1 a guide to doing business in the uae - global...

1 A guide to doing business in the UAE

A guide to doing business

in the UAE


Clifford Chance Middle East 3

Introduction 4

Political environment 5

Financial and tax regime 7

Trade environment 11

Employment 13

Land/real estate 21

Legal environment 24

Product liability 29

Intellectual property rights 31

Investment policies 35

Company law and corporate governance 39

Contacts 45

conte

nts

A guide to doing business in the UAE 3

Clifford Chance Middle East

Clifford Chance is one of the longest established international law firms in the

Middle East

Our team of over 120 lawyers advises clients on domestic, regional and international matters and has delivered many first-

of-a-kind deals. We opened our first UAE office in 1975 and are well known for innovative, market-leading work. We

specialise in:

Banking, Finance and Projects

Corporate, M&A and Equity Capital Markets

Financial Services Regulatory

Debt Capital Markets and Structured Products

Litigation & Dispute Resolution and Arbitration

Real Estate and Construction.

Our lawyers combine international experience and capability with an intimate and detailed knowledge of local requirements

in the region and advise on international, regional and domestic matters. In particular, we:

have over 120 lawyers, fully integrated into the firm's international network, serving the Middle East region

have been present in the Middle East for almost 40 years with offices today in Abu Dhabi, Dubai, Doha and Riyadh

are able to coordinate legal advice and services throughout the Middle East through our close contacts with leading

independent firms

have valuable Arabic language skills within the practice, at both associate and partner level, enabling us to work with

Arabic documentation.


Introduction

The purpose of this guide

This guide is designed to provide an overview of key considerations for doing business in the United Arab Emirates (UAE)

outside of the various free zones. It has been limited to a general description of areas that are of most interest.

The legal environment in the UAE is complex and rarely static. As the pace of development of domestic law continues

unabated, this publication cannot serve as a substitute for current and necessarily detailed advice on particular problems

that may arise. However, it is hoped that it will provide a valuable and informative outline of the relevant law for our clients.

Unless the context otherwise requires, references in this publication to the masculine include the feminine.

This publication is designed to provide a general summary of the key considerations as at March 2014 (unless otherwise

stated). It does not purport to be comprehensive or to render legal advice and, consequently, no responsibility can be

accepted for loss occasioned by any person acting or refraining from acting as a result of any statement in this publication.

Certain statistical information in this guide originates from third-party sources which are publically available. We do not take

any responsibility for the accuracy or completeness of such information and it has not been independently verified by us.

Further information

Online services: The Clifford Chance online services are useful know-how resources that can keep you up to date with

industry and market developments, provide a useful overview of the issues that affect the structuring or financing of cross-

border transactions and help you assess and manage risk more effectively. Should you wish to have access we can set up

an account for you, please follow the link to select your preferences www.cliffordchance.com/preferences, after which you

will receive an email with login details and instructions on how to log into the service for the first time.


Political environment The UAE is a federation of seven Emirates (Abu Dhabi,

Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and

Umm Al Quwain) (the Federation). Formerly known as

the Trucial States, they were a British protectorate until

they achieved independence in December 1971 and

merged to form the UAE. Each Emirate has a local

government headed by the Ruler of the Emirate. The

UAE has a Federal Government which is currently

headed by His Highness Sheikh Khalifa bin Zayed Al

Nahyan, the President of the UAE and Ruler of Abu

Dhabi.

There are a number of free zones established within the

UAE, including the Jebel Ali Free Zone and the Dubai

International Financial Centre (DIFC). Laws, regulations

and insolvency regimes applicable within the various free

zones can be different to those that apply in the remainder

of the UAE. Unless otherwise specified, the information in

this Guide does not apply to the individual free zones. For

further information with regards to free zones, please see

our guide 'Overview of Selected UAE Free Zones' available

on the Clifford Chance online services.

Structure of government

Constitution

In establishing the UAE, the rulers of the seven Emirates

issued a provisional constitution in 1971, which became

final in December 1996 (the Constitution).

The Constitution provides the legal framework for the

Federation and expresses Islamic Shari'a jurisprudence to

be the main source of legislation. The Constitution

apportions powers between the Federal Government

(based in Abu Dhabi) and the governments of the

constituent Emirates. The Federal Government is entrusted

with the task of issuing substantive legislation concerning

and regulating the principal and central aspects of the

Federation. The municipal governments of each Emirate

are authorised to regulate local matters not confined to the

Federal Government. Some areas are therefore regulated

only at the Federal level, although local interpretations and

practices sometimes differ from one Emirate to another. In

the event of a conflict between the Federal law and local

laws, the Federal law will supersede the local law of an

Emirate.

The Constitution grants sovereignty to the individual

Emirates over their own territories and territorial waters in

all matters which are not within the jurisdiction of the

Federation, such as foreign affairs, defence, justice and

public health. It provides for the Federation to form a single

economic and customs area with free movement of capital

and goods between the Emirates.

The natural resources and wealth in each Emirate are

considered to be the public property of that Emirate, which

is responsible for the protection and exploitation of its

natural resources and wealth for the benefit of the national

economy.

Framework of the Federation

The framework of the Federation consists of: (i) the

Supreme Council; (ii) the President and Vice President; (iii)

the Council of Ministers; (iv) the Federal National Council;

and (v) the Judiciary.

Supreme Council

The Supreme Council is the highest decision-making

authority of the Federation and consists of the Rulers of

each of the Emirates. Each Ruler (or his deputy) has a

single, equal vote on Supreme Council deliberations. The

Supreme Council has broad authority over Federal policy

and legislative matters within the jurisdiction of the

Federation.

The decisions of the Supreme Council must be approved: (i)

by a majority of five member Emirates (which must include

Abu Dhabi and Dubai) with respect to substantive matters;

or (ii) by a simple majority vote on procedural matters.

While the deliberations of the Supreme Council are

declared to be secret by the Constitution, it is believed that,

in practice, laws, decrees or executive orders of the

Supreme Council are effected with the unanimous consent

of each of the member Emirates (although the political and

economic influence of Abu Dhabi and Dubai may play a

role in ensuring the support of the other Emirates).

President and Vice President

A President and Vice President of the Federation are

elected from among the members of the Supreme Council

for terms of five years, with eligibility for re-election without

restriction.

The current President of the Supreme Council, His

Highness Sheikh Khalifa bin Zayed Al Nahyan, the Ruler of

Abu Dhabi, has served as President of the Supreme

Council since 2004. The current Vice President of the

Supreme Council is His Highness Sheikh Mohammad bin

Rashid Al-Maktoum, the Ruler of Dubai.


The primary role of the President of the Supreme Council,

and the Vice President in his absence, is to preside over

the actions of the Supreme Council, including the

enactment of legislation within the jurisdiction of the

Supreme Council and the appointment of the Council of

Ministers and other officers or representatives of the

Federation.

Council of Ministers

The Council of Ministers (otherwise known as the 'UAE

Cabinet') acts as the advisory cabinet of the UAE. The

Council of Ministers consists of the Prime Minister of the

UAE as its chairman (currently His Highness Sheikh

Mohammad bin Rashid Al-Maktoum, the Ruler of Dubai and

Vice President of the UAE, as described above), his deputy,

and other Ministers.

The Council of Ministers is responsible for the various

Federal Ministries of the UAE, most importantly the

Ministries of: (i) foreign affairs; (ii) interior; (iii) defence; (iv)

finance; (v) economy; (vi) justice; (vii) education; (viii)

health; (ix) public works; (x) foreign trade; (xi) labour; (xii)

social affairs; (xiii) culture, youth and community

development; and (xiv) environment and water.

In practice, the primary role of the Council of Ministers is

the implementation of Federal policy and the development

of Federal laws, decrees and budgets for consideration by

the Federal National Council (where necessary or

appropriate) and, ultimately, enactment by the Supreme

Council. The Council of Ministers also independently issues

implementing regulations for many of the UAE's Federal

laws. Like the Supreme Council, the Council of Ministers

has governing by-laws, and its deliberations generally are

not a matter of public record. Decisions of the Council of

Ministers are by a majority vote, with a casting vote

retained by the Prime Minister.

Federal National Council

The Federal National Council comprises 40 members

allocated between the Emirates as follows: (i) Abu Dhabi –

eight members; (ii) Dubai – eight members; (iii) Sharjah –

six members; (iv) Ras Al-Khaimah – six members; (v)

Ajman – four members; (vi) Umm Al-Quwain – four

members; and (vii) Fujairah – four members.

Half of the 40 members of the Federal National Council are

elected by electoral colleges while the other half are

appointed by the Rulers of the seven Emirates. The

electoral college is comprised of a group of people selected

by the Rulers of the Emirates numbering at least 300 times

the number of seats allocated. Each member may only vote

for a candidate in his/her Emirate. This mechanism was

implemented in 2006.

The members of the Federal National Council are private

citizens (public officials, including ministerial officials,

cannot be members of the Federal National Council). As

such, it is intended that the Federal National Council

members provide a broad representation of the UAE

citizens as a whole.

While the Federal National Council acts as an advisory

body to the Council of Ministers and, ultimately, the

Supreme Council, it does not have independent

discretionary executive or legislative authority.

Judiciary

The judiciary of the Federation is discussed in detail in the

Legal Environment section of this guide.

Key policies of government

Economic

The UAE's economy has, historically, been reliant on crude

oil revenues. However, the UAE government has

consistently promoted the creation of new business

opportunities and the diversification of the economy to

decrease the UAE's reliance on one source of income.

During the last 15 years the UAE has actively promoted

investment in infrastructure (for example the Dubai Metro)

and industrial diversification. Private sector investment has

been encouraged in a number of different fields, including

energy, communications, telecommunications, transport

and ports.

Social

The UAE government is keen to develop social and human

resources in the UAE. A large percentage of the 2013 UAE

budget has been allocated to social spending (51%) and

education (22%). Emphasis is placed on creating

world-class healthcare and education systems.


Financial and tax regime The system of financial regulation in the UAE is well

established and constantly evolving. The UAE banking

sector was heavily impacted by the financial crisis of

2008 with real estate and equity prices being the key

concerns. However, signs of recovery are appearing.

Financial authorities and regulators

Securities laws and the regime of financial regulation are

still evolving in the UAE. Historically, the regulation of

trading and securities and transactions involving investment

products were regulated solely by the UAE Central Bank. In

2000, the Securities and Commodities Authority (SCA) was

created and together the UAE Central Bank and the SCA

regulate the current UAE Federal financial landscape.

Under the law, the division of responsibilities between the

SCA and the UAE Central Bank remains unclear and it is

anticipated that some of this uncertainty will be resolved by

the implementation of a new financial services law in the

coming months. A separate regulatory regime exists in the

DIFC and the regulator in the DIFC is the Dubai Financial

Services Authority. A separate regulatory regime will also

apply in the new Abu Dhabi Global Market Free Zone, once

fully established.

UAE Central Bank

The UAE Central Bank, established in 1980, is the

governing body that regulates and supervises all banks

operating in the UAE. The UAE Central Bank monitors

banks through its Banking Supervision and Examination

Department which conducts reviews of banks periodically

based on the risk profile of each bank. It also reviews all of

the returns submitted by the banks to the UAE Central

Bank.

Historically, the UAE Central Bank does not act as a

"lender of last resort" and instead this role tends to fall on

the individual Emirates.

The UAE Central Bank is regulated primarily by UAE

Federal Law No. 10 of 1980, which grants the UAE Central

Bank powers to:

exercise currency issue, stabilisation, valuation and

free convertibility

direct credit policy for balanced growth of the economy

organise and promote an effective banking system with

private banks and institutions

advise the Federal Government on financial and

monetary issues

maintain the Federal Government's reserves of gold

and foreign currencies

act as a bank for the Federal Government and other

banks operating in the UAE

act as the Federal Government's financial agent with

the International Monetary Fund (the IMF), the World

Bank and other international financial organisations.

Although the UAE Central Bank is responsible for

regulating all banks, exchange houses, investment

companies and other financial institutions in the UAE, the

Dubai Financial Services Authority regulates all banking

and financial services activities in the DIFC.

The SCA

The SCA regulates listed public companies in the UAE.

There are three public exchanges in the UAE (outside of

the free zones) the Dubai Financial Market, the Abu Dhabi

Stock Exchange and the Dubai Gold and Commodities

Exchange. In addition, over the last few years, the SCA has

taken a more active role in the regulation of other matters,

for example, with regards to investment funds. The role of

the SCA is expected to evolve further with the

implementation of a new financial services law.

Availability of finance

Finance is readily available within the UAE from both

foreign and local banks.

Banks operating in the UAE often lend to large borrowers

who are well known and low risk. Often this is accompanied

by limited disclosure from the borrower.

Effective security is generally available, but for certain

assets the law is unclear (eg security over ownership

interests in limited liability companies (LLC), intellectual

property, bank accounts and contractual rights).

Enforcement of security can be time consuming and difficult,

although steps have been taken to improve the situation for

land and building mortgages.

Major banks and financial institutions

The list below sets out the foreign and local commercial

banks licensed by the UAE Central Bank as at 30 June

2013:


As at June 2013, the UAE Central Bank licenses 51

different commercial banks (comprising 23 locally

incorporated banks and 28 foreign banks), two investment

banks (Emirates Invest Bank – P.J.S.C. and HSBC

Financial Services (Middle East) Limited), four wholesale

banks (Deutsche Bank AG, Industrial & Commercial Bank

of China, The Bank of Tokyo – Mitsubishi UFI, Ltd. and

Korea Exchange Bank) and one company conducting

finance and investment activities (Mubadala GE Capital –

P.J.S.C.) to operate inside the UAE (excluding the DIFC).

In addition, the UAE Central Bank also licenses a number

of financial institutions and representative offices of foreign

banks and financial institutions.

The Dubai Financial Services Authority licenses a number

of banks in the DIFC.

Tax

The following is merely an overview of the general tax

regime in the UAE. UAE tax advice should be sought from

specialist tax advisers or consultants who maintain up-to-

date information on any changes to the tax regime. Clifford

Chance does not provide tax advice in the UAE.

Under existing UAE law, an income tax decree has been

enacted in Abu Dhabi and in Dubai (the Abu Dhabi Income

Tax Decree 1965 (as amended) and the Dubai Income Tax

Decree 1969 (as amended)) which provides for tax to be

imposed on the taxable income of all bodies corporate

which carry on a trade or business. In practice, however,

the regime is not currently enforced and only companies

engaged in the production of oil or gas, some service

industries and branches of foreign banks have been

required to pay tax.

There is currently no withholding tax on interest or

dividends in the UAE.

The Constitution of the UAE gives the Federal Government

exclusive legislative and executive authority in relation to

taxes, duties and fees and provides that the payment of

taxes is a duty of all citizens. It is not known whether these

provisions will be exercised and further taxation

implemented in the jurisdiction in the future.

Local Banks Foreign Banks

Abu Dhabi Commercial

Bank

Al Ahli Bank of Kuwait

Abu Dhabi Islamic Bank Al Khaliji (France)

Ajman Bank Arab African International

Bank

Al Hilal Bank Arab Bank

ARBIFT (Al Masraf) Bank Meli Iran

Bank of Sharjah Bank of Baroda

Commercial Bank

International

Bank Saderat Iran

Commercial Bank of Dubai Banque Misr

Dubai Bank Barclays Bank

Dubai Islamic Bank Blom Bank France

Emirates Islamic Bank BNP Paribas

Emirates NBD Bank CitiBank

First Gulf Bank Crédit Agricole –

Corporate and Investment

Bank

InvestBank Doha Bank

Mashreq Bank El Nilein Bank

National Bank of Abu

Dhabi

Habib Bank A.G. Zurich

National Bank of Fujairah Habib Bank Ltd.

