Weekly Spotlight Archives - Page 3 of 19

UAE: UAE’s President has issued amendments to the country’s Commercial Companies Law (Federal Law No. 2/2015)

27/11/202027/11/2020
by Benjamin Filaferro

The UAE’s President has issued amendments to the country’s Commercial Companies Law (Federal Law No. 2/2015). Under the amendments, Federal Decree-Law No. 19/2018 will be repealed and the requirement for onshore companies to have a major UAE shareholder will be removed. The removal of the major UAE shareholder requirement is aimed at helping companies reduce overhead costs, make it easier for foreign investors in the country to do business and enable them to operate more flexibly.
In addition to that, the requirement for a UAE national or UAE owned company to be appointed as an agent will be abolished. Requirements for a company chair to be an Emirati and the board of directors to have an Emirati majority will also be repealed. They mean companies will be able to be fully established by non-Emiratis regardless of nationality.
Under other changes, joint stock and limited liability company provisions will be amended. Among other changes, the chair or senior executives of a company will be able to be removed if they are found guilty of fraud or abuse of authority. Shareholders will also now be able to sue a company in civil law for any failures of duty which cause damage. In addition, electronic voting at annual general meetings will be allowed.
There are also amendments aimed at boosting local capital market liquidity by amending the rules for companies wanting to go public. A company wanting to go public will have to have the approval of the relevant authorities and will be able to sell up to 70% of the company instead of the existing 30%.
The amendments will also allow local authorities to continue determining the level of participation by Emiratis in any company. Companies in strategic sectors, like oil and gas exploration, utilities and transport and State-owned entities will be exempt from the amendments. In terms of capital increases or decreases in public companies, a company will be able to approve its capital increase by issuing bonds and converting them into shares.
The Securities and Commodities Authority will be able to establish the controls and procedures required for evaluating in-kind shares and the names of stakeholders attending the general assembly meetings of companies.
Under the new Article 10 to Federal Law No. 2/2015, a committee including representatives of the relevant authorities will oversee activities which have a strategic impact and the measures required to license companies operating in these areas. Following the recommendation of the committee, the Cabinet will state which activities will be considered to have a strategic impact and the measures to enable these companies to be licensed.
Affected companies will have one year to comply from when the amendments come into force. However, this may be extended by an appropriate Ministerial Decision proposed by the Economy Minister.
While most of the amendments come into force next month, the changes related to foreign ownership, agency and boards of directors will come into force six months after they are published in the Official Gazette.

UAE: Economic Substance Regulation Notification Deadline Announced

20/11/202020/11/2020
by Benjamin Filaferro

The UAE’s Finance Ministry has announced all companies in the UAE which engage in any of the relevant activities under the Economic Substance Regulations have to submit a notification to the Regulatory Authority by 31 December 2020. This applies to those entities whose financial year ended on 31 December 2019. If they do not, they will face administrative penalties.
The Undersecretary to the Finance Ministry added the Ministry will launch the Economic Substance Regulations portal in the first week of December 2020. The aim of the portal is to simplify the process of submitting these reports and notifications by allowing companies to submit reports, notifications and supporting documents electronically.
To help affected companies prepare the necessary applications on the Portal, the Finance Ministry has published sample notification forms on its website and social media platforms. They have also published relevant guides and documents, and a notice regarding the submission requirements and deadlines.

