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NEWS & PUBLICATIONS

The First-Ever UAE Federal Arbitration Law Published

June 17, 2018

UAE Federal Law No. 6 of 2018, which was issued on 3 May 2018 and formally promulgates a new arbitration law for the UAE, has finally been published. The new law repeals the previous provisions contained within UAE Civil Procedures Law No. 11 of 1992 and shall apply to all arbitral proceedings that are ongoing at the time the law comes into effect.

The new law consists of 61 articles and is based on the United Nations Commission on International Trade Law [UNCITRAL] Model Law.

 

It is expected that the new law will significantly revamp the existing arbitration provisions. It will go a long way in consolidating UAE’s position as the most attractive hub for arbitration in the MENA region.

Stimulating Business Growth in Dubai and Abu Dhabi

June 11, 2018

In an effort to stimulate business growth and economic development, Dubai and Abu Dhabi are exempting companies from administrative fines imposed by Department of Economic Development.

The ruler of Dubai has issued a decree waiving fines imposed on businesses whose licenses have expired until the end of 2018. This decree is a positive step in promoting economic growth and consolidating Dubai’s position as one of the important commercial and economic centres internationally.

Meanwhile, Abu Dhabi said it will exempt businesses whose licenses have not been valid for more than 24 months and which have applied for renewal, liquidation or cancellation of trade license – from paying all delayed and accumulated fees.

FTA has introduced a new section in FTA Vat return

June 19, 2018

FTA has introduced a new section in FTA Vat return, after submitting the VAT return, it asks for "Voluntary disclosure" which needs to be submitted if there is any error in VAT Return and attach the supporting documents for that i.e a letter on company's letter head explaining the background facts and figures and other supporting documents.

 

So from now onwards, FTA is not just going to rely on figures, instead it will dig further to identify erros and penalize the companies for deception ti FTA or mistakes in VAT return.

 

 

Following two penalties shall be applied in case of errors in VAT Return.

 

Failure of a business to voluntarily disclose errors in a tax return, tax assessment, or refund application before a tax audit.

Three penalties are applied:

1.     (AED3,000) for the first time

2.     (AED5,000) in case of repetition

3.      50% of the amount unpaid to the Authority due to the error.

 

 

So it is strongly advised to get your VAT Return filed by appropriate tax consultants to avoid penalties and fines from FTA

New investment rules in the UAE: a natural culmination of a series of proposed legislative reforms

June 19, 2018

the UAE Cabinet’s decision to (i) allow 100% foreign ownership by global investors in the UAE mainland; and (ii) grant 10 year residence visas for investors in the fields of medicine and engineering, as well as university students who have excelled in their area of study.
 

The decision appears to culminate previous discussions on relaxing foreign investment rules and assists in steering the UAE further towards becoming an open market. This trend began with Federal Decree Law No. (18) of 2017 amending Article 10 of the Federal Law No. (2) of 2015 on Commercial Companies by allowing the Cabinet to decide on sectors in which 100% foreign ownership would be permissible. Further, the draft proposed investment law gave investors the signal that the UAE was ready to relax its foreign investment rules in certain sectors.
 

While the decision is a much awaited positive step for the UAE, information regarding the implementation and impact of the cabinet decision remains scarce. We predict the following considerations will be taken into account when implementing the decision with respect to permitting 100% foreign ownership:
 

  1. Agencies: The impact on distributors and registered commercial agents. If the decision allows for 100% foreign ownership in the area of retail and wholesale there will be a great impact on the current arrangements between large retail companies/ manufacturers and local UAE companies.

  2. Free Zones: The impact on free zones. While the free zones offer other incentives for foreign investors setting up in their respective jurisdictions, the main advantage remains 100% foreign ownership. As such, the decision relaxes the ownership restriction in all sectors and this may affect the operation of the various free zones available within the UAE.

  3. Other Laws: The implications on other laws and regulations. Most likely, the implementation of the decision will require the amendment of some other laws and regulations, e.g. the Commercial Companies Law which should be amended to allow for a foreign sole shareholder company. Also, regulations governing the issuance of immigration cards and application for residency visas.
     

UAE is ready to relax its foreign investment rules in certain sectors and for certain categories of global investors particularly now in the period leading up to Expo 2020.

UAE plans amnesty for visa violators

June 19, 2018

The  UAE's policy and wise leadership have not hesitated since the inception of this young country to take into account the humanitarian aspects and noble values, so as to ensure respect for human dignity and to provide an opportunity for all those who aspire to live on this good land
 

A general amnesty for foreign violators of the country’s residency laws will shortly be announced by the Federal Authority for Identity and Citizenship (FAIC), a senior official said on Monday.
 

Violators will have the option to either rectify their legal status through paying nominal fees, or leave the UAE voluntarily without having to suffer any legal consequences, along with waiving any fines that they may have due to their illegal stay.

The Cabinet has approved a new legislative package, including a review of the current residency system to allow a two-year extension of the residency period for the dependents of their parents after finishing their university studies.
 

A new decision has also been approved to exempt transit passengers from all entry fees for the first 48 hours. Transit visa can be extended for up to 96 hours for a fee of only Dh50. Obtaining transit visa will be facilitated by a number of express counter at the passport-control hall across UAE airports.
 

The Cabinet also granted people overstaying their visa a chance to leave the country voluntarily without a "no entry" passport stamp. A new 6-month visa will be introduced for job seekers who overstayed their visa but wish to work in the country.

As for Individuals who entered the UAE illegally, they will have the chance to leave voluntarily with a "no entry" stamp for two years given that they provide a valid return ticket.
 

Equally, in a step aimed at simplifying the process and easing the financial burden on individuals wishing to adjust or renew their visa, they can now do so for a fee without having to leave and re-enter the country.
 

The  Director General of Foreigners Affairs and Ports Department, said, "We are ready to implement the decisions of the Council of Ministers and will work diligently and round the clock to accomplish all the legal and administrative procedures required by the implementation process
 

All violators, sponsors and members of the public shall take advantage of the amnesty and the facilities provided by the government through this initiative—a far better than previous ones as it offers an opportunity for the offender to get a job and without having to leave the country.

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