Doing Business in the U.A.E? Here's How the New E-comers Law Affects You

 Federal Law No. (1) of 2006 concerning Electronic Transactions and Commerce (ETCL) was a foundational piece of legislation in the UAE, but it's no longer the primary law governing electronic transactions. Here's a breakdown of the situation:

Federal Law No. (1) of 2006:

This law, enacted in 2006, established a legal framework for electronic transactions in the UAE.

It addressed key aspects like the legal validity of electronic documents and digital signatures.

It played a crucial role in promoting trust and confidence in electronic commerce activities.

Amendments and Superseded Status:

While there weren't any direct amendments to Federal Law No. (1) of 2006, the UAE recognized the need for a more comprehensive legal framework for the evolving digital landscape.

To address this need, the Federal Decree by Law No. 46 of 2021, also known as the Electronic Transactions and Trust Services Law (ETTSL), was introduced.

Federal Decree by Law No. 46 of 2021 came into effect in January 2022, superseding the 2006 law.

Current Landscape:

The ETTSL builds upon the foundation laid by the 2006 law but offers a more robust framework.

It emphasizes legal certainty in electronic interactions, aligns with international standards like the European eIDAS Regulation, and promotes the digital transformation of the UAE.

In essence, Federal Law No. (1) of 2006 is no longer the primary legal reference for electronic transactions in the UAE. You should refer to the provisions of the Federal Decree by Law No. 46 of 2021 for the current legal framework.

Federal Decree by Law No. 46 of 2021

Federal Decree by Law No. 46 of 2021, also known as the Electronic Transactions and Trust Services Law (ETTSL), is a significant piece of legislation in the United Arab Emirates. Its primary goals are to:

Boost trust and encourage electronic transactions: The law aims to make electronic transactions more reliable and secure, promoting their wider adoption across various sectors.

Protect customer rights: It includes provisions safeguarding the rights of individuals engaging in electronic transactions.

Support digital transformation: The ETTSL aligns with the UAE's national digital vision by fostering digital transformation and investment in electronic services.

Here are some key aspects of Federal Decree by Law No. 46 of 2021:

Legal validity of electronic documents and digital signatures: The law grants electronic and digital signatures the same legal weight as traditional paper documents and handwritten signatures, provided they meet specific criteria.

Regulations for electronic transactions: The ETTSL outlines rules governing the conduct of electronic transactions, including data storage, transmission, and record-keeping requirements for electronic documents.

Licensing of trust service providers: The law establishes a licensing framework for Trust Service Providers (TSPs) who create, validate, and manage electronic signatures and digital certificates.

Federal Decree by Law No. 46 of 2021 is accompanied by Executive Regulations issued in March 2023. These regulations provide further details on licensing procedures for TSPs, validation and retention standards for electronic documents and signatures, and other aspects of the law.

Federal Decree-Law No. 14 of 2023, also called the "Trade through Modern Technology Law", is a recent piece of legislation in the United Arab Emirates (UAE) aimed at supporting the country's digital transformation and growth in e-commerce.

Here are some of the key objectives of this law:

• Promote trade through advanced technologies: The law encourages the use of modern technology for business activities, facilitating a more digitalized trading environment.
• Enhance consumer protection: It aims to create a safe space for consumers by ensuring electronic security and cybersecurity measures are in place during online transactions.
• Attract investment: By creating a robust legal framework for e-commerce, the UAE hopes to become a more attractive destination for businesses and investors.

Overall, this law signifies the UAE's commitment to modernizing its economy and becoming a leader in the global e-commerce market.

If you'd like to explore the specifics of the law, you can find the official English translation on the website of the Telecommunications and Digital Government Regulatory Authority (TDRA)

A new life insurance plan to protect Indian expat workers in the U.A.E

 The United Arab Emirates recently announced a new insurance scheme specifically designed for Indian workers. The scheme called the Life Protection Plan (LPP), offers financial security to their families in case of a worker's death.

Here are the key features of the LPP:

• Compensation: The LPP offers compensation of up to Dh75,000 (around USD $20,445) to the beneficiary in case of the worker's death due to an accident or natural causes. The compensation amount varies depending on the chosen premium plan.
• Eligibility: The scheme is open to Indian workers aged 18 to 70 years working in the UAE.
• Affordability: The LPP aims to be accessible with annual premiums ranging from Dh37 to Dh72.
• Repatriation Coverage: The plan also includes Dh12,000 to cover the costs of repatriating the deceased worker's remains back to India.

This scheme fills a gap in employment benefits for many blue-collar Indian workers in the UAE. It provides their families with some financial support during a difficult time.

Here are some additional details about the Life Protection Plan (LPP) for Indian workers in the UAE:

Enrollment:

• The LPP launched on March 1, 2024.
• Enrollment is facilitated through the Indian Consulate in Dubai, which partnered with major UAE companies recruiting blue-collar workers and two insurance service providers.
• It's unclear yet if individual workers can directly enroll, as the current information suggests the program operates through employer participation.

