consumer and the tax paid by the manufacturer and others is credited or settled later through the system of input tax deduction. Products and services have been classified in three categories, whereon first, a five percent VAT is applicable, the second are the zero rated supplies and the third are the exempt supplies.

Crude oil and natural gas are taxed at zero percent whereas oil and gas products at the pumps are charged at five percent rate. Sale and rent of commercial buildings have been taxed at five percent. On the other hand the sale and rent of residential buildings is rated at zero percent. VAT on food and beverages, telecommunication services, hotels, etc are being charged at five percent. While private and public schooling is taxed at zero percent, the higher education by private institutions is taxed at five percent.

Interest on forms of lending (loans, credit cards, finance leasing) and issue, allotment or transfer of an equity and debt security are exempted from VAT. Sovereign activities not in competition with the private sector are outside the purview of VAT, while other government activities in competition with the private sector is being charged at a rate depending upon the product or service. Tourists can claim refund on the VAT, paid by them on purchases they made during their stay, while exiting the country at the airport.

Companies with annual turnover above Dh 375,000 are obligated to register for VAT while companies having more than Dh 187,500 can register voluntarily.  Taxable businesses will then have to keep a record of all the supplies and imports of goods and services and other such records where VAT is either paid or received which helps in deciding the tax liability and claiming the input tax credit. Returns should be filed either monthly or quarterly by businesses depending on their size. The registration for VAT can be done at the e-registration portal of Federal Tax Authority (FTA). FTA has also released comprehensive guides to clarify to the businesses their tax obligations. 

To know more about this regulation, please contact:

Thomas Paoletti

Fauzia Khan

 

">UAE Bankruptcy Law amendment

The Cabinet of the United Arab Emirates (UAE) has through an amendment in 2020 made an effort to help the businesses facing an Emergency Financial Crisis (EFC) because of the spread of Covid-19 and the subsequent lockdowns. The debtors have been exempted temporarily from the obligatory filing of bankruptcy after 30 days of its inability to pay debts. Debtors are allowed to make mutual arrangements with creditors which allows for a 12 month window to pay back the debts. Courts have been disabled from, accepting applications from creditors for bankruptcy and sealing the business premises of debtors.

  1. UAE Commercial Company Law amendment

Amendments made to the Commercial Company Law in 2020, has removed the requirement of having an Emiratis as 51% owner for registration of an Onshore Company in the UAE. Foreign investments up to 100% are now allowed in all sectors except in ‘Activities of Strategic Effect’. Foreign Companies are no longer required to have UAE nationals as directors in a joint stock company. The Departments of Economic Development in each of the Emirates are given the responsibility to come forward with list of such business activities where 100% foreign ownership is to be allowed.

  1. Equal pay law

With the motive of ensuring equality of wage, the UAE has through Federal Law Decree 6 of 2020 made it mandatory to pay equal wage to both men and women for equal work of equal value. These amendments made to Article 32 of Federal Law No 08 of 1980, is a positive step towards achieving gender equality in the UAE.

  1. Decriminalizing Bounced Cheques

With an aim to discourage criminal complaints with respect to bounced cheques, the cabinet of the UAE has come up with an amendment which enables banks to partially pay the cheque beneficiary from the available funds in the account. Once a person is convicted of the offence of cheque bounce, his cheque book shall be cancelled and he shall be banned from obtaining a new cheque book for five years. Other repercussions include a financial fine, suspension of license of a business for six months, and punishment of dissolution of business license for repeat offenders.

  1. Changes in Inheritance laws

Earlier in the UAE, only a non-Muslim expatriate was allowed to petition the courts to apply laws of his home country to decide on his inheritance. The changes made in 2020 to the inheritance laws have made it obligatory for the courts to mandatorily apply the law of the home country of an expatriate regardless of him being a Muslim or non-Muslim. Muslim expatriates had to previously abide by Sharia law of the UAE in case of inheritance without a Will. 

For more questions, please contact: 

Thomas Paoletti

Fauzia Khan

"class="material with-radius">UAE Bankruptcy Law amendment

The Cabinet of the United Arab Emirates (UAE) has through an amendment in 2020 made an effort to help the businesses facing an Emergency Financial Crisis (EFC) because of the spread of Covid-19 and the subsequent lockdowns. The debtors have been exempted temporarily from the obligatory filing of bankruptcy after 30 days of its inability to pay debts. Debtors are allowed to make mutual arrangements with creditors which allows for a 12 month window to pay back the debts. Courts have been disabled from, accepting applications from creditors for bankruptcy and sealing the business premises of debtors.

  1. UAE Commercial Company Law amendment

Amendments made to the Commercial Company Law in 2020, has removed the requirement of having an Emiratis as 51% owner for registration of an Onshore Company in the UAE. Foreign investments up to 100% are now allowed in all sectors except in ‘Activities of Strategic Effect’. Foreign Companies are no longer required to have UAE nationals as directors in a joint stock company. The Departments of Economic Development in each of the Emirates are given the responsibility to come forward with list of such business activities where 100% foreign ownership is to be allowed.

  1. Equal pay law

With the motive of ensuring equality of wage, the UAE has through Federal Law Decree 6 of 2020 made it mandatory to pay equal wage to both men and women for equal work of equal value. These amendments made to Article 32 of Federal Law No 08 of 1980, is a positive step towards achieving gender equality in the UAE.

  1. Decriminalizing Bounced Cheques

With an aim to discourage criminal complaints with respect to bounced cheques, the cabinet of the UAE has come up with an amendment which enables banks to partially pay the cheque beneficiary from the available funds in the account. Once a person is convicted of the offence of cheque bounce, his cheque book shall be cancelled and he shall be banned from obtaining a new cheque book for five years. Other repercussions include a financial fine, suspension of license of a business for six months, and punishment of dissolution of business license for repeat offenders.

  1. Changes in Inheritance laws

Earlier in the UAE, only a non-Muslim expatriate was allowed to petition the courts to apply laws of his home country to decide on his inheritance. The changes made in 2020 to the inheritance laws have made it obligatory for the courts to mandatorily apply the law of the home country of an expatriate regardless of him being a Muslim or non-Muslim. Muslim expatriates had to previously abide by Sharia law of the UAE in case of inheritance without a Will. 

For more questions, please contact: 

Thomas Paoletti

Fauzia Khan

">Intending to discourage increasing crimes of bounced cheques, the United Arab Emirates (UAE) government has, through Federal Decree Law No 14 of 2020, made changes to the provisions of the Commercial Transaction Law of 1993. The amendment decree will come into effect in January 2022.

The law has been amended to allow for partial payment of the value of the cheque if the entire amount is not in the account of the drawer. The bank shall also provide a certificate to the effect that the cheque has only been partially encashed while returning the original cheque to the bearer. The certificate validates the right of the bearer to the rest of the payment. If a bank stamps a cheque as non-paid, then the cheque could act as an executive instrument capable of being enforced wholly or partially.  

Financial Institutions or the cheque drawers will also be subjected to a penalty of 10% of the cheque or a minimum of AED 5,000, in cases where they wrongfully reject the bearers’ demand for full or partial payment of the cheque in bad faith and deny to the bearer the original cheque with the certificate of partial payment. The banks or the employees once convicted would also be subjected to the policies of name and shame as the judgments will be published in two widely read newspapers of the UAE.

Banks have now been mandated to submit information to the Central Bank of the account holders who indulges in any of the cases, (1) where the account had no sufficient and usable fund at the time of the maturity of the cheque, (2) where drawer had withdrawn the funds to disable the encashment of cheque, and (3) where partial payment has been made and certificate is issued by the bank as stated above.

The law has been changed to punish individuals who (1) ask their banks to deny payment of a cheque (with exceptions), (2) withdraw funds or close their account with an aim to deny payment (3) deliberately sign a cheque in a manner to make it unpayable. The individual could be punished for 6 months to 2 years imprisonment in addition to being fined for 10% of the cheque value or 5,000 AED.  

As per these amendments, if a person is convicted of the offence of cheque bounce, their checkbook could be withdrawn, and they may also be prevented from obtaining a new checkbook for five years. Other repercussions include a financial fine, suspension of license of a business for six months, and punishment of dissolution of business license for repeat offenders. Any bank not complying with the above orders could be subjected to the penalty of AED 100,000- AED 200,000.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">Intending to discourage increasing crimes of bounced cheques, the United Arab Emirates (UAE) government has, through Federal Decree Law No 14 of 2020, made changes to the provisions of the Commercial Transaction Law of 1993. The amendment decree will come into effect in January 2022.

