• Uncategorized

    6-month UAE visa announced for job seekers

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    The UAE Cabinet have recently announced plans for a six-month visa which provides for individuals who have overstayed their current visa but wish to continue working in the country.

    The move will be welcomed by residents looking for employment and will replace the current system whereby individuals are either provided with a grace period of only 30 days to change their visa status or are required to exit the country and re-enter on a new visa.

    Individuals wishing to adjust or renew their current visa will be able to do so for a fee without also having to leave and re-enter the country.

    Further proposed amendments include a free 48-hour visa for transit tourists and the option for individuals who entered the UAE illegally to leave voluntarily with a “no entry” stamp for two years.

    The new visa rules are intended to be introduced in the fourth quarter of 2018 with the specific costs and procedures to be announced in due course.

    To find out more about visas in the UAE and for help with employment law or any other legal requirements please get in touch.

  • Uncategorized

    Davidson & Co Featuring in The Legal 500: Private Client Country Comparative Guide

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    Davidson & Co are delighted to announce that Andrew Young (Head of Private Client Services) and Victoria Smylie (Associate) were asked to contribute to the prestigious Legal 500 and The In-House Lawyer Country Comparative Guide, for the UAE.  For an overview of the most FAQ’s with regards to private client law in the region, with a specific focus on Dubai, please click here.

    For further information on how Davidson & Co can assist you with regards to wealth planning and asset protection, please do not hesitate to contact either Andrew Young on ayoung@davidsoncolaw.com or Victoria Smylie on vsmylie@davidsoncolaw.com.

  • Uncategorized

    UAE Labour Law – FAQ’s

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    UAE Labour Law – FAQ’s 

    With an expat community making up over 80% of the total population of the UAE, Federal Law No.8 of 1980 otherwise known as the UAE Labour Law, is one piece of legislation that every employee in the private sector should familiarise themselves with.  To assist, we answer some of the most frequently asked questions.

    What type of contract is available?

    There are two forms of contract available under the UAE Labour Law:-

    1. Limited/fixed term contract – Generally a start and end date is provided for in the body of the contract up to a maximum of 2 years. Unless the contract is renewed by mutual consent prior to the end date, the contract is cancelled automatically. A renewed fixed term contract may only be for a maximum of 2 years service. An employer faces penalties for terminating a limited/fixed term contract before the end date unless it can be proved the employee breached one of the grounds provided for in Article 120.
    2. Unlimited term contract – An open ended contract with no specified end date. Generally seen as more flexible, an unlimited term contract may be terminated by either party provided that the notice period provisions as outlined in the contract have been correctly adhered to (UAE Labour law provides for a minimum notice period of 30 days). Similar to a limited/fixed term contract, an employee may be dismissed without notice if it can be proved that one of the grounds provided for in Article 120 has been breached.

    What are the maximum working hours?

    The maximum normal working hours for adult workers are 8 hours a day or 48 hours a week, although there are exceptions depending on the nature of your employment. During the holy month of Ramadan, normal working hours are reduced by 2 hours a day.

    What is the maximum probationary period?

    Any probationary period must not exceed 6 months and an employer is unable to place an employee on any subsequent probationary period. The probation period counts towards continuous service for purposes of gratuity calculation (see further below).

    What is the annual holiday entitlement?

    Employees are entitled to 2 days of annual leave per month having served between 6 months and 1 year of employment. 30 days annual leave if the employee has completed over 1 year of employment. Any annual holiday entitlement is in addition to a number of UAE official holidays.

    What is the annual sick leave entitlement?

    Employees are entitled to a total of 90 days sick leave a year calculated as follows:-

    • Full pay for the first 15 days
    • Half pay for the following 30 days
    • Unpaid leave for remaining 45 days

    Sick leave is not applicable during an employee’s probationary period.

    Who is eligible for end of service gratuity and how is it calculated?

