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Question & Answer

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Can power of attorney be used to buy or sell a property in the UAE?

A power of attorney is a legal way through it a principal can delegate his power and authority to the agent in order to act on his behalf to conclude legal transactions. Power of attorney might be general or limited (special). In general power of attorney can be used to buy or sell property according to the authority delegated to the agent and boundaries defined in the power of attorney.

How can an employee make a complaint about the breach of employment contract by employer?

By submitting a complaint by employee to the Ministry of Labor (MOL). Upon receipt of the complaint, the MOL will study the case and thereafter ensuring it has a legal ground, the MOL shall request the employer to put his case. On hearing of the both parties’ pleadings, the MOL shall make a decision with regard to the complaint. In case of non-compliance with the decisions of the MOL by either of them, the MOL will advise the parties to file a case with the competent court.

How can I register a property in Dubai?

In general registration of property in UAE can be done through the Land Department in each Emirate of the state. In Dubai, the Land Department is the authority entitled to register property and all type of transaction in connection with a real estate, for instance modification or transfer of title deed, mortgage and other transactions. By submitting the required documents to the Dubai Land Department, you shall be able to register a property and safeguard your rights.

How can patent be protected in the UAE?

intellectual property laws organize how a patent can be protected. An application will be filed in both English and Arabic accompanied by the required documents such as power of attorney, assignment in case of the applicant is not the inventor and a commercial license in case if the applicant is a business entity. When patent application is accepted by the patent office, it shall be assessed under the criteria of novelty, inventiveness and utility. After application is assessed, patent office will either accept or reject the application. Rejected application can be appealed within 60 days before the competent committee at the Ministry of Economy. If the patent office accepts the application, the applicant will then publish advertisements in the newspapers and pay the fees. Within 60 days of the publication, any interested party may file a notice of opposition to the decision to grant a patent. If no opposition is filed by the end of the 60 days period, a patent is granted and the UAE patent office issues a registration certificate evidencing the grant of patent. Patent is valid and enforceable for 20 years from the filing date.

How is employee annual leave regulated?

UAE Labor Law regulates the annual leave and states that the worker shall be entitled during every year of service an annual leave of no less than the following periods:

a) Two days for each month, should the period of service of the worker be at least six months and a maximum of one year.
b) Thirty days for each year, should the period of service of the worker exceeds one year. Should the service of the worker be terminated, the worker shall be entitled to an annual leave for the fractions of the last year.

How is number of overtime hours calculated?

UAE Labor Law regulates the calculation of overtime hours as follows:
Should the work circumstances require the carrying out by the worker of a work for more than the ordinary working hours, the additional period shall be deemed an overtime, for which the worker shall be paid a wage equivalent to the ordinary hourly wage with an addition of at least 25 % of the said wage.
Should the work circumstances require the carrying out by the worker of an overtime work between 9 p.m. and 4 a.m., the worker shall be entitled, in counterpart for the overtime, to a wage equivalent to the ordinary hourly wage with an addition of at least 50 % of the said wage.
Effective overtime working hours may not exceed two hours per day, unless such work is necessary for the prevention of the occurrence of a colossal loss, a serious accident or the removal or mitigation of the consequences thereof.

How is the distribution of the estate of non-Muslims after their death?

UAE courts shall apply Sharia law where there is no will by expatriate who is a non-Muslim in order to distribute his estate after his death. If he makes a will, he has chosen how he wishes his estate to be distributed after his death.

How is the end of service gratuity calculated?

UAE Labor Law states that the worker having spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service and the gratuity shall be calculated as follows:

  1. The wage of twenty one days for each of the first five years of service.
  2. The wage of thirty days for every additional year. Always provided that the total gratuity does not exceed the wage of two years.
How to sell a car of which lease payment is due?

Since the car is leased by the bank, you are required to settle your outstanding amount first in order to be able to transfer the car to new owner.

How to settle a loan prematurely?

In general, when a party takes a loan from a bank, there should be a loan agreement setting out the borrower obligations and ramifications in the event of failure of borrower to adhere to the terms specified in the loan agreement. Some of the banks allow early settlement so borrower might be requested to pay off outstanding loan amount plus early settlement fee while other banks may ask the borrower to pay the entire profit amount for the originally agreed tenure.

If a party has outstanding loan, what are the possibilities that he/she may get travel ban?

If the bank becomes worried that he/she is likely to abscond, the bank may request the competent court to implement a travel ban by showing documents that prove the amount is due and payable. However the bank has to prove and convince the court that the party is likely absconding.