UAE: Amendments to Law on Evidence in Civil and Commercial Transactions Approved

13/11/202013/11/2020
by Benjamin Filaferro

The UAE’s Cabinet has approved amendments to the Law on Evidence in Civil and Commercial Transactions (Federal Law No. 10/1992). A Decree-Law has been issued to this effect.
It has been amended to allow more remote communication technologies to be used in evidence-related procedures and adopt digital signatures and documents. In addition, they aim to legitimise e-hearing minutes which document witness testimonies, as well as judicial decisions, signed notary documents and other related provisions.
The amendments will also enable-signatures and e-documents to be approved and treated as official documents.
They also approved a Federal Law to amend the law regulating the notary public profession (Federal Law No. 22/1991). The amendments include provisions related to regulating the notary public profession, like simplifying the evidence-giving process for all parties and enabling the use of e-transactions in all notary public procedures. They also aim to create memos and verify evidence of identity. In addition, they aim to enable the registration, signing and payment of fees electronically.
Documents will have to be created and saved electronically and will be kept confidential. They will not be able to be circulated, copied or deleted from the electronic system without permission from the relevant administration of the notary public at the Ministry.
The Justice Minister will issue the necessary decisions to enable the use of information technology in notary public work.
The aim is to help digitalise Government services by encouraging electronic means of litigation and notary public services without compromising confidentiality, speed and flexibility and ensure national information security regulations and policies, both Federally and at an individual Emirate level are complied with.

UAE: Abu Dhabi Foreign Direct Investment License Issued

06/11/202006/11/2020
by Benjamin Filaferro

Abu Dhabi’s Economic Development Department has announced it has issued a foreign direct investment license. It has been issued in line with Federal Decree-Law No. 19/2018 and will enable investors to hold 100% ownership of their businesses in the Emirate. It covers 122 different economic activities in the agricultural, industrial and service sectors.
It targets businesses with total capital of between two and 100 million AED or more. The aim is to encourage more investment into the Emirate, diversify the Emirate’s economy and protect investors.
It will benefit foreign investors and UAE residents, including individuals, legal persons and foreign companies who are engaged in Foreign Direct Investment projects. The license can be applied for through the Department’s Business Centre by submitting the application, obtaining the approval after fulfilling all conditions and completing all the required documents and paying the relevant fees.
It covers agricultural sector activities, like the cultivation of grains, leguminous crops, vegetables, fruits and citrus fruits. Other activities which support crop and livestock production and seed processing for reproduction will also be able to get the license. It covers industrial activities like the manufacturing of food and beverages, Food and Beverage, products, clothing and leather production, wood and cork products and the production of plastics and synthetic rubber in its primary forms, fertilisers, pesticides and other agricultural chemical products. It covers service activities like legal consulting; accounting, auditing and tax advisory services; architectural and engineering activities; medical and dental clinics; veterinary activities; computer programming services; consultancy and research and development activities in science and technology.
The Department added certain activities cannot obtain the license without the approval of the UAE’s Cabinet. Postal and telecommunications services, audio and video media related services, petroleum exploration and production, ground and air transportation services, activities related to investigations, security and military sectors, the manufacturing of weapons, explosives as well as military equipment, devices and clothing, printing and publishing services, banking and finance activities, payment and cash handling systems, commercial agent services; insurance activities, medical retailing like private pharmacies; Haj and Umrah services, employment of labour, servants and recruitment of employees, activities related to poison control centres, blood banks and health quarantines and water, electricity and fisheries services are not covered.

UAE: Country’s Commercial Transactions Federal Law No. 18/1993 Amended

30/10/202030/10/2020
by Benjamin Filaferro

The UAE’s Cabinet has approved amendments to the country’s Commercial Transactions Law (Federal Law No. 18/1993). A Decree-Law to this effect has been approved. It will come into force in 2022.
The amendments include changing certain provision covering bounced cheques and the issuing of cheques without value, by providing fast, advanced and civil mechanisms to collect the outstanding payments. The amendments also re-define crimes involving cheques have been redefined.
In addition, several mechanisms and alternatives will be introduced to ensure payments are collected by cheque simply and quickly. For example, banks will have to partially pay the amount after deducting the total amount available to the beneficiary and make bounced cheques an executive document to be executed directly by an appropriate judge in court.
The amendments will introduce several ancillary penalties, including cancelling the cheque books of convicts and preventing them from obtaining new ones for up to five years. They will also be suspended from practising professional or commercial activities. Additional penalties for legal persons except banks and financial institutions will also be introduced. These penalties will include fines and licenses may be suspended for up to six months. Those who repeat violations will have their licenses revoked or dissolved.
Other amendments cover the opening of joint accounts between two and more people. If one of the joint account holders dies or loses legal control, the other joint account holders will have to notify the bank within ten days of the date of death or disqualification. The bank will then have to limit the ability to withdraw from the joint account within a party’s share of the account balance on the day of death or loss of eligibility.
This provision will apply from the day after the Decree-Law is published in the Official Gazette.
The aim of the amendments is to avoid criminal lawsuits and facilitate related procedures, by encouraging reconciliation and encouraging the value of the original cheque to be paid as the main condition a criminal lawsuit to be avoided.

