United Arab Emirates
Ahmad Saleh Partner, Head of Innovation, Patents & Industrial Property
Andrea Tithecott Partner, Head of Regulatory and Healthcare & Life Sciences
Sabeeha Moolla Professional Support Lawyer
The United Arab Emirates (UAE) has taken a significant step towards its ambitious climate goals with the enactment of Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects (the "Climate Law"). Set to take effect on 30 May 2025, this legislation establishes a comprehensive regulatory framework to support the nation's Net Zero 2050 strategy. By mandating emissions reporting, setting clear reduction targets, and empowering local authorities, the Climate Law ensures the UAE remains on track to achieve its ambitious climate objectives.
Key Features of the Federal Decree-Law on Climate Change Reduction
The Climate Law introduces several critical measures aimed at mitigating the impacts of climate change and achieving climate neutrality. These include:
Local Climate Action Plans: All local authorities, including municipalities and free zones, are mandated to develop and implement comprehensive climate action plans. These plans will encompass all emission sources, ensuring a whole-of-society approach to climate action.
Sector-Specific Targets: The Cabinet will set and periodically review ambitious annual emission reduction targets for various sectors, aligning with the national pathway to climate neutrality.
Enhanced Accountability: A robust monitoring, reporting, and verification (MRV) framework is established, including a centralized electronic system for tracking emissions data. This ensures transparency and accountability across all sectors.
Set to take effect on 30 May 2025, this landmark legislation establishes a comprehensive regulatory framework to support the nation's Net Zero 2050 strategy.
Emission Inventory Requirements: Sources are required to measure emissions from their activities regularly, prepare an emissions inventory, and submit periodic reports.
Promoting Innovation: The Climate Law incentivizes the adoption of low-carbon technologies, such as carbon offsetting and emissions trading systems, to accelerate the transition to a low-carbon economy.
Focus on CCUS: It encourages the use of Carbon Capture, Utilization, and Storage (CCUS) technologies to capture and store carbon dioxide emissions from industrial and energy-related sources.
Establishing a National Carbon Credit Registry: A national record will be created to track carbon emissions, credits, and retirements, facilitating carbon offsetting activities and emissions trading.
Developing Adaptation Plans: The development and implementation of adaptation plans will be mandated across critical sectors such as infrastructure, energy, environment, health, and insurance.
Strengthened International Cooperation: The UAE will continue to actively participate in global climate initiatives and collaborate with other countries to share best practices and accelerate climate action.
Incentivizing Emission Reduction: The Climate Law encourages sources to adopt and develop new technologies and methods to reduce their emissions through mechanisms such as carbon offsetting, emissions trading, and the adoption of shadow carbon prices.
Penalties for Non-Compliance: Penalties for violations of emissions measurement, reporting, and reduction requirements will range from AED 50,000 to AED 2,000,000.
In the coming months, we can expect several key developments:
Local authorities will commence the development and implementation of their tailored climate action plans.
The centralized electronic system will significantly improve the accuracy and transparency of emissions data.
The Climate Law’s focus on innovation will likely drive a surge in the adoption of low-carbon technologies, including CCUS, renewable energy, and energy efficiency improvements.
The UAE will continue to actively participate in global climate initiatives and collaborate with other countries.
Federal Decree-Law No. 11 of 2024 represents a comprehensive approach to addressing climate change in the UAE. By mandating local climate action plans, enhancing accountability, promoting innovation, and fostering international cooperation, the UAE is taking significant steps towards achieving its climate neutrality goals and contributing to global climate action efforts. For more information on this topic kindly refer to our previous publications:
UAE’s New Climate Law focuses on R&D, Innovation & Sustainability
A sustainable future: legal perspectives on climate change and the environment in the United Arab Emirates
Federal Law No. 11 of 2024: A New Era of Climate Responsibility in the UAE - Federal Law No. 11 of 2024: A New Era of Climate Responsibility in the UAE
Our team of experts possesses deep experience in transformation, innovation and climate-driven matters and is uniquely positioned to assist companies in fostering best practices and navigating this transition. For any enquiries, please feel free to reach out to us.