Is it possible for a foreign company to own a property in UAE?

According to the UAE Commercial Company Law, a company can enjoy its own legal identity which allows company to have and own its own assets separate from the one of its shareholders. Accordingly, as per regulations that govern ownership of assets owned by a foreign company, a property can be registered in the name of a foreign company within specific areas obtaining license from JAFZA.

What are the benefits of registering tenancy contract with Ejari (it is an online registration system initiated by Real Estate Regulatory Agency that requires all Dubai rental or lease contracts to be recorded at this portal)?

Registering your tenancy contract through Ejari system gives you legalized tenancy contract, the ability to protect your legal rights and to fully audited transactions when problems arise. Ejari registration is now required for:

  • Getting new residency visa or renew expired visa
  • Obtaining DEWA services
  • Strat up your own business
  • Obtaining internet and other media services
What are the functions of the liquidator?

In general a liquidator shall carry out the functions entrusted to him under the Commercial Company Law or the ones outlined in company’s memorandum of association, if any.
The main duties of a Liquidator include:

  • Take possession of a company’s property including its books and records;
  • List the people who are owe money and how much they owe;
  • List the people who must contribute to the company’s assets on its winding up and how much they have to pay;
  • Investigate the company’s affairs;
  • Sell the company’s assets;
  • Pay the company’s debts in the order stated by the  law;
  • Distribute any remaining money to the members in line with their entitlements.

When the voluntary liquidation is complete, the liquidator must:
Write a report on the winding-up;
Call a general meeting of members;
Call a creditors’ meeting (in the case of a creditors voluntary liquidation).

What are the implications of misusing the company's identity?

This issue is governed by Article No. 65 of the Federal Penal Code which criminalizes the unlawful acts committed for corporation account or in its name by its representatives, directors or agents. The punishment that may be imposed against a convicted corporation is limited to a maximum fine of AED 50,000. Nevertheless Article No. 22 gives the victim the right to sue the company and ask for compensation for harm suffered as a result of the crime.

What are the new decrees of Ministry of Labor regarding labor rules?

MOL has declared three ministerial decrees in respect of organizing the contractual relationship between the employer and the employee. The new rules are designed to protect both the employer and the worker by setting out clear rules that identify the rights and duties of the party to an employment contract. The new rules addressed vital  issues in the labor contract like standard work contract (decree764), termination of limited contract and unlimited contract(decree765) and granting new work permit  (decree 766).

What are the obligations of the landlord during the lease term in Dubai according to the law?

The legislator has assigned to each Emirate the task of legislating its own tenancy law according to its own needs. In Dubai, according to the law that regulates the relationship between the landlord and tenant, landlord obligations during the lease term include:

  • Handing over the property in good condition which allows the tenant full use stated in the tenancy contract.
  • Unless otherwise agreed by the parties, the landlord will, during the term of lease contract, be responsible for real property maintenance works and for repairing any defect or damage that may affect the tenant’s intended use of the real property.
  • The landlord shall not make to the real property or any of its amenities or annexes any 107 changes that would prevent the tenant from full use of the real property as intended.
  • The landlord must provide the tenant with the approvals required to be submitted to the official entities in the Emirate whenever the tenant wishes to carry out decoration works or any other works that require such approvals, provided that such works do not affect the structure of the real property and that the tenant has the official documents requesting such approvals.
What are the obligations of the tenant during the lease term in Dubai according to the law?

The tenant’s obligations according to the UAE Law include:

  • The tenant must pay the rent on due dates and maintain the real property in such a manner as an ordinary person would maintain his own property.
  • The tenant may not make any changes or carry out any restorations or maintenance works to the real property unless so permitted by the landlord and after obtaining required licenses from the official entities.
  • The tenant must surrender possession of the real property to the landlord in the same condition in which the tenant received it at the time of entering into the lease contract except for ordinary wear and tear or for damage due to reasons beyond the tenant’s control. The tenant must pay all fees and taxes due to government entities and departments for use of the real property as we well as any fees or taxes prescribed for any sub-lease.
  • Unless otherwise agreed by the parties, upon vacating and surrendering possession of the real property, the tenant may not remove any leasehold improvements made by the tenant.
  • The tenant may not assign the use of or sub-lease the real property to third parties unless written consent of the landlord is obtained.
What are the procedures for a marriage of Muslim and Non-Muslim in Dubai?
  • Before he visits the court to start marriage procedures, he needs to register electronically through the court website. After he fills the electronic form and submit it online, he will receive a reference number in his email which he should carry along with him on his visit to Dubai court.
  • At least one party to the marriage contract should have employment or residence visa in Dubai.
  • Party to marriage contract should bring their identification card and passports.
  • A spouse’s age should not exceed double of their partner. If one of the spouses is less than 18 years old, approval from chief justice of personal status court must be obtained.
  • A pre-martial certificate issued from a Dubai government hospital to rule out diseases such as HIV.
  • Party to the marriage contract should present themselves along with bride’s father or if the father is dead or unable to participate, the closest male guardian to the bride is required and two Muslims male witnesses.
  • Fees for the marriage contract.

