This year has been one of landmark reforms in the UAE, with the government introducing sweeping amendments to laws on inheritance, bounced cheques, bankruptcies and economic support during the Covid-19 pandemic.
“The sweeping changes come as part of the UAE’s efforts to develop its legislative and investment environment,” says Mihaela Moldoveanu, head of LegalTech at Burj Financial and head of advisory at The Metis Institute.
“The laws have followed suit to our changed reality in the UAE, and are presenting the country as a welcoming, tolerant home for people from various backgrounds, their families and their investments.”
The National spoke to legal experts about this year's regulatory changes, their effect on personal finances and whether there will be additional reforms next year.
Decriminalising bounced cheques
The UAE updated the Federal Law on Commercial Transactions in October with several new provisions that aim to discourage criminal lawsuits against people and businesses for bouncing cheques.
The amendments come into effect in 2022 and will introduce a mechanism that ensures banks partially pay the amount to the beneficiary after it is deducted from the available funds in the account of the cheque issuer.
“The recent issuance of the new decree-law on commercial transactions [Decree-Law No 14 of 2020] containing provisions that aim to discourage criminal prosecution in relation to bounced cheques constitutes a major development in the UAE legal landscape,” says Nour Gemayel, an associate at BSA Ahmad Bin Hezeem & Associates.
“[It] will greatly affect the way individuals deal with their banks and guarantee the finance they obtain as they will no longer be exposed to criminal liability in an event of default.”
Access to joint bank accounts
Amendments to the law on commercial transactions also cover joint bank accounts. If one of the account holders dies, the other account holder must notify the bank within 10 days.
Once it is notified, the bank will now only limit their ability to withdraw the deceased’s share of funds rather than freeze the account entirely.
“As opposed to the situation before the issuance of the changes, where the entire account would be blocked until the finalisation of the succession of the deceased account holder, the law now provides for the freezing of the share of the account belonging to the deceased only, thus facilitating the process for the other account holder, seeing as he or she continues to have access to the funds while the succession is organised,” Ms Gemayel says.
Full foreign ownership of businesses
In November, the UAE introduced reforms to commercial companies' law that allow 100 per cent foreign ownership of an onshore company. There is no longer need for a foreign-owned company that wishes to establish a branch or a representative office in the UAE to have a local service agent.
The requirement that Emiratis hold a minimum ownership of 51 per cent in most businesses in the country was also abolished.
The changes come into force on January 2, 2021. However, amendments removing the need for Emirati partners and local service agents will become effective six months after the publication of the law in the Official Gazette.
“This will attract foreign investment and capital to the UAE economy. These changes will have a significant impact in ensuring foreign investors can establish business in the UAE and enable investment into the UAE from all nationalities,” says Sarah Malik, chief executive and international disputes counsel at SOL International.
The UAE business community believes the changes to ownership laws will promote business and attract foreign investment.
“According to the World Bank Ease of Doing Business Indicator, the UAE was ranked 16 out of 190 countries and is now among global leaders,” says Danish Chotani, chief executive of Burj Financial.
“It will continue to rise in the ranking, based on this year’s sweeping regulatory and legislative changes.”
These changes will have a significant impact in ensuring foreign investors can establish business in the UAE
Improved bank loan access for SMEs
In September, the UAE announced that it would allow small and medium enterprises to use moveable assets, including tools and raw materials, as collateral to secure loans.
Generally, SMEs find it hard to secure bank loans due to their size and lack of financial history, legal experts say.
“SMEs play a huge role in the UAE economy and represent the highest market share of business and employees within the private sector. This [law] is encouraging to ensure SMEs continue to survive and thrive as an integral part of the economy,” Ms Malik says.
Changes to inheritance law
On November 7, the UAE announced sweeping changes to the country's personal status and family laws. Islamic law will no longer be applied to the division of assets if an expatriate die without a will. Instead, a person's nationality will dictate how their assets are divided, unless they have written a will. The exception is for property purchased in the UAE, which will be managed according to UAE law.