The law has been amended to allow for partial payment of the value of the cheque if the entire amount is not in the account of the drawer. The bank shall also provide a certificate to the effect that the cheque has only been partially encashed while returning the original cheque to the bearer. The certificate validates the right of the bearer to the rest of the payment. If a bank stamps a cheque as non-paid, then the cheque could act as an executive instrument capable of being enforced wholly or partially.  

Financial Institutions or the cheque drawers will also be subjected to a penalty of 10% of the cheque or a minimum of AED 5,000, in cases where they wrongfully reject the bearers’ demand for full or partial payment of the cheque in bad faith and deny to the bearer the original cheque with the certificate of partial payment. The banks or the employees once convicted would also be subjected to the policies of name and shame as the judgments will be published in two widely read newspapers of the UAE.

Banks have now been mandated to submit information to the Central Bank of the account holders who indulges in any of the cases, (1) where the account had no sufficient and usable fund at the time of the maturity of the cheque, (2) where drawer had withdrawn the funds to disable the encashment of cheque, and (3) where partial payment has been made and certificate is issued by the bank as stated above.

The law has been changed to punish individuals who (1) ask their banks to deny payment of a cheque (with exceptions), (2) withdraw funds or close their account with an aim to deny payment (3) deliberately sign a cheque in a manner to make it unpayable. The individual could be punished for 6 months to 2 years imprisonment in addition to being fined for 10% of the cheque value or 5,000 AED.  

As per these amendments, if a person is convicted of the offence of cheque bounce, their checkbook could be withdrawn, and they may also be prevented from obtaining a new checkbook for five years. Other repercussions include a financial fine, suspension of license of a business for six months, and punishment of dissolution of business license for repeat offenders. Any bank not complying with the above orders could be subjected to the penalty of AED 100,000- AED 200,000.

For more information, please contact:

Thomas Paoletti

Fauzia Khan

">The Covid-19 pandemic has brought many fold challenges to global economy which affected the daily lives of people across the world. The pandemic required a push from our governments to undo the damages and to initiate structural reforms required to strengthen the economies.

The government of the United Arab Emirates has recently initiated long awaited legal reforms to strengthen the economic structure of the nation. The country has made it easier for expatriates to not just setup their business in the UAE but also to maintain full control over it. The UAE now allows for 100% ownership of expatriates in various sectors except the ones of strategic importance to the nation. This has opened a wide range of activities for businesses across the world to own and operate their business in the UAE which earlier required involvement of a UAE national. This step will provide a major boost to foreign investments in the nation having one of the best infrastructures in the world.

 

 

 

The recent changes to the UAE’s Bankruptcy Laws have been made to save businesses from going bankrupt because of ‘Emergency Financial Crisis’. A debtor is no longer required to mandatorily file for bankruptcy in an event of not paying its debts for 30 days. Provisions have been made to promote mutual agreements between debtors and creditors to delay the payment of debts up to 12 months. The amendments have also been made to prevent the courts from entertaining bankruptcy petitions from creditors. Courts are barred in the phase of Emergency Financial Crisis to seal the business premises of debtors. Collectively these changes will not just prevent unfair closure but will also keep in market the businesses which are failing due to the Covid-19 pandemic.

Small and Medium Enterprises (SMEs) are the backbone of any economy for the reason that it provides employment to a large chunk of population. The UAE government has made it easy for such businesses to borrow money by diversifying the financial asset that can be used to take credit. SMEs can now use tangible assets such as tools and raw materials and intangible assets such as receivables and collateral against loans. This measure will expand the businesses of banks and will at the same hand provide financial support to SMEs in this crisis.  

To achieve the goal of gender equality the cabinet of the UAE has taken a positive step by providing equal wage for equal work of equal value for both men and women. This has been done to promote economic and social equality between both the genders. These changes will boost female participation in the labor force of the UAE and will strengthen its economy.

To know more, please feel free to contact us

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The Covid-19 pandemic has brought many fold challenges to global economy which affected the daily lives of people across the world. The pandemic required a push from our governments to undo the damages and to initiate structural reforms required to strengthen the economies.

The government of the United Arab Emirates has recently initiated long awaited legal reforms to strengthen the economic structure of the nation. The country has made it easier for expatriates to not just setup their business in the UAE but also to maintain full control over it. The UAE now allows for 100% ownership of expatriates in various sectors except the ones of strategic importance to the nation. This has opened a wide range of activities for businesses across the world to own and operate their business in the UAE which earlier required involvement of a UAE national. This step will provide a major boost to foreign investments in the nation having one of the best infrastructures in the world.

 

 

 

The recent changes to the UAE’s Bankruptcy Laws have been made to save businesses from going bankrupt because of ‘Emergency Financial Crisis’. A debtor is no longer required to mandatorily file for bankruptcy in an event of not paying its debts for 30 days. Provisions have been made to promote mutual agreements between debtors and creditors to delay the payment of debts up to 12 months. The amendments have also been made to prevent the courts from entertaining bankruptcy petitions from creditors. Courts are barred in the phase of Emergency Financial Crisis to seal the business premises of debtors. Collectively these changes will not just prevent unfair closure but will also keep in market the businesses which are failing due to the Covid-19 pandemic.

Small and Medium Enterprises (SMEs) are the backbone of any economy for the reason that it provides employment to a large chunk of population. The UAE government has made it easy for such businesses to borrow money by diversifying the financial asset that can be used to take credit. SMEs can now use tangible assets such as tools and raw materials and intangible assets such as receivables and collateral against loans. This measure will expand the businesses of banks and will at the same hand provide financial support to SMEs in this crisis.  

To achieve the goal of gender equality the cabinet of the UAE has taken a positive step by providing equal wage for equal work of equal value for both men and women. This has been done to promote economic and social equality between both the genders. These changes will boost female participation in the labor force of the UAE and will strengthen its economy.

To know more, please feel free to contact us

Thomas Paoletti

Fauzia Khan

">Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">Thomas Paoletti

Fauzia Khan

 

">The United Arab Emirates (UAE) is known for its world class malls and state of the art facilities provided in the same. The E-commerce business while already thriving got a big boost during this pandemic when people relied on online platforms for even grocery shopping. Despite having the best shopping malls, many companies in the UAE are expanding their e-commerce platforms for reaching wider markets. Online marketplaces were predicted to grow even pre-COVID times, but with the pandemic, there has been an acceleration in the growth of this sector. Both big and small business are now more focused on setting up at least a part of their business online.

Why set up e-commerce business in the UAE?

The UAE is the fastest growing ecommerce market in the MENA region. The Infrastructure, Transportation and Logistics in the UAE are one of the best in the world. In World Bank’s “Doing Business 2020” report the UAE has been ranked 16th in the ease of doing business category beating countries like Canada and Germany. Free Trade Zones (FTZ) offer benefits like 100% business ownership and capital repatriation and 0% corporate taxes. In terms of the legal requirements, the UAE allows for e-commerce businesses to operate easily. The UAE is welcoming, and the work culture here is smooth. Thus, setting up any business here is much easier than in other countries.

 

 

 

Steps to set up an e-commerce business in Dubai:

License:

The procedure for applying for a license in Dubai is swift and easy. The first step is to decide which legal entity is suitable for your respective business.  Next, you need to select the location where you want to get your license from- i.e. Free Zone or Mainland.

Website and payment gateway:

It is important to have a stable and user-friendly website, along with a name for the business via which the company will be registered and which will be unique to your company.

Payment gateway should be integrated for smooth payment functions, and to enable secure flow of money from consumer to business and vice versa. The UAE’s Federal Law No. (1) of 2006 on Electronic Commerce was passed to facilitate and promote electronic transactions by ensuring their legal effectiveness. This law served the purpose of minimizing the forgery of electronic communication and financial transactions. This led to a boost for the e-commerce sector which needed such assurances for the consumer confidence. Every E-commerce business requires secure online payment gateway to transact through plastic money (credit or debit card) or other online modes of payment.

The primary regulatory body responsible for regulating electronic transactions and commerce in the UAE is the Telecommunications Regulatory Authority (TRA). 