National Bank of U.A.Q. HSBC Bank Middle East

Limited

Noor Islamic Bank Janata Bank Limited

Sharjah Islamic Bank Lloyds TSB Bank

The National Bank of

R.A.K. (RAKBANK)

National Bank of Bahrain

Union National Bank National Bank of Kuwait

United Arab Bank National Bank of Oman

Rafidain Bank

Samba Financial Group

Standard Chartered Bank

The Royal Bank of

Scotland

United Bank Ltd.


The UAE has entered into double taxation arrangements

with certain other countries, but these are not extensive in

number. The table below sets out the list maintained by the

Ministry of Finance:

Country Final signature Effective date

Egypt 12 April 1994 26 March 1995

Algeria 24 April 2001 28 November 2001

Yemen 13 February 2001 25 August 2001

Tunisia 10 April 1996 24 February 1997

Morocco 9 February 1999 26 September 1999

Sudan 15 March 2001 28 November 2001

Syria 26 January 2000 11 June 2000

Lebanon 17 May 1998 25 October 1998

Mozambique 24 September 2003 4 May 2004

Pakistan 7 February 1993 29 January 1994

India 29 April 1992 21 August 1993

India (Amendment Protocol)

27 March 2007 3 October 2007

Sri Lanka 7 July 1992 4 May 2004

Philippines 22 September 2003 29 December 2004

Korea 22 September 2003 4 May 2004

Singapore 1 December 1995 17 June 1996

Indonesia 30 November 1995 17 June 1996

Thailand 1 March 2000 12 November 2000

Malaysia 28 November 1995 17 June 1996

China 1 July 1993 5 June 1994

New Zealand 24 September 2003 4 May 2004

Ukraine 2003 28 February 2004

Belarus 27 February 2000 2 January 2001

Turkmenistan 9 June 1998 24 November 1999

Armenia 22 April 2002 29 December 2004

Tajikistan 17 December 1995 29 January 2000

Mongolia 21 February 2001 29 November 2002

Azerbaijan 20 November 2006 30 April 2007

Austria 23 September 2003 27 April 2004

Poland 31 January 1993 29 January 1994

Germany 9 April 1995 18 March 1996

Finland 12 March 1996 24 February 1997

Italy 22 January 1995 20 November 1995

Czech Republic

30 September 1996 26 June 1997

Country Final signature Effective date

France 19 July 1989 15 November 1989

Belgium 30 September 1996 26 June 1997

Romania 11 April 1993 9 January 1996

Turkey 1993 29 January 1994

Luxembourg 20 November 2005 7 May 2006

Spain 5 March 2006 13 August 2006

Malta 13 March 2006 13 August 2006

Bosnia and Herzegovina

18 September 2006 30 April 2007

Seychelles 19 September 2006 6 February 2007

Mauritius 18 September 2006 20 June 2007

Canada 9 June 2002 7 January 2004

Netherlands 8 May 2007 29 November 2007

Bulgaria 26 June 2007 ...

Uzbekistan 26 October 2007 ...

The position in the free zones is different as free zones

have their own rules and regulations. Typically free zones

offer guaranteed tax holidays for businesses which

establish a presence in the free zones.


Transfer pricing

Currently, there are no regulations relating to transfer

pricing in the UAE.

Transfer taxes

Notary fees are payable in connection with the execution of

agreements to transfer shares, real estate and certain other

assets.

Currently there are no property taxes in the UAE; however,

a fee is payable to the relevant Emirate's lands department

when registering dealings relating to real estate. The

registration fees applicable in Abu Dhabi and Dubai for the

most common dealings (indicative only) are set out below:

Registration Fee

Dealing Abu Dhabi Dubai

Transfer 2% of property value, up to a maximum of AED1 million.

4% of the consideration paid. There is no cap on the fee payable.

Mortgage 0.1% of amount secured, up to a maximum of AED1 million.

0.25% of the amount secured.

Lease 1% of annual rent. 4% of total rent under the lease, if the lease is for a term of 10 years or greater, otherwise a nominal fee applies.


Trade environment The UAE is a member of the World Trade Organisation

as well as the GCC Customs Union, which applies

uniform custom tariffs across the Gulf Co-operation

Council (GCC). The UAE is also a member of the

Greater Arab Free Trade Area. The UAE's membership

of the Greater Arab Free Trade Area provides for the

duty-free trade of certain goods between signatory

states to the agreement.

The UAE imposes a boycott on trade with Israel.

GCC Standardization Organisation (GSO)

The GSO publishes GCC Standards and Technical

Regulations for products and services, including motor

vehicles, tyres and toys, which are designed to be applied

in substantially the same form in each member state of the

GCC.

The GSO issues certificates for particular products. This

ensures that manufacturers comply with certain health and

safety standards.

The first step in the GSO process is to register with the

GSO. To obtain a registration the GSO team will visit all

manufacturing sites to ensure conformity with the GCC

Standards and thereafter will work with companies to

achieve compliance.

The UAE's Membership of the Greater Arab Free Trade

Area provides for the duty free trade of certain goods

between signatory states to the agreement.

The GSO will also carry out tests on the relevant product

during the manufacturing process to ensure compliance.

The GCC Standards are not applicable in the free zones;

however, for the purposes of importing into the UAE,

companies will require a certificate showing compliance

with the GCC Standards. If the company does not obtain

the GSO certificate, the customs authorities will not clear

the products.

Foreign exchange regulations

Currently, there are no foreign exchange control regulations

in the UAE. The only exception is transactions involving

Israeli parties.

Bilateral investment agreements

Country Date of Signature Date of Entry into Force

Algeria 24 April 2001 3 June 2002

Austria 17 June 2001 1 December 2003

Azerbaijan 1 November 2006 24 August 2007

Bangladesh 17 January 2011 ---

Belarus 27 March 2000 16 February 2001

Belgium and Luxembourg

5 March 2004 10 November 2007

China 1 July 1993 28 September 1994

Czech Republic

23 November 1994 25 December 1995

Egypt 11 May 1997 11 January 1999

Finland 12 March 1996 15 March 1997

France 9 September 1991 10 January 1995

Germany 21 June 1997 2 July 1999

Italy 22 January 1995 29 April 1997

Jordan 15 April 2009 12 February 2010

Korea, Republic of

9 June 2002 5 June 2004

Kuwait 12 February 1966 ---

Import and export regime (including the GCC

Customs Union)

A unified customs tariff is applied throughout the GCC.

Most goods are taxed at 5%. Duty is charged on the CIF

(cost, insurance, freight) value of the goods at the port

of entry.

As a result of the UAE's membership of the GCC

Customs Union, once a product has been imported into

the UAE, it should be able to move freely within the

GCC and no further custom duties should be imposed.

There are no local export restrictions and no local export

duties.

The UAE's membership of the Greater Arab Free Trade

Area will also mean that it should be easier to move

goods into certain other Middle Eastern countries

including: Egypt, Iraq, Jordan, Kuwait, Libya, Palestine,

Saudi Arabia, Sudan, Syria, Tunisia, and Yemen.


Country Date of Signature Date of Entry into Force

Lebanon 17 May 1998 14 July 1999

Malaysia 11 October 1991 22 May 1992

Mongolia 21 February 2001 ---

Montenegro 26 March 2012 ---

Morocco 9 February 1999 1 April 2002

Mozambique 24 September 2003

---

Pakistan 5 November 1995 ---

Poland 31 January 1993 9 April 1994

Portugal 19 November 2011 ---

Romania 11 April 1993 7 April 1996

Russian Federation

28 June 2010 ---

Sudan 4 April 2011 ---

Sweden 10 November 1999 6 May 2000

Switzerland 3 November 1998 16 August 1999

Syrian Arab Republic

26 November 1997 10 January 2001

Tajikistan 17 December 1995 ---

Tunisia 10 April 1996 24 February 1997

Turkey 28 September 2005

24 July 2011

Turkmenistan 9 June 1998 24 November 1999

Ukraine 21 January 2003 28 February 2004

United Kingdom

8 December 1992 15 December 1993

Uzbekistan 26 October 2007 22 April 2008

Vietnam 16 February 2009 ---

Yemen 13 February 2001 25 August 2001

Source: United Nations Conference on Trade and

Development


Employment Employment matters in the UAE are governed by

Federal Law No. 8 of 1980 regulating Labour Relations,

as amended, together with various supplementary

Ministerial Decrees and Resolutions (the Labour Law).

Categories of employees

The Labour Law applies to employees working in the UAE

(except for certain free zones) whether they are nationals or

non-nationals. Certain categories of employees are

exempted from the Labour Law, such as domestic servants,

staff and workers employed by the Federal Government

and members of the armed forces and police.

No distinction is drawn between white-collar and blue-collar

employees in terms of the rights conferred by the Labour

Law.

The Labour Law does not deal specifically with employees

who are also directors. The position of directors (or

managers) of companies incorporated in the UAE is

regulated to a certain extent by Federal Law No. 8 of 1984

(as amended) (the Commercial Companies Law).

Hiring

Employers recruit through a variety of sources, including via

the internet and by advertising in newspapers and journals.

Recruitment agencies are commonly used for the

recruitment of professionals. A state-run agency assists in

the recruitment of UAE nationals.

Emiratisation is a programme which was introduced in 2004

by the UAE Government to encourage employment for its

citizens in both public and private sectors.

In order to live and work legally in the UAE, work permits

and residence visas are required for all nationals who are

not from the UAE or any of the other GCC states. The

residence visa is issued under the sponsorship of the

employer (except in cases where a married woman is

sponsored by her husband, or a child by its father).

A labour card is usually issued for one year at a time, while

a residence visa is usually valid for two years.

Discrimination

The Labour Law does not expressly outlaw discrimination.

UAE nationals, followed by other Arab nationals, have a

right to employment over the right of people of other

nationalities. The UAE government is pursuing a policy of

"emiratisation", pursuant to which certain professions have

quotas of UAE nationals that must be employed. Generally,

for every establishment that employs over 50 employees, at

least 2% should be UAE nationals. (The quota is much

higher in the financial and insurance sectors.)

Contracts of employment

The parties to the employment contract are free to contract

on whatever terms they choose provided always that they

are not less favourable than the provisions of the Labour

Law. Under the Labour Law, only two types of contract are

recognised. These are "Fixed Term Contracts" or "Indefinite

Term Contracts". Fixed term contracts have a specified

commencement and termination date and must not exceed

four years, but are thereafter renewable by mutual consent

of the parties. Indefinite term contracts have a

commencement date, but do not specify a termination date

and can be terminated by either party by giving at least 30

days' prior written notice.

The employment contract must be in writing. In order to

obtain a labour card, the Standard Form Contract must be

filed with the Ministry of Labour. While the standard form

may suffice for unskilled labourers, it is usually not sufficient

for other categories of employees, and employers often

make use of their own contracts which are usually far more

detailed than the Standard Form Contract.

In the event of a dispute, the Labour Department is likely to

consider (at first instance) both contracts (if there are two)

regardless of the different entities concerned and

regardless of whether only one contract is registered, and is

likely to uphold the provisions out of both contracts that are

most beneficial to the employee. It is not possible to

enforce an employment contract in the UAE where it does

not comply with the provisions of the Labour Law (except to

the extent that it is more beneficial to the employee).

Trial periods are common in the UAE. The Labour Law

provides that the maximum trial period shall be six months,

and that a person may only be placed on probation once

during the course of employment with the same employer.

During the trial period the employee may be dismissed

without notice, except where the employment contract

provides for a longer notice period to be given.

Under the Labour Law, it is possible for an employee to

agree that, after termination of his employment, he shall

refrain from competing with the employer or participating in

any enterprise which competes with that of the employer.

Such agreement will only be valid if it is limited as to the


time, place and nature of business, to the extent necessary

to protect the employer's lawful interests.

The UAE Civil Code (Federal Law No. 5 of 1985, as

amended by Federal Law No. 1 of 1987) (the Civil Code)

imposes an obligation on the employee to keep confidential

the industrial secrets of the employer, including on

termination of the contract as required by agreement or

custom, and to preserve the things entrusted to him

(whether tangible, such as company property, or intangible,

such as intellectual property or confidential information) for

the performance of his work.

The UAE Federal Penal Code (Law No. 3 of 1987) imposes

criminal liability on anyone who, by reason of his profession

or employment, is entrusted with confidential information,

and who discloses it in circumstances other than those

permitted by law, or who uses it for his own advantage

without the consent of the person to whom the confidential

information relates.

Generally, if intellectual property is created by an employee

during the course of employment, it will belong to the

employer and compensation is only payable to the

employee in limited circumstances.

Pay and benefits

Basic pay

There is no minimum salary under the Labour Law.

With effect from 1 September 2009, a "Wages Protection

System" was implemented in the UAE, which applies to all

employers that are registered with the Ministry of Labour.

(The Wages Protection System currently does not apply to

entities registered within any of the UAE free zones,

although this position is likely to change in the future. The

Jebel Ali Free Zone, for instance, applies the Wages

Protection System). Employers are now required to pay

their employees' salaries into accounts held at banks or

other institutions that have been approved by the Ministry of

Labour, and which appear on its "Agents List".

The Ministry of Labour will maintain a database of all salary

payments in the private sector, to ensure that the full

salaries are paid on time.

Employers are required to complete and submit a

prescribed form declaration within two weeks of the salary

payment becoming due. For most employers, this will mean

submitting the declarations on a monthly basis.

Companies which fail to comply with the provisions of the

Wages Protection System will be denied the right to obtain

new work permits for employees. The authorised signatory

of the company will be held responsible for the information

contained in the declarations, and may be subject to civil

and criminal liability for any violations.

Each company will need to have a bank account at one of

the Ministry-approved banks, and will need to enter into a

contract with such bank to provide the required service.

Each employee will need to open an account at one of the

approved banks, into which the salary will be paid. (Some

banks have a higher minimum balance/salary requirement

than other banks, so, depending on the salary levels of

employees, different banks may need to be used). The

employer is responsible for all costs involved in joining the

Wages Protection System, including bank charges, service

provider fees and all other costs, and employers may not

deduct any such charges from their employees' salaries,

whether directly or indirectly.

As part of the administration of the Wages Protection

System, information will be shared between the banks, the

UAE Central Bank and the Ministry of Labour to ensure that

the salaries paid match with the details registered at the

Ministry of Labour. (There would be no problem if the actual

salary paid exceeded the amount reflected on the contract

filed with the Ministry of Labour – such as in the case of a

salary increase – but the amount paid should not be less

than that registered at the Ministry of Labour).

Up until now, in the case of expatriate employees, a portion

of salary was frequently paid in the home country to meet

the employee's ongoing financial commitments in the home

country. In the past, the full salary would be reflected in the

Ministry of Labour official contract, but there was no

requirement for the full sum to be paid in the UAE.

With the introduction of the Wages Protection System, the

full salary as reflected in the contract filed with the Ministry

of Labour will need to be paid in the UAE, so any transfer to

the employee's home country bank account would need to

take place after the full salary has been paid locally.

Although the Decree implementing the Wages Protection

System is not clear, it is likely that the definition of "wages",

as used in the UAE Federal Labour Law will apply. This

includes all the employee's contractual entitlements, such

as basic salary, commission, and allowances. Discretionary

bonuses that are not contractual entitlements would be

excluded, which means that discretionary bonuses do not

need to be paid in accordance with the Wages Protection


System, and could, in theory, be paid outside the UAE, in

cash, or into any other bank account.

The Wages Protection System is aimed at salary and

benefits that are paid as "cash" to employees. Where the

employer pays a benefit other than in cash or to another

party (eg pension contributions directly to the pension fund,

life assurance premiums paid directly to the assurance

provider, etc), because the employee would never have

received the cash amount (or payment into a bank account)

anyway, there is no need for these amounts to be paid

under the Wages Protection Scheme.

As the Wages Protection System legislation does not

specifically address the issue of discretionary bonuses and

non-cash benefits such as pension contributions the

position will need to be monitored in case any policy or

guidance notes are issued.

