Weekly Spotlight Archives - Page 10 of 19

Weekly Spotlight: ADGM Courts Issue Litigation Funding Rules

21/04/201911/12/2019
by Benjamin Filaferro

Abu Dhabi Global Market’s Courts have issued the Litigation Funding Rules. They have come into effect immediately. They are the first of their kind in the region and are designed to provide parties and funders with greater certainty on the enforceability of funding arrangements in proceedings for resolving disputes.

They have been issued following growing interest in third party funding of parties to manage their litigation and arbitration proceedings. Amongst other things, the Rules state a Funder’s principal business must be in funding proceedings to which the Funder is not a party and the Funder must have qualifying assets of at least $5 million. In addition, the Litigation Funding Agreement must contain some minimum terms including to ensure there are no conflicts of interest, the Funder’s involvement in the settlement of proceedings and the Funder’s obligations about dealings with lawyers.

Updated anti-money laundering rules are also now in force in the Global Market as well. It comes ahead of an assessment of the UAE by the Financial Action Task Force this summer. The updated rules also cover anti-terrorist financing.

The Litigation Funding Rules are now available on Lexis Middle East : https://www.lexismiddleeast.com/regulatory/AbuDhabiGlobalMarket/ADGM_ADGM_Litigation_Funding_Rules_2019/

Weekly Spotlight: The UAE Announces Changes to Guarantees System for Domestic Workers

14/04/201911/12/2019
by Benjamin Filaferro

UAE officials have announced changes to the country’s guarantees system for domestic workers. Under the changes, domestic workers will now be able to be replaced or the hiring fees fully or partially refunded within the two-year recruitment contract.

The guarantee for those domestic workers who are recruited through the Tadbeer system has been extended to two years, in line with the Implementing Regulations to the Domestic Workers’ Law. The Law had previously granted a six-month guarantee period during which time an employer could get their recruitment fees refunded or replace a worker.

Under the new rules full recruitment fees will be refunded or an employee is replaced as an employer may want during the first six month of the contract or the probationary period in the event of termination of the contract by an employee illegally, quitting without an acceptable reason, the employee being unfit or unable to carry out their duties as required and agreed on.

After the probationary period and up to the end of the recruitment contract, part of the recruitment fees will be refunded if an employee terminates the contract illegally or quits without an acceptable reason. The amount refunded will be calculated on the basis of the remaining period of the contract. Recruitment firms will have to refund the fees to an employer within a month of the date an employer returns an employee or reports their absence from work. Where an employer specifically named a domestic worker to be recruited and the recruiting firm hired them, no recruitment fees will be refunded.

Weekly Spotlight: New Consultation Launched by the ADGM on Amendments to the Market’s Employment Regulations

08/04/201911/12/2019
by Benjamin Filaferro

The Registration Authority of Abu Dhabi’s Global Market has launched a public consultation on proposed amendments to the Market’s Employment Regulations. The consultation ends on 28 April 2019. The consultation includes a proposal for a new rule to govern work carried out by individuals not sponsored by Global Market entities in the Global Market.

The amendments aim to enhance the Market’s employment framework and make it appealing for both employers and employees. The proposed amendments have been developed in light of international practices and standards. The key proposals include introducing a temporary work permit regime which will allow individuals seconded from other jurisdictions or outsourced from non-Global Market entities to officially work in the Market and facilitate the engagement of interns, with or without pay by Global Market entities

It will also allow temporary freelancers to operate in the Global Market subject to a temporary work permit being obtained for them and add provisions for ‘overtime’ and ‘overtime compensation’ for employees, except for those who are employed in managerial or supervisory positions.In addition, it will introduce amendments to the Ramadan working hours provision and sick leave pay provisions and introduce a one-way repatriation flight ticket entitlement to employees

Finally, it will add protective provisions for the employment of young people between 15 and 18, add a provision to confirm the application of the Federal Law Concerning the National and Reserve Service in the Global Market and introduce amendments to the Protection of Wages and Hiring Employees sections of the Abu Dhabi Global Market Employment Regulations (Compensation and Awards Limits) Rules 2016.