Logistics:

Another important feature of an e-commerce business is logistics. For logistics, you have the option to collaborate with a logistics company, which will be easier and more economical than setting up your own logistics company. There are numerous logistic providers available in the UAE and each have their own fee structure, therefore, it is important to compare and select the type best suited for your business structure.

 

For more information please feel free to contact – 

Thomas Paoletti 

Fauzia Khan 

"class="material with-radius">The United Arab Emirates (UAE) is known for its world class malls and state of the art facilities provided in the same. The E-commerce business while already thriving got a big boost during this pandemic when people relied on online platforms for even grocery shopping. Despite having the best shopping malls, many companies in the UAE are expanding their e-commerce platforms for reaching wider markets. Online marketplaces were predicted to grow even pre-COVID times, but with the pandemic, there has been an acceleration in the growth of this sector. Both big and small business are now more focused on setting up at least a part of their business online.

Why set up e-commerce business in the UAE?

The UAE is the fastest growing ecommerce market in the MENA region. The Infrastructure, Transportation and Logistics in the UAE are one of the best in the world. In World Bank’s “Doing Business 2020” report the UAE has been ranked 16th in the ease of doing business category beating countries like Canada and Germany. Free Trade Zones (FTZ) offer benefits like 100% business ownership and capital repatriation and 0% corporate taxes. In terms of the legal requirements, the UAE allows for e-commerce businesses to operate easily. The UAE is welcoming, and the work culture here is smooth. Thus, setting up any business here is much easier than in other countries.

 

 

 

Steps to set up an e-commerce business in Dubai:

License:

The procedure for applying for a license in Dubai is swift and easy. The first step is to decide which legal entity is suitable for your respective business.  Next, you need to select the location where you want to get your license from- i.e. Free Zone or Mainland.

Website and payment gateway:

It is important to have a stable and user-friendly website, along with a name for the business via which the company will be registered and which will be unique to your company.

Payment gateway should be integrated for smooth payment functions, and to enable secure flow of money from consumer to business and vice versa. The UAE’s Federal Law No. (1) of 2006 on Electronic Commerce was passed to facilitate and promote electronic transactions by ensuring their legal effectiveness. This law served the purpose of minimizing the forgery of electronic communication and financial transactions. This led to a boost for the e-commerce sector which needed such assurances for the consumer confidence. Every E-commerce business requires secure online payment gateway to transact through plastic money (credit or debit card) or other online modes of payment.

The primary regulatory body responsible for regulating electronic transactions and commerce in the UAE is the Telecommunications Regulatory Authority (TRA). 

Logistics:

Another important feature of an e-commerce business is logistics. For logistics, you have the option to collaborate with a logistics company, which will be easier and more economical than setting up your own logistics company. There are numerous logistic providers available in the UAE and each have their own fee structure, therefore, it is important to compare and select the type best suited for your business structure.

 

For more information please feel free to contact – 

Thomas Paoletti 

Fauzia Khan 

">The United Arab Emirates (UAE) provides resident visa to an individual and his/her dependents if he/she (1) is employed by a company, (2) is employed in the government sector (3) has invested in a business (4) has a property, in the UAE. Additionally, university sponsored students and elderly foreigners who want to retire and reside in the UAE are also given residence visas. 

A foreigner needs a relevant entry permit to enter the country after which his/her sponsor has to apply for the residence visa within 60 days after completing the necessary formalities. Every foreigner has to comply with the mandatory health checkup. The visa application has to be applied at the office of General Directorate of Residency and Foreigners Affairs (GDRFA) of the respective Emirate. GDRFA is responsible for approving your residence visa and providing you with a UAE Resident Identity Card valid for the visa period and affixing visa stamp on the passport.

An investor will have to sponsor his/her investment visa on his/her own accord. Property owner’s visa will be sponsored under the property name that he/she owns. Visa for dependents has to be sponsored by the person who has residence visa in one of the above stated categories. Dependents include children, parents, maids and close relatives of the resident visa holder.

Having a residence visa of the UAE enables you to open a bank account, access financial facilities, apply for a driver’s license, access government health services and health insurance, register one’s children in schools and includes several other perks not available to a non-resident.  

The visa period granted varies according to its type, for instance work visa usually is given for the period of 1-3 years. Retirement visa and Investment visa can be granted for periods of 5 and 10 years, respectively. Renewal of visa can be done within 30 days after the expiration of the visa. As a general rule the residence visa lapses if the person stays out of the UAE for more than six months continuously.

In 2019, the UAE offered an option of Golden Visa to foreigners enabling them to live, work and study in the UAE without the need of a national sponsor and with 100 per cent ownership of their business on the UAE’s mainland. The duration of the visa will be 5 and 10 years and will be renewed automatically. Golden Visa will be granted to a specified group of individuals which includes investors, entrepreneurs, individuals with exceptional talents, researchers, medical professionals and those within the fields of science and knowledge, and outstanding students.

To know more about Residence Visa in the UAE, please contact:

Thomas Paoletti

Fauzia Khan

 

"class="material with-radius">The United Arab Emirates (UAE) provides resident visa to an individual and his/her dependents if he/she (1) is employed by a company, (2) is employed in the government sector (3) has invested in a business (4) has a property, in the UAE. Additionally, university sponsored students and elderly foreigners who want to retire and reside in the UAE are also given residence visas. 

A foreigner needs a relevant entry permit to enter the country after which his/her sponsor has to apply for the residence visa within 60 days after completing the necessary formalities. Every foreigner has to comply with the mandatory health checkup. The visa application has to be applied at the office of General Directorate of Residency and Foreigners Affairs (GDRFA) of the respective Emirate. GDRFA is responsible for approving your residence visa and providing you with a UAE Resident Identity Card valid for the visa period and affixing visa stamp on the passport.

An investor will have to sponsor his/her investment visa on his/her own accord. Property owner’s visa will be sponsored under the property name that he/she owns. Visa for dependents has to be sponsored by the person who has residence visa in one of the above stated categories. Dependents include children, parents, maids and close relatives of the resident visa holder.

Having a residence visa of the UAE enables you to open a bank account, access financial facilities, apply for a driver’s license, access government health services and health insurance, register one’s children in schools and includes several other perks not available to a non-resident.  

The visa period granted varies according to its type, for instance work visa usually is given for the period of 1-3 years. Retirement visa and Investment visa can be granted for periods of 5 and 10 years, respectively. Renewal of visa can be done within 30 days after the expiration of the visa. As a general rule the residence visa lapses if the person stays out of the UAE for more than six months continuously.

In 2019, the UAE offered an option of Golden Visa to foreigners enabling them to live, work and study in the UAE without the need of a national sponsor and with 100 per cent ownership of their business on the UAE’s mainland. The duration of the visa will be 5 and 10 years and will be renewed automatically. Golden Visa will be granted to a specified group of individuals which includes investors, entrepreneurs, individuals with exceptional talents, researchers, medical professionals and those within the fields of science and knowledge, and outstanding students.

To know more about Residence Visa in the UAE, please contact:

Thomas Paoletti

Fauzia Khan

 

">The post Covid amendments made to the UAE’s Bankruptcy Law of 2016 are a drastic but necessary step to deal with the steep fall in the growth and profits of the companies based in the United Arab Emirates (UAE). The resulting fall in growth of companies amid the Covid-19 crisis not only affected their profits but also took a toll on their ability to pay back their debts.

The inability to pay back debts leads to bankruptcy in usual circumstances however due to the emergence and spread of Covid-19 most of the businesses are not able to cope with the downfall for reasons which are entirely out of their hands. This has led several countries to formulate new regulations to prevent unfair and untimely closure of businesses through bankruptcy.

UAE is one such country which, in this time of financial crunch, has made amendments to its Bankruptcy Laws to provide relief to businesses suffering from an ”Emergency Financial Crisis” (EFC). EFC has been defined by the new amendments as ”a public event that affects trade or investment in the State such as the outbreak of an epidemic, a natural or environmental disaster, war or others.” The existence and duration of the period EFC is to be determined through a cabinet resolution of the Government of the UAE.

The amended provisions provide leeway for the debtors in various forms. For instance, debtors have been exempted temporarily from the obligatory filing of bankruptcy after 30days of its inability to pay debts. Further the courts have also been provided power to allow for additional 40 days of grace period to debtors to reach a settlement with creditors in case of ‘EFC’. However, the debtors are obligated (1) to promise to satisfy the debts within a 12 month period and also (2) to satisfy the majority of the creditors to its proposals, the failure of which will lead to bankruptcy proceedings through the normal course.