Mark Brown Partner, Head of Projects
Ashish BangaSenior Consultant
Kamarya El YaagoubiProfessional Support Lawyer
Mohammed AbouhaligahTrainee Solicitor
The Financial Services Regulatory Authority (the "FSRA") of the Abu Dhabi Global Market (the "ADGM") issued a Consultation Paper on 29 October 2024 (the "Consultation Paper"), proposing enhancements to its regulatory framework. These proposals aim to align with international standards, including the Basel Committee on Banking Supervision’s Core Principles for Effective Banking Supervision (the "BCBS Principles"), the International Organization of Securities Commissions’ Objectives and Principles of Securities Regulation (the "IOSCO Principles"), and the International Association of Insurance Supervisors’ Insurance Core Principles (the "IAIS Principles").This initiative reflects the FSRA's commitment to maintaining a robust and progressive regulatory framework that anticipates global financial developments and emerging risks.
By adhering to these international benchmarks, the FSRA seeks to address the specific needs of the ADGM financial services market and uphold high standards for banks, insurers, credit providers, and managers of profit-sharing investment accounts within the ADGM. The Consultation Paper identifies several key areas of focus (the “Proposals”), including:
The corporate governance;
The designation of Domestic Systemically Important Banks (“D-SIBs”);
Proposals to enhance existing guidance regarding country risk, transfer risk, and regulatory expectation for stress testing;
Introducing additional criteria for “Connected” and “Closely Related”;
Establishing criteria for classifying bank exposures; and
Introducing rules on prior notification requirements for major acquisitions or investments.
Corporate Governance
The FSRA proposed enhancements to corporate governance to align with international standards, aiming for forward-looking structures capable of managing emerging risks. Key proposals include:
Requiring banks and insurers to include a specified proportion of non-executive and independent directors on their governing body, with adjustments based on size, risk, complexity, and operations.
Allowing the FSRA to mandate committees (e.g., audit, nomination, risk, remuneration) with designated non-executive and independent directors.
Strengthening guidance on governance best practices, including independence criteria, balance of directors, governance reviews, and committee conditions.
Empowering the FSRA to require ADGM branches of banks and insurers to establish governance committees as needed.
Recommending appointing a senior manager, distinct from the senior executive officer, to advise on governance risks.
Domestic Systemically Important Banks
To account for the systemic importance of D-SIBs and the higher risks they may pose to the financial system of the ADGM and UAE, the FSRA proposed updating its Prudential – Investment, Insurance Intermediation and Banking Rules (“PRU”) to:
Enable the FSRA to designate authorised persons undertaking regulated activities of accepting deposits and managing unrestricted profit-sharing investment accounts as D-SIBs, based on certain criteria including size, interconnectedness, substitutability, complexity, and cross-border activities.
Outline procedures for D-SIB designation, including notification, consultation, review, and appeal processes.
Enabling the FSRA to impose higher prudential requirements for D-SIBs, such as additional capital buffers, higher minimum leverage ratios, and lower large exposure limits, especially for exposures to other D-SIBs or their subsidiaries.
Country Risk and Transfer Risk Management
The FSRA’s self-assessment and benchmarking with international standards highlighted the need for robust policies and processes to identify, measure, monitor, report, and mitigate country and transfer risks in international lending and investment.
The FSRA proposes to enhance its expectations relating to:
Key elements of an authorised person's policy, including scope, objectives, roles, methodologies, limits, reporting, stress testing, provisioning, and disclosures.
Factors for setting country or regional limits, such as economic indicators, political environment, legal framework, sovereign rating, cross-border exposures, and portfolio diversification.
Defining the responsibilities of the governing body and senior management, including policy approval, risk appetite setting, exposure monitoring, and policy reviews.
The proposed enhancements aim to ensure the regulatory framework remains robust, progressive, and capable of managing emerging risks, thereby supporting the growth and stability of the ADGM financial services market.
Stress Testing
In line with the BCBS Principles, particularly its stress testing principles and with an aim to ensure that the results of stress testing are appropriately integrated into a bank’s decision making and risk management, the FSRA proposed enhancing its existing guidance to explicitly state, that stress testing frameworks for authorised persons, among other things:
Are commensurate with risk profile and systemic importance of the authorised person;
Are subject to appropriate governance;
Are appropriately integrated with decision-making and risk management processes;
Capture all material risks;
Provide sufficient data and IT capabilities;
Are subject to appropriate documentation, maintained, updated; and
Address communication of results within the firm and to authorities, within and across jurisdictions, as relevant.
In this regard, the FSRA proposes to update, amongst others, its existing design of stress testing framework, IRAP and ICAAP requirements to cover enhanced stress testing and references to the BCBS standards for Interest rate risk. Definitions of “Connected Parties” and “Closely Related”
The FSRA proposed refining the definitions of “Connected Counterparties” and “Closely Related” by incorporating control and economic interdependence criteria, aligning with BCBS standards. Key proposals include:
Adding control criteria for “connected counterparty,” such as significant influence, shared management, cross guarantees, or dominant funding sources.