“The 2020 reform re-affirms the principles that were laid out in 2015 with the launch of the DIFC Courts Wills Service Centre and the enactment of rules allowing non-Muslim residents to register their English-language wills and benefit from a common-law jurisdiction for their succession,” Ms Moldoveanu says.
The Abu Dhabi Courts Judicial Department followed suit with a similar registry in 2017.
The amendments to the inheritance law will create a level playing field for investors with assets in the country, Ms Moldoveanu says.
However, residents and investors who die without an estate plan – a will, a trust or a foundation – and those with wills drafted abroad are unlikely to benefit from the recent law changes, she says.
“Expats’ home wills are presently not upheld by the Personal Status Courts. The deceased’s family needs to file an appeal at the Civil Court against the Dubai Personal Status Court’s Sharia Succession Judgment [so] that the home wills are enforced,” says Cynthia Trench, a principal at Trench & Associates.
As a result of this, many expatriates have arranged for their wills to be issued by the DIFC, Ms Trench says.
Economic support
In March 2020, the Central Bank of the UAE introduced the Targeted Economic Support Scheme to support the economy during the Covid-19 pandemic. The initiative offered local banks zero-interest, collateralised loans of up to Dh50 billion and a capital buffer package worth Dh50 billion.
The programme was introduced to assist the private sector for up to six months. This has now been extended until June 30 next year. More than 310,000 retail customers, 10,000 SMEs and 1,500 private companies have benefitted from the programme.
“This initiative is an example of the UAE assisting the survival of private businesses and ensuring the ease of business,” Ms Malik says.
Changes to bankruptcy law
The UAE updated the country's bankruptcy law in October to help people and businesses unable to repay their debts or keep up with financial payments due to pandemics, natural disasters or wars.
This has been extremely helpful for businesses that are facing challenges to either consider protection under the Bankruptcy Law or debt restructuring or declare bankruptcy in extreme circumstances
The changes will help cash-strapped debtors avoid declaring bankruptcy, encourage them to reach a settlement with creditors and agree on debt restructuring. Previously, businesses that were unable to pay their creditors had to file for bankruptcy immediately.
“This has been extremely helpful for businesses that are facing challenges to either consider protection under the bankruptcy law or debt restructuring or declare bankruptcy in extreme circumstances,” says Essam Al Tamimi, chairman of Al Tamimi law firm.
Life insurance sector overhaul
In October, the UAE Insurance Authority unveiled new regulations to streamline life and family takaful insurance.
It capped the overall commission that can be paid on a policy over its entire duration. Financial advisers are also now required to include a mandatory 30-day “free-look” period in the policy and allow customers to cancel it free of charge within the first month of the policy.
The regulatory body has also imposed increased disclosure requirements on financial advisers, who must provide customers with a benefit illustration before the policy begins and a policy statement every six months.
Outlook for 2021
Legal experts say the UAE will continue to issue legal updates next year. Amendments will be made in the near future to “enhance consumer protection in relation to technology products and data privacy”, Ms Gemayel says.
“Laws will also be put in place to combat banking fraud.”
Meanwhile, Mr Al Tamimi predicts further changes to the commercial companies' law, the commercial transactions law, the federal banking law, maritime law, industrial law and the law governing free zones.
“All this will work towards providing opportunity to the private sector,” he says. “It is also a diversion from the old style of licensing and managing business towards a progressive economy.”
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
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Fuel consumption: 9.1L/100km
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Price: From Dh149,900
Killing of Qassem Suleimani
Wenger's Arsenal reign in numbers
1,228 - games at the helm, ahead of Sunday's Premier League fixture against West Ham United.
704 - wins to date as Arsenal manager.
3 - Premier League title wins, the last during an unbeaten Invincibles campaign of 2003/04.
1,549 - goals scored in Premier League matches by Wenger's teams.
10 - major trophies won.
473 - Premier League victories.