Other changes to the laws include disabling courts from accepting applications from creditors for bankruptcy proceedings during an EFC. The amendments also prevent courts in such cases from sealing the business premises of the debtors. One of the several other changes to the law include providing a relief to the directors and managers from being held personally liable to creditors during the period of EFC. Debtors may also, subject to certain conditions, apply to a court to procure new finances, hence providing them the flexibility necessary to survive in these uncertain times of pandemic. 

For more information, please contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The post Covid amendments made to the UAE’s Bankruptcy Law of 2016 are a drastic but necessary step to deal with the steep fall in the growth and profits of the companies based in the United Arab Emirates (UAE). The resulting fall in growth of companies amid the Covid-19 crisis not only affected their profits but also took a toll on their ability to pay back their debts.

The inability to pay back debts leads to bankruptcy in usual circumstances however due to the emergence and spread of Covid-19 most of the businesses are not able to cope with the downfall for reasons which are entirely out of their hands. This has led several countries to formulate new regulations to prevent unfair and untimely closure of businesses through bankruptcy.

UAE is one such country which, in this time of financial crunch, has made amendments to its Bankruptcy Laws to provide relief to businesses suffering from an ”Emergency Financial Crisis” (EFC). EFC has been defined by the new amendments as ”a public event that affects trade or investment in the State such as the outbreak of an epidemic, a natural or environmental disaster, war or others.” The existence and duration of the period EFC is to be determined through a cabinet resolution of the Government of the UAE.

The amended provisions provide leeway for the debtors in various forms. For instance, debtors have been exempted temporarily from the obligatory filing of bankruptcy after 30days of its inability to pay debts. Further the courts have also been provided power to allow for additional 40 days of grace period to debtors to reach a settlement with creditors in case of ‘EFC’. However, the debtors are obligated (1) to promise to satisfy the debts within a 12 month period and also (2) to satisfy the majority of the creditors to its proposals, the failure of which will lead to bankruptcy proceedings through the normal course.

Other changes to the laws include disabling courts from accepting applications from creditors for bankruptcy proceedings during an EFC. The amendments also prevent courts in such cases from sealing the business premises of the debtors. One of the several other changes to the law include providing a relief to the directors and managers from being held personally liable to creditors during the period of EFC. Debtors may also, subject to certain conditions, apply to a court to procure new finances, hence providing them the flexibility necessary to survive in these uncertain times of pandemic. 

For more information, please contact:

Thomas Paoletti

Fauzia Khan

">The UAE is the major regional hub and the commercial capital for the Middle East. It has one of the most liberal trade regimes in the Gulf.

The position of the UAE means it is the centre of traffic between Europe, Africa, and Asia. As a gateway between these regions, the UAE holds the potential for developing international relations, no matter what sector you specialize in.

Not only do the Free Trade Zones (FTZ) promote the trade of physical goods, the booming technology and digital spheres had a good foothold. Seen at the Silicon Valley of the Middle East, the incentive for research and development across all forms of technology is growing. This support has led to a location that rivals technology hubs in Asia and the United States.

The cost of creating and doing business  has dropped dramatically. Cutting over 98% of the fee for things from licensing to trademarks has breathed fresh air into small and emerging businesses. Banking has also become more supportive for SMEs, providing aids while the government has rolled out updates to the National SME Programme; the National SME Programme now has a targeted phased system of support. Businesses that have been directly impacted by Covid-19 can avail interest-free loans, free advisory services, and subsidized working spaces.

Keeping the Covid-19 virus in check has meant little economic or hospitality impact. Tourism has remained popular with quarantine-free zones and business has continued strong into 2021. From 1 October 2021 – 31 March 2022 the World Exposition event will host countries and regions for six months while promoting Sustainability, Mobility, and Opportunity across sectors and disciplines.

Amidst all the crisis surrounding the Covid-19, the UAE also introduced a new amendment allowing 100% foreign investment. The Federal Decree Law no. 26/2020 has amended the Commercial Company law by getting rid of the requirement of having an Emirati as 51% owner for registration of an Onshore Company in the UAE. The amendment now allows 100% foreign investments in the UAE except in “Activities of Strategic Effect”. Activities of Strategic Effect denotes a definitive negative list where 100% ownership will not be allowed yet. The changes to these foreign investment laws have come into effect from 1st June 2021.

The UAE government had in the past, through Federal Law no.19 of 2018, made similar efforts by issuing a positive list including 122 sectors where ownership pf more than 49% was allowed for foreigners. The amendments of 2020 are a giant leap forward and has opened several other sectors which were not earlier included in the 122 sector list. The Departments of Economic and Developmeny in each of the Emirates are given the responsibility to come forward with a list of such business activities. Dubai, Ajman, and Abu Dhabi have drawn up a list 1,105, 1000, and 1100 commercial activities respectivelym where 100% foreign investment will now be allowed.

Foreign investors can now own and control Onshore Companies without the need to employ nominees. These changes have now removed the requirement of having majority directors of a joint stock company to be a UAE National.

Additionally, the need to have a UAE national service agent for branches of foreign companies have also been removed. These measures will not just reduce the cumbersome arrangements and additional costs which investors had to make earlier, they will also create an atmosphere of legal certainty.

To know more, please feel free to contact:

Thomas Paoletti

Fauzia Khan

"class="material with-radius">The UAE is the major regional hub and the commercial capital for the Middle East. It has one of the most liberal trade regimes in the Gulf.

The position of the UAE means it is the centre of traffic between Europe, Africa, and Asia. As a gateway between these regions, the UAE holds the potential for developing international relations, no matter what sector you specialize in.

Not only do the Free Trade Zones (FTZ) promote the trade of physical goods, the booming technology and digital spheres had a good foothold. Seen at the Silicon Valley of the Middle East, the incentive for research and development across all forms of technology is growing. This support has led to a location that rivals technology hubs in Asia and the United States.

The cost of creating and doing business  has dropped dramatically. Cutting over 98% of the fee for things from licensing to trademarks has breathed fresh air into small and emerging businesses. Banking has also become more supportive for SMEs, providing aids while the government has rolled out updates to the National SME Programme; the National SME Programme now has a targeted phased system of support. Businesses that have been directly impacted by Covid-19 can avail interest-free loans, free advisory services, and subsidized working spaces.

Keeping the Covid-19 virus in check has meant little economic or hospitality impact. Tourism has remained popular with quarantine-free zones and business has continued strong into 2021. From 1 October 2021 – 31 March 2022 the World Exposition event will host countries and regions for six months while promoting Sustainability, Mobility, and Opportunity across sectors and disciplines.

Amidst all the crisis surrounding the Covid-19, the UAE also introduced a new amendment allowing 100% foreign investment. The Federal Decree Law no. 26/2020 has amended the Commercial Company law by getting rid of the requirement of having an Emirati as 51% owner for registration of an Onshore Company in the UAE. The amendment now allows 100% foreign investments in the UAE except in “Activities of Strategic Effect”. Activities of Strategic Effect denotes a definitive negative list where 100% ownership will not be allowed yet. The changes to these foreign investment laws have come into effect from 1st June 2021.

The UAE government had in the past, through Federal Law no.19 of 2018, made similar efforts by issuing a positive list including 122 sectors where ownership pf more than 49% was allowed for foreigners. The amendments of 2020 are a giant leap forward and has opened several other sectors which were not earlier included in the 122 sector list. The Departments of Economic and Developmeny in each of the Emirates are given the responsibility to come forward with a list of such business activities. Dubai, Ajman, and Abu Dhabi have drawn up a list 1,105, 1000, and 1100 commercial activities respectivelym where 100% foreign investment will now be allowed.

Foreign investors can now own and control Onshore Companies without the need to employ nominees. These changes have now removed the requirement of having majority directors of a joint stock company to be a UAE National.

Additionally, the need to have a UAE national service agent for branches of foreign companies have also been removed. These measures will not just reduce the cumbersome arrangements and additional costs which investors had to make earlier, they will also create an atmosphere of legal certainty.

To know more, please feel free to contact:

Thomas Paoletti

Fauzia Khan

">

We are inviting you to read our Latest Publication on IR Global The Middle East & North Africa: A dynamic region for inward & outward investment from Thomas Paoletti.