UAE: Bankruptcy Law Amendments Approved

25/10/202025/10/2020
by Benjamin Filaferro

The UAE’s Cabinet has approved amendments to the country’s Bankruptcy Law.
The amendments to Federal Decree-Law No. 9/2016 add new provisions in terms of ’emergency situations’ which interrupt trade or investment. The aim is to enable individuals and businesses to overcome credit challenges in times of extreme events like pandemics, natural and environmental disasters and wars.
They are also aimed at ensuring obligations are met and losses are mitigated against in cases of default without prejudice to the Law and enable creditors to secure their rights.
The new amendments also state the debtor will be exempt from starting procedures to declare bankruptcy. If the debtor files an application which would be approved by the relevant court, they may reach a settlement with creditors. They may request a grace period, or negotiate a debt settlement period of up to 12 months.
In addition, the relevant court, where a bankruptcy application is approved, will not take any proceedings involving the debtors’ funds which are needed to keep businesses running during the set period in case they default on debt because of an emergency.
Finally, the amendments offer the possibility of getting new financing in line with specific terms and conditions to secure the liquidity needed to recover businesses and enable them to survive challenges in time of emergencies.
The amendments are part of the Government’s moves to develop the legal and legislative frameworks in various sectors, particularly the economic sector.

Oman:Decree No. 121/2020 on the VAT law approved by the Oman’s Sultan

17/10/202017/10/2020
by Benjamin Filaferro

Oman’s Sultan has approved Oman Sultani Decree No. 121/2020 issuing the Sultanate’s VAT Law. Under the Law, the tax will be imposed on most goods and services with specific exceptions detailed in the Law and subsequent regulations. It will be applied at every stage of the supply chain and on the import of goods into the Sultanate with specific exceptions specified in the Law and subsequent regulations. It will be levied at 5% and the Sultani Decree has been issued in line with a VAT Agreement signed by the GCC countries in November 2016.
Under Article 2 of Oman Sultani Decree No. 121/2020 the Chairman of the Tax Authority will issue the Implementing Regulations to the Law within six months of the Law being enforced. They will also issue the necessary decision to implement it. Anything which contravenes or contradicts it will be repealed.
The relevant Sultani Decree will be published in the Official Gazette and it will come into force 180 days after it is published in the Gazette.

Qatar: Non-Qataris Can Own and Use Real Estate

09/10/202009/10/2020
by Benjamin Filaferro

Qatar has set conditions and regulations for non-Qataris to own real estate in 25 areas in the country. Non-Qataris may own real estate and use it in these areas in line with Qatar Cabinet Decision No. 28/2020. The aim is to encourage more foreign investment in this sector in this country.
Non-Qataris will be able to own real estate in nine freehold areas and be able to use real estate in 16 other areas on a 99-year lease.
The Justice Ministry stated non-Qataris may also own a detached unit in one of the residential complexes and may also own detached units like offices and shops in commercial malls in areas which aren’t included in the 25 areas. However, they will not be able to modify or change the nature, shape or outward appearance of the unit.
In a related development, Qatar’s Justice Ministry and Interior Ministry have announced an Office for Non-Qatari Real Estate Ownership has been established.
It will provide real estate ownership and utilisation services through a single window for investors.
It provides all the requirements for the sale and purchase of real estate, residential units and offices in the areas covered by Qatar Cabinet Decision No. 28/2020. This specifies the areas in which non-Qataris may own and benefit from real estate and the conditions, controls, benefits and procedures for their ownership.
It will enable beneficiaries to obtain a title deed in under an hour and through an automated system which has been developed by the Interior and Justice Ministries, will enable the issuing of residency on completion of ownership or usufruct procedures, where the property of the owner or the beneficiary is in the category whose value is not less than 730.000 Riyals. An owner of property in this category will be able to obtain a residence permit for themselves and their family without a recruiter for the duration of their ownership of the property.
As well as residency for them and their family, the owner of the property will also receive permanent residency benefits which include health, education and investment in some commercial activities, where the property value is at least 3,650,000 Riyals.
Elsewhere, the first real estate bond for the first investor to apply for real estate ownership was issued.

