In this vlog series, our MENA team of cross-practice specialists provide a quick roundup of the latest legal and commercial developments in the region as well as insights to emerging challenges and opportunities, to guide you as you shape your organization’s business resilience and strategy in the medium and long term. In addition, our senior female lawyers from our BakerWomen Middle East team join the conversations and share their insights on business and inclusion issues and trends in the region, as together we look to build trust and well-being in a post-pandemic world.
The issuance of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses on 9 December 2022 provides businesses operating in the UAE with a framework for understanding how the corporate tax regime will impact their business model. The Corporate Tax law is broadly in line with the public consultation document that was issued in April 2022, however, one of the notable changes is the release of the conditions to be satisfied by UAE Free Zone entities to be eligible for the 0% rate (rather than being taxed at the headline 9% rate).
The Dubai Financial Services Authority of the Dubai International Financial Centre had started its foray into regulating the crypto sector by introducing investment tokens in September 2021. The spotlight is now on the DFSA as it looks to make sweeping changes to its regulatory regime concerning recognized crypto tokens as of 1 November 2022.
On 30 June 2022, the Government of Abu Dhabi Department of Health (DoH) issued Circular No. 147 of 2022 requiring health and pharmaceutical facilities licensed by the DoH (“Licensed Entities”) to obtain a “secure” or “safe” certificate that certifies they operate in full compliance with the requirements of the Abu Dhabi Standard for Health Information Security and Cyber Security Standards (“Standards”). Licensed Entities have until the end of this year (i.e., by 31 December 2022) to complete an audit process to verify their self-certification with the Standards.
The Circular also states that Licensed Entities are urged to apply stricter cybersecurity controls, including to ensure health data is not transmitted outside of the UAE and to discontinue the use of any cloud-based services that store or utilize health data, irrespective of whether that solution is hosted within or outside the UAE.
On 4 February 2022, the Dubai International Financial Centre Office of the Commissioner of Data Protection announced that the commissioner issued an adequacy decision recognising, among others, Singapore’s Personal Data Protection Act for safe data transfers from the DIFC. This is a welcome development as it facilitates cross-border personal data transfers from the DIFC to Singapore, which can in turn strengthen business ties between the two territories.
The UAE Ministry of Finance has announced the introduction of a corporate tax regime that will apply to businesses. It will become effective for financial years starting on or after 1 June 2023. The headlines are that the tax rate will be 0% for taxable income up to AED 375k and 9% on taxable income above AED 375k. Large businesses (expected to be those with revenue above EUR 750m) may be subject to a different tax rate (potentially 15%) in line with the Pillar Two OECD BEPS project.
The UAE has introduced a number of new welcome legislative changes to mark the UAE’s 50th anniversary, with the aim of solidifying the country’s position as a global trade and commercial hub. Among these changes is the issuance of Federal Law by Decree No. 32 of 2021 on Commercial Companies (“New Law”), which has now come into force last 2 January 2022.
The long-awaited Decree-Law No. 33 of 2021 on Regulation of Labour Relations is among a number of new legal developments introduced recently in the UAE. On Tuesday, 7 December 2021, the UAE Government announced that effective 1 January 2022, Federal Government entities shall operate on a 4-and-a-half day working week, with the weekend set to start on Friday afternoon and include Saturday and Sunday.
On 27 November 2021, the UAE published the long awaited UAE Personal Data Protection Law, Federal Law 45 of 2021 on Personal Data Protection. The development signifies a landmark in the evolution of the UAE’s regulatory framework and lays the foundation for the modernization of the economy and digitization of the country’s growth sectors.
While the financial impact of COVID 19 has affected almost every sector across the world, the hospitality sector has been one of hardest hit. This sector has borne the brunt of reduced travel together with event and booking cancellations. We look at the key employment related considerations faced as a result.