Adding economic interdependence criteria for “closely related,” including correlated financial performance, shared funding sources, or significant common risks.
Allowing the FSRA to designate or remove counterparties as connected or closely related for large exposure limits.
Exempting economic interdependence assessment for transactions where exposures are under 5% of tier 1 capital.
Managing Problem Exposures
The FSRA proposed introducing “non-performing,” “performing,” and “forborne” exposure criteria to align with BCBS Principles, enhance clarity in credit classification, and improve understanding of asset quality, ensuring better compatibility of credit risk information reported by authorised persons.
Prior Notification Requirements for Major Acquisitions or InvestmentsIn line with the BCBS Principles, the FSRA proposed updating notification requirements, including prior notification for authorised persons in certain categories regarding major acquisitions, investments, or new subsidiaries. Specific requirements include:
Establishing or acquiring a subsidiary, excluding special purpose vehicles for financing.
Proposing to acquire or invest in entities with assets 10% or more of the authorised person's capital resources.
Proposing to acquire 20% or more of an entity's equity.
The proposed amendments also grant the FSRA the authority to reject or impose conditions on such proposals if the authorised person lacks adequate resources to manage the change.
Conclusion
The FSRA's proposed enhancements to its regulatory framework align with international standards, addressing corporate governance, systemic risk, stress testing, and major acquisition notifications. These measures aim to strengthen ADGM's resilience against global financial risks, with stakeholder engagement ensuring transparency and informed decision-making.
Looking ahead to 2025, the FSRA’s focus on aligning with international standards will enhance ADGM’s position as a leading financial hub. By improving governance, risk management, and stability, the FSRA aims to boost investor confidence and create a robust, forward-looking financial system. These changes are expected to foster sustainable growth, innovation, and high standards of integrity within the ADGM.
Mohamed Al Marzouqi Partner, Co-Head of Dispute Resolution
Ahmad GhoneimPartner
Shaikha Alzubaidi Trainee Lawyer
The authority to sign arbitration agreements in the United Arab Emirates ("UAE") has been a contentious issue, particularly in the context of public joint-stock companies. The UAE's legal framework mandates specific requirements for the validity of arbitration agreements, emphasizing the necessity of proper authorization. Recent court rulings have further clarified these requirements, highlighting the evolving judicial approach towards arbitration agreements. This article considers recent developments and the future outlook regarding the authority to sign arbitration agreements in the UAE.
Legal Framework and Historical Context
In the UAE, the validity of arbitration agreements is governed by the UAE Arbitration Code (Federal Law No. 6 of 2018) and the UAE Civil Code. Article 7 of the UAE Arbitration Code stipulates that an arbitration agreement must be in writing, while Article 4 requires that such agreements can only be entered into by individuals with the legal capacity to dispose of the rights in question or by representatives of legal entities authorized to enter into such agreements.
Historically, UAE courts have adopted a strict approach towards the authority required to sign arbitration agreements. The doctrine of actual authority has been predominantly applied, necessitating explicit authorization for representatives to bind their principals to arbitration agreements. This strict interpretation has often led to the annulment of arbitration awards where the signatory lacked the requisite authority.
Recent Judicial DevelopmentsAbu Dhabi Court of Cassation JudgmentA landmark case that highlights the strict approach of UAE courts is the recent judgment from the Abu Dhabi Court of Cassation in Case No. 902 of 2024. The court annulled an arbitration award on the grounds that the arbitration agreement was signed by the executive manager of the claimant company without proper authorization from the company's board of directors. The court emphasized that, according to the company's Articles of Association and the UAE Commercial Companies Code, only the chairman of the board had the authority to enter into arbitration agreements.
The court's decision was based on the principle that proper authorization is a fundamental element of the validity of arbitration agreements. The judgment underscored that an arbitration agreement signed by an unauthorized person is void and cannot be ratified by subsequent participation in arbitration proceedings.
The Abu Dhabi Court of Cassation judgment is likely to influence future cases, encouraging a more cautious approach to the execution of arbitration agreements and potentially leading to more rigorous internal governance procedures within companies.