Pensions

The statutory end of service gratuity is usually given to

employees in lieu of benefits under a pension scheme for

employees who have more than one year's service. The

end of service gratuity is calculated on the basis of 21 days'

basic pay per year of service for each of the first five years,

and 30 days' basic pay for each additional year. Where an

employer provides a pension or similar scheme for

employees, it is possible for the employee to choose in

writing between the pension scheme and the statutory end

of service gratuity. International companies which have a

pension scheme in place, and who set up in the UAE,

typically offer benefits under the pension scheme in lieu of

the statutory end of service gratuity.

There is no entitlement to an end of service payment if the

employee is terminated for one of the reasons set out in

Article 120 of the Labour Law (which include failing to carry

out basic duties under the employment contract or being

found drunk or intoxicated by drugs during working hours.

Incentive schemes

Share incentive schemes are not mandatory in the UAE,

but are fairly common in the case of very senior executives.

Fringe benefits

Common fringe benefits typically include private medical

insurance, accommodation allowance and an annual air

ticket allowance. In some cases, an education allowance or

company car will also be provided. There are indications

that mandatory private health insurance to be provided by

employers in respect of all employees will be introduced

throughout the UAE within the next couple of years. (It is

already mandatory within the Emirate of Abu Dhabi for

employers to provide private health insurance for

employees).

Deductions

There is currently no personal income tax levied in the UAE.

Generally, deductions from salary are prohibited, except in

certain limited circumstances provided in the Labour Law

(eg for the recovery of advances made by the employer, or

employee's contributions to a savings fund). The

deductions generally must not exceed one quarter of the

employee's remuneration.

Social security

There is no state-administered social security scheme for

non-UAE nationals. UAE national employees are obliged to

participate in the state-administered General Pensions and

Social Securities Scheme under Federal Law No. 7 of 1999

(the Pensions Law).

UAE national employees are obliged to contribute to the

General Pensions and Social Securities Scheme 5% of

their salary (by way of salary deduction), while employers

are obliged to contribute an amount equivalent to 15% of

the UAE national employee's salary, of which the State will

contribute 2.5%. Employees who are nationals of the other

GCC states must be enrolled in the pension scheme

applicable in their home country. Employees who are

enrolled in the statutory pension scheme will not be entitled

to receive an end of service gratuity under the Labour Law.

Hours of work

The maximum normal working hours are 48 per week, and

no employee should work for more than five consecutive

hours without breaks for rest, meals and prayer, amounting

in aggregate to at least one hour. The one-hour break is not

counted as part of the working hours. The maximum normal

daily working hours are eight, but may be increased to nine

in commercial establishments, hotels, restaurants, guard

duties, and other operations where the Ministry of Labour

so authorises.

During the Holy Month of Ramadan, the normal working

hours are reduced by two per day. This applies to all

employees, irrespective of whether they are Muslim or

observing the fast.


Holidays and time off

Holidays

In addition to published official holidays (with full pay) that

are declared by the Ministry of Labour and Social Affairs for

the sector in which they are working (public or private), an

employee is entitled to minimum annual leave with full pay

in each year of service as follows:

two days for every month, if service is more than six

months but less than one year

30 days if service exceeds one year

pro rata for any fraction of the final year of service.

Family leave

After one year of continuous service, a working woman is

entitled to a total of 45 days' maternity leave with full pay.

(This would be "calendar" days, rather than "working days".)

This leave includes the period before and after delivery.

If the woman has not completed one year's service, the

maternity leave above will be granted with half pay.

In either of the above cases, maternity leave may not be

deducted from any other leave to which a working woman

is entitled.

At the end of the maternity leave, a woman has the right to

extend the leave for a maximum period of 100 days without

pay if this absence is caused by illness. This illness can be

continuous or interrupted, but in either case the employee

must provide a medical certificate that she is unable to work.

The illness must have been caused by the nature of the

employee's work or prior confinement.

During the 18 months following delivery, a working woman

who is nursing her child has a right to two daily breaks not

exceeding half an hour each for this purpose. These two

intervals are classified as part of the working hours and no

deduction in wages may be made in this respect.

Illness

An employee who is absent through illness (other than an

injury caused by his employment) must report it to his

employer within two days. After two days, the employer

may have the employee medically examined to verify the

cause of illness.

An employee is not entitled to any paid sick leave during his

probationary period.

Where an employee has completed more than three

months' continuous service following the end of his

probationary period (if any is stipulated in the contract of

employment) he is entitled to a maximum period of 90 days'

sick leave, which may be either continuous or cumulative in

respect of every year of service.

Payment during any sick leave taken by the employee is

calculated as follows:

the first 15 days with full pay

the following 30 days with half pay

any subsequent periods, without pay.

No remuneration is payable during sick leave if the

employee's illness is the direct result of the employee's

misconduct; for example, illness that is attributable to the

consumption of alcohol or narcotic drugs.

An employer may not terminate an employee's contract

during sick leave. Any such notice will be considered invalid.

Other time off

A Muslim employee is entitled once during his contract of

service to leave without pay for up to 30 days for

performing the Hajj pilgrimage (pilgrimage leave). Such

period does not count as part of annual leave or any other

leave to which the employee is entitled.

Health and safety

Accidents

An employer is obliged to provide adequate preventive

equipment to protect employees against the danger of

employment accidents and occupational diseases that may

occur during employment, as well as against fire and other

hazards that may result from the use of machines and other

machinery. Although employers are not obliged by law to

provide any form of insurance in this regard, as a matter of

practice, many of the larger employers, especially the

international companies, do so.

Health and safety consultation

An employer is obliged to inform each employee at the time

of recruitment of any dangers connected with the

employment and of the protective measures the employee

must take. While employers are not obliged to consult with

employees on health and safety issues, they are obliged to

display detailed instructions in a conspicuous position at the

workplace indicating the measures to be taken to prevent

fire and to protect the employees against hazards to which

they may be exposed while performing their work.


Industrial relations and trade unions

Trade unions are not recognised nor are they

permissible in the UAE.

The Labour Law does not recognise collective

agreements.

There is no right to strike under UAE law.

There are no formalised requirements for employee

participation in the UAE, nor are there any works

councils.

Disputes relating to employment or termination of

employment should be referred to the Ministry of

Labour.

Acquisitions and mergers

General

There is no specific legislation that addresses the obligation

to inform and consult with employees in the event of any

business or share sale.

The Ministry of Labour and the Immigration authorities

should be notified where the business or share sale is to

have an effect on the employee's residence visa (eg if the

employer entity is changing, thereby resulting in a change

of sponsor for immigration purposes).

Information and consultation requirements

There are no information or consultation requirements

under UAE law.

Notification of authorities

If the business or share sale results in a change of

employer (whether by transfer of employment, or as a result

of merger), the Ministry of Labour and Immigration

authorities should be notified, as it would be necessary to

transfer the sponsorship of the employee to the new

employer.

Termination

Individual termination

A contract under the Labour Law may be terminated:

by mutual consent, provided that the employee

consents in writing

where a contract is for a fixed term, upon its expiry,

unless it is expressly or impliedly renewed

where a contract is for an unlimited period, by at least

30 days' notice of either party given for a valid reason

in accordance with the Labour Law.

Provided that certain conditions apply, the Labour Law

provides for a one-off payment to be made to an employee

on the expiry or termination of an employment contract. An

employee completing one year or more of continuous

service is entitled to end of service benefits to be calculated

as follows:

21 days' wages for each year completed for the first

five years of service

30 days' wages for each year thereafter,

provided that the total end of service benefits shall not

exceed a total of two years' wages. This gratuity payment is

calculated by reference to the last basic wage earned

(basic wage for these purposes does not include any

allowances or discretionary bonuses). The Labour Law

provides that the remuneration used as a basis for the

purpose of calculating the severance pay shall not include

what is given to the employee in kind, including housing

allowance, transport, travel allowance etc. Further, the

employer is entitled to deduct any amounts owed to him by

the employee from the latter's severance pay.

The prevailing opinion is that any amount payable to an

employee as wages, including wages paid by commission

or payment by percentage, may fall within the definition of

wages and be taken into consideration in calculating

gratuity payable.

Where an employee under a fixed-term contract resigns

before the end of his contract, he will not be entitled to the

full amount of gratuity unless his continuous service has

exceeded five years.

An employee under an indefinite term contract who resigns

after continuous service of:

between one and three years, is entitled to one third of

the gratuity provided for in the Labour Law

between three and five years, is entitled to two thirds of

the stipulated gratuity

more than five years, is entitled to the full gratuity.

However, where an employer terminates an employee's

indefinite term contract, the full gratuity will generally be

payable.

The Labour Law states that where the employer has

provided accommodation to the employee, the employee is

obliged to vacate the premises within 30 days of the date of

termination of employment. Where the employee disputes

the amount of his end of service entitlements, these shall

be determined by the Labour Department, and, in this case,

the 30-day period for vacating the accommodation shall


commence from the date that the employer deposits the

value of the expenses and entitlements as determined by

the Labour Department concerned (such as the requisite

gratuity).

Where an employee is a UAE national, termination of

employment may only be done in accordance with the

provisions of Ministerial Resolution No. 176 of 2009.

Notice

The Labour Law requires the employer to give a minimum

of 30 days' notice for terminating an employment contract,

although it is open to the employer to extend this period,

and the court will uphold the notice period most beneficial

to the employee. Payment in lieu of notice is permissible

and should be calculated on the basis of the last

remuneration received.

In addition, where the contract provides for a longer notice

period, that longer period of notice should be given to the

employee.

An employer may dismiss an employee without notice, and

with forfeiture of the statutory end of service gratuity, for

one of the reasons set out in Article 120 of the Labour Law,

namely:

if the employee adopts a false identity or nationality or

submits forged certificates or documents

if the employee is engaged on probation and is

dismissed during the probationary period or on its

expiry

if the employee makes a mistake resulting in

substantial material loss for the employer, provided

that the employer notifies the Labour Department of

the incident within 48 hours of its becoming aware of

its occurrence

if the employee disobeys instructions regarding

industrial safety or the safety of the workplace,

provided that such instructions are in writing and have

been posted in a conspicuous place and, in the case of

illiterate employees, such instructions have been

explained to them verbally

if the employee does not perform his basic duties

under the employment contract and persists in violating

them despite the fact that he has been the subject of a

written investigation for this reason and that he has

been warned that he will be dismissed if such

behaviour continues

if the employee reveals any secret of the establishment

in which he is employed

if the employee is finally sentenced by a competent

court for an offence involving honour, honesty or public

morals

if the employee is found in a state of drunkenness or

under the influence of a drug during working hours

if, while working, the employee assaults the employer,

the responsible manager or any of his colleagues

if the employee is absent from work without a valid

reason for more than 20 non-consecutive days, or for

more than seven consecutive days.

Reasons for dismissal

In the event that the employee's contract cannot be

severed by mutual agreement, the Labour Law provides

that an employee's contract may only be cancelled for a

"valid reason". In essence, dismissal of an employee for

reasons relating to his work performance will generally

constitute a valid reason. In the case of redundancy, where

the underlying reason has nothing to do with the

employee's performance, it is unlikely to be considered a

valid reason for termination. Where, however, the employee

is dismissed for reasons other than his work performance,

he is deemed to be "arbitrarily dismissed". In this regard,

Article 123 of the Labour Law provides that the employer

may be ordered by the court to pay compensation to the

employee. In assessing the relevant quantum of

compensation, the court is likely to look at the nature of the

employee's job, what damage has been caused to him, the

duration of his service and the reason for termination of his

employment. Such compensation is subject to a maximum

of three months' remuneration. Accordingly, employers are

advised to make the reasons for dismissal clear in any

letter of termination, and to ensure that they comply with

the concept of "valid reason" under UAE law.

In a 2012 Dubai Court of Cassation case, the court

recognised that where an employer changes the terms and

conditions of employment to the detriment of the employee,

such that the employee is forced to resign, this may amount

to arbitrary dismissal. Although the concept of "constructive

dismissal" is not expressly recognised in UAE law, this

case brings under the scope of "arbitrary dismissal"

circumstances which may be akin to constructive dismissal

in other jurisdictions.

If the employer terminates a fixed term contract for reasons

other than those specified in Article 120 of the Labour Law,

he will be liable to pay compensation to the employee. The

compensation shall be determined on the basis of the


wages due for a period of three months or for the remaining

period of the contract, whichever is less.

If an employee under a fixed term contract resigns before

the end of his contract, he will be required to pay

compensation to his employer for any prejudice that the

employer suffers as a result of the early termination. The

maximum amount of such compensation is limited to the

lesser of one and a half months' remuneration or the

remuneration for the rest of the contract period.

As a starting point, in order to ensure that the Standard

Form Contract in the UAE is terminated officially in the eyes

of the Labour Department, the standard Arabic release form

should be signed. In addition, a compromise agreement

may be a good idea for additional protection in relation to

confidentiality etc. From a UAE law perspective, the

compromise agreement should be drafted in such a way

that the employee acknowledges that the amount he

receives under the agreement is in full and final settlement

of all amounts having arisen or accrued by virtue of the

Standard Form Contract. Such acknowledgement should

expressly include all of his employment rights in the form of

salary, benefits, annual vacation, settlement of account,

expenses and end of service gratuity due to him under the

laws of the UAE and the terms of his contracts.

Special protection

An employer cannot terminate an employee's contract

during annual leave. The Labour Law does not expressly

include any protection against dismissing employees on

maternity leave.

In the event of an employment dispute, the aggrieved party

should file a complaint with the Labour Department. The

Labour Department will summon both parties to a hearing,

and shall endeavour to ensure that the dispute is resolved

amicably. Neither party is permitted to have legal

representation at this hearing.

If the parties are not able to reach an amicable settlement,

the Labour Department shall refer the dispute to the Court.

No claim based on an employment dispute may be heard if

brought to court after one year from the date on which the

entitlement became due.

There are no provisions in the Labour Law addressing

redundancy dismissals.

Closures and collective dismissals

The Labour Law does not address the procedure for and/or

gratuity payments applicable in the context of an individual

or collective redundancy exercise.

Data protection

Employment records

There are no comprehensive data protection laws in the

UAE (outside of the free zones), although it is anticipated

that a Federal law on data protection will be issued in the

near future. There are also various pieces of legislation that

may have an impact on the security and processing of

personal data in certain circumstances including employee

records.

The Labour Law obliges an employer, who employs five or

more employees, to collect and maintain certain personal

information in respect of each employee. This information

includes the employee's name, address, marital status,

nationality, remuneration, date of recruitment, any penalties

imposed on him, any employment injuries or occupational

diseases, and the date of and reasons for the termination of

employment. The Penal Code prohibits the publication of a

person's private affairs. In Dubai only, the Transactions and

Electronic Trade Law (Dubai Law No. 2 of 2002) makes it a

criminal offence for any person "enabled by powers granted

to him by this law" to access information contained in

electronic registers or documents or correspondence

deliberately or negligently to disclose such information. It

seems that this provision is primarily aimed at persons who

provide electronic authentication certificates or other

verification services, but there is the possibility that it might

be construed more widely to include other persons who are

entrusted with electronic data, such as employers.

Employee access to data

There are no specific provisions in UAE law entitling an

employee to request copies of, or access, to data held

about them.


Monitoring

There are no specific provisions in UAE law entitling an

employer to monitor employee email, internet and

telephone usage and use CCTV within the workplace.

The UAE Constitution states that freedom of

communication by post, telegraph or other means of

communication and secrecy shall be guaranteed in

accordance with the law. In addition, the UAE Penal Code

establishes criminal offences in relation to the disclosure or

use of "secrets" (including the inception or disclosure of

correspondence or telephone conversations).