Session Topics:

i.  Starting a business in/out of MENA: How easy is it for entrepreneurs and businesses in/out of MENA to start a business in your jurisdiction? How can you help smooth the process for your clients and overcome common pitfalls?

ii.  What are the key recent developments your clients should be aware of when investing in/out of the MENA region to your jurisdiction? What grants and incentives are available to overseas investors?

iii. What are the latest trends shaping business growth and creating opportunities in MENA for clients in your jurisdiction? What markets offer the most stability and growth and where would you advise your clients to invest?

 

Click HERE to read the full publication.

"class="material with-radius">

We are inviting you to read our Latest Publication on IR Global The Middle East & North Africa: A dynamic region for inward & outward investment from Thomas Paoletti.

Session Topics:

i.  Starting a business in/out of MENA: How easy is it for entrepreneurs and businesses in/out of MENA to start a business in your jurisdiction? How can you help smooth the process for your clients and overcome common pitfalls?

ii.  What are the key recent developments your clients should be aware of when investing in/out of the MENA region to your jurisdiction? What grants and incentives are available to overseas investors?

iii. What are the latest trends shaping business growth and creating opportunities in MENA for clients in your jurisdiction? What markets offer the most stability and growth and where would you advise your clients to invest?

 

Click HERE to read the full publication.

">

“Despite these uncertain times, expanding overseas can be a key driver for future growth for an ambitious business. International expansion can breathe new life into a company, drive huge value and set it on a path of continued success.”

“IR Global members across the world address questions that help businesses to survive and thrive as they establish themselves in different jurisdictions. From tax to corporate governance, our members take you to a journey that can help you understand how to expand your business internationally – with little or no pain.”

 

CHECK OUT how THOMAS PAOLETTI answered these questions:

  1. What are the main government incentives available in your jurisdiction to attract multinationals and FDI Investments?
  2. What Industries do you feel there are opportunities in for international investors/ businesses in your jurisdiction? What factors do you think contribute to inward investment?
  3. Why is it important to hire a local firm to support international expansion? How can you help smooth the process for your clients and overcome common pitfalls?

**Get some exciting TIPS for successful expansion in United Arab Emirates

Click the link below to read the full publication

Click Here

 

"class="material with-radius">

“Despite these uncertain times, expanding overseas can be a key driver for future growth for an ambitious business. International expansion can breathe new life into a company, drive huge value and set it on a path of continued success.”

“IR Global members across the world address questions that help businesses to survive and thrive as they establish themselves in different jurisdictions. From tax to corporate governance, our members take you to a journey that can help you understand how to expand your business internationally – with little or no pain.”

 

CHECK OUT how THOMAS PAOLETTI answered these questions:

  1. What are the main government incentives available in your jurisdiction to attract multinationals and FDI Investments?
  2. What Industries do you feel there are opportunities in for international investors/ businesses in your jurisdiction? What factors do you think contribute to inward investment?
  3. Why is it important to hire a local firm to support international expansion? How can you help smooth the process for your clients and overcome common pitfalls?

**Get some exciting TIPS for successful expansion in United Arab Emirates

Click the link below to read the full publication

Click Here

 

">SESSION ONE
Can force majeure justify a suspension
of performance or the unilateral imposition
of new deadlines or cancellations of purchase orders?

SESSION TWO
Does the COVID-19 crisis and possible
breach of international contracts fundamentally
alter assumptions surrounding risk
allocation, supply chains and access to markets?

SESSION THREE
Where a contract does not contain a force majeure clause,
how simple is it for parties to consider the doctrine of frustration?
In which jurisdiction would this apply?

Please click the button to read our contribution

#IRPUBLICATIONS

 

"class="material with-radius">SESSION ONE
Can force majeure justify a suspension
of performance or the unilateral imposition
of new deadlines or cancellations of purchase orders?

SESSION TWO
Does the COVID-19 crisis and possible
breach of international contracts fundamentally
alter assumptions surrounding risk
allocation, supply chains and access to markets?

SESSION THREE
Where a contract does not contain a force majeure clause,
how simple is it for parties to consider the doctrine of frustration?
In which jurisdiction would this apply?

Please click the button to read our contribution

#IRPUBLICATIONS

 

">

With recent data protection legislation across different jurisdictions, companies are now being held to account regarding their use of personal data. Will this result in a more litigious culture for companies and what does this mean for boards?

The UAE is an international hub interconnected with the rest of the world and capable of attracting great investments thanks to the different and various foreign direct investment policy and incentives that have been launched in the past few years. The UAE has not yet adopted a data protection law, but has taken the European GDPR as a case study to draft its own data protection law, which we all hope it will adopt soon. Dubai International Financial Center and Abu Dhabi Global Market have both adopted a data protection framework consistent with the EU and international standards.

To read our contribution

Download"class="material with-radius">

With recent data protection legislation across different jurisdictions, companies are now being held to account regarding their use of personal data. Will this result in a more litigious culture for companies and what does this mean for boards?

The UAE is an international hub interconnected with the rest of the world and capable of attracting great investments thanks to the different and various foreign direct investment policy and incentives that have been launched in the past few years. The UAE has not yet adopted a data protection law, but has taken the European GDPR as a case study to draft its own data protection law, which we all hope it will adopt soon. Dubai International Financial Center and Abu Dhabi Global Market have both adopted a data protection framework consistent with the EU and international standards.

To read our contribution

Download">
 

This is a video that describes the steps you need to know in order to use your personal portal where you can view all the information related to your relation with Paoletti Law Group.
On your portal you can view :

– Recent happenings
– Due payments
– Invoices
– Documents 
– Project details and status of progress
– Updating KYC
– Expenses 
– Activities 
– Receipts 

You will also be able to print and download your invoices, receipts and you can upload and view all your documents, and be in direct contact with the Firm through Chatter.

Please take a moment to watch the video.

If you have any comments, please feel free to share with us.

"class="material with-radius">
 

This is a video that describes the steps you need to know in order to use your personal portal where you can view all the information related to your relation with Paoletti Law Group.
On your portal you can view :

– Recent happenings
– Due payments
– Invoices
– Documents 
– Project details and status of progress
– Updating KYC
– Expenses 
– Activities 
– Receipts 

You will also be able to print and download your invoices, receipts and you can upload and view all your documents, and be in direct contact with the Firm through Chatter.

Please take a moment to watch the video.

If you have any comments, please feel free to share with us.

">
IR Global presents in the publication “International Deal Making”.                                                                                                                         

Key considerations when assessing a target company for acquisition, including the due diligence process and key sales contract clauses.

Paoletti Law Group is a global legal and business services firm advising clients across the Middle East, EU countries and the rest of the world.                                          

They provide value adding and cost-effective solutions for national and multinational businesses in a wide range of sectors including corporate domestic and cross border transactions, finance, new technologies, construction, and oil & gas. Headquartered in UAE, the firm maintains offices in Rome and Shanghai, and grants its clients access to a worldwide network with operational desks in key jurisdictions around the world.

Tips for completing a successful

cross-border acquisition

Find the right partner in the jurisdiction you want to operate in. Previous demonstrated experience with M&A is essential. Transactional lawyers, as such, are not necessarily the right advisor for a complex M&A case.

Have a post-closing plan in place. This is more for the client to prepare, but it is desirable that we as lawyers teach the client that the due diligence process and even the transaction itself are only the starting point. These are delicate negotiations that could take weeks or even months to complete after the deal is closed.

Don’t lose sight of the resources and costs involved. Due diligence can easily become an endless process in complex projects. Costs should be carefully estimated and agreed before work starts.

Read all

"class="material with-radius">IR Global presents in the publication “International Deal Making”.                                                                                                                         

Key considerations when assessing a target company for acquisition, including the due diligence process and key sales contract clauses.

Paoletti Law Group is a global legal and business services firm advising clients across the Middle East, EU countries and the rest of the world.                                          

They provide value adding and cost-effective solutions for national and multinational businesses in a wide range of sectors including corporate domestic and cross border transactions, finance, new technologies, construction, and oil & gas. Headquartered in UAE, the firm maintains offices in Rome and Shanghai, and grants its clients access to a worldwide network with operational desks in key jurisdictions around the world.

Tips for completing a successful

cross-border acquisition

Find the right partner in the jurisdiction you want to operate in. Previous demonstrated experience with M&A is essential. Transactional lawyers, as such, are not necessarily the right advisor for a complex M&A case.