    If an employee has completed at least twelve months in continuous employment with an employer, then they are entitled to payment of an end of service gratuity upon the termination of their employment. The end of service gratuity is calculated as follows:-

    • 21 days wages for every year of employment completed, and for each year of the first five years of employment (calculated pro rata for any additional days served).
    • 30 days wages for each additional year of employment after five years, (calculated pro rata for any additional days served) subject to the limitation that the total of the gratuity does not exceed two years salary.

    There are several restrictions on the payment of the end of service gratuity and the amount due depending on what grounds the contract was terminated on, and whether the contract is unlimited or fixed.

    What happens if there is a dispute between an employee and employer?

    In the event of a dispute between an employee and their employer, a complaint must be lodged by either party at the Ministry of Human Resources and Emiratisation, in the Emirate where the company is situated. On the submission of a complaint, the Ministry will summon both parties in an attempt to amicably settle matters. In the event that the dispute is unable to be settled at the Ministry, the case is referred within two weeks to the local courts to resolve.

    Any complaint must be submitted within one year from the date on which the amount or entitlement was due.

    This article is intended to be an introduction to the Labour Law in the UAE and a brief summary of some of the most frequently asked questions. In any situation, the individual facts of the employment and the circumstances surrounding the termination would need to be fully explored.

    For further information on how we can assist you in your enquiries regarding Labour Laws, or to discuss in more detail any of the general principles raised above, please contact us on 04 343 8897 where one of our team will be delighted to assist you.

    Please note that the DIFC has a separate legal framework for Employment matters.

     

  • Economy/ Legal Update/ Taxation/ Uncategorized

    Federal Tax Authority announce list of Designated Zones in the UAE

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    Cabinet decision No. (59) of 2017 on the Executive Regulations of the Federal Decree-Law No. (8) of 2017 (UAE VAT Law) has provided for 20 Designated Freezones in the UAE (as listed below), which will be treated for VAT purposes as being outside the UAE.

    Under the UAE VAT Law and Executive Regulations, a Designated Zone is defined as “a specific, fenced geographic area which has security measures and customs controls in place to monitor entry and exit of individuals and movement of goods to and from the area.”

    Subject to the below exceptions, in general, if a supply is deemed to have taken place in a designated zone, VAT should not be charged. The place of supply is generally determined by looking at the location of the goods, activities or parties to a transaction. The rules are as follows:

    • Goods that arrive into a Designated Zone from outside the UAE are not treated as imported into the UAE, and no VAT should be charged on the arrival of such goods; and
    • A transfer or sale of goods from a place in the UAE which isn’t a Designated Zone into a Designated Zone is not an export for VAT purposes, and therefore will not give rise to zero-rated VAT treatment.

    The transfer of goods between Designated Zones will not be subject to VAT, as stated in Article (51) of the VAT law, provided both of the following conditions are met:

    • The goods (or part of the goods) are not released, used, or altered during the transfer between Designated Zones; and
    • The transfer is in accordance with the rules for customs suspension pursuant to GCC Common Customs Law.

    The Federal Tax Authority may also request that, where goods are moved between Designated Zones, the owner of the goods provides a guarantee in respect of the VAT in case the conditions outlined above are not met.

    However, there are exceptions within the VAT Executive Regulations that state that certain types of supplies taking place in the Designated Zones are to be treated as if they actually took place within the UAE, and are therefore subject to VAT. These supplies include:

    • Any services provided;
    • Water and all forms of energy; and
    • Goods sold for use or consumption.

    Designated Zones:

    Abu Dhabi: Free Trade Zone of Khalifa Port; Abu Dhabi Airport Free Zone; and Khalifa Industrial Zone.

    Dubai: Jebel Ali Free Zone (North-South); Dubai Cars and Automotive Zone (Ducamz); Dubai Textile City; Free Zone Area in Al Quoz; Free Zone Area in Al Qusais; Dubai Aviation City; and Dubai Airport Free Zone.