Transmission of data to third parties

There are no specific provisions in UAE law dealing with

the transmission of personal data to third parties either

within the UAE or elsewhere. However, circumstances in

which electronic personal information may be accessed or

disclosed are also restricted by a number of laws in the

UAE.


Land/real estate The basis of UAE real estate law and the real estate

rights available within the UAE is found in the Civil

Code. The Civil Code does not address important areas

such as the registration of the transfer of land or

property rights and other interests. Accordingly, the

majority of the Emirates have passed their own local

laws in relation to these (and other) areas, in order to

supplement the Federal law. Although it is not always

apparent where the distinction between Federal and

Emirate law lies, these local laws have had an

important role in developing the regulation of real

estate in the UAE.

In a real estate context it is therefore important to consider

not only the applicable Federal laws, but also the specific

laws that will apply at the Emirate level (which will depend

on the location of the real estate). It is also important to

note that certain free zones in the UAE, such as the DIFC

and to a certain extent the Jebel Ali Free Zone, have

bespoke laws which apply to real estate situated within

those free zones.

Real estate rights

As noted above, the Civil Code sets out and describes the

types of real estate rights that are available in the UAE.

These are:

Absolute ownership

This is the right to own real estate outright, without

restriction as to time, and is akin to the common law

concept of "freehold" title. An absolute owner of land will

own the area of land, together with the rights benefiting the

land and any improvements constructed upon such land,

but will be subject to matters affecting the land, such as

easements.

Musataha

A right of musataha confers both a right to occupy another

person's land for a period (under the Civil Code the

maximum period is 50 years but under some Emirate laws

this term is renewable), as well as a right to build on or alter

the land that is the subject of the right. Any improvements

erected by the musateh (the grantee) will legally be owned

by the musateh during the term of the musataha and

ownership of the land interest is bifurcated from the right to

build on or alter the land. A right of musataha is sometimes

described in the UAE as a "development lease". In common

law jurisdictions a musataha is similar to a "ground lease"

or a "bare lease".

Usufruct (Intifa)

This is the right to use and occupy real estate belonging to

another person for a period (under Emirate laws the

maximum term is 99 years, which is renewable). The right

needs to be exercised in accordance with the terms of the

instrument granting the right, therefore there may be

restrictions on how the real estate may be used.

Accordingly, a right of usufruct shares a number of

characteristics with a long-term lease.

Each of the Emirates has passed its own laws restricting, to

varying extents, the ability of "foreigners" to obtain the

above rights over real estate within those Emirates.

Leases

The above three rights are all rights in rem, ie they confer

upon the holder a right in the relevant property, and this

right "runs with" or attaches to the property. Under the Civil

Code, leases (which are described in the Civil Code as

"hire contracts") only confer upon tenants a personal

contractual right, as opposed to granting any actual right in

the relevant property. Consequently, as a lease is a

personal contract, the rights under it are only enforceable

against the counterparty and are not directly enforceable

against third parties. This is in marked contrast to other

jurisdictions where a lease is itself a property right.

Notwithstanding the position under the Civil Code, changes

to the law and policy in Abu Dhabi and Dubai, respectively,

have resulted in leases over a certain duration being

treated as rights in rem – 25 years in Abu Dhabi and 10

years in Dubai.

Registration of rights and interests

Registration

Generally speaking, under Abu Dhabi law, any title to or

right in real estate must be registered at the Abu Dhabi

Land Registration Department (the LRD).1 An unregistered

dealing with any such title or right will be binding and

enforceable as between the contracting parties but not

enforceable against third parties. The position in Dubai is

stricter in that unless such dealing is registered at the Dubai

Land Department (the DLD) it is invalid.

1 There is an on-line tenancy registration system called "Tawtheeq"

which is now increasingly being used by landlords and tenants but

this system is only intended for leases of four years or less.


In Abu Dhabi, recent changes to the law appear to now

require that all leases must be registered, whereas

previously only leases over four years in length needed to

be registered. In Dubai, leases over 10 years in length must

be registered at the DLD and leases of less than 10 years

need to be registered with the Real Estate Regulatory

Authority.

The information on the registers maintained at the various

land departments is not publically searchable. Generally,

only interested parties and judicial authorities have access

to this information.

Dubai's interim register

In 2008, the DLD established an interim real estate register

(Interim Register) for Dubai property developers to record

all "off-plan" sales of real estate. An "off-plan" sale is one

where the property has yet to be built, so the buyer is

purchasing on the basis of the plans of the property. The

applicable law states that any "off-plan" sale which is not

recorded on the Interim Register will be void. A registered

"off-plan" contract can be mortgaged, despite only being a

personal contract. Once construction of the property is

complete and the transaction has been concluded,

application must be made to "transfer" the registration to

the DLD's "full" Real Estate Register. The fees to register

dealings with "off-plan" property on the Interim Register are

generally the same as those applicable in respect of the

Real Estate Register and purchasers should not be

expected to pay twice.

Foreign ownership restrictions

Abu Dhabi

UAE nationals

UAE nationals and companies wholly-owned by them are

permitted to own (as well as obtain inferior usufruct or

musataha rights in) all types of real estate anywhere in Abu

Dhabi. Certain Abu Dhabi entities which have an element of

foreign shareholding may, by special exemption from the

Abu Dhabi government, be granted "UAE national status"

for this purpose. These exempted entities are therefore also

permitted to own real estate throughout Abu Dhabi. As far

as we are aware, only Aldar Properties PJSC (which has

recently merged with Sorouh Real Estate PJSC), which is

Abu Dhabi's largest listed property developer, currently

holds such an exemption. We understand that certain utility

companies have also been granted exemptions, but the

extent of those are unclear. The exemptions have largely

not been published.

GCC nationals

The ability of GCC nationals (and companies wholly-owned

by them) to acquire real estate rights is limited to certain

designated areas, known as "Investment Zones", which

include the following developments: Al Reem Island, Al

Maryah Island, Saadiyat Island, Yas Island, Al Raha Beach

and Masdar City. In these zones, GCC nationals may own

land outright and may also be granted usufruct and

musataha rights over land and usufruct rights in buildings

and apartments.

Foreign nationals

"Foreign" nationals (ie individuals not falling into the above

categories) and companies owned in any part by them are

not permitted to own land in Abu Dhabi. They may own

apartments or "floors" within buildings in "Investment

Zones", but not the land that those buildings are situated on.

They may, however, be granted usufruct, musataha and

long-term lease rights over land in "Investment Zones". In

addition, a foreign national may, for a term of less than 25

years, lease anywhere in Abu Dhabi (ie not a "long-term

lease").

A company with any foreign shareholding will be

considered a foreign national, and will therefore be subject

to these restrictions, unless it receives an exemption as

outlined above. In determining the eligibility of a company

to acquire a right over real estate in Abu Dhabi, the LRD

will look through the ownership chain to determine the

nationality of the ultimate shareholders of that company.

According to a recent announcement by the Abu Dhabi

Municipality, foreigners will now be permitted to own land in

the Investment Zones in Abu Dhabi but this has not yet

been implemented in any legislation and further details are

required.

Dubai

The law relating to foreign ownership of property is less

restrictive in Dubai than it is in Abu Dhabi. There are only

two tiers of property ownership in Dubai (in contrast to Abu

Dhabi's three), which are:

UAE nationals, GCC nationals and PJSCs

These parties are permitted to own land and obtain real

estate rights in property anywhere in Dubai.

Foreign nationals

Foreign nationals (and companies with any shareholding)

are permitted to own real estate or acquire usufruct rights in


real estate, but only within certain "Designated Areas".

There are currently over 20 "Designated Areas" in Dubai,

which include most Nakheel and Emaar master

communities (eg the Palm Jumeirah and Downtown Dubai),

as well as most (but not all) of Dubai's free zones.

The DLD implemented a new policy with effect from 1

January 2011 concerning the types of foreign national

entities which are permitted to hold title to land in Dubai's

"Designated Areas". Previously, entities incorporated

offshore, in jurisdictions such as the Cayman Islands, the

British Virgin Islands, etc., were able to hold title to land in

these areas. However, the policy now provides that

offshore companies may only hold real estate through a

Jebel Ali Free Zone entity or registered branch. Verbally,

the DLD has also confirmed that offshore companies could

also hold interests through the Dubai International Financial

Centre and the Dubai Technology and Media Free Zone

(TECOM) entities. Companies registered in free zones

outside Dubai would not be able to hold real estate in Dubai

directly.

Other Emirates

The restrictions on foreign ownership of real estate vary in

the other five Emirates. There are generally no restrictions

on the ownership of real estate by UAE nationals. GCC

nationals are also typically unrestricted; however, in some

Emirates, the Ruler's consent is required. Foreign nationals

are usually either prohibited from owning real estate or

limited to owning buildings and apartments or real estate

within designated areas. In Fujairah there is no applicable

law pertaining to ownership, while in the other four Emirates

the position is usually based on a mixture of law and policy.

Ownership structures that comply with the foreign

ownership restrictions

A long-term lease is one of the methods that is used in

the UAE to ensure compliance with the foreign

ownership restrictions. Foreign entities wishing to obtain

an interest in real estate in a restricted area (ie an area

which does not permit foreign ownership) sometimes do

so by way of long-term lease. However, changes to the

law and policy in Abu Dhabi and Dubai have meant that

leases over a certain length of term are now considered

property rights (which foreign nationals are prohibited

from obtaining outside of certain designated areas).

These changes are designed to prevent foreign entities

from circumventing the restrictions in this way.

Accordingly, consideration must be given as to the

length of the term of a long-term lease granted for this

purpose, in order to avoid potential breaches of the

restrictions.

An Islamic structure known as a mudaraba arrangement

is another method which is sometimes employed by

foreign national entities wishing to invest in real estate in

the UAE. Broadly speaking, this arrangement involves

the foreign entity "partnering" with a UAE company

whose shareholding permits it to acquire ownership of

the relevant real estate. The foreign entity provides

funds to the UAE company for investment in accordance

with an agreed investment plan, and the revenues

derived from the assets purchased are split in

accordance with a pre-agreed profit sharing ratio.


Legal environment The UAE has a civil law system and its laws draw

heavily on the laws of other Arab countries, in

particular Egypt.

Federal court system

The Constitution provides for a Federal court system, but

acknowledges the right of each constituent Emirate to

maintain an independent legislative body and judicial

authority. Currently, the Emirates of Ajman, Fujairah,

Sharjah and Umm Al Quwain have joined the Federal court

system. The Emirates of Dubai, Ras Al Khaimah and (since

2007) Abu Dhabi maintain separate court systems. Federal

laws that apply to all seven Emirates govern rules of

evidence and court procedure.

The Federal court system comprises a Court of First

Instance in each Emirate and a two-tier appeal system. The

Federal Courts of First Instance are trial courts and located

in each major city. Decisions of one of the Federal Courts

of First Instance may be appealed to one of the Courts of

Appeal in the Emirate in question, and a further appeal on

matters of law can then be made to the Court of Cassation

in Abu Dhabi (known as the Court of Cassation, Federal

Supreme Court or, on occasion, Union Supreme Court).

The Federal Supreme Court hears any dispute between the

individual Emirates, as well as disputes between the

Emirates and the Federal Government. It is also ultimately

responsible for the interpretation of the Constitution and of

the constitutionality of all legislation issued at either Federal

or Emirate level.

The types of courts, which make up the legal framework for

each Emirate within the Federal Court system, are: (i) the

civil courts; (ii) the Shari'a courts; and (iii) the criminal

courts. Generally, the civil courts have exclusive jurisdiction

over civil, commercial, company, insurance, banking and

maritime matters. The Shari'a courts on the other hand

have exclusive jurisdiction in connection with all family law

matters. Both courts have non-exclusive jurisdiction in

respect of criminal proceedings; although in practice, civil

courts usually hear most criminal matters.

Other domestic court systems

The Emirates of Dubai and Abu Dhabi have their own

Courts of Cassation that operate independently from the

Federal Supreme Court (as mentioned above, in all

Emirates other than Dubai, Abu Dhabi and Ras Al Khaimah,

the final appeal will be to the Federal Supreme Court also

located in Abu Dhabi).

In addition, in a number of the Emirates there are quasi-

judicial bodies dealing with the resolution of disputes in

specified areas of law or in relation to specific entities (such

as rental disputes and commercial agency disputes and

special committees for Dubai World and Zabeel

Investments). The DIFC also has an independent court

system based on an international model to hear civil cases,

which are subject to separate laws and procedural rules.

The judgments of the local courts have no binding or

persuasive effect on the Federal courts of the UAE and

their persuasive effect is normally limited to their own

jurisdiction (for example, decisions of the Dubai Court of

Cassation may be persuasive on the Dubai Court of Appeal

and the Dubai Court of First Instance). Likewise, the

decisions of the Federal Supreme Court are not usually

persuasive in the local courts.

Precedent and interpretation of UAE

legislation

There is no concept of binding judicial precedent or formal

system of court reporting in the UAE, although an informal

system of precedent does operate in the Federal Supreme

Court (which covers Ajman, Fujairah, Sharjah and Umm Al

Quwain), the Dubai Court of Cassation (which covers

Dubai), the Ras Al Khaimah Court of Cassation (which

covers Ras Al Khaimah) and the Abu Dhabi Court System

(which covers Abu Dhabi). Therefore, the decisions of a

court in one case will have no binding authority in respect of

another case. Such decisions may, however, be persuasive

and indicative of how the courts may react in cases with

similar issues and disputes. Accordingly, given that each

case is fact dependent, it is difficult to reach a conclusive

interpretation on the laws of the UAE or to predict how the

UAE courts would view a specific project or any of its

transactional agreements and their particular provisions.

The courts should, in theory, follow a set pattern when

interpreting the laws of the UAE. Federal Law No. 18 of

1993 (as amended) (Commercial Code) governs

commercial transactions and further provides that in the

absence of a provision (ie of a specific law) regarding a

specific matter, the following sources in the following order

may be referred to:

other laws and regulations relating to commercial

matters (especially local custom)


if there is no specific law or relevant local commercial

custom, the provisions pertaining to civil matters in

general (as set out in the Civil Code) shall apply to the

extent that they are not in conflict with the general

principles of the commercial activity in question

the Civil Code in turn provides that Islamic Shari'a is a

reference source in the absence of a provision in the

Civil Code in respect of any particular matter.

The Civil Code exists alongside the Commercial Code. The

Commercial Code provides that the Civil Code will apply to

commercial as well as civil transactions other than insofar

as it contradicts the provisions of other laws and

commercial practices.

Arbitration in the UAE

Overview

At present, there is no law in the UAE (outside the DIFC)

that deals exclusively with arbitration or alternative dispute

resolution in the UAE. Rather, arbitration in onshore UAE is

governed by Articles 203 to 218 of the UAE Civil Procedure

Law.

There are three prominent domestic arbitration centres

within the UAE. They are the Dubai International Arbitration

Centre (DIAC), the Dubai International Financial Centre –

London Court of International Arbitration Centre

(DIFC-LCIA) and the Abu Dhabi Commercial Conciliation

and Arbitration Centre (ADCCAC). There are other centres

for arbitration in the Emirates, such as in Ras Al Khaimah

and Sharjah, but these centres are of lesser prominence.

The DIAC is based in Dubai and administers arbitrations

under the DIAC Arbitration Rules 2007. The DIAC also

serves as an appointment or challenging authority in ad hoc

arbitral proceedings. The default seat of arbitration under

the DIAC Rules is Dubai, although the parties are of course

free to determine the seat in their arbitration agreement.

With respect to the language, unless otherwise agreed by

the parties the initial language will be that of the arbitration

agreement. The Tribunal then enjoys the power to

determine the language(s) of the arbitration having regard

to the observations of the parties and all relevant

circumstances of the case.