Have a post-closing plan in place. This is more for the client to prepare, but it is desirable that we as lawyers teach the client that the due diligence process and even the transaction itself are only the starting point. These are delicate negotiations that could take weeks or even months to complete after the deal is closed.

Don’t lose sight of the resources and costs involved. Due diligence can easily become an endless process in complex projects. Costs should be carefully estimated and agreed before work starts.

Read all

">Read More

"class="material with-radius">Read More

">To read the full article, Download now

If you wish to have a multi jurisdiction comparative overview, please refer to http://– https://www.irglobal.com/download-report-acc

"class="material with-radius">To read the full article, Download now

If you wish to have a multi jurisdiction comparative overview, please refer to http://– https://www.irglobal.com/download-report-acc

">https://www.difc.ae/business/laws-regulations/legal-database/.

Companies registered or that will be registered in the future in the DIFC are required to comply with the new regime. Get in touch using our contacts below: we are ready to assist you with any further questions or need you may have in connection with the new DIFC company Laws. LIMITED LIABILITY COMPANY ABOLISHED Under the new regime, only companies limited by shares, public or private, are authorized to operate in the DIFC.

LTD OR PLC The name of a private company limited by shares must now end with the ‘Limited’ or ‘Ltd.’ The name of a public company limited by shares must end in “Public Limited Company” or “PLC”.
DIRECTORS’ DUTIES STRENGTHENED. The former is any subject that determines the purposes and means of the processing of personal data, the latter is any subject that processes personal data on behalf of a data controller.

Download  LegalUpdate-003-difc

"class="material with-radius">https://www.difc.ae/business/laws-regulations/legal-database/.

Companies registered or that will be registered in the future in the DIFC are required to comply with the new regime. Get in touch using our contacts below: we are ready to assist you with any further questions or need you may have in connection with the new DIFC company Laws. LIMITED LIABILITY COMPANY ABOLISHED Under the new regime, only companies limited by shares, public or private, are authorized to operate in the DIFC.

LTD OR PLC The name of a private company limited by shares must now end with the ‘Limited’ or ‘Ltd.’ The name of a public company limited by shares must end in “Public Limited Company” or “PLC”.
DIRECTORS’ DUTIES STRENGTHENED. The former is any subject that determines the purposes and means of the processing of personal data, the latter is any subject that processes personal data on behalf of a data controller.

Download  LegalUpdate-003-difc

">In these cases, choosing not to launch a joint venture with a local partner from the very beginning of the initiative wasted time and, above all, money (including incorporation of the company, office, administrative costs, salary of the General Manager, etc.).

Now, let’s look at the other option: organizing with a local partner, through a joint venture.

In my experience, the local partner often turns out to be the most appropriate solution, but the next question is: what local partner is best to choose?

Approaching a reliable Emirati is critical to the success or failure of the whole venture, especially if the investor is not already introduced in the market.

What can happen?

For instance, my Emirati partner might sponsor not only my company, but also other companies.

When this happens, it often means that this person has a problem – for example, the non-renewal of a license – on one of them. This problem automatically affects the licenses of all the other companies associated with this person.

The most serious consequence for the foreign entrepreneur is that the Resident Visa for the employees or the renewal of the license is halted.

Let’s get back to our basic questions.

The second question is: is it best to choose an active partner or a silent partner?

The basic difference is that the first is an active sponsor who gives real help to enter the market, while the second merely receives a yearly remuneration (remember: the 49-51% formula is mandatory to work in Mainland).

Even in this case one must be careful and not to fall in easy traps, like those of people promising overnight success upon payment of tens of thousands of Euro.
I remember, in fact, a client coming to my office in an attempt to recover a huge investment made to a local company that promised to unlock the Dubai market for her upon establishment of a company.

Result: after a year she obtained a license for an offshore company established in Jebel Ali (a free zone located 35 km south-west of Dubai). But this license was completely useless to her since it couldn’t be used to commercialize within the country.

And to add insult to injury: this license cost little more than 2,000 Euro for the first year, while the remuneration to the Emirati company amounted to 100,000 Euro!

And, finally, the third basic question: what guarantees does the entrepreneur have that the partner will truly get the foreign company into the market and achieve the expected results?

This is a question that has a twofold answer.

First, the guarantee can be given by the professional who assists the entrepreneur along the process of internationalization.
Generally this person has a network of reliable contacts who have already worked successfully with the professional in the past.
Together with this professional, the entrepreneur can conduct a thorough market analysis and choose the most suitable type of local partner or company type or whether to set up in free zone.

My recommendation is always to invest more at the start, not only in terms of money, but also of time.
Second, well, the guarantee of achieving the expected results is given by a mix of factors, some predictable and maneuverable, others unpredictable (the known entrepreneurial risk).

Among the predictable factors are: the assistance of a reliable professional; the implementation of a project and a strategy which are well studied, structured and complete under all points of view (legal, fiscal etc.); and, last but not least, determination, commitment and perseverance by the entrepreneur. A venture like this is complex, but can offer great satisfaction to the committed entrepreneur.

Do you have further questions about business in Dubai? Get in touch and I will reply directly or in another post.

"class="material with-radius">In these cases, choosing not to launch a joint venture with a local partner from the very beginning of the initiative wasted time and, above all, money (including incorporation of the company, office, administrative costs, salary of the General Manager, etc.).

Now, let’s look at the other option: organizing with a local partner, through a joint venture.

In my experience, the local partner often turns out to be the most appropriate solution, but the next question is: what local partner is best to choose?

Approaching a reliable Emirati is critical to the success or failure of the whole venture, especially if the investor is not already introduced in the market.

What can happen?

For instance, my Emirati partner might sponsor not only my company, but also other companies.

When this happens, it often means that this person has a problem – for example, the non-renewal of a license – on one of them. This problem automatically affects the licenses of all the other companies associated with this person.

The most serious consequence for the foreign entrepreneur is that the Resident Visa for the employees or the renewal of the license is halted.

Let’s get back to our basic questions.

The second question is: is it best to choose an active partner or a silent partner?

The basic difference is that the first is an active sponsor who gives real help to enter the market, while the second merely receives a yearly remuneration (remember: the 49-51% formula is mandatory to work in Mainland).

Even in this case one must be careful and not to fall in easy traps, like those of people promising overnight success upon payment of tens of thousands of Euro.
I remember, in fact, a client coming to my office in an attempt to recover a huge investment made to a local company that promised to unlock the Dubai market for her upon establishment of a company.

Result: after a year she obtained a license for an offshore company established in Jebel Ali (a free zone located 35 km south-west of Dubai). But this license was completely useless to her since it couldn’t be used to commercialize within the country.

And to add insult to injury: this license cost little more than 2,000 Euro for the first year, while the remuneration to the Emirati company amounted to 100,000 Euro!

And, finally, the third basic question: what guarantees does the entrepreneur have that the partner will truly get the foreign company into the market and achieve the expected results?

This is a question that has a twofold answer.

First, the guarantee can be given by the professional who assists the entrepreneur along the process of internationalization.
Generally this person has a network of reliable contacts who have already worked successfully with the professional in the past.
Together with this professional, the entrepreneur can conduct a thorough market analysis and choose the most suitable type of local partner or company type or whether to set up in free zone.

My recommendation is always to invest more at the start, not only in terms of money, but also of time.
Second, well, the guarantee of achieving the expected results is given by a mix of factors, some predictable and maneuverable, others unpredictable (the known entrepreneurial risk).

Among the predictable factors are: the assistance of a reliable professional; the implementation of a project and a strategy which are well studied, structured and complete under all points of view (legal, fiscal etc.); and, last but not least, determination, commitment and perseverance by the entrepreneur. A venture like this is complex, but can offer great satisfaction to the committed entrepreneur.

Do you have further questions about business in Dubai? Get in touch and I will reply directly or in another post.

"> So, why turn to a lawyer?  

When an Italian entrepreneur reaches out to me, he/she often explains his/her idea and from that idea I build an investment, which has an impact from both a legal and a fiscal point of view.

It’s on the legal side the entrepreneur is in more need of support, as on the fiscal side he/she is likely to have received some advice from the accountant in Italy.
Most of the time the information is incomplete but, once the investment is set up, I also firm up fiscal issues, connecting the entrepreneur with the best local accountant for the job using my extensive network.