    Sharjah: Hamriyah Free Zone; and Sharjah Airport International Free Zone.

    Ajman: Ajman Free Zone.

    Umm Al Quwain: Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port; and Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road.

    Ras Al Khaimah: RAK Free Trade Zone; RAK Maritime City Free Zone; and RAK Airport Free Zone.

    Fujairah: Fujairah Free Zone; and Fujairah Oil Industry Zone (FOIZ).

     

  • Uncategorized

    Bounced cheques in Dubai now subject to fines under new order

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    In a move intended to promote business confidence and aide those who find themselves in debt, Dubai Public Prosecution have launched a new Penal Order system that will allow minor misdemeanors, such as a bounced cheque, to be dealt with through fines rather than the court system. It is also intended that the move away from civil prosecution will ease the burden on the Dubai Courts, and allow greater time and resources to be devoted to more serious offences including money laundering, assaults and cybercrime.

    The new Order comes under Law No. (1) of 2017 which was approved by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, in March.

    Under the new Order, which comes into effect in December 2017, the current understanding is that any individual who issues a bounced cheque not exceeding the value of AED 200,000 will be subject to the following fines:

    • Bounced cheques not exceeding AED 50,000 –AED 2,000.
    • Bounced cheques between AED 50,000 and AED 100,000 –AED 5,000.
    • Bounced cheques between AED100,000 and AED 200,000 –AED 10,000.

     

    It is important to note however that any individual who finds themselves in debt may still have a civil case opened against them, and be liable for any interest on outstanding debts. It is therefore advisable to seek legal adviceshould you have any concerns regarding bounced cheques and/or personal or company debt.

    To find out how the Davidson & Co team could assist your specific requirements regarding any legal enquiries, please do not hesitate to get in touch.

  • Uncategorized

    New UAE Traffic Laws – What You Need to Know

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    Amended traffic laws for the UAE were announced on 21st March following four years of intensive research and studies, with the main aim to reduce road traffic deaths from the current figure of 6 in 100,000 to 3 in100,000 in line with the UAE Vision 2021.

    The move is welcomed by advocates of road safety in making UAE’s roads safer for everyone, and is aligned with the UAE Strategic Traffic Plan. 2016 saw a 7.4% increase in the number of road accident fatalities with 725 deaths recorded in comparison to the previous year, when the fatality figure was 675.

    Major General Mohammed Saif Al Zafeen, Head of the Traffic Prosecution Council and Assistant Commander in Chief of Dubai Police Operations stated that the new federal traffic laws would come into effect on 1st July 2017. As well as the law amendments, new and amended fines for traffic violations will also be introduced in a further effort to deter UAE drivers from breaking the law.

    The New Traffic Laws and Fines

    Mandatory seat belts for all passengers

    All passengers travelling in a vehicle, including those in the rear seats, must wear a seat belt. The law follows on from European studies into seat belt wear in prevention of road accident deaths and injuries, where more stringent seat belt rules have resulted in a considerable reduction in road accident fatalities.

    A fine of AED 400 will be issued per passenger found not to be wearing a seat belt.

    Children in vehicles

    The amendment means that only children over the age of 10 may travel in the front passenger seat, and must be at least 145 cm tall.

    Child safety seats are now mandatory for children under the age of four – violation of this rule means a fine of AED 400 and four black points on the driver’s licence.

    Amended speeding and reckless driving rules

    In an effort to curb speeding and reckless driving offences, fines, issuing of black points and confiscation measures have been updated as part of a zero-tolerance stance on these violations.

    Being caught speeding at 60 Km/H or over the stated speed limit will incur a hefty AED 2,000 fine, 12 black points, and the car impounded for 30 days. The worst speeding violations will see AED 3,000 fines issued, and the vehicle confiscated for three months.

    Recreational vehicles such as quad bikes are not allowed on public highways and residential areas, anybody violating this rule will be slapped with AED 3,000 in fines and confiscation of the vehicle for a month.