Dubai Courts' Evolving StanceWhile the Abu Dhabi Court of Cassation maintains a strict approach, there have been signs of a more liberal interpretation emerging from the Dubai courts. In recent cases, the Dubai Court of Cassation has shown a willingness to apply the doctrine of apparent authority, particularly in instances where the signatory's actions were consistent with general business practices and the counterparty acted in good faith. This shift is evident in cases where the court upheld arbitration agreements despite challenges to the signatory's authority, emphasizing the principles of good faith and trust in commercial transactions.
Future OutlookThe future of arbitration agreements in the UAE will see a continued balancing act between strict statutory adherence and the evolving judicial interpretations that favour commercial pragmatism. The divergence between the Abu Dhabi and Dubai courts' approaches may lead to further judicial clarification or legislative amendments to harmonize the standards across the UAE.
ConclusionThe authority to sign arbitration agreements in the UAE remains a complex and evolving issue. The recent judgment by the Abu Dhabi Court of Cassation underscores the importance of proper authorization and adherence to statutory requirements. As the UAE continues to position itself as a hub for international arbitration, the legal landscape will likely evolve to balance the need for strict compliance with the practicalities of commercial transactions. Companies must remain vigilant in ensuring that their representatives are duly authorized to avoid the pitfalls of invalid arbitration agreements.
Mariam SabetPartner
The UAE is on the cusp of a major shift in its merger regime with the relevant cabinet resolutions on turnover thresholds set for an imminent release and the new implementing regulations to follow.
In November 2023, the UAE generated considerable attention by announcing the issuance of its revamped competition regime which included a comprehensive overhaul of its merger control framework. 2025 is the year that all eyes will be on the much-anticipated new Implementing Regulations (the “Implementing Regulations”) and the cabinet decision on the turnover thresholds (the “Turnover Decision”).
The Turnover Decision (along with other cabinet decisions) and Implementing Regulations are expected to be issued during the first half of 2025, and it is anticipated that they will address several important topics. These topics include turnover thresholds, filing fees, and other procedural aspects. However, there are additional critical issues that require further clarification, either within these decisions or through separate guidelines. These issues include:
Turnover thresholds:
High Value for Financial Thresholds: It is crucial to set high financial thresholds to avoid the challenges experienced with the initially low thresholds in Saudi Arabia.
Extent of UAE Nexus: Ensuring that a transaction has a sufficient nexus to the UAE is a key consideration.
Extent of government exemptions: Clarification is needed on the status of exemptions for companies that are only partially owned by the government.
Reasonable Filing Fees: The law should ensure that filing fees are not prohibitively high.
Easing Legalizations: Given the costs and timelines associated with rigorous legalization processes, it is important to determine whether these requirements will be eased.
Fast-Track Procedure: Clarification on whether a fast-track process will be available is essential.
The UAE's merger regime is set for a major shift, with cabinet resolutions on turnover thresholds and new regulations expected soon.
Guidelines and Definitions
Definition of “Control”: Specific guidelines on what constitutes control are necessary.
Minority Shareholdings: A clear position on the treatment of minority shareholdings is required.
Local Carve-Outs / Hold-Separate Agreements: It is important to address the position on local carve-outs and hold-separate agreements.
Guidance on Joint Ventures: Separate guidance on joint ventures, such as the distinction between full-function and non-full-function joint ventures, is needed.
Dubai Courts' Evolving Stance
While the Abu Dhabi Court of Cassation maintains a strict approach, there have been signs of a more liberal interpretation emerging from the Dubai courts. In recent cases, the Dubai Court of Cassation has shown a willingness to apply the doctrine of apparent authority, particularly in instances where the signatory's actions were consistent with general business practices and the counterparty acted in good faith. This shift is evident in cases where the court upheld arbitration agreements despite challenges to the signatory's authority, emphasizing the principles of good faith and trust in commercial transactions.
The importance of the upcoming changes cannot be overstated. From a merger control perspective, one of the most significant challenges that businesses, practitioners, and relevant stakeholders will face is the impact a new merger regime can have on the execution of global deals in international M&A transactions.
To address uncertainties associated with the new regimes, several measures can be implemented: establishing a fast-track route for no-issue transactions, simplifying the notification process for efficiency, implementing shorter review timelines, and ensuring there is a clear local nexus to eliminate unnecessary foreign-to-foreign no-impact transactions.
Indeed, all eyes will be on the Implementing Regulations and Turnover Decision in the UAE. This is a developing story, so stay tuned for further updates and detailed reporting.
