• Legal Update

    13 sectors eligible for up to 100% foreign ownership within the UAE announced

    foreign ownership

    Following the announcement of new law in November 2018 in which the UAE Cabinet approved plans to allow for up to 100% foreign ownership of certain onshore companies registered in the UAE, a total of 122 economic activities expanding across 13 sectors have now been announced as eligible.

    1. Administrative and support services;
    2. Agriculture;
    3. Art and entertainment;
    4. Construction;
    5. Educational activities;
    6. Healthcare;
    7. Hospitality and food services;
    8. Information and communication;
    9. Manufacturing industry;
    10. Professional, scientific and technical activities;
    11. Renewable energy;
    12. Space; and
    13. Transport and storage.

    Companies which fall out with the approved sectors and economic activities will remain subject to the current law requiring a 51% local shareholding.

    The intention behind the new law is part of the UAE’s plan to attract further foreign investments and boost the local economy. The UAE cabinet has also announced that local governments at an Emirate level will have the authority to decide on the percentage of foreign ownership for each sector and activity.

    For further information on how our team at Davidson & Co can assist you with your business set up please contact us on +971 343 8897.

  • Legal Update

    Andrew Young – Ranked Band 1 for Private Wealth Law in the UAE within Chambers High Net Worth 2019 Guide

    Andrew Young-partner

    Davidson & Co are delighted to announce that Andrew Young, head of our Private Client Department, has once again been recognised by Chambers and Partners in their prestigious Chambers High Net Worth 2019 guide.

    Andrew is one of only three lawyers to be ranked Band 1 for Private Wealth Law in the UAE, and is awarded recognition for being “very likeable, very results-driven and excellent on governance matters”, whilst also having the ability “to explain very complicated matters and to simplify them so clients understand”.

    Andrew’s full listing can be viewed here https://chambers.com/lawyer/andrew-young-high-net-worth-21:25561451

    Andrew has over 30 years’ experience advising wealthy individuals, families and family offices in relation to both personal and business assets, and our team at Davidson & Co are one of a limited number of firms in the region offering international high net worth private client expertise including; international estate planning, asset protection, offshore trust structuring, family governance and family office advisory.

    For further information on how our team at Davidson & Co can assist with your estate planning and asset protection, please contact us on +971 343 8897.

  • Legal Update/ Wills

    New DIFC Wills and Probate Registry Rules now in effect

    Probate Registry Rules

    The DIFC Wills and Probate Registry (“DIFC WPR”) have announced the release of new Rules which will significantly widen the scope and applicability of the DIFC WPR’s services.

    The new Rules, which come into effect as of today (30th June 2019), allow a non-Muslim testator over the age of 21 to register a Full DIFC Will to provide not only for assets held in all seven Emirates (“UAE Estate”), but also worldwide assets. This is a significant expansion from the previous rules, which limited a testator to assets held in the Emirates of Dubai and/or Ras al Khaimah only.

    Individuals who wish to continue to register Full Wills limited only to their Dubai and/or Ras Al Khaimah assets may continue to do so, and Guardianship Wills and provisions will continue to apply only to minor children (under the age of 21) who are habitually resident within these two Emirates.

    The remaining 3 available DIFC WPR Wills; Property Will, Business Owners Will, and Financial Assets Will, will apply to a testator’s “UAE Estate”.

    Individuals who have already registered a DIFC Will, but wish to extend the jurisdiction under the Will to include assets across the UAE or worldwide, will be able to do so at no additional cost up until 29th August 2019 by appointment only.

    For further information on the new Rules and/or how Davidson & Co can assist you with amending the jurisdiction of an existing DIFC registered Will, please contact Victoria Smylie or Finlay Donaldson on +971 343 8897 or vsmylie@davidsoncolaw.com / fdonaldson@davidsoncolaw.com.

  • Employment

    The New DIFC Employment Law – What Will Change?

    DIFC Employment Law

    The New DIFC Employment Law – What Will Change?

    The legislation that regulates employment relationships within the Dubai International Financial Centre (the ‘‘DIFC’’) will receive a substantial update come August 28th 2019, after the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, announced the enactment of DIFC Law No.2 of 2019 (the ‘‘New Law’’).

    The New Law, which was originally announced in early 2018 and which has undergone substantial consultation, attempts to strike a more even balance between the interests of employers vs employees, whilst also updating and incorporating provisions to reflect best current global practices.

    Davidson and Co examine some of the key new changes set to be introduced.

    End of Service Gratuity:

    Regardless of the circumstances which give rise to a termination, end of service gratuity payments must now be made, even where an employee is dismissed for cause.

    The New Law also provides employees with the choice of receiving either an end of service gratuity payment, or a pension contribution, provided that the total contributions are not less than what the employee would be entitled to by way of end of service gratuity.

