Weekly Spotlight: Cabinet has approved the Implementing Regulations to the Federal VAT Law

This week the spotlight is on VAT developments in the UAE, where the country’s Cabinet has approved the Implementing Regulations to the Federal VAT Law, Federal Decree-Law No. 8/2017. Cabinet Decision No. 52/2017 is yet to be Gazetted but its priority translation has been requested from our Publishing Partners, SADER Legal Publishing.

In a separate but related development, the Director General of the UAE’s Federal Tax Authority, Khaled Al Bustani has said the introduction of VAT in the country will not be delayed, despite calls from prominent organisations like the UAE Banks Federation for it to be to allow them more time to prepare. VAT will be introduced in the UAE on 1 January 2018. Al Bustani added the Authority is seeing a surge in registrations as the registration deadline looms.

Weekly Spotlight: New laws will be issued to stop the unauthorised sale of antibiotics

This week the spotlight is on health and insurance developments in the United Arab Emirates, where the Ministry of Health and Prevention is promising new laws will be issued to stop the unauthorised sale of antibiotics, amidst growing fears that their overuse worldwide could create drug-resistant bacteria. As well as creating a new law, the ministry has stated it will work with local health authorities to more closely supervise and inspect pharmacies across the UAE. There is a particular concern about the estimated 2,400 private pharmacies which operate outside hospital networks, where unauthorised dispensing of prescription drugs is most prevalent. The ministry will also seek to make doctors more aware of the need to prescribe antibiotics only when they needed, and to make sure they give accurate doses and the correct strength.

Elsewhere, the Insurance Authority is preparing a new legal framework to regulate reinsurance activities. Experts in the field have stressed on the importance of intervention by the Authority as a means of setting the necessary standards for the sector. It has been said been said by some that there has been a lack of commitment from some companies to risk management and on the calculation of their percentages.

Weekly Spotlight: ADGM announced that businesses registered with them will also be licenced to operate onshore in Abu Dhabi

This week the spotlight is on legal and regulatory developments in the Abu Dhabi Global Market, where they have announced businesses who register to operate with them will also be licenced to operate onshore in Abu Dhabi. It follows an agreement between the Global Market and Abu Dhabi’s Economic Development Department. Under the agreement, entities established in the Global Market will be able to hold dual licences providing they satisfy and fulfil the requirements of each jurisdiction and operate according to their rules and regulations. Entities with dual licences will not have to be physically present in Abu Dhabi. However financial service firms will still be subject to the relevant regulatory obligations and applicable laws, including any licencing requirements which may be imposed by any Federal financial service regulators.

Elsewhere, the Market’s Financial Services Regulatory Authority has launched a consultation on its proposed Remote Membership Framework plus other miscellaneous amendments aimed at boosting its capital market regime. The consultation ends on 2 January 2018. If approved, brokers from outside the Global Market would be able to access the Market’s exchanges and clearing houses. This would expand international investor participation in the Market, facilitates cross-border flows and increase liquidity for the Market’s capital market.

Weekly Sportlight: Dafza has announced it is going to launch the region’s first e-commerce free zone

This week the spotlight is on legal and regulatory developments in Dubai, where the Chairman of Dubai’s Airport Freezone Authority (Dafza) has announced it is going to launch the region’s first e-commerce free zone. Dubai CommerCity will be a 2.7-billion AED, 2.1-million square feet joint venture between Dafza and Wasl Asset Management Group. It will be located in the Umm Ramool area and will be strategically placed to be near Dubai’s International Airport. This will provide direct access to e-commerce stakeholders in the MENA region and South Asia. The free zone project will be implemented in two phases. 50% of the project will be completed in both phases. The aim is to accelerate the growth of the e-commerce market in the region, which is expected to reach $20 billion in 2020 in the GCC countries. Over the next five years, e-commerce sector is expected to account for 10% of Dubai’s retail sales. These sales are expected to reach 200 billion AED by the end of this year.

Elsewhere the UAE’s Vice President, Prime Minister and Dubai Ruler has issued a Law regulating inheritance, wills and probate for non-Muslims. It comes into force on its issued date and will be published in the Official Gazette. Dubai Law No. 15/2017 will apply to the wills and assets of non-Muslims based in the Emirate including the DIFC. It creates a clear legal framework for non-Muslims to create wills in line with their wishes. It also outlines clear legal procedures to encourage residents to register their wills and manage their assets in Dubai. It will establish a Non-Muslim Wills and Probate Registry in both the DIFC and Dubai Courts. The heads of these Courts will develop its regulations, policies and procedures. It will specify the legal requirements for wills and probate for non-Muslims as well as the liabilities and obligations of the beneficiaries of wills. In addition it will specify the responsibilities and limitations of will executors as well the regulations governing inheritance and the distribution and management of the estate as well as appeal procedures. Disputes will be adjudicated by the Dubai Courts or DIFC Courts, depending on where the wills are registered. Any non-Muslim will registered at the DIFC or Dubai Courts before this Law will remain valid.

DIFC has launched a consultation on Common Reporting Standard Law

This week the spotlight is on legal and regulatory developments in the DIFC, where the Dubai International Financial Centre Authority has launched a consultation on a proposed Common Reporting Standard Law (DIFC Law No. 7/2017) and Common Reporting Standard Regulations. The Consultation ends on 8 November 2017. The proposal follows UAE Federal Cabinet Decision No. 9/2016 where the UAE Federal Government committed to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority on Automatic Exchange of Financial Account Information. Article 5 of Federal Law No. 8/2004 (the Financial Free Zone Law) states ‘Financial Free Zones shall not do anything which may lead to a contravention of any international agreements to which the [UAE] is or shall be a party’. The DIFC therefore has to introduce the relevant regulatory regime.

Elsewhere, the Authority has launched a consultation on proposed new Trust and Foundation Laws. The consultation ends on 8 November 2017. The Authority is also proposing to establish a Family Business Centre. The Centre would support regional and international family offices who are looking to relocate private wealth and succession planning structures. The laws are aimed at boosting the conventional and Islamic wealth management sector.