Ammar Haykal Partner, Head of Northern Emirates
Zafer OghliPartner, Head of Office - Sharjah
Dina AssarProfessional Support Lawyer
Khaled BouchnaqIntern
On 23 October 2024, His Highness Sheikh Sultan bin Mohammed Al Qasimi issued Sharjah Emiri Decrees (70), (71), and (72) of 2024, signifying a major shift in the judicial framework of the Emirate of Sharjah. These decrees transition Sharjah from a Federal Judicial Emirate to an Independent Judicial Emirate and establish Sharjah’s Judicial Council (SJC), Judiciary Department, and Public Prosecution. This article explores the anticipated legislation and regulatory developments for 2025 and their likely impact on the legal environment in Sharjah and the UAE.
Previously, Sharjah was part of the Federal Judicial Emirates, which included Ajman, Umm Al Quwain, and Fujairah. These Emirates adhered to the UAE Federal Judicial System, which often faced challenges such as inefficiency and slow judicial processes due to the increasing number of cases. As Sharjah continues to grow, these issues have become more pronounced.
Establishment of the new Sharjah Judiciary
The formation of the new court system will address these inefficiencies by providing Sharjah with much-needed judicial autonomy. The SJC will oversee the implementation of policies and provide direct legal and administrative support to judicial institutions. The Judiciary Department will manage the justice system, and the Public Prosecution will have the authority to investigate and file lawsuits before Sharjah courts.
Impact in 2025
The restructuring of Sharjah's judicial system is expected to prompt the issuance of new legislation in 2025, particularly concerning the formation and establishment of the Court of First Instance, Court of Appeal, and Court of Cassation. The Court of Cassation in Sharjah will be independent and distinct from the UAE Federal Supreme Court, making it the highest court in the Emirate. Additionally, an anticipated law will regulate the organization of the judicial authority, marking the completion of the transition and providing a legal framework for the judicial system's operation.
Benefits of the New Judicial System
The creation of the Judicial Council is expected to significantly enhance the judicial foundations of Sharjah. This improvement will be achieved by facilitating the management of a higher volume of cases through alternative dispute resolution methods, such as arbitration, as well as through the local courts. This is expected to result in a more efficient judicial process with heightened oversight. The legal environment in Sharjah is expected to become more dynamic, with a rise in the number of disputes being referred to the Sharjah Courts and the Arbitration Centre in Sharjah, either voluntarily or through new legislative provisions.
What Should Clients Look For?
We will keep our clients updated on the regulations to be issued in 2025 governing the Judicial Council to ensure compliance with current legal standards and leverage opportunities.
We advise our clients to review current contracts and agreements, which will be crucial in identifying provisions that may need to be amended or removed once the new regulations are issued. Businesses operating in Sharjah should consider legal representation specific to the Emirate.
As Sharjah continues to develop, a localized judiciary will ensure that the court system is responsive to the needs of its growing population. These welcome changes will allow Sharjah to continue to tailor its legal system more closely to the specific needs and values of its residents, much as other Emirates have done in the past.
In our article on the transformation of Sharjah real estate dispute resolution, we look at some of the other forward-thinking reforms taking place in Sharjah. With all of this change, the autonomy to implement judicial reforms and innovations will lead to a more robust and adaptable legal framework, which can swiftly address emerging issues and improve overall governance.
This evolution of the legal framework will not only improve the efficiency of the judicial system but also ensure that it is better aligned with the specific needs of Sharjah's residents and businesses. As the emirate continues to grow and develop, these changes will play an instrumental role in enhancing governance and fostering a more vibrant legal framework.
Adnan Al ErqsousiSenior Associate
In the past two years, Ras Al Khaimah ("RAK") has introduced new legislation designed to establish a fair, secure and transparent business environment for both local and international investors, and create processes aligned with global best practices. These legislative changes are expected foster a more robust investment environment as development in RAK continues to progress and flourish. Below, we explore the key implications and benefits of these new laws for our clients in 2025.
New Notary LawIntroduction of Private Notary Services
The New Notary Law, effective from September 2023, has revolutionized notary services in RAK by allowing the establishment of private notary services. This change is particularly beneficial for clients who may find it challenging to appear before a public notary. Private notaries can now be licensed to conduct all or some of the authentication works stipulated in the law, making the process more accessible and efficient. Al Tamimi & Company is in the process of obtaining a private notary license in 2025 to streamline service provision for our clients in the Emirate of RAK.