In addition to the above conditions there are other special conditions for newly converted Muslims, divorcees, widows and for marriage of UAE female with expatriates.

What are the remedies for unfair dismissal of employees?

If an employee got unfair dismissal he/she shall be entitled to the following:

  • A notice period or any amount due in lieu of the notice period in the case of an unlimited contract.
  • If the contract is unlimited term, compensation for unreasonable dismiss if the contract was terminated by the employer for unreasonable cause
  • If the contract is for limited term, an amount equivalent to three months’ salaries or period until the end of the contract, whichever is shorter unless otherwise stipulated in the contract.
  • Amount due for unutilized leave or any part therefore.
  • Due payment for overtime works or unpaid any salaries as per the Labor Law.
  • End of service gratuity as per the Labor Law.
  • Repatriation expense as per the Labor Law.
What are the situations of termination of employment contract without notice from the employer?

According to UAE Labor Law Article No. 120, the employer may dismiss the employee without notice in the following cases:

  1. Should the worker assume false identity or nationality or submits false certificates or documents.
  2. Should the worker be appointed under probation and the dismissal occurs during or at the end of the probation period.
  3. Should the worker commit an error resulting in colossal material losses to the employer, provided that the Labor Department is notified of the incident within 48 hours of the knowledge of the occurrence thereof.
  4. Should the worker violate the instructions related to the safety at work or in the work place, provided that such instructions be written and posted in a prominent location and he is notified thereof should he be illiterate .
  5. Should the worker fail to perform his main duties in accordance with the employment contract and fail to remedy such failure despite a written investigation on the matter and a warning that he will be dismissed in case of recidivism.
  6. Should he divulge in any of the secret of the establishment where he works.
  7. Should he be convicted in a final manner by the competent court in a crime of honor, honesty or public ethics.
  8. Should he be found in a state of drunkenness or under the influence of a narcotic drug during work hours.
  9. Should he assault during the work the employer, responsible manager or co - worker.
  10. Should he be absent without valid cause for more than twenty non - consecutive days in one year or for more than seven consecutive day
What are the steps and procedures for company liquidation?

Liquidation is of two kinds; voluntary or by a court decision. According to Federal Law regarding Commercial Companies,
company may be liquidated in the following circumstances:

  • If the majority of the shareholders decide to liquidate the company.
  • If the company made a cumulated losses which is greater than authorized capital. A court ruling to dissolve and liquidate the company.

If the liquidation is upon a court decree, then the court shall appoint a liquidator and define the method of liquidation. In voluntary liquidation, the shareholders or the general assembly shall appoint a liquidator.
The aforesaid law states that, for the liquidation of the company, provisions of Articles hereunder shall be complied with, unless a method for liquidation is provided for in the company memorandum or articles of association or an agreement between the partners is reached upon dissolution.

Liquidation shall be carried out by one or more liquidator(s) appointed by the partners or by the general assembly with the simple majority whereby the company resolutions are being issued. If liquidation is initiated under a court decree, the court shall define the method of liquidation and appoint the liquidator. In all cases, functions of liquidator shall not end as a result of death of the partners or their bankruptcy, insolence or sequestration, even if he was appointed thereby.

What are the steps in establishing business in Dubai?

Before start up new business in the city of Dubai, there are several steps a party must follow in order to obtain trade license:

  • Select business activity
  • Select legal form (sole proprietorship, civil company, limited liability company, private shareholding company /private joint-stock company, public shareholding company, simple limited partnership, partnership company,
    branch of a foreign company/representative office, Intalaq - home-based business for UAE nationals and SME license for UAE nationals)
  • Select trade name
  • Apply for initial approval
  • Prepare memorandum of association, articles of association and local service agent (LSA) contract where applicable
  • Establish business location
  • Get approval
  • Get the license and commence your business
What are the types of employment contracts under UAE Labor Law?

