Latest Amendments in DIFC companies law of UAE

Introduction

On 8th March 2022 ,His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity being  the Ruler of Dubai, announced the amended Law No. 2 of 2022 of Dubai International Financial Center (the DIFC) which was enacted to strengthen alignment with leading global financial centers. The DIFC, the leading global financial center in the Middle East region is trying to reform its legal structures to meet the world standard by incorporating the amendments that maintain the regulatory support associated with worldwide best practice.

Amendments in Companies Law

The enactment facilitates amendments to Data Protection Law of 2020, Insolvency Law of 2019 (and Insolvency Regulations), Electronic Transactions Law of 2017, Trust Law of 2018, Strata Title Law of 2007 and Common Reporting Standard Law of 2018, as well as to the rules of interpretation in various DIFC Laws.

 Under this topic we are discussing the related amended law under new companies law of DIFC.

Data Protection Law:- 

DIFC has committed to remain on top in respect of Privacy legislation so the amendments in Data Protection Law envisage that DIFC is intending to fulfill its commitment to maintain its position at the forefront in the region by protecting the data. The salient features of new amendments in Data Protection amendments may be discussed as follows:-

• Clarity regarding judicial process:- 

 The individual has been granted more clarity regarding the judicial process through modifications in data protection.

•  According to International Practice:-

 The new amendments are brought forth  to  align with international best practice more closely.

•  To practice the setting rulings in Europe:- 

By following the latest precedent-setting rulings in Europe regarding data subjects’ rights, the law has been amended to enhance privacy.  

• Better accountability:-

Better accountability is essential for Controllers and Processors where individuals’ rights may be impacted by giving  access to data that is considered vexatious or repetitive.

• Refined Commission powers:-

The powers of the Commission  have  been refined concerning available information while determining the contravention of the Data Protection Law.

•  According to DIFC courts law:-

In respect of payments and impositions of court fees by DIFC Authorities are made up according to  the intention of DIFC Courts Law. 

Insolvency Law and Insolvency Regulations  

 Decree Law No. 19 of 2019 enforced in January 2020 enacted by the UAE Cabinet in respect of insolvency to proceed to cases of insolvency of natural persons. The law was introduced to enhance the ease of business by creating a favorable competitive environment in the UAE for the financial issues of individuals as well as business families by giving them protection against the unpaid debts due to their bankruptcy. The following are the main provisions of the law:-

•  Support to individuals under financial crisis:-

The law will support individuals who are under financial crisis and are facing fiscal difficulties while settling their debts.

• Help in rescheduling the debt:-

The law will help individuals reschedule their debts and give them the opportunity to take new concessional loans

• Protection against legal prosecution:-

The new law will protect the debtors from legal prosecution, decriminalize the financial obligations of the insolvent person and give them an opportunity to work, be productive and provide for their families.

• Settlement of debtor financial obligation:-

One or more experts will be appointed by the court to settle the financial obligations of the debtor. The expert will coordinate with the debtor and creditor to come up with a plan to settle the financial liabilities within three years.

•  Enhancing the creditworthiness:-

The law contributes to enhancing the creditworthiness of the country in the long run and ensures an enabling environment that facilitates entrepreneurship and provides favourable conditions for doing business.Amendments to the Insolvency Law bring bonding requirements in line with current practices in the UAE and ensure consistency in the liquidator’s reporting obligations in respect of the different types of liquidation procedures available under the Insolvency Law. 

• Electronic Transactions Law

 The Government of Dubai has a vision to make the country paperless, so the same is the strategy of  DIFC in view of expanding the law i.e electronic signature,contracts and records regarding real estate contracts , sales,purchase and long term lease etc. 

Trust Law

The DIFC Trust laws have been amended by modifying the definitions of the Ultimate Beneficial Owner or real beneficial owner under the Trust Law. The Financial Action Task Force has made recommendations to clarify the definition of Ultimate Beneficial Owner or real beneficial owner so amended accordingly.(chk)

Strata Title Law

The Amendment Law incorporates minor amendments to align certain definitions of the Strata Title Law with the respective definitions of Real Property Law of 2018, as well as correcting typographical errors.

Common Reporting Standard Law

Cabinet Resolution No.93 of 2021 has been announced to upgrade framework of the common reporting standard (CSR)  of DIFC to align with the  federal CSR framework.The Amendments for instance the right to appeal,process of enforcement,penalties and many other different developments introduced by the DIFC to ensure with the purpose of ultimately meeting the relevant standards issued by the Organisation for Economic Cooperation and Development (OECD). 

Rules of Interpretation

“day” and “ business” in different DIFC laws have been defined Under new regulations and the  Updates have been made to clarify this by following the Government’s decision to align the UAE working span and weekend schedule with global markets.

How HHS Lawyers Can Help You

DIFC laws and their amendments are quite difficult to understand for new business owners in the UAE. That is where the HHS Lawyers come into play. Our team of expert lawyers provides various services to ensure that your business complies and reaps full benefits from the legal frameworks put in place.

Our services include, but are not limited to the following:

• Legal Consulting: Our legal expert advice on updated DIFC laws and amendments with great expertise.
• Regulatory Compliance: We assist the client in compliance matters to ensure your business is following all legal requirements.
• Contract Review and Drafting: Reviewing and drafting contracts in light of the new amendments.
• Representation: Representation before courts and tribunals in case of disputes or litigation.

Contact HHS Lawyers today for more information about how we can help you with your specific legal needs. Let us help you get through the recent amendments and protect your business interests in the United Arab Emirates.