Enhanced Notary CapabilitiesPublic notaries now have the authority to authenticate and notarize affidavits taken on oath and attest deeds with acknowledgment of debt or obligation, which can be directly enforceable before the court. Additionally, deeds in foreign languages can be notarized if accompanied by a certified Arabic translation. These enhancements streamline the notarization process, providing greater convenience and legal certainty for our clients.
Real Estate Development Law (RED Law)
Developer Registration and AccountabilityThe RED Law, effective from October 2023, mandates that all entities or individuals involved in real estate development must register with the Real Estate Regulatory Authority (RERA). This requirement ensures clear accountability and transparency throughout the project lifecycle, benefiting both developers and purchasers, which will be more important than ever in light of RAK’s projected growth in 2025.
Obligations and ProtectionsDevelopers are now compelled to complete projects according to approved designs and schedules, provide accurate information to buyers, and register real estate units under the buyer's name in the RAK Land Department. Purchasers are protected by the ability to withhold payments if developers fail to meet agreed-upon milestones, provided they notify RERA, the developer, and Escrow Account Trustees in advance.
Financial TransparencyThe establishment of an Escrow Account Trustees Register ensures that buyers' funds are used solely for project-related expenses. Trustees must submit monthly financial reports to RERA, detailing all transactions related to real estate projects. This mechanism protects buyers' investments and promotes financial transparency.
Dispute ResolutionIn case of disputes between purchasers and developers, the RED Law requires mediation through RERA before court proceedings can be initiated. This process aims to resolve conflicts efficiently and amicably, and will inevitably reduce the burden on the court system in 2025 by reducing the need for lengthy and costly litigation.
Court Fees Law
Introduction of Fee CapsThe new Court Fees Law, effective from November 2023, introduced a cap of AED 40,000 for all civil and commercial claims. This change aligns RAK's fee structure with those of Dubai and Abu Dhabi, making legal actions more cost-effective for entities such as banks and real estate companies. Previously, high court fees deterred many from pursuing legal claims, but the new cap encourages more entities to seek judicial recourse when necessary.
ConclusionThe recent legislative changes in RAK are set to create a more transparent, accountable, and investor-friendly environment by 2025. These laws collectively enhance the legal framework and ensure greater accessibility to notary services, protect real estate investments, and make legal actions more affordable. Al Tamimi & Company has played a pivotal role in these developments, working closely with key bodies such as RERA to ensure effective implementation. As we move towards 2025, our clients can expect a greatly different and much more supportive legal environment in RAK, and our firm is well-positioned to guide you through these changes.
Richard CatlingPartner
Nawal AbdelhadiSenior Counsel
Stuart PrykeSenior Counsel
The UAE has recently introduced transformative legal reforms to bolster its position as a global leader in family business governance and private wealth planning. By implementing both freezone and onshore laws, it aims to address diverse needs while fostering economic stability and intergenerational wealth transfer. These reforms reflect the UAE’s proactive approach to creating a robust legal framework that caters to family businesses and high-net-worth individuals. This article explores these developments, covering the Dubai International Financial Centre Law No. 4 of 2018 Concerning Trusts ("DIFC Trust Law"), the Federal Decree-Law No. 31 of 2023 Relating to Trusts ("Onshore Trust Law"), Federal Decree-Law No. 37 of 2022 in relation to Family Companies ("Family Companies Law"), and Sharjah Executive Council Resolution No. 31 of 2024 ("Sharjah Family Business Resolution").
DIFC Trust Law Reforms
The Dubai International Financial Centre ("DIFC") continues to lead with its innovative trust framework. The recent amendments to the DIFC Trust Law through Amendment Law No. 1 of 2024 address emerging challenges and solidify the DIFC’s position as a premier jurisdiction for family wealth planning.
Firstly, the introduction of severable terms allows trusts to incorporate provisions governed by different jurisdictions for specific asset classes. For example, families can apply one jurisdiction’s laws to real estate and another’s to financial holdings. This flexibility is invaluable for families managing cross-border assets.
Secondly, the reforms enhance asset protection by imposing stringent requirements on creditors seeking to challenge asset transfers. Creditors must now prove fraudulent intent or insolvency at the time of the transfer, making it significantly harder to undermine trust structures.
Moreover, the DIFC has strengthened protections against foreign judgments. Trusts established within the DIFC are insulated from rulings by foreign courts that conflict with DIFC principles, ensuring the jurisdiction’s autonomy and safeguarding family wealth. Lastly, provisions enabling the division or amalgamation of trusts provide families with adaptable solutions for evolving needs. These measures, coupled with a streamlined governance framework, position the DIFC as a jurisdiction of choice for sophisticated trust structures.