7 - FA Cup triumphs, with three of those having come the last four seasons.
151 - Premier League losses.
21 - full seasons in charge.
49 - games unbeaten in the Premier League from May 2003 to October 2004.
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Liverpool’s fixtures until end of 2019
Saturday, November 30, Brighton (h)
Wednesday, December 4, Everton (h)
Saturday, December 7, Bournemouth (a)
Tuesday, December 10, Salzburg (a) CL
Saturday, December 14, Watford (h)
Tuesday, December 17, Aston Villa (a) League Cup
Wednesday, December 18, Club World Cup in Qatar
Saturday, December 21, Club World Cup in Qatar
Thursday, December 26, Leicester (a)
Sunday, December 29, Wolves (h)
At a glance - Zayed Sustainability Prize 2020
Launched: 2008
Categories: Health, energy, water, food, global high schools
Prize: Dh2.2 million (Dh360,000 for global high schools category)
Winners’ announcement: Monday, January 13
Impact in numbers
335 million people positively impacted by projects
430,000 jobs created
10 million people given access to clean and affordable drinking water
50 million homes powered by renewable energy
6.5 billion litres of water saved
26 million school children given solar lighting
The five pillars of Islam
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The lowdown
Bohemian Rhapsody
Director: Bryan Singer
Starring: Rami Malek, Lucy Boynton, Gwilym Lee
Rating: 3/5
MATCH INFO
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Tottenham advance on away goals rule after tie ends 3-3 on aggregate
Final: June 1, Madrid
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 258hp from 5,000-6,500rpm
Torque: 400Nm from 1,550-4,000rpm
Transmission: Eight-speed auto
Fuel consumption: 6.1L/100km
Price: from Dh362,500
On sale: now
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Benefits of first-time home buyers' scheme
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- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Naga
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About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
KILLING OF QASSEM SULEIMANI
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POSSIBLE ENGLAND EURO 2020 SQUAD
Goalkeepers: Jordan Pickford, Nick Pope, Dean Henderson.
Defenders: Trent Alexander-Arnold, Kieran Trippier, Joe Gomez, John Stones, Harry Maguire, Tyrone Mings, Ben Chilwell, Fabian Delph.
Midfielders: Declan Rice, Harry Winks, Jordan Henderson, Ross Barkley, Mason Mount, Alex Oxlade-Chamberlain.
Forwards: Harry Kane, Raheem Sterling, Marcus Rashford, Jadon Sancho, Tammy Abraham, Callum Hudson-Odoi.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
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MATCH INFO
Championship play-offs, second legs:
Aston Villa 0
Middlesbrough 0
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Fulham 2
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Derby County 0
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Final
Saturday, May 26, Wembley. Kick off 8pm (UAE)
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Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Ain Issa camp:
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- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
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- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
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PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
Volunteers offer workers a lifeline
Community volunteers have swung into action delivering food packages and toiletries to the men.
When provisions are distributed, the men line up in long queues for packets of rice, flour, sugar, salt, pulses, milk, biscuits, shaving kits, soap and telecom cards.
Volunteers from St Mary’s Catholic Church said some workers came to the church to pray for their families and ask for assistance.
Boxes packed with essential food items were distributed to workers in the Dubai Investments Park and Ras Al Khaimah camps last week. Workers at the Sonapur camp asked for Dh1,600 towards their gas bill.
“Especially in this year of tolerance we consider ourselves privileged to be able to lend a helping hand to our needy brothers in the Actco camp," Father Lennie Connully, parish priest of St Mary’s.
Workers spoke of their helplessness, seeing children’s marriages cancelled because of lack of money going home. Others told of their misery of being unable to return home when a parent died.
“More than daily food, they are worried about not sending money home for their family,” said Kusum Dutta, a volunteer who works with the Indian consulate.
Retirement funds heavily invested in equities at a risky time
Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.
Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.
The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.
The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.
Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.
The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.
• Bloomberg
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
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The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