The first advice for business internalization should be legal advice, though, because the Italian entrepreneur is required to enter into a number of contracts with the local partner, which will have to be drawn up or reviewed by a lawyer capable of representing and safeguarding the entrepreneur.
The experience of a lawyer can be significant even in the very early stages of the operation.
I’ve often received an entrepreneur presenting a business idea, which was most of the time a non-structured, do-it-yourself idea.

By the end of the entrepreneur’s first meeting with me and my team, that idea was transformed into something else, as the realization hit that the initial planning was wrong, that it was not embedded into an overall framework or it didn’t take into account the possible effects an entrepreneurial initiative in the Emirates can have on the other Gulf markets.

A good professional whose mission is to accompany and assist the entrepreneur along his/her start up journey in the Emirates plays a specific role, which unfolds step by step as follows:

  1. listen to the entrepreneur’s indications and needs, make a preliminary analysis and convert them into an operational framework, outlining the most effective way to enter the market (strategy planning);
  2. connect the entrepreneur with the professionals dealing with each and every aspects of the operation; not only the fiscal one, as mentioned before, but also — for example — the tasks relating to market research and the business plan (solution design);
  3. examine and adjust the business plan, if it was designed by the entrepreneur autonomously, in light of costs and expenses he/she wasn’t aware of;
    advise on areas relating to governance;
  4. obtain the license, draw up commercial contracts;
  5. follow up, or, in other words, make sure that what the entrepreneur is doing in the market is in full observance of local legislation.

If you are looking for a competent professional to start your business in Dubai, get in touch.

"class="material with-radius"> So, why turn to a lawyer?  

When an Italian entrepreneur reaches out to me, he/she often explains his/her idea and from that idea I build an investment, which has an impact from both a legal and a fiscal point of view.

It’s on the legal side the entrepreneur is in more need of support, as on the fiscal side he/she is likely to have received some advice from the accountant in Italy.
Most of the time the information is incomplete but, once the investment is set up, I also firm up fiscal issues, connecting the entrepreneur with the best local accountant for the job using my extensive network.

The first advice for business internalization should be legal advice, though, because the Italian entrepreneur is required to enter into a number of contracts with the local partner, which will have to be drawn up or reviewed by a lawyer capable of representing and safeguarding the entrepreneur.
The experience of a lawyer can be significant even in the very early stages of the operation.
I’ve often received an entrepreneur presenting a business idea, which was most of the time a non-structured, do-it-yourself idea.

By the end of the entrepreneur’s first meeting with me and my team, that idea was transformed into something else, as the realization hit that the initial planning was wrong, that it was not embedded into an overall framework or it didn’t take into account the possible effects an entrepreneurial initiative in the Emirates can have on the other Gulf markets.

A good professional whose mission is to accompany and assist the entrepreneur along his/her start up journey in the Emirates plays a specific role, which unfolds step by step as follows:

  1. listen to the entrepreneur’s indications and needs, make a preliminary analysis and convert them into an operational framework, outlining the most effective way to enter the market (strategy planning);
  2. connect the entrepreneur with the professionals dealing with each and every aspects of the operation; not only the fiscal one, as mentioned before, but also — for example — the tasks relating to market research and the business plan (solution design);
  3. examine and adjust the business plan, if it was designed by the entrepreneur autonomously, in light of costs and expenses he/she wasn’t aware of;
    advise on areas relating to governance;
  4. obtain the license, draw up commercial contracts;
  5. follow up, or, in other words, make sure that what the entrepreneur is doing in the market is in full observance of local legislation.

If you are looking for a competent professional to start your business in Dubai, get in touch.

">

What do you have to do at this point?
You’re obliged to go to your lawyer to seek advice. And you can’t help but wonder if it wouldn’t have been wiser and cheaper to spend money upfront, with a contract in hand drawn up by a professional, rather than turn to him only when the problem has come up.

Recently an acquaintance of mine in Dubai, who was sued in Italy, asked for my advice. He was sued for breach of a preliminary sales contract of real estate in a well-known destination in Northern Italy.
What happened?
In short, he undertook to sell his real estate but later he changed his mind, thinking that “this is what we do in Dubai” (which is absolutely not true) and he didn’t understand why the counterparty couldn’t accept the idea of simply searching for a different property.
Now, he will find himself caught up in a dispute that will last years. He will also have to pay the legal fees.

What I want to stress is that lawyers don’t have to be called in only when you get involved in a dispute, but are necessary ahead of time, in order to avoid more serious troubles later.

If you need legal qualified assistance for your business, get in touch.

"class="material with-radius">

What do you have to do at this point?
You’re obliged to go to your lawyer to seek advice. And you can’t help but wonder if it wouldn’t have been wiser and cheaper to spend money upfront, with a contract in hand drawn up by a professional, rather than turn to him only when the problem has come up.

Recently an acquaintance of mine in Dubai, who was sued in Italy, asked for my advice. He was sued for breach of a preliminary sales contract of real estate in a well-known destination in Northern Italy.
What happened?
In short, he undertook to sell his real estate but later he changed his mind, thinking that “this is what we do in Dubai” (which is absolutely not true) and he didn’t understand why the counterparty couldn’t accept the idea of simply searching for a different property.
Now, he will find himself caught up in a dispute that will last years. He will also have to pay the legal fees.

What I want to stress is that lawyers don’t have to be called in only when you get involved in a dispute, but are necessary ahead of time, in order to avoid more serious troubles later.

If you need legal qualified assistance for your business, get in touch.

">Let’s start with the real estate sector.

There is no shortage of people who are interested in investing in real estate in the Emirates, and particularly in Dubai.

Developers are very aware of this, and in response they are building ever more incredible and luxurious projects at a rapid pace.

Just as an example: I received a request to examine a sales contract for the purchase of a property in a luxurious floating resort.

Hidden in this lengthy contract of 60 pages were more than a few “tricks”. It was drafted in this manner with the very objective of confusing the buyer.

For starters, what first caught my eye was that my client was not buying a real estate, but a cabin on a ship.

This “resort” was in reality a floating ship. Through a wily use of words, ambiguity reigns.

And not only that.

The developer promised a 100% ROI (return on investment); in truth, somewhere in the middle of the 60 pages, the contract indicated the real percentages: 4% the first year, 5% the second year, up to a maximum of 12%.

The most incredible clause was related to payment.

My client was supposed to pay 20% of the price within 30 days of the signing of the contract, but the developer would send her the contract proposal only afterwards, within 60 days!

Obviously, during this time, my client was supposed to pay the subsequent installments.

Moreover, my client was given the opportunity to pay the whole sum in advance with a 10% discount without, however, having the slightest idea about the location of the real estate – of the cabin, actually! – she would buy: if inside or outside, if a fore or an aft cabin, if up or down.

In other words, a totally blind purchase, for not exactly an inconsequential amount of money.

But there’s more: if my client hadn’t accepted and agreed to sign the contract, she would have lost the down payment (of 20%) as a penalty!

Real estate investments in the Emirates are mostly, in fact, six-figure investments.

I will give you another example.

I was asked to examine another sales contract to buy a property in a building to be constructed in front of the Burj Khalifa [LM2] in Dubai for an amount of EUR 1 million.

In the usual 60-page contract, there’s a clause declaring that the developer is even entitled to transfer the funds received by the investor to any other project the developer is involved in.

In practice, I believe I’m buying real estate in Dubai and instead I end up being owner of something I haven’t chosen in a part of the world I haven’t chosen.

Luckily, I checked this client’s contract in advance and so I could contest the clause and get it removed.

Instead, unfortunately, it‘s often the case that investors seized with the excitement that this country conveys and with the promises of easy money sign contracts without even realizing what they are getting into.

In the next post I will focus on some corporate examples.

If you need advice about this subject, get in touch.

"class="material with-radius">Dubai real estateLet’s start with the real estate sector.

There is no shortage of people who are interested in investing in real estate in the Emirates, and particularly in Dubai.

Developers are very aware of this, and in response they are building ever more incredible and luxurious projects at a rapid pace.

Just as an example: I received a request to examine a sales contract for the purchase of a property in a luxurious floating resort.

Hidden in this lengthy contract of 60 pages were more than a few “tricks”. It was drafted in this manner with the very objective of confusing the buyer.

For starters, what first caught my eye was that my client was not buying a real estate, but a cabin on a ship.

This “resort” was in reality a floating ship. Through a wily use of words, ambiguity reigns.