Onshore Developments: Federal Decree-Law No. 31 of 2023 Relating to Trusts
The Onshore Trust Law replaces the previous federal trust law and provides an important step in expanding the onshore legal framework for trusts in the UAE. Effective as of September 25, 2023, the Onshore Trust Law introduces provisions aimed at enhancing governance and facilitating wealth management. The Onshore Trust Law recognizes trusts as legal entities, empowering them to own assets and enter into contracts independently. It also introduces a certification and registration process to ensure regulatory oversight.
Federal Decree-Law No. 37 of 2022 in relation to Family Companies
The issuance of the Family Companies Law marks a significant milestone in the UAE Government's strategy to establish a comprehensive legal framework for family businesses. the Family Companies Law which came into force on January 11, 2023. This decree-law continues the UAE Government’s efforts to establish a comprehensive legal framework to regulate the ownership and governance of family companies, boost the sector’s contribution to economic and social development, and facilitate the transfer of wealth between successive generations.
The Family Companies Law applies to any family company in which the owners of the majority of its capital agree to register their company in a unified Register of Family Companies established under this decree-law. A family company can take the form of any company recognized by the Federal Commercial Companies Law, with the exception of public joint stock companies and general partnerships, or under the laws in force in the Free Zones. Furthermore, the majority of the shares in a family company must be owned by persons belonging to the same family. It introduces innovative provisions, such as permitting classes of shares with different rights and enabling the buy-back of up to 30% of the family company’s shares to facilitate the exit of family members. It also abolishes restrictions on the number of shareholders a family company may have, further expanding its applicability.
Additionally, families are allowed to enter into Family Constitutions to regulate their affairs and provide governance structures, including family assemblies, family councils, and family offices. These provisions offer flexibility, enabling families to design arrangements tailored to their unique needs. Al Tamimi & Company is proud to have assisted in registering the UAE’s first family company under this groundbreaking legislation.
Sharjah Executive Council Resolution No. 31 of 2024
Sharjah’s proactive approach to family business governance is reflected in the Sharjah Family Business Resolution. This resolution establishes a comprehensive legal framework to sustain family businesses while enhancing their economic contributions to the Emirate. The resolution mandates the inclusion of “Family Business” in the Articles of Association, ensuring transparency and governance alignment. Furthermore, it permits the issuance of non-voting shares, enabling families to distribute profits widely without compromising on control.
For dispute resolution, the resolution emphasizes internal reconciliation through family councils. However, when internal mechanisms prove insufficient, the Sharjah International Commercial Arbitration Centre (TAHKEEM) provides a reliable and expert-driven alternative. Notably, the resolution allows family business properties to be designated as endowments under Sharjah’s endowment laws. This feature ensures the preservation of assets for philanthropic or legacy purposes, reinforcing the Emirate’s commitment to sustainable family wealth management.
The UAE’s recent legal reforms underscore its dedication to creating a supportive environment for family businesses and private wealth. By balancing freezone innovations with onshore developments, the nation provides families with diverse tools to manage their assets effectively. As the UAE moves towards 2025, these reforms will play a critical role in ensuring the continuity and growth of family enterprises. At Al Tamimi & Company, we remain committed to guiding families through this evolving landscape, delivering solutions that align with the nation’s vision for economic excellence and intergenerational legacy.
These reforms ensure economic stability and intergenerational wealth transfer, positioning the UAE as a jurisdiction of choice for family enterprises.
Ali Bachrouch Partner, Head of Corporate Structuring – Northern Emirates
The UAE has recently enacted significant changes to the regulatory framework governing Welfare Associations and Institutions, previously regulated under Federal Law No. (2) of 2008 Concerning Public Welfare Associations and Institutions (the "Old Law"). These changes come into effect mid-2024 with the introduction of Federal Decree by Law No. (50) of 2023 Concerning the Regulation of Public Welfare Associations (the "New Law"). This article will focus on the implications and benefits of the New Law for our clients, highlighting new opportunities and enhanced regulatory measures expected by 2025.
Key Changes to the Old Law
One of the primary implications of the New Law is the improvement in governance and transparency for Public Welfare Associations and National Societies, both seeking to practice one or more public welfare activities without the intent of achieving any profit, ensuring that their operations align more closely with national policy.
In contrast to the previous legislation, the New Law applies to all Free Zone (“FZ”) regions within the UAE, ensuring a uniform regulatory framework across the country. The New Law also mandates adherence to obligations and prohibitions governing Public Welfare Associations, including stringent controls to combat money laundering and terrorist financing.