Qatar:Representative Office Rules 2020 QFCRA Rules 2020-5

02/10/202002/10/2020
by Benjamin Filaferro

Qatar Financial Centre’s Regulatory Authority has issued the Representative Office Rules 2020. They came into force on 1 October 2020. The new Rules introduce a Representative Office framework which allows financial services firms to carry out a limited range of activities in respect of services or products offered by its head office or corporate group. The activities of a Representative Office may include providing information, carrying out market research, assessing business trends and opportunities for the head office, acting as a channel of communication to the head office and generic marketing. The new Rules are aimed at being proportionate and reflecting the narrower range of activities and services which can be undertaken by Representative Offices.
The Authority also issued the Miscellaneous Amendments Rules 2020. They come into force on 15 October 2020. The amendments include changes to the General Rules 2006 relating to the regulation of captive finance and providing leases. In addition they include changes to GENE clarifying the application of the ‘late fees’ framework to late submissions of regulatory reports for Designated Financial Businesses and Professions and reduce the number of business days to elapse before late fees are payable by all authorised firms and Designated Financial Businesses and Professions. They also include changes to the Collective Investment Schemes Rules 2010 regarding Real Estate Investment Trusts or REITs.

Abu Dhabi: New Public Private Partnership Regulations Issued

25/09/202025/09/2020
by Benjamin Filaferro

Abu Dhabi’s Investment Office has issued new Public-private Partnership Procurement Regulations. They have also published a Partnership Projects Guidebook to support greater cooperation between the private and public sectors in the Emirate.
The framework is consistent with international best practices to support greater private sector investment in the procurement and delivery of public sector infrastructure assets and services across Abu Dhabi.
The new regulations have been issued in line with the Emirate’s 2019 Public-Private Partnership Law (Abu Dhabi Law No. 2/2019). They provide greater clarity to the private sector in terms of engaging with the Government during the procurement and development phase of any major PPP project.
The Regulations have been issued following an Abu Dhabi Government announcement earlier this year to procure approximately 10 billion AED worth of infrastructure partnership projects across various sectors, including education, transport and municipality. The announcement was made as part of Ghadan 21 which is aimed at driving the Emirate’s development by investing in business, innovation and people.
The Office’s Infrastructure Partnerships Unit will be responsible for implementing the Regulations. They will also work with Government departments to identify, develop and procure infrastructure partnership projects.
The Partnership Projects Guidebook, includes a practical and comprehensive overview of the processes and procedures for developing, procuring and managing partnership projects in Abu Dhabi to support public and private sector entities deliver projects transparently and in a timely and efficient way.
It is aimed at improving the ease of doing business with the public sector by providing developers, investors and financiers with a single, trusted source of information when assessing, bidding and executing projects. It covers procurement procedures, as well as best practice approaches to promote effective partnerships between Government and private sector stakeholders.
Earlier this year, the Office enabled its first partnership project under the new Partnership Projects framework. The Noor Abu Dhabi Street Lighting PPP project involved the design, supply, retrofitting, financing, operating and maintenance of approximately 43,000 luminaires with power-saving state-of-the-art sustainable LED-based technology. It is also expected to save enough energy to power 8,000 homes.