Benefits:

• Compensation: As mentioned before, the compensation ranges from Dh35,000 to Dh75,000 depending on the chosen premium plan.
• Premium Plans: There are three premium options:
• Dh37 per year - provides Dh35,000 in compensation
• Dh50 per year - provides Dh50,000 in compensation
• Dh72 per year - provides Dh75,000 in compensation
• Repatriation Coverage: The plan offers Dh12,000 to cover the cost of repatriating the deceased worker's remains back to India.
• Claim Process: Specific details about the claim process haven't been widely reported yet. However, it's likely claims will be handled by the chosen insurance company upon notification by the employer or beneficiary.

Important Considerations:

• This is a relatively new program, and details might evolve over time.
• It's crucial for individuals to consult with the Indian Consulate in Dubai or their employer for the latest information and enrollment procedures.
• It's important to understand the complete terms and conditions of the specific LPP plan offered by the chosen insurance company before enrollment.

For further details and inquiries, it's recommended to reach out to the Indian Consulate in Dubai or your employer's HR department. They can provide the most up-to-date information and guide you through the enrollment process if applicable.  

Don't Get Fined -Important Updates to the U.A.E Corporate Tax

 Registration Deadlines: The Federal Tax Authority (FTA) has issued new deadlines for companies to register for Corporate Tax. These deadlines depend on the company's type and situation:

• Resident Persons: Companies incorporated or established in the UAE, including those in Free Zones, must register within 3 months of their incorporation, establishment, or recognition.
• Non-Resident Persons:
• Companies with a Permanent Establishment in the UAE need to register within 6 months of establishing the Permanent Establishment.
• Companies with a nexus in the UAE (e.g., generating taxable income in the UAE) must register within 3 months of establishing the nexus.
• Companies with licenses issued in January or February 2024 need to register by May 31, 2024, regardless of their type.
• Failing to register within the specified timeframe can lead to a penalty of AED 10,000.

It's important to understand that avoiding fines associated with UAE corporate tax is not about finding loopholes, but about complying with the regulations. Here are some key steps to ensure compliance and avoid penalties:

1. Timely Registration:

• Ensure you register for corporate tax within the specified deadlines based on your license issuance month.
• The current deadlines are outlined in the Federal Tax Authority (FTA) Decision [source].
• Late registration incurs a penalty of AED 10,000.

2. Maintain Accurate Records:

• Keep detailed and up-to-date records of your finances, including income, expenses, and tax calculations, as per the Tax Procedures Law and the Corporate Tax Law.
• Failure to maintain proper records can result in fines of AED 10,000 for the first offense and AED 20,000 for repeat offenses within 24 months.

3. Timely Submission of Tax Declarations:

• Submit your tax declarations to the FTA within the stipulated deadlines.
• Late submissions incur monthly penalties, starting at AED 500 for the first 12 months and increasing to AED 1,000 per month thereafter.

4. Seek Professional Guidance:

• If you have any complexities regarding UAE corporate tax, consider consulting with a qualified tax advisor or accountant who can provide personalized guidance and ensure compliance.

Remember, the UAE government aims to create a fair and transparent tax system. By complying with the regulations, you can avoid unnecessary fines and penalties and contribute positively to the country's economic development. 

Additional Resources:

• You can find more information and guidance on the FTA website: https://tax.gov.ae/en/taxes/corporate.tax.aspx

It's important to note that this information is for general awareness only and may not apply to all situations. For specific advice regarding your company's tax obligations, it's recommended to consult with a tax professional.

 

Important updates for you in 2024: Domestic worker laws in the U.A.E

 Two key pieces of legislation have significantly impacted the rights and regulations for domestic workers in the UAE:

1. Federal Decree-Law No. 9 of 2022 (amended by Decree-Law No. 21 of 2023):

Eligibility:

Stricter requirements for individual sponsors, with a minimum monthly income of AED 25,000 (except Golden Visa holders and specific professionals). Companies and establishments can still sponsor domestic workers for their employees.

Employment Contract:

The standard contract has clear rights and obligations for both parties.

Visa Application:

A work visa through the Ministry of Human Resources and Emiratisation (MoHRE) is mandatory.

Working Conditions:

Prohibition of:

• Employing anyone under 18.
• Discrimination based on race, color, gender, religion, or nationality.
• Sexual harassment.
• Forced labor or trafficking.
• Physical harm.
• Assigning tasks outside the contract.

Mandates:

Minimum two-bedroom accommodation.

Salary certificate and bank statements for sponsors.

Rest periods:

• One paid weekly rest day.
• 12 hours of rest per day, including 8 consecutive hours.
• 30 days of paid annual leave.
• Medical fitness certificate.
• Healthcare coverage.

Legal Recourse:

Domestic workers have legal recourse against employers who violate their rights.

2. Ministerial Decree No. 336 of 2023:

Recruitment Agencies:

Regulations on fees and practices of recruitment agencies.

Worker Protection:

Clear procedures for addressing grievances and complaints.

Access to legal aid and translation services.

Establishment of a dedicated hotline for reporting violations.