The DIFC-LCIA Arbitration Centre is based in the DIFC and

administers arbitrations under the DIFC-LCIA International

Rules of Arbitration 2008 (in association with the London

based LCIA). It also serves as an appointment or

challenging authority in ad hoc arbitral proceedings. Absent

a choice from the parties, the default seat of arbitration is

the DIFC. Like the DIAC Rules, absent party choice, the

initial language of the arbitration will be that of the

arbitration agreement. The Tribunal may then determine the

language(s) of the arbitration after taking into account the

initial language of the arbitration and any other matter it

considers appropriate in the circumstances of the case.

ADCCAC administers arbitrations under the ADCCAC

Procedural Regulations of Arbitration, which came into

force on 1 October 2013. The place of the arbitration will be

Abu Dhabi and the language will be Arabic unless

otherwise specified by the parties.

Choice of arbitration

The parties to an agreement may agree to refer a dispute

relating to that agreement to arbitration. Such an

agreement must be clear and in writing. Best practice

dictates that the arbitration agreement should specify a

particular arbitral institution (unless the parties wish for the

arbitration to be ad hoc), a place or "legal seat" of the

arbitration, the number of arbitrators, the language of the

arbitration and the governing law which will apply to the

merits of the dispute being referred to arbitration. Evidence

must be provided that the parties have knowledge of the

arbitration clause which is normally implied when a party

has signed an agreement. Accordingly, a court may not

uphold an arbitration clause which is printed as a standard

clause in fine print in terms and conditions or at the back of

an invoice or delivery note unless specific attention is

drawn to that clause, and the terms and conditions are

signed.

UAE

Joint stock companies are prohibited from entering into an

arbitration agreement without express power in their articles

of association or a resolution of the shareholders.

No contract entered into with the Government of Dubai, its

departments or corporations, may stipulate arbitration

outside Dubai, or the application of any laws or procedures

other than those of Dubai. Any provision to the contrary is

void and shall not be binding on the Government. It is

possible for His Highness Sheikh Mohammad bin Rashid

Al-Maktoum to disapply the aforementioned restrictions.

There is also an Executive Council Resolution from 1985

which, on the face of it, provides that no foreign arbitration

provisions will be enforceable in any contracts with Abu

Dhabi government departments and that any dispute

should be referred to the UAE courts.


Procedure

If no particular arbitration procedure has been specified in

the contract, then the rules followed by arbitrators tend to

be a combination of local practice, standard principles and,

possibly, the rules of a well-known institution. Where the

parties agree to arbitrate under the rules of a particular

institution, then those rules will be adopted and followed.

There are no requirements for the arbitrators to be UAE

nationals or that the proceedings must be conducted in

Arabic. These aspects will therefore depend on the

agreement entered into between the parties.

Jurisdiction

UAE courts will not hear an action if the parties have

agreed to refer it to arbitration in the UAE or abroad.

Generally, any agreement to refer a dispute to arbitration

must be brought to the court's attention at the first hearing

of the case. If the court's jurisdiction is not challenged at

this first hearing, the courts will assume that the parties

have waived their rights to refer the matter to arbitration. If

the litigation proceedings are challenged, the court will stay

the proceedings unless there is a reason for the court to

invalidate the arbitration clause. An arbitrator must deliver

the award within six months of the first hearing; otherwise

the parties may ask the court to deal with the dispute. It is

open to the parties to agree to extend the six-month period.

The arbitration award

The arbitral award once it is passed will become binding on

the parties and will not be subject to appeal.

In the UAE, an arbitral award must be ratified by the court

before enforcement. This normally will be made by an

application to the court by way of an action requesting the

court to ratify the award for the purpose of enforcing the

same. Typical of most jurisdictions, the UAE courts cannot

consider the merits of the arbitrator's findings and an

application to nullify an award must be on purely procedural

grounds which are outlined in Article 216 of the UAE Civil

Procedure Law.

A party may apply to the court to nullify an award at the

same time as the court is looking into validating an award.

Therefore, in the UAE (in contrast to other jurisdictions) the

validation or nullification of an arbitral award becomes

effectively the subject of a separate legal action. This is an

often-practised tactic by defendants who wish to nullify an

award on the basis of procedural errors. The claimant will

not be able to enforce the arbitral award until it is converted

into a final judgment confirming the validity of the original

award. This process can often delay the enforcement of an

award anywhere between six months to several years.

However, this may now only apply to domestic arbitration

awards (ie arbitration awards issued in the UAE) as

ratification of non-UAE arbitral awards are likely to be dealt

with under the New York Convention.

Recognition and enforcement of non-UAE arbitral

awards (other than the DIFC)

In July 2006, the UAE ratified its accession to the New

York Convention. By this ratification, the UAE joined its

GCC neighbours Oman, Bahrain, Qatar and Saudi Arabia

who have already ratified the New York Convention. It

entered into force in the UAE on 19 November 2006.

The New York Convention provides for the recognition and

enforcement of non-UAE arbitral awards in over 135

countries worldwide, subject to a limited number of

defences.

It applies to "non-UAE" arbitral awards, which are defined

as "arbitral awards made in the territory of a State other

than the State where the recognition and enforcement of

such awards are sought", as well as those that are "not

considered as domestic awards" in the State where

enforcement is sought.

The New York Convention is based on two important

principles; first, that of recognising the importance of

arbitral agreements, and second, any review of the arbitral

award is limited to specified grounds only. It is hoped that

this will substantially simplify the "validation" of arbitral

awards by the UAE Courts, but it remains to be seen how

the New York Convention provisions will be interpreted

and applied in practice.

The New York Convention sets out limited grounds on

which recognition and enforcement of an arbitral award

may be refused. It provides, for example, that recognition

and enforcement of a non-UAE award may be refused by

the court of its own motion in the country where

enforcement is sought where the court finds that the

subject matter of the dispute is not capable of being

settled by arbitration or recognition and enforcement would

be contrary to public policy.

The New York Convention specifically prohibits the

imposition of substantially more onerous conditions on the

recognition and enforcement of non-UAE arbitral awards

than are imposed on the enforcement of domestic arbitral

awards. It does not affect the validity of any multilateral or

bilateral agreement on enforcement of awards, or the

rights available to an enforcing party, under local law in the

country of enforcement.


Enforcement in the UAE

The key issue in determining whether a foreign judgment

will be enforced in the UAE is reciprocity. In order to

enforce the foreign judgment, it is necessary to

demonstrate to the UAE court that a judgment from the

UAE would be enforced by the foreign court. Such

reciprocity is most easily demonstrated where a treaty or

convention on enforcement exists between the UAE and

the foreign jurisdiction.

The UAE is a party to a number of bilateral and multilateral

treaties/conventions. The UAE has reciprocal enforcement

agreements in place with the GCC States on the

recognition and on the enforcement of judgments and

arbitral awards, France and India and co-operative

arrangements with other countries, including Syria, Egypt,

Jordan, Tunisia, Algeria, Sudan, Somalia, Djibouti,

Palestine, Lebanon, Libya, Morocco, Mauritania and

Yemen.

Generally, in the absence of a bilateral treaty/other

convention, non-UAE judgments are not automatically

enforced, as the procedure for enforcement of non-UAE

judgments is restrictive and heavily qualified. Even in cases

where a treaty/convention is in existence, enforcement

difficulties are likely to arise because of conditions

contained therein and powers given to judicial authorities to

look into conditions and evaluate them, although the

provisions of the treaty will be applied before local law.

In circumstances where there is no treaty/convention, for

UAE courts to enforce a non-UAE judgment it is not

sufficient that the non-UAE court had jurisdiction in

accordance with its own jurisdictional criteria. The following

terms and conditions for the enforcement and

implementation of non-UAE judgments (and arbitral awards)

must be met:

there is an overriding requirement to show reciprocity

of enforcement between the UAE and the country in

which the non-UAE judgment or order has been

granted

the UAE courts themselves must not have jurisdiction

in the proceedings in which the non-UAE judgment has

been issued and the relevant court issuing the

judgment had jurisdiction according to the law

governing that court. If both the non-UAE and the UAE

courts would have had jurisdiction in accordance with

each court's respective jurisdictional criteria, then the

UAE courts will not enforce the non-UAE judgment

the non-UAE courts must have had the requisite

jurisdiction under the applicable international rules

prescribed by the law governing any relevant court to

hear the dispute

the judgment or order must have been issued by a

competent court under the laws of the court in which it

was issued

the parties to the proceedings in relation to which the

judgment was issued gave due notice of the

proceedings, were properly summoned to appear and

did duly appear before the non-UAE court

the judgment is final under the law governing the

relevant court

the judgment does not conflict with any existing UAE

judgment

the judgment does not breach UAE public policy, order,

morals, or Islamic Shari'a.

If the above conditions have been satisfied, the non-UAE

judgment may be enforced directly by court order in the

UAE. In the event that the relevant UAE court is not

satisfied with any matter listed above, then it is likely that

the unsuccessful party will file a fresh claim.

The procedure for enforcement is the same as that for an

ordinary court action; an enforcement order application is

brought before the Court of First Instance within whose

jurisdiction enforcement is required. The application must

be accompanied by the non-UAE judgment (duly notarised,

legalised and consularised before the UAE embassy or

While the ratification of the New York Convention is to be

welcomed, it still remains to be seen how easy it will be in

practice to enforce non-UAE arbitral awards in the UAE.

As a note of caution, in some of the other Gulf countries

(eg Saudi Arabia), where the New York Convention does

apply in theory, it is still very difficult to enforce foreign

arbitral awards in practice. However, this important

development should be considered when drafting dispute

resolution mechanisms in contracts.

The uncertainty regarding the interpretation and

application of the New York Convention provisions by the

UAE courts is further reinforced by the lack of a system of

binding judicial precedent in the UAE and the

independent existence of different Emirates within the

UAE, some with their own court systems, whose rulings

may have no more than persuasive force cross border.

There is therefore no guarantee that the UAE courts will

take the same approach in similar proceedings in the

future.


consulate in the country where it was issued). Reciprocity

of enforcement evidence is usually provided in the form of

an affidavit from an independent lawyer in the relevant

country. A hearing date is then fixed at which both parties

will be summoned before the court to hear the objection.

Any objection suspends enforcement proceedings until the

court either dismisses the objection or terminates the

enforcement process.

Practical implications of pursuing an

action/enforcing a foreign award or

judgment in the UAE

It is very difficult to predict the time it will take in practice to

bring successfully an action/enforce a foreign arbitral award

or foreign judgment in the UAE courts. The complexity of

the case, the level of engagement of the courts and the

other party will, in practice, determine the time taken.

Requirements for documents to be translated into Arabic

also add to time (and cost). In this respect, UAE law does

not mandate a standard disclosure and inspection process.

Therefore each party is only required to produce the

documentary evidence upon which it seeks to rely. For

evidence to be admissible within the UAE courts, all

documentation must be in Arabic and/or duly translated.

The Arabic translation, if submitted, is deemed to be the

definitive and binding version for the purposes of all

proceedings before such courts. Equally, foreign judgments

must be translated into Arabic, legalised and ratified by the

relevant UAE court before being enforced. All translations

carried out for the purpose of submission before the UAE

courts must be prepared and certified by a translator

suitably licensed by the UAE Ministry of Justice (who, in

addition, may be required to affix his official stamp, which

will require notarisation). In addition, certain documents

may need to be notarised, legalised and authenticated

before they can be enforceable or admissible in evidence

before a UAE court.

If a substantive action (ie a case) is brought in the UAE, or

if a party seeks to enforce a foreign arbitral award or

judgment, the action will proceed via a series of

documentary pleadings. Only once the judge considers he

has enough information before him will the case be

reserved for judgment – this means that there may be

upwards of five or six rounds of pleadings prior to judgment.

The same process is followed at Court of Appeal level

(where new evidence can be introduced and the basis of an

appeal can be law or fact) and the Court of Cassation level

(no new evidence and appeals restricted to points of law).

In all but the simplest of cases, the Court of First Instance

(and possibly the Court of Appeal) will appoint an expert to

review the pleadings and evidence submitted by the parties.

The expert will then produce a report outlining his

conclusions. The report is not binding on the Court of First

Instance, but in practice it is highly persuasive. This

process can be intensive, often taking months.

If any document is executed in the UAE pursuant to a

power of attorney, to be valid and enforceable in the UAE,

the power of attorney must be notarised (no document can

be notarised unless it is in Arabic whether or not there is

also text in another language) and, if executed outside the

UAE, must be legalised and authenticated.

Only UAE lawyers (that is, UAE national lawyers and

lawyers from certain other GCC countries who must satisfy

specified criteria before a licence is issued) have rights of

audience in the UAE. There will therefore be a need to

appoint a local law firm in order to bring an action/seek

enforcement of a foreign judgment.


Product liability

The UAE has not enacted specific product liability

legislation; however, relevant provisions are contained

in various Federal laws and regulations, in particular:

Federal Law No. 24 of 2006 concerning Consumer

Protection (Consumer Protection Law)

Cabinet Resolution No. 12 of 2007 concerning the

Executive Regulation of Federal Law No. 24 of 2006

concerning Consumer Protection (Consumer

Protection Regulations)

the Civil Code

the Commercial Transactions Code

Suppression of Fraud Regulations – 4 of 1979 –

has provisions relating to false adversting.

The Consumer Protection regime is administered by

the Consumer Protection Directorate at the Ministry of

Economy (Directorate).

Product liability

The Consumer Protection Regulations protect consumers

from damage or harm arising from the use of a "commodity"

which is defective. A defect can be caused by the design or

manufacturing process of the product or as a result of not

warning the consumer about inherent dangers in the

product. Suppliers (which would include the manufacturer)

must ensure that consumers are properly educated in how

to use the products and are aware of any inherent or latent

dangers.

Under the product liability regime, a supplier may be liable

for any damage or harm resulting from use of a defective

product, providing spare parts in relation to the defective

product and providing any guarantees which have been

agreed or advertised.

Risks related to defective products

Recall

When?

The Consumer Protection Regulations contain "recovery"

provisions which require a supplier to issue a recall of the

product in the following circumstances:

discovery of a defect in the product (this is a very wide

definition which includes design and manufacturing

faults, non-compliance with standards, guarantee or

the specifications that are advertised by the supplier)

existence of reports or studies proving the existence of

a defect in the product

complaints received from consumers in relation to the

existence of a defect in the product

issuance of a notice from the Ministry of Economy

existence of recovery operations of the same product

abroad (ie a global recall of the product)

non-compliance of the product with adopted standards

in the UAE.

The recall provisions contained in the Consumer Protection

Regulations are very wide and, on a strict reading, would

appear to capture customer complaints, warranty claims

and minor defects in just one product, rather than a major

design fault which impacts the majority of products.

However, based on our understanding of product recalls

which have taken place in the UAE, the approach adopted

in practice in determining whether to institute a recall is

likely to be based on the following considerations:

the reasonable likelihood that the defect will affect all

or a material proportion of the products (ie the fault is

Repair, replace and refund

If a product or its spare parts are found to be defective,

the supplier will be held liable and will be required to

take one of the following actions (taking into account the

nature of the defect and the period for remedying such

defect):

repair the defective product

replace the defective product

refund the defective product.

Provided that the consumer takes into account the

nature of the defect and the period for remedying such

defect, the consumer has the right to select the action to

be taken to remedy such defect.

The supplier is also required to provide a substitute

product while any defect is being remedied.

In addition to the costs of remedying the defect, the

supplier is liable to a minimum fine of AED1,000 in

relation to the defective product and if the supplier fails

to indicate the hazards of using the product to the

consumer, thereby causing harm, he will be liable to a

minimum fine of AED10,000.


either inherent in the products or there is a reasonable

chance that it will appear in all the products)

the defects would put the health and safety of

consumers at risk.