    Additionally, driving a vehicle without number plates will cost the driver dearly with a fine and 24 black points on their licence.

    New radar to detect driving violations

    Earlier in March, Dubai Police Traffic Department launched a new radar device to track drivers who do not adhere to mandatory routes on Dubai’s roads. It’s an innovative solution to catch drivers who ignore the rules and endanger other drivers and pedestrians on the emirate’s streets. The device is able to capture images up to 1,000 m in both directions, tracking cars as they move from side to main streets.

    In addition to the amended traffic rules and fines, the Federal Traffic Council is due to discuss the introduction of community service for drivers committing more severe, dangerous driving offences such as excessive speeding and recklessness.

     

  • Uncategorized

    Biased Arbitrators Could Face Jail in UAE

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    The UAE, and principally Dubai, prides itself on fast-becoming one of the leading international arbitration seats in the World.  However, the recent amendment to Article 257 of the UAE Penal Code now imposes criminal liability on arbitrators found to have issued biased decisions, and casts a shadow over the future of Dubai’s arbitration reputation.

    On 29 October 2016, Federal Law No. 7 of 2016 revised Article 257 of the UAE Penal Code to read as follows:

    “An expert, arbitrator or translator or investigator who is appointed by a judicial or an administrative authority or elected by the parties, and who issues a decision or expresses an opinion or submits a report or presents a cause or proves an incident, in favour of a person or against him, contrary to the duty of fairness and unbiasedness, shall be punished by temporary imprisonment.”
    Grose, (unofficial translation)

    To clarify – the recent amendment brings only arbitrators into the equation, conforming their position with that of court-appointed experts and translators. All biased, judicially-appointed decision makers, or quasi-decision makers, who consciously exercise undue influence will be held accountable.  This intention is well-founded.

    Whilst there exists a number of checks and balances on arbitrator impartiality, upholstered by institutional rules (e.g. DIAC Rules, ICC Rules), the consequences of breach are of a civil nature.  Understandably, introducing a criminal aspect at Federal-law level into the mix has caused widespread concern amongst the international arbitral community. 

    Firstly, the practical reality is that many arbitrators will likely think twice about accepting UAE-based appointments – not because they have predisposed opinions, but because there is now a peg upon which unscrupulous parties may hang their complaint.  We may see a shift in arbitrators dealing with arbitrations at an arm’s length – from the safety of their overseas seats.

    Secondly, unwarranted opportunities may arise for procedural delay, pending a criminal investigation.  Although a criminal complaint alone should not be enough to suspend proceedings, tribunal members have been known targets of disgruntled parties hoping to kick the can down the road. Notwithstanding, it is doubtful that the introduction of a specific offence will affect the commercial decision that a party inclined to deploy such tactics must perform. 

    Despite the sensationalism this new law has attracted, there seems to be a high enough standard for an accuser to substantiate a claim under Article 257.  There must be sufficient evidence that the content of an award or decision in favour of one party is biased, and that such bias is connected to the illegitimate reasoning of the arbitrator.  It is hoped that this burden distinguishes the spurious allegations from those with merit.

  • Uncategorized

    Davidson & Co Establishes Strong Working Relationship with Renowned British Law Firm in Mauritius

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    Situated in the Indian Ocean, Mauritius is a quite unique legal landscape. This is because it is a hybrid system comprising French Civil Codes and procedure and legislation predominantly influenced by English law.  Increasingly, companies and individuals are choosing to establish themselves in Mauritius, because of the excellent opportunities it offers for investment and trade. There are significant tax incentives for setting up structures in Mauritius in addition to an economic and political stability that is rare in Africa.

    Seeking to serve those companies and individuals, Thomas More International (TMI) has offices based in the islands main business community in Ebène, close to the capital city of Port Louis. Philip Tsalikis, Managing Director of TMI, is of the view that Mauritius will continue to become a more influential and powerful platform for business in the years ahead. “The progress of Mauritius over the last twenty years indicates that it will be the main rival to Singapore for conducting business and investment into Africa, the Middle-East, and Asia for the decades ahead. It has substance, it is cost-effective and it will continue to flourish”.