Weekly Spotlight: Greater Insights into the Implications of the UAE Standalone Healthcare Data Protection Law

31/03/201911/12/2019
by Benjamin Filaferro

An insight piece from Clyde & Co provides greater insights into the implications of the standalone healthcare data protection law in the UAE. Federal Law No. 2/2019 regulates the use of technology in healthcare and is the first piece of federal legislation which directly addresses data protection principles. The new rules will be relevant to healthcare providers, insurers and companies delivering healthtech solutions in the UAE market. Affected organisations will include healthcare providers but also medical insurance businesses, healthcare IT system suppliers and providers of outsourced services to the health sector, such as cloud service providers.

Amongst other things, the Law establishes a central IT system and mandatory interoperability standards for the health sector throughout the UAE and creates a national IT strategy for healthcare. In addition it creates ‘data protection’ obligations and restrictions, in particular in relation to confidentiality, integrity, sharing, storage and retention of data. However there are derogations from data sharing restrictions to promote scientific and clinical research and to allow the necessary exchange of information with the insurance industry. Finally disciplinary committees in each local Emirate health authority to enforce the law and apply sanctions for breach will be established. Federal Law No. 2/2019 was published in UAE Official Gazette, 647 of 2019 on 14 February 2019.

Weekly Spotlight: Saudi Arabia Has Issued New Zakat Regulations

24/03/201911/12/2019
by Benjamin Filaferro

Saudi Arabia’s General Authority for Zakat and Tax has issued the updated Zakat Regulations in Arabic.

The Regulations are subject to certain exceptions, effective for financial years beginning on or after 1 January 2019 and supersede the provisions of all the previous Regulations and any conflicting circulars, instructions and Decisions.

The key changes include, amongst other things, new rules on how finance activities will be treated for Zakat purposes and a change to the Zakat rate applicable to the Zakat base. A permanent establishment of a non-resident Saudi or GCC national will be treated as a Zakat payer subject to a certain condition being met.

Weekly Spotlight: Oman’s Capital Market Authority Announces the New Companies Law

17/03/201911/12/2019
by Benjamin Filaferro

Oman’s Capital Market Authority has announced the new Companies Law. Oman Sultani Decree No. 18/2019 will be enforced from 1 April 2019 and Oman Law No. 4/1974 will be repealed. The Authority also announced they will be responsible for enforcing all its provisions, except the registration of listed companies. The new Law was issued through Oman Sultani Decree No. 18/2019. Under the Law, a holding company will take the form of a joint stock company unlike previously where a holding company could be a limited liability or joint stock company. A new Article on establishing professional firms has also been introduced and special rules for how they are regulated will be issued in due course as will the Implementing Regulations to the Law.

Elsewhere, Oman’s Sultan has issued a Decree approving the Selective Tax Law which will come into force 90 days after the issuing of the Sultani Decree. It will see tobacco product, alcohol, energy drink and pork product prices increase 100% and carbonated drink prices by 50%. Oman Sultani Decree No. 23/2019 will come into force in June 2019 and the Sultanate is the fifth GCC country to introduce it. Bahrain, Qatar, Saudi Arabia and the UAE have already introduced the tax.

Weekly Spotlight: The New DIFC Employment Law Introducing Extensive Changes to the Current Law Expected to be Enacted Shortly

10/03/201911/12/2019
by Benjamin Filaferro

A new employment law for the DIFC is expected to be enacted shortly, following a consultation in early 2018 and subsequent amendments made during the course of last year. The DIFC is a financial free zone in Dubai, UAE and is home to many leading financial institutions, law firms and other professional services companies. The DIFC is an independent legal system with its own laws and courts. The current employment law for DIFC companies is DIFC Law No. 4/2005, as amended by DIFC Law No. 3/2012 (DIFC Employment Law) which will be replaced in its entirety by the new law once it is enacted.

The proposed new law introduces quite extensive changes to the DIFC Employment Law. For many of the changes, the intention is to strike a fairer balance between the respective rights of employers and employees than under the current DIFC Employment Law, for example in relation to employee leave entitlements and termination benefits. Other changes are reflective of recent developments and trends in working practices, for example part-time employment and secondment arrangements which are not expressly provided for under the DIFC Employment Law. Certain changes are intended to rectify unintended consequences of the current wording of the DIFC Employment Law, whereas others are being introduced from a compliance and enforcement perspective, including the right for the DIFC Authority to inspect DIFC companies’ premises and records and to impose monetary fines (up to $10,000) for non-compliance.