Procedure

The supplier must announce the recall in two daily

newspapers at least twice (one of which must be in Arabic)

and on the Ministry of Economy website within a period of

24 hours from issuing the recall. The advertisement must

measure not less than 15cm by 15cm and must include the

following information:

name and address of supplier

description of product, including trademark and country

of origin

description of the defect

instructions for consumers on how to minimise the risk

of harm occurring

instructions for consumers to be followed to repair and

replace the product or to receive a refund.

The Directorate reserves the right to specify further

measures in relation to advertising the recall.

The supplier must notify the Directorate within 14 days of

any recall being initiated and provide the following details:

details of the product, including supplier and country of

origin

a colour photo of the product and defective part

an accurate description of the defective product and

cause(s) of such defect

quantity sold and quantity recalled

description of the harm which could be caused to

consumers

the procedures which will be taken to recall the product

the means for announcing the recall, including period

and times for such announcement

procedures to be taken by the supplier in relation to the

defective product

expected period for remedying the defect of each

product.

We understand that the Ministry of Economy has issued a

policy statement in relation to motor vehicle recalls

requiring all notifications to the Directorate to be made

within 24 hours of a recall being issued.

While the regulations provide for the timeframe for the

notification to the Directorate, they do not provide a

timeframe for the recall itself to be initiated following

discovery of a defect. It would, however, be prudent to take

action as soon as practicable following discovery of the

defect as the Ministry of Economy does have authority to

initiate a recall on behalf of the supplier. In this instance all

costs of the procedures will be met by the supplier.

In the case of a recall the supplier must replace, repair or

refund the cost of the product or defective part of the

product for free, regardless of any guarantee or warranty

period. In addition, the supplier must cover all costs relating

to transporting the product or sending technicians to

replace or repair the product.

The Abu Dhabi Quality and Conformity Council has

launched a public portal, "Manaa", to promote, control and

monitor consumer safety in Abu Dhabi (website:

www.qcc.abudhabi.ae/English/MediaCenter/News/Pages/M

anaa.aspx). The Manaa portal is an interactive product

recall and incident reporting system which identifies

products that have been recalled.

We also understand that the Dubai Department of

Economic Development is in the process of launching a

similar website.

Penalties

If the supplier fails to recall a product while knowing there is

a defect in the product, it will be deemed to have committed

commercial fraud under the Suppression of Cheating and

Fraudulence in Commercial Transactions Law and will be

liable to a prison sentence of up to two years and a

maximum fine of AED10,000.

The supplier will also be liable under the Consumer

Protection Law for a minimum fine of AED1,000 in relation

to the defective product and if the supplier fails to indicate

the hazards of using the product to the consumer, thereby

causing harm, he will liable for a minimum fine of

AED10,000.

In addition, the Ministry has the authority to suspend the

trading of the business for up to a week if it does not

comply with the Consumer Protection Law and may refer

the issue to the courts to impose a permanent closure of

the business.

Other product liability matters

The Dubai Department of Economic Development has

published policies relating to consumer protection. Such

policies require suppliers to provide spare parts for a period

of five years from the date of purchase.

The supplier must also clarify the replacement policy in the

outlet by prominently displaying it in Arabic and in any other

foreign language.


Intellectual property rights Since the initial adoption of laws relating to intellectual

property rights in 1992, the UAE has adopted laws

regulating trademarks, patents and industrial designs

and copyrights. The legal framework is developing and

the relevant government departments can take a long

time to process applications to register intellectual

property rights.

The Emirates Intellectual Property Association was

established to provide information and awareness to

the public about intellectual property rights. The offices

for regulating intellectual property rights in the UAE

include:

the Ministry of Information and Culture (Copyright

Department)

the Ministry of Economy (the Industrial Property

Authority deals with patents and the Trademark

Department deals with trademarks) (IP Authority).

Key legislation

Federal Law No. 37 of 1992 concerning Trademarks

(amended by Federal Law No. 19 of 2000 and Federal

Law No. 8 of 2002) (UAE Trademarks Law)

Ministerial Decision No. 6 of 1993 issuing the

Executive Regulations for Federal Law No. 37 of 1992

concerning Trademarks (amended by Ministerial

Decision No. 165 of 2001) (UAE Trademarks

Regulations)

Federal Law No. 17 of 2002 Regulating and Protecting

Industrial Property Rights For Patents and Industrial

Designs & Models (amended by Federal Law No. 31 of

2006) (UAE Patent Law)

Federal Law No. 7 of 2002 in Respect of Author

Copyrights & Parallel Rights (amended by Federal Law

No. 32 of 2006) (UAE Copyright Law).

International treaties

There is no requirement to register intellectual property

rights in the UAE if such rights have already been

registered in another country. Enforcement of such rights

may be obtained where the country in question has

acceded to treaties or conventions to which the UAE is an

intellectual property party. However, by registering such

rights in the UAE an intellectual property owner can ease

the manner in which enforcement is conducted.

The UAE is a member of, or has acceded to, the following

treaties and conventions which relate to intellectual

property rights:

WIPO Convention

Convention Establishing the World Intellectual Property

Organisation

Paris Convention for the Protection of Industrial

Property

Berne Convention for the Protection of Literary and

Artistic Works

Patent Cooperation Treaty (PCT)

Agreement establishing the WTO

WTO – Agreement on Trade-Related Aspects of

Intellectual Property Rights (TRIPS Agreement)

Convention for the Safeguarding of the Intangible

Cultural Heritage

Convention on the Protection and Promotion of the

Diversity of Cultural Expressions 2005

WIPO Copyright Treaty

WIPO Performances and Phonograms Treaty.

Trademarks

Overview

Under the UAE Trademarks Law, a trademark is anything

which takes a distinctive form, whether names, words,

signatures, letters, figures, drawings, symbols, titles, tax

stamps, seals, pictures, inscriptions, advertisements or

packs or any other mark or a combination thereof, which is

used or is intended to be used, either in distinguishing

goods, products or services. A number of symbols such as

public emblems, flags, official symbols, symbols of the Red

Crescent or the Red Cross and marks that mislead or

contain false information cannot be registered.

Registration and protection

Trademarks must be registered in the publicly accessible

Trademark Register at the Trademark Department of the

Ministry of Economy. The UAE laws do not provide

protection for unregistered trademarks.

A trademark may be registered in more than one class of

product or products in accordance with the International

Classification of Goods and Services under the Nice

Agreement. However, to register a trademark in more than

one class, separate applications must be submitted for

each class.


The Trademark Department can restrict or amend a

registration application in order to prevent confusion with a

previously registered trademark. The Ministry of Economy

will consider and make a decision on a trademark

application within 30 days of submission.

If an application is suspended or rejected, the applicant can

lodge an appeal with the Trademark Department within 30

days from such suspension or notification.

If the Trademark Department accepts the application, it will

publish a circular relating to the trademark before

completing the registration. Any objections to a registration

will be heard by the Trademark Department.

A party that has registered a trademark is considered the

exclusive owner of such mark. The ownership of the

trademark cannot be disputed if it has been in continuous

use by the owner for at least five years after its registration

date with no party challenging the validity of registration.

The owner of a registered trademark will be able to prevent

third parties from using identical or similar marks. A

registration is valid for 10 years and may be renewed for

further periods of 10 years.

Transfer of ownership and licensing

The owner of a registered trademark may, in accordance

with a written and attested agreement, give a licence to one

or more persons to use the trademark for all or some of the

products or services.

An assignment, mortgage or licence agreement shall not be

binding unless it is entered in the Trademark Register and

published.

Infringement and penalties

Imprisonment and a fine of up to AED5,000 can be

imposed for counterfeiting or imitating a registered

trademark to mislead the public, make fraudulent use,

register a trademark belonging to another person knowingly

or misusing it or selling or distributing knowingly products

bearing a counterfeit trademark. Further, imprisonment and

a minimum fine of AED5,000 (not to exceed AED10,000)

can be imposed for using trademarks without consent or

falsely indicating a mark to be registered.

A second time offender will, in addition to the above, also

risk closure of its business for a period ranging from 15

days to six months.

A party suffering damage can bring a civil action against the

infringing party to seek compensation. Before initiating a

claim, the owner of the trademark can seek the following

preventive measures from the court:

the preparation by the defendant of a detailed

descriptive inventory of the articles and tools intended

to be used or actually used in committing a violation of

the Trademark Law

the seizure of the relevant goods after the claimant

submits a financial deposit to indemnify the defendant

for the value of the goods.

Patents and utility certificates

Overview

Patentable material may be protected by filing a patent

application with the IP Authority which will issue a

protection document in the form of either a patent or a utility

certificate.

The material must have a degree of novelty and

inventiveness, scientific basis and industrial application.

Patents are not issued for research, biological methods of

production of plants or animals, methods of diagnosis,

theories and hypotheses, plans or rules applicable to

authentic intellectual activities or material prejudicial to

public order if exploited.

Utility certificates are issued for industrially exploitable

inventions which do not have adequate inventive qualities

to be granted a patent.

If all other requirements of registration are met, a party that

files an application for a patent or utility certificate will have

priority over those who follow.

If patentable material is created on a contractual basis or

pursuant to an employment agreement, any rights to such

patentable material shall devolve to the employer unless

otherwise agreed.

The rights to patentable material devolve to the inventor

and their legal successors.

Registration

The name of the creator of the patentable material must be

mentioned in the patent or utility certificate unless otherwise

stated. An application may include a demand to consider

priority of entrustment to another application previously

submitted in a state that is a party to an agreement or

convention with the UAE. If an application is dismissed, a

period of 60 days will be granted during which the applicant

can file an objection to the dismissal with the Complaints

Committee of the Ministry of Economy. The patent


certificate will be handed over to the applicant after 60 days

if no objection is filed.

The UAE is a signatory to the PCT, which allows a patent

registered in the UAE to be registered in other member

countries of the PCT. Protection is given to patents that are

registered in member countries of the PCT.

Transfer of ownership and licensing

A party can transfer a patent or a utility certificate before

the patent or utility certificate is granted. The transfer of a

patent or a utility certificate must be made in writing and be

signed by the contracting parties before the IP Authority

and then must be attested before the notary public. Any

assignment must be registered in the designated register.

Term and enforcement

The term of a patent is 20 years from the date of filing the

application and 10 years from the date of filing an

application in relation to a utility certificate. The holder of a

patent or utility certificate will be required to pay any annual

fee to register the patent or utility certificate. If a party fails

to pay the registration fee within six months from the initial

due date, the patent certificate will be rendered void.

The owner of the patent is entitled to prevent third parties

from using the process or any product generated as a result

of the use of the patent, and from using, retaining or

importing any resultant product without permission from the

patent owner.

In the UAE, if a party has, in good faith, manufactured or

utilised a patented product or process at the time another

party has lodged the protection application, such party shall

have the right to continue manufacturing regardless of

whether the third party has been granted a patent or utility

certificate.

Know-how

Practical know-how is statutorily protected against

unauthorised utilisation, disclosure and publication by third

parties so long as it is not placed in the public domain. To

receive the benefit of protection, measures should be taken

by the owner to keep the know-how confidential.

Although it is unlawful to use, disclose or publish know-how

without consent of the owner, if identical or similar

know-how is obtained by a person by lawful means it can

be used or disclosed to others without any consent from its

owner.

Industrial designs and industrial

drawings

Industrial designs or models (IDM) will not be subject to

protection unless registered with the IP Authority for which

it should be novel and innovative, capable of being used as

an industrial product and not cause prejudice to public

order or violate morals.

Protection is provided for 10 years from the date of

submission of protection application. Protection provides

the right to prevent third parties from using the IDM for

manufacturing or importing a related product or its use or

sale.

Copyright

Overview

Items can be copyrighted and protected by depositing such

copyrighted material with the Ministry of Economy but

failure to deposit does not prejudice protection. The items

which are subject to copyright include printed works,

computer software and its applications, databases and

similar works, lectures, musical works, audio-visual works

of art, architectural works, works of fine art, photographic

works, applied or plastic arts, diagrams, geographical maps

and derivative works of art.

Concepts, procedures, techniques, mathematical theories,

or abstract principles and facts will not be subject to

protection. Protection will not cover official documents,

news bulletins and similar work and works of art in the

public domain.

Only the author and his successor or the copyright holder

may authorise the exploitation of the copyrighted work in

any manner whatsoever. The author and his successors

may assign to a third party all or part of their rights to

exploit commercially the copyright provided that the

assignment is in writing and its purpose, duration and

territory are set out in the agreement.

Term of protection

An author's rights to commercial exploitation shall be

protected during the author's lifetime and extend for 50

years commencing on the first day of the calendar year

following the author's demise or the demise of the last

surviving joint-author in the case of joint authors.

Protection relating to applied works of art lapses after 25

years and for broadcasting authorities after 20 years,


commencing on the first day of the calendar year following

the year of first publication.

Any person can apply to the Copyright Department of the

Ministry of Economy for a mandatory licence for copying or

translating, or both, any work protected under the UAE

Copyright Law after the lapse of three years from the date

of publication in the case of an application for translation.

Copyright holders may assign their respective rights to

commercial exploitation to specialised professional

associations which undertake the management of such

rights.

Penalties and enforcement

An aggrieved party can petition the court to suspend the

publication, attach or seize copies and seize the proceeds

of any unlawful use of a copyright.

Parties that infringe copyright or other rights to commercial

exploitation or sell, rent-out or deal in any work of art,

performance, audio-record, or broadcast programmes shall

be subject to imprisonment of not less than two months and

the payment of a fine of not less than AED10,000.

Parties that unlawfully produce or import any work,

unlawfully obstruct or impede any protection to technology,

download or save any software without a licence, shall be

subject to imprisonment of not less than three months and

the payment of a fine of not less than AED50,000 and not

more than AED500,000.

If a party committing an offence is a corporate person, a

court can order its closure for not more than three months.

A court can take the following actions:

order the seizure and destruction of goods which

infringe a copyright

order the seizure of equipment and tools which are

used exclusively in committing an infringement

order the closure of the establishment where the

infringement took place.

Trade secrets

There is no dedicated regime protecting trade secrets in the

UAE.

The Civil Code imposes an obligation on employees to

keep industrial secrets of the employer, including upon

termination of such employment, confidential. Further,

criminal liability would be imposed on such employee if he

causes the information to be disclosed.


Investment policies The UAE is keen to promote foreign investment and

has established numerous free zones to facilitate this.

Foreign direct investment

The Commercial Companies Law requires at least 51% of

the shares in a UAE company to be owned by UAE

nationals or companies owned by UAE nationals. In some

circumstances some or all of the UAE ownership

requirement may be satisfied by nationals of other GCC

countries (or companies owned by them).

It is anticipated that a new Foreign Investment Law may be

issued which may provide a framework for relaxing the

foreign ownership restrictions in certain market sectors. The

timing for publication is currently unclear.

Free zone entities are generally not subject to the foreign

ownership restrictions.

As noted earlier, non-GCC nationals or companies partly or

wholly-owned by non-GCC nationals are not permitted to

own real property in the UAE outside of certain areas

designated for foreign ownership by a decree of the Ruler

of the relevant Emirate. Most foreign residents and foreign

businesses lease their homes and office spaces. Entities

operating outside the free zones are permitted to lease

space in the UAE upon registration as a locally

incorporated entity or as a branch or representative office.

For entities operating within the free zones, registration as

a free zone entity requires, in most cases, a lease or

purchase of freehold from the free zone's real estate

authority.

Commercial agencies

If a foreign entity wishes to carry out business in the UAE

without establishing a physical presence, it may enter into a

distribution or agency relationship with a licensed UAE

national or company wholly owned by a UAE national.

In the UAE, commercial agency and distribution

arrangements are governed by the Commercial Agencies

Law (Federal Law No. 18 of 1981) as amended (CAL).