And not only that.

The developer promised a 100% ROI (return on investment); in truth, somewhere in the middle of the 60 pages, the contract indicated the real percentages: 4% the first year, 5% the second year, up to a maximum of 12%.

The most incredible clause was related to payment.

My client was supposed to pay 20% of the price within 30 days of the signing of the contract, but the developer would send her the contract proposal only afterwards, within 60 days!

Obviously, during this time, my client was supposed to pay the subsequent installments.

Moreover, my client was given the opportunity to pay the whole sum in advance with a 10% discount without, however, having the slightest idea about the location of the real estate – of the cabin, actually! – she would buy: if inside or outside, if a fore or an aft cabin, if up or down.

In other words, a totally blind purchase, for not exactly an inconsequential amount of money.

But there’s more: if my client hadn’t accepted and agreed to sign the contract, she would have lost the down payment (of 20%) as a penalty!

Real estate investments in the Emirates are mostly, in fact, six-figure investments.

I will give you another example.

I was asked to examine another sales contract to buy a property in a building to be constructed in front of the Burj Khalifa [LM2] in Dubai for an amount of EUR 1 million.

In the usual 60-page contract, there’s a clause declaring that the developer is even entitled to transfer the funds received by the investor to any other project the developer is involved in.

In practice, I believe I’m buying real estate in Dubai and instead I end up being owner of something I haven’t chosen in a part of the world I haven’t chosen.

Luckily, I checked this client’s contract in advance and so I could contest the clause and get it removed.

Instead, unfortunately, it‘s often the case that investors seized with the excitement that this country conveys and with the promises of easy money sign contracts without even realizing what they are getting into.

In the next post I will focus on some corporate examples.

If you need advice about this subject, get in touch.

">And when a client comes to me because he/she did one of these three (or four) things, he/she is generally in real trouble, as the problems have compromised business functioning and efficiency, with obvious negative consequences on profits and competitiveness.

For example, if I don’t regulate the relationship with a vendor to whom I have outsourced the production of a good or the execution of a service, in case of delays, interruptions, inefficiencies or failure to deliver the good or service, I will have to incur extraordinary costs, such as:

Given that a company produces dozens, hundreds or thousands of commercial relationships, if the entrepreneur doesn’t bother to regulate all of them through ad hoc contracts drafted by a qualified professional, problems and unexpected circumstances can arise quickly and the entrepreneur can end up lost in a maze of conflicts.

I’m referring to everything related to business: from tenancy contracts, to leasing agreements, to contracts with suppliers, with clients, to contractor and subcontractor.

A qualified professional is capable of drafting a tailor made contract, solid in its essential parts, such as:

These are just some of the points that are extremely important to regulate in a contract.

Many other elements – of differing nature and complexity – need to be taken into consideration and tackled on-a-case-by-case basis with a view to finalizing a tailored contract with appropriate measures avoiding conflicts between the parties as much as possible. 

Does the contract have an economic value? 

It certainly does, but unfortunately its perception in a business setting is weak and, alas, the lawyer is often seen only as an extra cost.

People prefer to invest in the resolution of commercial problems, rather than in their prevention.

And yet, we only need to apply a simple saying, which, if it’s true for everyday life, is even more so in business: “prevention is better than cure”.

If you want a more detailed explanation of the subject, go read the next post.

"class="material with-radius">And when a client comes to me because he/she did one of these three (or four) things, he/she is generally in real trouble, as the problems have compromised business functioning and efficiency, with obvious negative consequences on profits and competitiveness.

For example, if I don’t regulate the relationship with a vendor to whom I have outsourced the production of a good or the execution of a service, in case of delays, interruptions, inefficiencies or failure to deliver the good or service, I will have to incur extraordinary costs, such as:

Given that a company produces dozens, hundreds or thousands of commercial relationships, if the entrepreneur doesn’t bother to regulate all of them through ad hoc contracts drafted by a qualified professional, problems and unexpected circumstances can arise quickly and the entrepreneur can end up lost in a maze of conflicts.

I’m referring to everything related to business: from tenancy contracts, to leasing agreements, to contracts with suppliers, with clients, to contractor and subcontractor.

A qualified professional is capable of drafting a tailor made contract, solid in its essential parts, such as:

These are just some of the points that are extremely important to regulate in a contract.

Many other elements – of differing nature and complexity – need to be taken into consideration and tackled on-a-case-by-case basis with a view to finalizing a tailored contract with appropriate measures avoiding conflicts between the parties as much as possible. 

Does the contract have an economic value? 

It certainly does, but unfortunately its perception in a business setting is weak and, alas, the lawyer is often seen only as an extra cost.

People prefer to invest in the resolution of commercial problems, rather than in their prevention.

And yet, we only need to apply a simple saying, which, if it’s true for everyday life, is even more so in business: “prevention is better than cure”.

If you want a more detailed explanation of the subject, go read the next post.

">
Breitling is a well-known brand of luxury watches founded in Switzerland in 1884 as a company producing chronometers and watchmaker tools. Today it specializes in tech watches (it is an official provider for the Air Force) and in wrist chronographs.

It has boutiques and retailers worldwide (there are 4 boutiques in Dubai alone) and it targets a high-end market. It is therefore well regarded among the Persian Gulf countries, which have one of the highest per capita incomes in the world (Qatar, Kuwait, United Arab Emirates, Saudi Arabia etc.).
An Emirati company, already a client of mine, sensed an opportunity in Bahrain, where the brand was suffering from lack of visibility and decline in market share and could be due for a relaunch.

This company turned to my legal office to invest in this relaunching operation that involved two players:

The unincorporated type of joint venture wouldn’t make sense in this case, since the objective of the initiative was to market a product over the long term.

What we did was to build a joint venture agreement where the business model was set out as the establishment and capitalization of a new company formed by the Bahraini partner and by our client with the objective of distributing and marketing the Breitling brand in Bahrain.

This agreement was made up of:

It was a well-structured operation, which, just a few months later, turned out to be a success.

The Emirati partner already had a lot of know-how in the luxury watch sector and was already familiar with the specific marketing for this product.

For its part, the Bahraini partner knew the country’s market very well, had useful business connections, and believed strongly in the venture.

This is really the ideal situation for the professional who brings together the parties.

My job was to identify the most suitable partner in Bahrain, define the most appropriate corporate form, determine the contractual relations protecting my client as much as possible and, in general, provide the company with the most solid framework to achieve the expected sales performance

If your objective is to do business in Dubai and you want to understand all the opportunities, get in touch.

"class="material with-radius">Breitling is a well-known brand of luxury watches founded in Switzerland in 1884 as a company producing chronometers and watchmaker tools. Today it specializes in tech watches (it is an official provider for the Air Force) and in wrist chronographs.

It has boutiques and retailers worldwide (there are 4 boutiques in Dubai alone) and it targets a high-end market. It is therefore well regarded among the Persian Gulf countries, which have one of the highest per capita incomes in the world (Qatar, Kuwait, United Arab Emirates, Saudi Arabia etc.).
An Emirati company, already a client of mine, sensed an opportunity in Bahrain, where the brand was suffering from lack of visibility and decline in market share and could be due for a relaunch.

This company turned to my legal office to invest in this relaunching operation that involved two players:

The unincorporated type of joint venture wouldn’t make sense in this case, since the objective of the initiative was to market a product over the long term.

What we did was to build a joint venture agreement where the business model was set out as the establishment and capitalization of a new company formed by the Bahraini partner and by our client with the objective of distributing and marketing the Breitling brand in Bahrain.

This agreement was made up of:

It was a well-structured operation, which, just a few months later, turned out to be a success.

The Emirati partner already had a lot of know-how in the luxury watch sector and was already familiar with the specific marketing for this product.

For its part, the Bahraini partner knew the country’s market very well, had useful business connections, and believed strongly in the venture.

This is really the ideal situation for the professional who brings together the parties.

My job was to identify the most suitable partner in Bahrain, define the most appropriate corporate form, determine the contractual relations protecting my client as much as possible and, in general, provide the company with the most solid framework to achieve the expected sales performance

If your objective is to do business in Dubai and you want to understand all the opportunities, get in touch.

">DOWNLOAD PDF"class="material with-radius">DOWNLOAD PDF">DOWNLOAD PDF"class="material with-radius">DOWNLOAD PDF">DOWNLOAD PART 1

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