Overall:

These changes aim to improve working conditions and protect the rights of domestic workers in the UAE.

Employers must comply with the new regulations to avoid legal repercussions.

It's advisable to consult with a lawyer for specific legal advice or interpretations.

The law regarding sponsoring domestic workers in the UAE has recently changed, so it's important to have the latest information. Here's what you need to know:

Eligibility to Sponsor:

Generally: Only a few categories of people can sponsor domestic workers in the UAE:

Individuals with a monthly income of AED 25,000 from legal sources.

Golden Visa holders (no specific limit on the number of domestic workers).

Special permission holders from the UAE Cabinet.

Certain professionals like judges, specialists, and legal counsellors.

Patients with medical coverage whose family members have a monthly income over AED 15,000.

Exception: Companies and establishments can sponsor domestic workers for their employees.

Process and Requirements:

Obtain a license from a government-approved agency to recruit domestic workers.

Sign a standard employment contract with the worker, outlining their rights and obligations.

Apply for a work visa for the worker through the Ministry of Human Resources and Emiratisation (MoHRE).

Provide accommodation, meals, and healthcare for the worker as per the law.

Respect basic working hours and rest days.

Key Points of the Law:

Prohibits: Employment of anyone under 18, discrimination, sexual harassment, forced labor, physical harm, and tasks outside the contract.

Mandates: Medical fitness certificate, minimum two-bedroom accommodation, salary certificate, and bank statements for sponsors.

Offers: Legal recourse for workers in case of violations. 

Fines for Employing Visit Visa Holders as Domestic Workers in the U.A.E.

In the United Arab Emirates (U.A.E.), employing individuals on visit visas as domestic workers is illegal. Doing so can lead to significant fines for the employer and the worker.

Here's a breakdown of the penalties:

Employer: Fines range from AED 50,000 to AED 200,000 per worker depending on the severity of the violation and whether it's a repeat offense. Additionally, the employer may face closure of their business and deportation.

Worker: Fines for working illegally can reach AED 50,000 and can lead to deportation.

It's important to understand the risks involved before employing anyone on a visit visa for domestic work. Here are some key points to remember:

Visit visas are not intended for work purposes. They are for tourism and short-term visits.

Domestic workers require a valid work permit. Obtaining one through proper channels ensures both employer and worker are protected by labor laws. The consequences of illegal employment are severe. Don't put yourself and the worker at risk. 

Good news -U.A.E's Exiting FATF Grey list Opens Doors for New Opportunities!

The United Arab Emirates (UAE) was officially removed from the Financial Action Task Force's (FATF) "grey list" in February 2024. This means that the country is no longer considered to have major deficiencies in its anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks. 

This is a significant development for the UAE, as being on the grey list can deter foreign investment, complicate international transactions, and impact credit accessibility. It reflects the UAE's commitment to improving its financial regulations and maintaining financial integrity, which will hopefully boost its economic stability on the global stage. 

Here's a quick timeline of the events: 

• March 4, 2022: UAE added to FATF grey list.
• October 2023: FATF acknowledges significant progress by UAE and anticipates delisting.
• February 2024: UAE officially removed from FATF grey list.

Know more about the Financial Action Task Force's (FATF) "grey list"

The Financial Action Task Force's (FATF) "grey list" is a list of jurisdictions that the FATF has identified as having strategic deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CTF) regimes. These deficiencies are considered to pose a significant risk to the international financial system.

Being on the FATF grey list can have several negative consequences for a jurisdiction, including: 

• Increased scrutiny from financial institutions and regulators
• Higher costs of doing business
• Difficulty in attracting foreign investment
• Damage to the jurisdiction's reputation

However, it is important to note that being on the grey list is not the same as being on the FATF's black list. The black list is a list of jurisdictions that the FATF has identified as having major deficiencies in their AML/CFT regimes and that are subject to countermeasures. 

As of October 27, 2023, there are 23 jurisdictions on the FATF grey list. These jurisdictions are: 

1. Barbados
2. Bulgaria
3. Burkina Faso
4. Cameroon
5. The Democratic Republic of Congo
6. Croatia
7. Gibraltar
8. Haiti
9. Jamaica
10. Mali
11. Mozambique
12. Nigeria
13. Philippines
14. Senegal
15. South Africa
16. South Sudan
17. Syria
18. Tanzania
19. Turkey
20. Uganda
21. United Arab Emirates
22. Vietnam
23. Yemen

The FATF regularly reviews the progress of jurisdictions on the grey list and may remove them from the list if they have made sufficient progress in addressing their deficiencies. 

Here are some of the key things to know about the FATF grey list: 

It is a tool that the FATF uses to encourage jurisdictions to improve their AML/CFT regimes.

Being on the grey list is not a sanction, but it can have negative consequences for a jurisdiction.

The FATF regularly reviews the progress of jurisdictions on the grey list and may remove them from the list if they have made sufficient progress.

Do you have any other questions about the UAE's removal from the grey list or its implications for the country's economy? I'm happy to share further information or discuss related topics.