The rights of the parties to a distribution/agency agreement

will depend upon whether the agreement is registered as a

commercial agency with the Ministry of Economy pursuant

to the CAL. In order to be registered:

the agent/distributor should be a UAE national or a

company wholly-owned by UAE nationals

the agreement should state that it is given to the

agent/distributor on an exclusive basis

the agreement should be governed by UAE law and

should be subject to the jurisdiction of the UAE courts

the agreement should be prepared in Arabic (or in

English/Arabic dual format) and notarised

the agreement should provide for registration, or the

consent of the principal to registration should be

obtained in a separate letter.

UAE free zones

Free zones are geographical areas in the UAE that are

intended to promote inward investment and provide a

market-oriented legal and regulatory alternative to the

non-free zone regime that exists elsewhere in the UAE.

Free zones may adopt their own rules and regulations,

although, with the exception of the DIFC, they generally

remain subject to UAE Federal laws. The free zones

are, however, able to exclude provisions of the UAE

Commercial Companies Law (in particular, the

restrictions on foreign ownership of companies) and

offer investors a single point of contact for establishment

and licensing.

The main benefits of free zones include 100% foreign

ownership and exemptions from taxes and custom

duties. Land and property may be leased for a specified

period of time under fully transferable renewable leases

and ownership of land is possible for a 99-year period.

The free zones also facilitate speed and ease of

establishing a presence.

The principal disadvantage of free zones is that

companies established in a free zone are unable to

conduct business outside the relevant free zone in the

UAE other than through a registered commercial agent,

representative or distributor licensed by the relevant UAE

authorities or without a licence from the relevant UAE

authorities.

Examples of some of the larger free zones include the

DIFC, the Jebel Ali Free Zone, Dubai Internet City, Dubai

Media City, Dubai Healthcare City and the Dubai Airport

Free Zone (all of which are located in Dubai) and Masdar

Free Zone, Abu Dhabi Global Market and Abu Dhabi

Airports Free Zone (all of which are located in Abu

Dhabi).


On a strict interpretation of the CAL it could be argued that

unregistered distribution agency agreements are not valid.

However, from our experience of practice in the UAE,

unregistered agreements are regarded as valid even if they

are not registered with the Ministry of Economy, and the

usual principles of UAE contract law would be applied to

them.

Registration provides the agent with certain statutory

protections, making it extremely difficult, in practice, for the

principal to terminate or fail to renew a registered

agreement without the payment of compensation. Even if a

material reason exists for termination, the Commercial

Agency Committee is still likely to award compensation to

the agent.

The CAL also provides that a principal may not import any

products into the territory covered by the agency agreement

either directly or indirectly if the agreement is registered

with the Ministry of Economy.

Preferential policies and incentives for

foreign investment

While the UAE has pursued an open and progressive

economic agenda aimed at attracting foreign investment

and reducing reliance on oil resources and income, there

remain a number of restrictions on foreign investment as

discussed more fully in other sections of this guide.

The establishment of free zones and ongoing discussions

relating to possible relaxation of the foreign ownership

restrictions do point towards more economic freedom for

foreign investors wishing to establish themselves in the

UAE, although the timing of this remains uncertain.

Anti-trust

The UAE enacted a Competition Law (Federal Law No. 4 of

2012 concerning the regulation of Competition (Competition

Law)) in December 2012, which came into force on 23

February 2013. Prior to the Competition Law there were no

specific laws or provisions in existing laws that dealt

comprehensively with the issue of anti-competitive

behaviour in the UAE.

While the UAE Competition Law is now in effect, the key

implementing regulations (which, among other matters,

establish the UAE's competition regulator and set the

relevant thresholds) have not yet been introduced. In

practice, this means that it is not currently possible for a

party, or its advisers, to state with certainty the impact of

the Competition Law.

The Competition Law applies to enterprises, being any

natural or legal person or consortium of such persons,

engaging in economic activity or holding intellectual

property rights in the UAE. Where economic activity occurs

outside the UAE but has the ability to affect competition in

the UAE, these practices and agreements will also be

subject to the Competition Law.

The Competition Law prohibits activity constituting an

abuse of dominant market position and restrictive

agreements above a certain de minimis threshold and

regulates economic activity (including mergers and

acquisitions) which will result in an enterprise attaining a

dominant market position.

Dominant position

An enterprise will be considered to have a dominant

position in a market where its total number of transactions

in that market exceeds a certain percentage of all

transactions undertaken in that market. The UAE

Competition Law does not indicate what that percentage

threshold is and this is expected to be communicated by

the Cabinet in due course. The Cabinet is also empowered

to reduce or increase this percentage threshold depending

on prevailing economic circumstances.

The Competition Law does not prohibit an enterprise from

occupying a dominant market position – this may be

achieved legitimately by having a superior product or

providing a superior customer service. What is prohibited is

using market dominance to act independently of

competitors, customers, suppliers and, ultimately, the final

consumer in a way that prejudices, limits or prevents

competition.

Where a firm having a dominant position in the market acts

in a manner which is anti-competitive to maintain or

increase its market share, then it will be considered to be

abusing its dominant market position. The UAE Competition

Law prohibits such behaviour as it damages true

competition between firms, exploits consumers, and makes

it unnecessary for the dominant firm to compete with other

firms on merit. Activity that may be considered abuse of a

dominant market position can include:

Predatory pricing: where a firm deliberately drives

down the prices of products and services to below

market costs to drive competitors out of the market or

restrict competitors from entering a market. Where

prices are set below average variable costs, this is

likely to indicate predatory pricing.


Indirect resale price maintenance: where a firm

indirectly fixes the resale price of products and

services to the dealer's consumers including, for

example, by setting a fixed distribution margin or

maximum level of rebate. The supplier is imposing

conditions on the buying and selling of products and

services.

Trade restraints: obliging a dealer or customer not to

deal with a competitor, denying a dealer or customer

access to products and services or not permitting

access on standard commercial terms and

discriminating between different types of clients as to

the prices of products and services.

Ancillary restraints: restraints imposed on a

legitimate trade activity. An ancillary restraint does not

constitute the primary obligations of an agreement (eg

exclusive geographical distribution) but is directly

related to the functioning of the objectives of the

agreement (eg conditions of sale in those exclusive

geographical territories).

Price manipulation: removing, decreasing or

increasing the supply of products and services or

disseminating incorrect price information to maintain an

artificial price for products and services.

Restrictive agreements

The Competition Law provides examples of what may be

considered a restrictive agreement:

Direct resale price maintenance: agreements

between the supplier and dealer which directly fix the

resale price of products and services to the dealer's

consumers.

Collusion in bids: agreements with other firms which

can prejudice the outcome of a process whereby bids

are submitted. This may include agreeing in advance

the value of bids to be submitted, or the lowest bid to

be submitted. Agreements between firms as to which

tenders are bid for with a view to allocating value

contracts between them will also fall under this head.

Essential facilities: agreements which limit the

availability of a facility or infrastructure which is

necessary to reach customers and/or required to

enable competitors to carry on their business. Where

such facilities are difficult or prohibitively costly to

reproduce and agreements limit the availability of such

facilities and infrastructure, such agreements are likely

to be considered anti-competitive.

Exclusive distribution: agreements whereby one firm

grants exclusive rights to another firm in respect of its

products and services. This may include exclusive

geographical distribution rights. Typically, competition

in this regard is maintained by inter-product

competition as opposed to competition between

suppliers. However, it may be worth reviewing these

agreements to ensure that they do not contain any

ancillary restraints.

Other distribution agreements: agreements which

prescribe the level of products and services offered in

a particular market. Where the oversupply or

undersupply of products or services to a market is

done with a view to affecting the price of the products

or services, then this is likely to be considered

anti-competitive.

Barriers to entry: factors which prevent or hinder

companies from entering a specific market. Entry

barriers may result, for instance, from a particular

market structure or the behaviour of incumbent firms

(eg prohibiting new entrants from engaging in existing

trade organisations or coalitions).

Merger and acquisition control

The Competition Law requires any activity which will result

in an enterprise attaining a dominant market position (such

as a merger or acquisition) to obtain the prior approval of

the Ministry of Economy. Again, what will be considered a

dominant market position will be determined by the Cabinet

and subject to change. If approval is not sought, an

enterprise may be subject to a fine representing between 2%

and 5% of annual revenues of the business undertaken in

the resultant dominant position. If annual revenues cannot

be determined, a financial penalty of between AED5,000

and AED5 million may be imposed.

As mentioned above, the key implementing regulations

have not yet been introduced. Accordingly, when

considering whether to notify or not it is not currently

possible, for a party to a transaction, or its advisors, to state

with certainty that a notification requirement arises. Under

such circumstances, companies will regularly pursue one of

two options:

take the view that the law is not yet in force, and

decide not to contact the authorities or otherwise

request an informal assessment of the deal

approach relevant governmental ministries (most likely

the UAE Ministry of Economy) to seek an informal

review process.

The merits of the latter option lie primarily in maintaining a

reputation as a good corporate citizen and in building


relationships with governmental contacts who will later be

responsible for the formal notification process, once

implemented. The downsides are uncertainty as to process

and timing, the scope of information that might need to be

provided, and the inevitable difficulties of trying to manage

a review that is not subject to any statutory timeframe or

agreed boundaries.

As to potential jurisdictional thresholds that might be

adopted, the UAE, like the Saudi Arabian regime, includes

a market share-based threshold. It is conceivable that the

UAE may adopt the same approach as Saudi Arabia, using

a market share threshold of 50%.

Penalties

If an enterprise continues to engage in anti-competitive

activity or be a party to restrictive agreements then it may

be subject to a fine of between AED5,000 and AED5 million.

Where an enterprise continues to violate the provisions of

the Competition Law then the fine can be doubled. In the

severest cases, the court may order the enterprise to shut

down operations for a period of between three and six

months and cause notice of such to be published in two

local newspapers. The penalties are therefore severe and

have the potential to inflict severe reputational damage.

Anti-dumping

The UAE acceded to the World Trade Organisation (WTO)

in 1997 and signed an agreement on anti-dumping, which

was adopted in the Uruguay Round. The GCC has since

developed a unified anti-dumping law to protect against

dumping of products by all other non-GCC nations which

are members of the WTO. The UAE ratified this agreement

in Federal Decree No. (7) of 2005 concerning the GCC

Unified Law on Anti-dumping, Countervailing Measures and

Safeguards (Anti-dumping Law).

Application

The Anti-dumping Law is intended to combat practices

which cause or threaten to cause damage to the market in

the GCC and targets the following three practices:

dumping: the exportation of products into the GCC at

an export price lower than their value on the

international markets

subsidising: direct or indirect financial contributions to

the exporter from the government in the country of

origin or from a public authority therein

unjustifiable increase of imports: the importation of

non-dumped and non-subsidised products to GCC

countries at increasing quantities absolutely or relative

to local production which causes gross damage to the

market in the GCC.

The Anti-dumping Law applies to countries other than

members of the GCC.

Complaints

Complaints may only be filed by a representative of the

relevant industry, the relevant GCC state's Chamber of

Commerce or Industry or relevant Ministry and any

producer's union or interest group. Complaints should be

lodged with the Technical Secretariat of the Permanent

Committee. The Permanent Committee is composed of

representatives of the governments of each GCC Country.

The Permanent Committee is responsible for determining

when to initiate or terminate an investigation, implement

provisional measures and advise on penalties. The

Technical Secretariat performs the administrative functions

of the Permanent Committee.

In order for the Permanent Committee to undertake an

investigation, the complaint must be supported by domestic

producers whose output constitutes 50% of the total

production of the product or similar products.

Provisional measures

Provisional measures may be imposed against the products

of the country in question. These measures can take the

form of provisional customs duties being imposed on the

relevant product. These measures will not prevent the

importation of the product in question into the GCC.

Provisional measures are restricted to a period of four

months, which may be extended for a further two months in

the case of dumping and subsidising breaches.

Penalties

An infringement of the Anti-dumping Law will result in the

relevant state imposing punitive charges or customs duties

against the products being imported from the state in

question. The actual amounts will depend on the

circumstances.

The Ministry of Economy in the UAE currently administers

the rules and regulations relating to anti-dumping at UAE

level.


Company law and corporate

governance Companies incorporated or established in the UAE are

subject to the Commercial Companies Law other than

the following, which can be partially or fully exempted:

companies incorporated in any of the UAE's free

zones, if the free zone has special provisions

regulating these companies (otherwise the

Commercial Companies Law prevails)

companies operating in the exploration, extraction,

marketing and transportation of oil, or in producing

electricity, gas, water, desalination and related

activities

any company excluded from the provisions of the

Commercial Companies Law by resolutions of the

Council of Ministers.

Licensing

In order to commence (and continue) trading in the UAE,

every legal entity or business must be licensed to conduct

the relevant trading activity or activities by the appropriate

authorities. In general, the licence is renewable annually.

Generally speaking, companies and businesses operating

"onshore" in the UAE (ie not in a free zone) will need to be

licensed by the Municipality and/or Economic Department

of the Emirate in which they are established. In Dubai, the

competent authority is the Dubai Department of Economic

Development, and in Abu Dhabi it is the Abu Dhabi

Department of Economic Development.

A trade licence (usually designated as either a commercial,

industrial or professional licence, depending on the nature

of the activity) may permit the licensee, to a limited extent

and depending on the nature of the business, to conduct

business activities in other Emirates but it will not generally

permit a licensee to establish a place of business in another

Emirate (which requires a separate licence).

If a company is seeking to tender for government contracts

in a particular Emirate, it may be necessary to have

established a legal entity in that Emirate, which is duly

licensed to conduct the relevant activity.

Certain activities are reserved solely for UAE nationals or

nationals of other GCC countries.

In some sectors (for example, construction), trade licences

will only be issued if it can be shown that the company or its

shareholders have the requisite experience of operating in

the relevant sector. In addition, for some activities, such as

financial services, education, healthcare and utilities,

consents may need to be obtained from Federal institutions.

An entity licensed to conduct business in a free zone by the

relevant free zone authority may, generally speaking, only

conduct business in the free zone or outside the UAE.

As a general rule, all entities in the UAE (other than

offshore companies within certain free zones) are required

to have a physical place of business within the Emirate in

which they are licensed and, in the case of entities

established in free zones, physically within the relevant free

zone.

Forms of entity

Common forms

It is possible to establish a place of business in the UAE

either "onshore" in an Emirate under the Commercial

Companies Law or in one of the free zones within an

Emirate.

The most common forms of entities incorporated under the

Commercial Companies Law are limited liability companies,

public joint stock companies and private joint stock

companies.

Free zones are regulated by the relevant free zone

authority and generally have their own company laws.

Consequently, foreign companies seeking to establish a

presence in a free zone do not, generally speaking, need to

comply with the restrictions on foreign ownership in the

Commercial Companies Law and may establish wholly-

owned companies.

Limited liability company

An LLC is generally the preferred vehicle for foreign

investors seeking to establish a presence in the UAE.

A new Commercial Companies Law for

the UAE

A new Commercial Companies Law is expected to be

published in the federal official gazette later this year

and come into force three months after publication. The

current draft of the new Commercial Companies Law

(New CCL) contains certain provisions that will have an

impact on the subject matter of this guide if fully

enacted. This guide addresses relevant anticipated

changes which may alter the current position.


An LLC may not carry out insurance, banking or

investment management activities.

An LLC is a separate legal entity, distinct from its

shareholders. It enters into contracts in its own name

and is responsible for the performance of the legal

obligations in these contracts.

Shares in an LLC may not be issued or offered to the

public without first converting the company into a public

joint stock company.

Shares in an LLC must be fully paid up on issue and

must have a nominal value of at least AED1,000.

There is no specific minimum share capital

requirement. An LLC must have sufficient share capital

to achieve its purposes, as determined by its

shareholders, although the competent authority in each

Emirate retains the discretion to prescribe a higher

minimum capital threshold for specific types of

activities.