    Under the New Law, the end of service gratuity calculations remain the same, however, the law does stipulate that the basic wage must not be less than 50% of the employee’s annual wage.

    Amendment to Article 18 Penalty Provision:

    The New Law has completely re-written Article 18 under the current law, the somewhat controversial penalty for the late payment of end of service benefits to an employee on their termination.

    Similar to the current law, employers will face a daily penalty where an employee has not received their full remuneration 14 days following the termination date, however, entitlement to any such penalty payment will now only arise where the court rules the amount due to an employee is in excess of their weekly wage. The court furthermore will have discretion to waive the penalty payment in circumstances where: i) the dispute is pending in the court; or ii) where the employees unreasonable conduct is the material cause of the employee failing to receive the amount due from the employer.

    Another key change introduced by the New Law is a cap on the penalty payment of 6 months, equivalent to the employee’s remuneration for 6 months employment.

    Notice Periods:

    Under the New Law, parties can now only agree to extend a notice period, whereas previously notice periods could also be reduced or waived by mutual agreement. While the minimum notice periods prescribed under the current law remain the same, the minimum notice periods will not apply to: i) employees who are in their probation period; ii) employees who have a fixed term contract with a fixed end date; or iii) where an employee has been terminated for excessive sick leave.

    Where an employer wishes to make a payment in lieu of notice, the employee must agree to this by the way of a settlement agreement.

    Sick Pay & Accrued Holiday:

    Currently, employees are entitled to full pay for 60 working days, however, under the New Law this has been reduced to full pay for the first 10 working days, half pay for the following 20 working days, and the remaining 30 days without pay.

    In respect of annual leave, employees will no longer be allowed to carry over 20 working days holiday into the next working year, with the New Law introducing a cap of 5 working days.

    Settlement Agreements:

    The current law is silent on this aspect, however, the New Law provides that settlement agreements may be utilised by employers and employees to resolve disputes or govern the end of an employment relationship. In order for settlement to be upheld, an employee will be required to confirm that they have been given the opportunity to seek legal advice on the terms of the agreement, and such advice must be given by a lawyer registered with the DIFC Academy of Law.

    Anti-Discrimination Provisions:

    The protected characteristics under the current law have been expanded to include discrimination based on age, pregnancy and maternity. The New Law also introduces a prohibition on victimisation.

    Of significance, the New Law introduces remedies for circumstances in which an employer is found to have discriminated against or victimised an employee including:

    1. To make an order for payment of compensation (capped at an amount equivalent to the employee’s annual wage) which the court considers reasonable in the circumstances;
    2. To make a declaration as to the rights of the employee and employer in relation to the subject of the proceedings; and
    3. To make a recommendation regarding changes to a company’s internal policies and practices.

    The court is given express powers to increase the amount of compensation awarded where the employee fails, without reasonable excuse, to comply with a recommendation of the court.

    Any claim for discrimination under the New Law must be raised within 6 months of the alleged behaviour or failure of the employer to act in circumstances where a complaint has been raised, otherwise the claim is time barred.

    Paternity Leave:

    Fathers now have the right to up to five working days of paid paternity leave, alongside the right to take time off to attend antenatal appointments, where they have been continuously employed for one year immediately preceding the expected or actual week of his wife giving birth, and where the employer is notified at least 8 weeks in advance. The New Law also extends to the adoption of a child.

    For further information in relation to the New Law and/or how Davidson & Co can help your company ensure that its employment contracts and associated documentation are in compliance with the new provisions, please contact Victoria Smylie on +971 434 8897 or vsmylie@davidsoncolaw.com

  • Legal Update

    Dubai International Financial Centre has introduced a new Insolvency Law


    The Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE has introduced a new Insolvency Law, Law No.1 of 2019, for companies operating within the DIFC.

    The new law, which is intended to come into effect from the 28th August 2019, was announced via a statement released on His Highness’s website and is expected to introduce a more “efficient and effective bankruptcy restructuring regime”.

    The statement further added that the new law introduces “a new debtor in possession bankruptcy regime in line with best practice globally which will also place the DIFC at the forefront of complicated debt restructurings”. The legislation will also provide for a new administration process in circumstances where there is evidence of mismanagement or misconduct.

    Law No.1 of 2019, which was legislated following extensive research, and in light of the high-profile collapse of Abraaj Group, will also incorporate the UNCITRAL Model Law (the UN Commission on International Trade Law) in cases involving cross border insolvency, which reflects current best practice in the area. Incorporating these internationally recognised model laws will encourage existing and potential investors in the region, and will increase the chance of retaining commercial value and rescuing businesses that are suffering financial hardship.