According to the UAE Labor Law, employment contract might be either for limited or unlimited period. Limited contract shall not exceed 2 years and the contract may with a mutual agreement be renewed one or more times for similar period or periods. Unlimited contract, on the other hand, is considered for unlimited period from the day of its commencement in any of the following cases:

  • If it is not concluded in writing
  • If it is made for unlimited period
  • If it is made in writing for a limited period and continues to be applied by both parties after lapse of its period without a written agreement between them

If it is concluded for performance of a specific job for which no period is fixed or if the job by its nature calls for renewal and had remained in force despite the completion of the work agreed to.

what are the types of legal forms of businesses that can be formed in the UAE?

UAE Commercial Company Law authorizes different entities that can be formed in the UAE including:

  • Sole proprietorship or individual company
  • Civil work or professional company
  • A branch of foreign company
  • Limited liability company
  • Free Zone Company
  • Offshore company

Some of these entities require designation of a UAE local representative agent. Limited liability company requires the local representative to be a local sponsor not an agent and most hold at least 51% of the shares in the LLC. The Free Zone Company, no local agent or sponsor is required, permits 100% foreign ownership and is tax free. An offshore company has plethora of benefits including but not limited to, 100% tax exemption, ability to be 100% foreign owned. An offshore company may be set up in free zone areas like JAFZA, DAFZA, RAKFTZ, Sharjah and Ajman.

What are the types of life insurance?

First the party needs to decide nature and term of life insurance he/she is looking for. When it is decided upon, he/she need to outline, what he/she wants the insurance to cover, what amount of coverage he/she needs, how long will he/she needs the coverage for and finally what his/her budget is.

What are the types of properties entitled for mortgage?

According to the law and regulations in UAE, any property can be mortgaged as guarantee of the loan provided that the mortgagor is the owner of the property or has the right to conduct legal actions on the property.

What does continuous service mean?

UAE Labor Law defines continuous service as: Uninterrupted service with the same employer or his lawful successor from the date of commencement of the service.

What does financial crime mean?

Financial crimes are commonly considered as covering the following offences:

  • Fraud
  • Electronic crimes
  • Money laundering
  • Terrorist financing
  • Bribery and corruption
  • Market abuse and insider dealing
  • Information security
What is a post-dated cheque?

A post-dated cheque (PDC) is cheque written for a date in future used by beneficiaries to ensure to receive the money they are entitled to, resulted by borrowing or any other transactions. In loans and mortgage transactions, the bank will ask the borrower to sign a post-dated cheque (in mortgagee transaction some banks will ask this, in addition to mortgaged property) in order to be used by the banks in the event of the failure of the borrower to pay the outstanding loan. A PDC allows the bank to cap the loan amount. Bounced PDC can result in very serious legal consequences on the issuer or the person who signs a PDC. This is same as ordinary bounced cheque in which offender shall be imposed detention and fine or both. In general practice, a PDC has been used in many civil and commercial transactions.

What is a will?

A will is a legal document through which the testator declares his intentions to how he wishes his estate to be distributed and among whom following his death. In UAE it is important for a non-Muslim expatriate who owns a property in the UAE to draft a will, because in the absence of a registered will, courts shall apply Sharia law to distribute his estate among his inheritors. Non-Muslim can now register a will under International Common Law. The DIFC lunched the DIFC Wills and Probate Registry (WPR) that can help non-Muslim expatriates to register their will.

What is an employment contract?
According to the UAE Labor Law, an employment contract is any agreement, whether for a limited or for an unlimited period, concluded between an employer and an employee under which the latter undertakes to work in the service of the employer and under his management or control against a remuneration payable to him by the employer.
What is Initial registration of property?
Initial registration is registering an incomplete sale (i.e. when only part of the value of the property has been paid). The initial registration is designed for properties sold off-plan. Certificate is issued to indicate the sale process and the paid and pending amounts. The purpose of this type of registration is to safeguard the rights on owners and investors in case of re-sale.
What is maximum number of working hours?
UAE Labor Law governs the maximum working hours and states that the maximum number of ordinary working hours for adult workers shall be eight hours per day or forty eight hours per week. The number of hours may be increased to nine hours per day for people employed in trade, hotels, cafeterias, security and other jobs whose addition may be made by virtue of a decision from the Minister of Labor. Furthermore, the daily number of working hours may be reduced for strenuous or harmful works and such by virtue of a decision from the Minister of Labor and Social Affairs. The ordinary working hours shall be reduced by two hours per day during Ramadan. The commutation periods spent by the worker from the place of residence to the worksite thereof shall not be calculated within the working hours. The daily working hours shall be so regulated that no worker shall work for more than five successive hours without breaks - for rest, meals and prayer - amounting in aggregate to not less than one hour. Such breaks shall not be included as part of the working hours.