An LLC must have not less than two and not more than

50 shareholders (75 shareholders under the New CCL)

(referred to as "partners" in the Commercial

Companies Law, although in practice the terms

"partner" and "shareholder" are used interchangeably).

Shareholders have statutory rights of pre-emption on

any transfer of shares by another shareholder (which

cannot be waived in advance).

An LLC is not permitted to issue share certificates and

it is the entry on the register maintained by the

competent authority in the relevant Emirate that

evidences legal ownership.

There is currently no clear legal mechanism by which a

shareholder in an LLC may create a pledge over its

shares. Under the New CCL, a shareholder in an LLC

may pledge its shares; however, there is some

uncertainty as to how this will work in practice given

that LLCs do not issue share certificates.

The constitutional documents of the LLC may give its

shareholders mutual blocking rights by increasing the

thresholds at which resolutions may be passed.

Management rights may be vested in a particular

shareholder (which may be a foreign shareholder).

Entitlements to distributions can be allocated

disproportionately to the shareholdings in the LLC by

including a different ratio in the Memorandum of

Association (MoA). In Dubai, the authorities have

historically permitted a ratio of 80:20 in favour of a

minority shareholder, and in Abu Dhabi a ratio of 90:10

has been permissible.

An LLC must allocate 10% of its net profits each year

to create a statutory non-distributable reserve until the

reserve equals half the company's capital.

Public and private joint stock companies

Public and private joint stock companies are essentially

the same form of legal entity, with the principal

exception that only a public joint stock company can

apply to have its shares listed on a UAE stock

exchange and issue shares or debt securities to the

public.

A joint stock company is a separate legal entity distinct

from its shareholders. It enters into contracts in its own

name and is responsible for the performance of the

legal obligations in those contracts.

Joint stock companies must have a minimum share

capital of AED10 million (AED30 million under the New

CCL) for a public joint stock company and AED2

million (AED5 million under the New CCL) for a private

joint stock company.

Shares in joint stock companies must be of an equal

nominal value between AED1 and AED100.

A private joint stock company must have at least three

shareholders (two shareholders under the New CCL)

and a public joint stock company must have at least 10

shareholders (five shareholders under the New CCL).

The liability of shareholders is limited to the amount

unpaid on shares held by them (if any).

There are no statutory rights of pre-emption on a

transfer in shares in a public joint stock company

(PJSC), although pre-emption rights exist in favour of

existing shareholders on an issue of new shares.

Under the New CCL it will be possible to sell such

pre-emption rights to a third party.

A PJSC must allocate 10% of its net profits each year

to create a statutory non-distributable reserve until the

reserve equals half the company's capital.

Regulations issued by SCA require public joint stock

companies to list their shares on a UAE stock

exchange within one year of their establishment.

The table below provides a brief overview of the

advantages and disadvantages associated with an LLC and

a private joint stock company:


Branches of foreign companies

Branches of foreign companies are permitted under the

Commercial Companies Law.

The ability to obtain a licence to establish a branch of a

foreign company is at the discretion of the authorities in

the relevant Emirate and, generally, branches are not

permitted to carry out commercial trading (as opposed

to professional) activities in the UAE. It is also possible

to obtain a more restrictive form of licence to establish

a representative office to perform marketing and

administrative functions on behalf of a foreign parent.

A branch of a foreign company is currently required to

appoint a UAE national (or a company wholly-owned

by UAE nationals) as its service agent or sponsor. The

sponsor will normally be paid an annual fixed fee for

his/her services and, except for this fee, is not entitled

to share in the profits or to own any assets of the

branch or to receive any fees or commissions. This

requirement is likely to be removed in the New CCL.

Branches/representative offices are not separate legal

entities.

Sole proprietorships

A substantial amount of business in the UAE is conducted

through sole proprietorships. Generally speaking, only UAE

nationals are permitted to obtain a trade licence to conduct

commercial (as opposed to professional) activities as a sole

proprietor, but in some Emirates this right may be extended

to GCC nationals.

Entities established in free zones

Entities established in free zones may be treated as being

"offshore" or outside of the UAE for certain legal purposes.

Free zones may adopt their own rules and regulations and

can elect to disapply the provisions of the Commercial

Companies Law but, with the exception of financial free

zones, are otherwise subject to the provisions of UAE

Federal law.

Entities established in free zones usually take the form of

either: (i) a branch of a foreign company; (ii) a sole or

multi-shareholder limited liability company more commonly

known as a free zone establishment (FZE) or a free zone

company (FZCo); or (iii) an offshore company.

FZEs and FZCos are generally required to have a minimum

share capital of between AED500,000 and AED1 million,

although the precise requirements vary from free zone to

free zone.

ADVANTAGES

Private Joint Stock

Company

Limited Liability

Company

Commercial banks in the

UAE accept pledges over

shares in respect of

financings

One month to three

months for incorporation

Public offerings of shares

are permitted if approved

by the Emirates Securities

and Commodities

Authority (following

conversion to a public joint

stock company)

Less initial capital required

and flexible management

of the company

Less cumbersome share

transfer process – no

requirement to attend a

notary

No statutory lock-up

period on transfers of

shares

Wider permissible

activities (eg banking and

insurance)

Only two shareholders

required

DISADVANTAGES

Joint Stock Company Limited Liability

Company

At least four to six months

for incorporation

No clear legal route to

pledge shares

Minimum of three

shareholders, three board

members and minimum

capital of AED2 million2

required. Shareholder

meetings must be

convened on notice and

publically advertised

Pre-emption rights over

existing shares under the

Commercial Companies

Law mean that a transfer

of shares requires the

cooperation of all

shareholders

A majority of the board

(including the Chairman)

must be UAE nationals

Cannot carry out certain

activities (eg banking and

insurance)

Statutory lock-up period of

two years from

incorporation on transfer

of shares

Maximum of five directors

currently permitted

___________________________ 2 A public joint stock company must have a minimum share

capital of AED10 million.


An offshore company may generally conduct any business

(other than insurance or banking) provided that it does not

trade or carry out business in the UAE or with persons

resident in the UAE. Certain property purchases and other

activities are not regarded as prohibited onshore activities.

Less common forms

Civil companies

In addition to companies that may be incorporated under

the Commercial Companies Law, there are three types of

civil company that may be established under the Civil Code:

service/professional companies (similar to English

partnership arrangements)

speculative venture partnerships (a contract between

two or more persons to purchase property on credit, to

sell it and to subsequently share in the profits as

agreed between them)

"mudaraba" arrangements (a contract whereby one

partner contributes capital/property and the other its

effort or work in order to make a profit).

Decree companies

Decree companies are established by a decree of the Ruler

of the relevant Emirate.

Following the implementation of the Commercial

Companies Law, existing decree companies were required

to convert to one of the types of companies permitted under

the Commercial Companies Law. The legal status of

companies which have not regularised their positions is a

matter of some uncertainty (particularly as many of the

remaining decree companies have some element of

government shareholding).

Partnership companies

Partnership companies are split into general and limited

partnerships.

In a general partnership the partners (who must be UAE

nationals) are liable jointly and severally to the extent of all

their assets for the liabilities of the partnership.

A limited partnership consists of one or more general

partners (who must be UAE nationals), each of whom is

liable for the obligations of the partnership to the full extent

of his or their assets, and one or more limited partners

liable only to the extent of his or their respective share in

the partnership.

The limited partners may be foreigners but they are not

entitled to have their name incorporated into the name of

the partnership.

Incorporation of commonly used

corporate entities

Shelf company procedure

Due to the nature of the incorporation process,

there is no shelf company conversion procedure

available by which a previously incorporated

company with no previous trading history can be

transferred to a client.

Process and documentation required for

incorporation

The following formalities must be completed in

order to register a new LLC with the UAE

authorities:

Approval of the LLC's name and activity must

first be obtained from the competent authority

in the Emirate in which the LLC is to be

established (the Competent Authority). In

Dubai, the Competent Authority is the

Department of Economic Development and in

Abu Dhabi it is the Abu Dhabi Department of

Planning & Economy.

The establishment of an LLC carrying out

certain types of activity may require the

approval of one or more local or Federal

Government departments in the form of a

"no-objection" confirmation. For example,

companies carrying out industrial activities

require the approval of the Minister of Industry

and construction activities require the approval

of the Municipality in the relevant Emirate.

The MoA, which is a standard form document

but can be amended to a limited extent, must

be prepared in Arabic or dual language

English/Arabic.

Once agreed the MoA must be signed by duly

authorised representatives of the initial

shareholders in the presence of the Court

Notary.


Management structure

LLCs

Management of an LLC is carried out by a single board of

between one and five directors which has the authority to

exercise all powers of the company that are not specifically

reserved for the shareholders.

Directors may be removed by the shareholders in

accordance with an LLC's MoA, by unanimous shareholder

resolution or court order.

There is no general requirement that directors should be

UAE nationals, although certain companies carrying out

industrial activities require a majority of the directors to be

UAE nationals.

There is no statutory requirement that directors be

shareholders.

An LLC with more than seven shareholders must form a

supervisory board containing at least three shareholders,

appointed by the general assembly of shareholders for

renewable periods.

An LLC is required to have a general manager, who is

named on the trade licence and may be one of the directors.

The manager may have powers delegated to him/her by the

board of directors and/or specified in the company's MoA.

The general manager must be a UAE resident or GCC

national.

Once a management structure has been chosen, a great

degree of flexibility can be given to the management under

the MoA, including the ability to change the management,

alter procedures and delegate responsibility.

Free zone companies

Free zone companies are generally managed by a board of

directors consisting of at least two directors.

There is no general requirement that directors of free zone

companies should be UAE nationals. However, for some

free zones, at least two of the directors and the secretary

must be resident in the relevant Emirate.

Directors generally have the authority to exercise all the

powers of the company that are not specifically reserved to

the shareholders.

Directors' duties

Duty to company

Although not explicitly stated in the Commercial Companies

Law, the directors are generally considered to owe duties to

the company, not directly to the company's members

(ie shareholders). Only the company can enforce these

duties in the event of a breach but shareholders can bring

derivative claims in the name of the company against

directors in certain circumstances.

A director must avoid actual or potential conflicts of interest

and may not participate in any competing business without

shareholder approval (renewable annually).

A director must declare to the other directors any interest in

conflict with that of the company in respect of a proposed

transaction or arrangement with the company, and is not

permitted to vote on a resolution concerning the relevant

transaction or arrangement.

A director who accepts a bribe from a third party commits a

criminal offence punishable by imprisonment for up to five

years. No de minimis threshold applies and the offence is

committed whether or not the director intended to be

influenced by the bribe.

The notarised MoA, together with certain supporting

documents, must be submitted to the Competent

Authority. The supporting documentation required

can change from time to time but will generally

include:

– a bank certificate and auditors' certificate

confirming deposit of the initial share capital

– constitutional documents of the shareholders

and resolutions authorising the establishment

of the LLC (notarised in the country of origin in

the case of non-UAE shareholders)

– a lease in relation to the LLC's office premises

– any requisite "no-objection" confirmations.

The LLC must then apply to the Competent

Authority for a trade licence by submitting the

following documents, together with the applicable

fees:

– a prescribed application form

– the original lease of the LLC's premises

– a prescribed form for obtaining the requisite

Municipality approval of the premises.

Once the trade licence is obtained, the LLC should

be registered with the Chamber of Commerce and

Industry in the relevant Emirate.


Duty to shareholders

Any shareholder may bring a derivative action in respect of

alleged breaches of duty by directors. A shareholder is not

required to hold any minimum number of shares in order to

have standing to bring a claim but must notify the company

of the intention to initiate proceedings in advance.

Duty to creditors

There is no specific requirement for directors to have

regard to the interests of the company's creditors, whether

in times of financial difficulties or otherwise.

If a company has suspended payment of its debts, the

directors must apply to a UAE court for a declaration of

bankruptcy within 30 days of the suspension. If the

company fails to file within the 30-day period, the directors

can be found guilty of the criminal offence of negligent

bankruptcy.

Liability of directors

A director may be personally liable to the company,

shareholders and third parties for acts of fraud, power

abuse, violations of the Commercial Companies Law or the

company's constitutional documents and/or

mismanagement.

A director may be personally liable for misstatements or

information disclosed to licensing and regulatory authorities

or otherwise published (such as in offer documents) which

cause loss or damage to third parties. Such loss or damage

can encompass a broad range of harm, considered by the

courts on a case-by-case basis.

In the event that the assets of a bankrupt company are

insufficient to meet at least 20% of the company's debts,

the court overseeing the bankruptcy may direct some or all

of the directors to pay some or all of the company's debts

where the directors are held to be responsible.

Continuing obligations

Once the company has been incorporated it is necessary to

comply with certain ongoing requirements, including the

following in relation to an LLC (which is the most common

form of company):

an LLC needs to renew its trade licence annually,

although for some industry sectors licences of three

years may be obtained

the manager(s) of an LLC must prepare annual

accounts. The accounts should be audited by a locally

registered auditor (appointed by the shareholders),

ratified by the general assembly at its annual meeting

and filed with the Competent Authority and the Ministry

of Economy

the manager(s) of an LLC must convene a general meeting of the shareholders annually within four months of the end of the LLC's financial year; and an LLC must contribute 10% of its annual net profits towards a statutory reserve until such reserve is equivalent to half of the LLC's share capital.

Statutory reserved matters

The Commercial Companies Law sets out a number of

matters that require a certain percentage of shareholders

voting in the affirmative to be validly passed. These are

set out below. It is permissible for the shareholders to

agree to increase the percentage thresholds in the MoA.

100%

Shareholders representing 100% of an LLC's share

capital must vote in the affirmative in order to:

increase the financial obligations of the shareholders

dissolve the company.

75%

Shareholders representing at least 75% of an LLC's

share capital must vote in the affirmative in order to:

amend the MoA (including changes to its objects)

increase or decrease the share capital

convert the company to another type or approve the

merger or amalgamation with another company.

In practice, these matters require the unanimous

approval of all shareholders as the Court Notary requires

all shareholders to sign any amendment to the MoA

(which is a necessary part of the process to complete the

other matters).

50%

Shares representing at least 50% of an LLC's share

capital must vote in the affirmative in order to:

appoint auditors

approve balance sheets, profit and loss statements,

and distribution of net profits (if any).


Contacts

Dubai

James Abbott

Partner, Litigation, Dispute & Resolution T: +971 43620 608 [email protected]

Tim Plews

Partner, Banking & Finance T: +971 4362 0689 [email protected]

Robin Abraham


Mike Taylor

Partner, Corporate T: +971 50559 5371 [email protected]

Mohammed Al-Shukairy


Stuart Ure

Partner, Capital Markets T: +971 43620 659 [email protected]

Peter Avery


Debbie Walker


Debashis Dey

Partner, Head of Capital Markets, Middle East T: +971 43620 624 [email protected]

Nigel Wellings

Partner, Head of Corporate, Middle East T: +971 43620 676 [email protected]

Abu Dhabi

Qudeer Latif

Partner, Head of Islamic Finance T: +971 43620 675 [email protected]

Sandy Hall

Partner, Construction T: +971 2613 2343 [email protected]

Graham Lovett

Office Managing Partner, Middle East, Litigation & Dispute Resolution T: +971 43620 625 [email protected]

Mohamed Hamra-Krouha


James McCarthy


Rupert Harper



This publication does not necessarily deal with every important topic or cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice.

Clifford Chance, Building 6, Level 2, The Gate Precinct, Dubai International Financial Centre, P.O. Box 9380, Dubai, United Arab Emirates

© Clifford Chance 2014

Clifford Chance LLP is a limited liability partnership registered in England and Wales under number OC323571. Registered office: 10 Upper Bank Street, London, E14 5JJ. We use the word 'partner' to refer to a member of Clifford Chance LLP, or an employee or consultant with equivalent standing and qualifications. Licensed by the DFSA.

www.cliffordchance.com

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