One of the most important developments is the proposed expansion of the anti-discrimination provisions of the DIFC Employment Law. In particular, under the proposed new law there will be additional protected characteristics and the introduction of various remedies including court declarations, recommendations and most importantly, significant monetary compensation for an employee who has suffered unlawful discrimination. In light of the extensive changes under the proposed new law, DIFC employers should prepare to have their employment contract templates and HR policies reviewed and updated to ensure compliance with the new law. Consideration must also be given to how existing employees’ contracts and benefits will be dealt with in light of the new developments. More broadly, DIFC employers will need to carefully review their policies, procedures and general approach when dealing with HR and employment matters generally (from recruitment and hiring through to the termination of employment) to ensure the company’s legal risks are appropriately managed, particularly in light of the increased scope (and repercussions) for employee discrimination claims under the new law.

Weekly Spotlight: Final Rules on Crypto-Assets Activities Issued by Bahrain’s Central Bank

03/03/201911/12/2019
by Benjamin Filaferro

Bahrain’s Central Bank has issued the final rules on various activities related to Crypto-Assets, including licensing, governance, minimum capital, control environment and risk management. The Rules are the first of their kind in the region and are aimed at ensuring Crypto-Asset activities are regulated effectively. They also cover anti-money laundering and anti-terrorist financing, business conduct standards, avoiding conflicts of interest, reporting and cyber security for these activities.

In addition, there are provisions on supervision and enforcement standards including those provided by a platform operator as a principal, agent, portfolio manager, adviser and a custodian in or outside Bahrain.

Those licensed by the Central Bank as crypto-asset exchanges will have additional regulatory requirements to comply with. These additional requirements relate to order matching, pre and post-trade transparency, measures to avoid market manipulation and market abuse and conflicts of interest. They also state there is a need for enhanced due diligence when onboarding new clients, requirements to ensure no encrypted safe custody accounts or ‘wallets’ are maintained which cannot be retrieved, a mandate to ensure keyman risks are adequately managed including by having the necessary insurance covers and clients are educated and given clear instructions on using safe custody wallets.

Weekly Spotlight: Key Company Law Changes in Oman Sultani Decree No. 18/2019

24/02/201911/12/2019
by Benjamin Filaferro

Oman Official Gazette, issue 1281 has included Oman Sultani Decree No. 18/2019 and at the same time some of the company law changes have become clearer. According to legal experts, Oman Sultani Decree No. 18/2019 has amended the company ownership rules for small firms. It also replaces individual institutions with sole proprietorships who will be regulated differently. Previously companies in the Sultanate could only be established with two proprietors.

Other changes include facilitating the process for companies to turn into SAOGs without the need to have a capital of 2,000,000 Riyals. In addition, these companies will now be regulated by the Capital Market Authority. It will also be easier for companies to merge and there are measures to help struggling companies, so they don’t have to declare bankruptcy. There are various guarantees including a public mandate for insurance to ensure bankrupt companies are insured. Voluntary liquidation must also be completed within three years now and judges can oversee liquidations.

Elsewhere the Government is considering a new Foreign Investment Law. If it is approved, it will allow foreign companies or individuals to increase their ownership in local companies to up to 100%. Currently foreign companies must have a local partner to do business in the Sultanate. The local partner must own 33% of the company. Additional restrictions on foreign entities having property assets or minimum capital requirements could also be introduced. Disputes will also be able to be settled by international arbitration.

Weekly Spotlight: Executive Regulations to Omani Income Tax Law Amended

18/02/201911/12/2019
by Benjamin Filaferro

Oman Official Gazette, issue 1280 has included Executive Regulations clarifying provisions in the Income Tax Law. The new Regulations are found in Oman Ministerial Decision No. 14/2019 and the amendments include changes on withholding tax, deductibility of expenses, tax exemptions, administrative procedures and the tax ability of enterprises. They also detail new forms for providing or updating taxpayer information and procedures for obtaining a tax card, electronic filing and onsite inspection. The changes generally apply from 11 February 2019, although some have retroactive application to tax years beginning on or after 1 January 2018. Taxpayers should check these amendments for implications they may have on their tax returns.

Oman’s tax authorities are also expected to begin issuing Tax Cards for all corporate entities, including LLCs, SAOCs, SAOGs, branches of foreign companies and permanent establishments operating in the Sultanate shortly. The Cards are mandatory for companies following amendments to the Income Tax Law which were issued last year. The cards will be either chip-based or take the form of an electronic document with a Unique Identification Number. Card applications will have to be submitted on the Tax Department portal once the forms are available online.