    Navigating Mauritius’s legal system is time-consuming and complex, and can involve significant costs and risks for those unfamiliar with the challenges it brings. TMI offers clients an unrivalled understanding of the Mauritian legal, political, and cultural spheres at all levels whilst maintaining the international standard expected of a British-led law firm. As a result, TMI’s clients can be confident that they will receive easily comprehensible, commercially sound, dependable advice and representation, regardless of the law and practice involved.

    TMI work in close association with Thomas More Chambers in London, Davidson & Co. in Dubai and a leading Mauritian set of Attorneys to cater to the needs of the international business community on the island.

    In relation to the international network of TMI, Jonathon Davidson, Founding Partner at Davidson & Co added, “We are delighted to be working on a number of exciting projects with TMI for our clients with business interests in Indian Ocean and surrounding jurisdictions. The synergy of our close collaboration will only enhance the services provided to our clients.”

     

  • Uncategorized

    New UAE Bankruptcy Law May Be Finalised This Year

    New UAE bankruptcy law

    Last month, the UAE government advised that the long-awaited bankruptcy law might be finalised by the end of this year. The new law, which has been drafted since 2011, is said to incorporate elements of the French, German and US insolvency systems.

    The UAE’s commercial, banking and legal sectors have been eagerly-anticipating the reform of the current insolvency and bankruptcy regime which remains widely untested in the Courts despite their codified status in the UAE Companies Law and the UAE Commercial Code. These federal laws provide for court-led bankruptcy and liquidation procedures which make the dissolution of companies a public event. Given that there is yet to be a major corporate insolvency driven through the Courts in the UAE, it appears that no one, be it debtors or creditors, make use of the existing legal framework.

    The impact of this, on small businesses especially, is significant. The lack of modern bankruptcy regulations makes it difficult for companies to restructure or wind themselves up and the criminal liability that attaches to bad debt has historically encouraged affected parties to abandon their affairs altogether. This is also reflected in the World Bank’s annual ‘Doing Business’ report,[1] where the UAE is currently ranked 91st in the world in terms of its legal framework for resolving insolvency. According to the insolvency framework index, insolvency proceedings may be commenced as soon as a debtor is unable to pay its debts as they mature, however the only available action for both debtors and creditors is to file for liquidation only.

    In practice, this often creates an impediment to foreign direct investment (FDI), especially since unpaid debt or a dishonoured cheque can result in criminal proceedings and imprisonment in the case of non-UAE nationals. Tackling this issue, earlier this year the UAE banks agreed to halt criminal prosecutions for bounced cheques drawn by SME business customers with the aim of “restoring market stability, stemming credit losses and maintaining the reputation of the UAE as a place to do business”.[2] Under the scheme, new insolvency and restructuring provisions are implemented whereby debtors are given a fifteen-day-period to agree on a new arrangement with their creditors, followed by a ninety-day-period in which the bank may refrain from any pre-emptive action in respect of the unpaid debt.

    Efforts such as these by the UAE Banks Federation along with the new UAE bankruptcy law, will likely boost FDI by bringing more clarity and stability within the local insolvency framework. The new scheme is intended to allow for a more debt-friendly regime in which bankruptcy is decriminalized and where struggling business are supported by way of a confidential financial recovery procedure. This would also enable creditors to boost their recovery rate, which is currently only 29 cents on the US Dollar on average.[3]

     

     

    [1] http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/

    [2] http://www.thenational.ae/business/banking/uae-banks-to-halt-prosecutions-on-cheques-bounced-by-smes

    [3] http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/

     

     

    [1] http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/

    [2] http://www.thenational.ae/business/banking/uae-banks-to-halt-prosecutions-on-cheques-bounced-by-smes

    [3] http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/