    For further information in relation to the DIFC or the new insolvency rules, please contact caschipperton@davidsoncolaw.com

  • Legal Update

    ADGM issues new rules permitting litigation funding


    The Abu Dhabi Global Market (“ADGM”) Courts have recently issued legislation which expressly allows for third-party litigation funding in what they describe as a “first” in the Middle East and North Africa (“MENA”) region.  The introduction of the “Litigation Funding Rules 2019” follows a public consultation and review of existing frameworks in jurisdictions such as the United States, England and Wales, and Hong Kong.

    Litigation Funding is a process which enables third parties to bear the costs of litigation in exchange for an agreed proportion of the eventual recovered sum. Litigation Funding Agreements (“LFA”) share certain similarities with Conditional Fee Agreements (“CFA”) or ‘no-win-no-fee’ arrangements. Both an LFA and CFA ensure that the Litigant does not bear certain upfront and/or ongoing costs in respect of the litigation, in exchange for the Litigant agreeing to part with a sum or percentage of their final payout. The main difference between a CFA and LFA is that under an LFA, a third party to the litigation (the Funder) covers the agreed upfront costs and/or ongoing costs.

    The Chief Justice of the ADGM Courts commented that the legislation aims “to strike a balance between litigants’ needs for the financing of their proceedings to ensure access to justice, the legitimate commercial interests of Funders, and promoting transparency of the Funder’s role for the benefit of consumers of these resources.” The new rules do so by providing for the minimum terms to be included in an LFA such as liability to pay insurance premiums, the amount of funding and its scope, and timings with regards to the advance of tranches. The legislation contains provisions which also regulate settlement of funds, LFA termination procedures and provide that the ADGM is the correct forum and jurisdiction for disputes arising from AGDM LFAs.

    The new framework is yet another progression in the UAE legal sector, following the DIFC Courts’ Practice Direction No. 2 of 2017 which established a framework for funding claims in the DIFC Courts, and the long-awaited amendment to DIAC Arbitration Rules, which will acknowledge third party funding.

    For further information in relation to the ADGM or the new rules permitting litigation funding, please contact caschipperton@davidsoncolaw.com

  • Visa

    New Visa Sponsorship Policy


    Considerations will now be made to the persons “income”, rather than their “profession”.

    The UAE cabinet has recently announced it has adopted a decision to amend rules for expats sponsoring family members. Previously, only members of certain listed “professions” could sponsor the visa of a family member, meaning that certain workers, regardless of their salary, would not be able to move their family over to the UAE to reside with them. This condition has now been removed, with the sole requirement being an individual must have an “income”. As of yet, there are no specific details in respect of whether there will be a minimum threshold of income for the rules to apply however, the decision has been welcomed as a positive move for the UAE, as it simplifies the sponsorship process and allows more UAE residents to move their families to the country.

  • Private Client

    Did you know that Davidson & Co has one of the best Private Client practices in the UAE?

    Private Client practices in the UAE

    As our economy continues to expand and the private wealth of individuals across the globe is on the rise, at Davidson & Co we recognise that it is now more important than ever to make suitable arrangements to manage your assets and your family’s future.

    We pride ourselves on being one of a limited number of firms within the region offering a full range of private client services. Our team are expertly placed to advise expats, UAE residents, or international persons with a connection to the UAE on: –

    • Wealth Structuring
    • Asset Protection
    • Succession Planning
    • Family Governance
    • Family Office
    • Family/Private Disputes
    • Reputation Management
    • Economic residency and Second Citizenship

    For further information on how our team could assist you, please contact Andrew Young or Victoria Smylie on +971 4 343 8897 or at ayoung@davidsoncolaw.com / vsmylie@davidsoncolaw.com.

  • Employment/ Legal Update

    All UAE workers entitled to 14 public holidays in 2019 and 2020

    uae worker

    The UAE government has taken the decision to remove the distinction between private sector and public sector in terms of public and national holidays. Previously the public sector had been granted more public holiday than the private sector every year, and the decision is seen as one designed to encourage more Emiratis to enter into the private sector.

    All workers in the UAE for the next 2 years are therefore entitled to 14 days public and national holiday.

  • Legal Update

    Middle East Legal Awards 2019


    Davidson & Co are delighted to announce that two of our lawyers have been shortlisted for awards at the Middle East Legal Awards 2019.

    Scottish duo Yousif Ahmed (‘Rising Star’ category) and Victoria Smylie (‘Most Promising Newcomer’ category) have been recognised for their outstanding legal work and contribution over the last year.

    The firm’s founding partner, Jonathon Davidson commented “For two of our lawyers to receive nominations and be shortlisted for awards at such a prestigious ceremony is a testament to the quality of our team as a whole. Well done to our nominees and to all those in the firm who have supported them. Congratulations, as well, to all of the other firms and individuals involved!

    The awards ceremony will be taking place on Thursday 18 April 2019 at the Ritz-Carlton in JBR, Dubai.