However, in factories and workshops where work is organized in the form of successive day and night shifts and in processes where work has to continue uninterrupted for technical and economic reasons, the manner in which breaks for rest, meals and prayer are to be granted shall be specified in a resolution by the minister.
What is probationary period?

An employee may be appointed for probationary period not exceeding six months according to the Labor Law. During the probationary period, the employer may terminate the employment contract without giving a notice and/or ‘end of service gratuity’. Appointment of particular employee on probation basis in the service by particular employer may not be made more than once. However if the employee passed the probationary period satisfactorily and remained in service, such period of service shall be added to total period of his service.

What is process of trademark registration?

Registration process include initial search to make sure if the trademark registered before or not, if not then an application with the required documents including the image of the targeted trademark shall be filed and fees must be paid. Advertisements in two local newspapers will be made requesting the registration of the trademark. Within 30 days of the publication any interested party may file a notice of opposition to the registered trademark. The Registrar's decision about the opposition may be appealed to the ministry's committee and the committee's decision may be appealed to the competent court. In case if no opposition is lodged within the time limit above, a trademark is registered and a certificate of registration is issued. A trademark registration is valid for 10 years in the UAE and the registration can be renewed for the same period.

What is the difference between the basic salary and the gross salary?

Basic salary is the pay provided for in the employment contract during its validity between both parties. On the other hand, a gross salary is the pay provided in the employment contract plus allowances of whatever kind are not included in the basic salary.

What is the legal position on employee working during his annual leave?

UAE Labor Law states that should the employee works during his annual leave as per requirement of the employer, the employee shall receive a basic wage and a housing allowance, if any for the days of the annual leave. Should the work circumstances require that the worker to work during his total annual leave or a part thereof, the leave during which the worker worked is not carried forward to the next year, the employer must pay the worker the wage thereof, in addition to a leave allowance for the days of work, equal to his basic wage. In all cases, the worker may not be required to work during the annual leave for more than once within two consecutive years.

What is the punishment for bounced cheque?

As per the UAE Penal Code which reads: “Detention or a fine shall be imposed upon anyone who, in bad faith, gives a draft cheque without a sufficient and draw able balance or who, after giving a cheque, withdraws all or part of the balance, making the balance insufficient for settlement of the cheque or if he orders a drawee not to encash a cheque or makes or signs the cheque in a manner that prevents it from being cashed. The same penalty shall apply to anyone who endorses a cheque in favor of another or gives him a bearer draft, knowing that there is no sufficient balance to honor the cheque or that it is not drawable”.  If you sign a cheque and it bounces due to insufficient funds in your bank account, this is a criminal offense. The victim may approach police station to report the offender. Police will conduct search to nab the accused, and once the accused reported to the police station, police would give chance for the parties to settle the case amicable. If there is no room for the amicable solution, then police shall register the case and transfer it to the public prosecution and later to the court. Case will be closed toward the defendant, if he paid value of the cheque or if the complainant withdraws the complaint before the court awards final judgement and if the defendant paid the value of the cheque or the complainant withdraws the complaint after the award of the court’s judgement, then stay of execution will be ordered. Court has discretion to punish the accused by detention or fine as it may find fit thereafter.

What punishment could a Non-Muslim faces for drinking of alcoholic beverage in UAE Penal code?

According to the federal penal code punishment shall be imprisonment for not less than one month nor more than six months and a fine of not less than one thousand dirhams And not more than two thousand dirhams or either of them.

When can a mortgagor dispose the mortgaged property?

A mortgagor cannot dispose or conduct any transaction on the mortgaged property without getting the approval of the mortgagee. A mortgage contract shall set out the obligations of both mortgagor and mortgagee.

Who pays the registration cost of title deed?

The registration cost of title deed should be shared between the buyer and the seller but in practice it’s paid by the buyer.

Would UAE law or its land law apply to personal matters of expatriates?

The UAE Personal Status Law shall be applied for both Emiratis and expatriates, but if the litigants are not UAE nationals, they can request the court to apply the law of their land.