Newly established Associations must be properly registered and licensed before occupying, renting, or using any facilities belonging to a natural or legal person. The minimum number of founding members required has been reduced from 20 to 7, making it easier for individuals to participate in welfare initiatives, fostering a more inclusive environment.
The New Law streamlines setup procedures, allows establishment and organisation under local decrees, and increases penalties for violations, reflecting the UAE's commitment to modernizing its regulatory framework.
All Associations should have a Board of Directors, and all National Societies are required to have a Board of Trustees, with a maximum term limit of four years.
The New Law introduces stricter financial controls for Associations and National Societies and higher penalties for violations to promote compliance and deter misconduct. A minimum capital requirement of AED 5,000,000 for National Societies has been established, which ensures adequate resources for charitable initiatives. The New Law increases fines for violations from AED 10,000 to at least AED 500,000, with the possibility of imprisonment. Other penalties include dissolution and closure of Associations by the Competent Authority for operating without the required license. These changes create a more transparent and accountable environment, which will enhance the credibility and integrity of Public Welfare Associations in the UAE.
Foreign Nationals' Participation in Public Welfare Associations
A significant shift introduced by the New Law is the inclusion of foreign nationals in the establishment and management of Public Welfare Associations and National Societies. Foreign nationals of legal age can now become members of Associations and National Societies, with the number of foreign founding members capped at 30% of the total founding members, provided they have valid residency in the UAE for at least three years. These provisions extend to the Board of Directors of Associations and National Societies. This ensures more diverse governance and reflects the UAE’s commitment to an inclusive approach in civic development, likely attracting more international expertise and resources, and enhancing the overall impact of welfare initiatives.
The New Law has also narrowed down the parameters of an Association or a National Society, limiting their membership to only natural persons in contrast to the Old Law which allowed for corporate entity membership.
Expedited Setup Procedures
The New Law significantly reduces the time required for the Ministry to approve an Association's license from 60 days to 10 working days. In the event of a Ministry rejection, the founding Temporary Committee can file a grievance within 30 days instead of 180 days.
Expanded Involvement of the Ministry and Local Competent Authorities
The New Law grants expanded powers to the Ministry and local authorities, improving oversight and regulation. Their supervisory roles have been extended, and they are responsible for applying, maintaining, and updating the guide, which classifies Public Welfare Associations, National Societies, and their activities. They will determine the new standard Bylaws for Associations and National Societies.
Other powers were, however, transferred from the Ministry to the local competent authority. They now oversee the liquidation process of dissolved Associations and have discretion to exempt Associations from regularisation procedures after their promulgation.
The expanded involvement of the Ministry and local authorities will ensure more consistent and effective regulation, promoting a more robust and well-regulated welfare sector.
The introduction of the New Law represents a significant shift in the regulation of Public Welfare Associations in the UAE. By 2025, clients can expect enhanced governance and a more diverse sector. The New Law will institute a wider scope of Ministry and local authority oversight, stricter financial controls, violation penalties, streamlined setup procedures, and establishment and organisation under local decrees. The implementing regulations are in the final process of issuance and are expected to be implemented in 2025. These comprehensive reforms underscore the UAE's commitment to modernising its regulatory framework for Public Welfare Associations, aligning with national policies and international standards. By 2025, the sector can expect a more efficient, inclusive, and well-regulated environment, fostering greater community engagement and enhancing the overall impact of welfare initiatives.
Mohamed Al MarzouqiPartner, Co-Head of Dispute Resolution
Naief YahiaPartner, Head of Litigation - Dubai
Hassan El TahirPartnerZane AnaniSenior PSL
Recent developments have indicated that the UAE is poised to introduce significant advancements aimed at improving legal services and judicial processes in 2025. This article will delve into four of these key initiatives: Smart e-trials, the "Virtual Lawyer" project, the introduction of bilingual courts, and the implementation of a judicial resources and services AI platform. Each project will be briefly discussed below.
Smart e-Trials
One of the most notable advancements is the implementation of Smart e-Trials.
The UAE has been progressively integrating electronic means into its judicial processes, a trend that has gained momentum with the introduction of Federal Law No. 5 of 2017, which regulates the use of telecommunications technology in criminal procedures. This was further bolstered by the new Federal Civil Procedure Code which include provisions for electronic litigation.
Smart e-Trials, or remote litigation, involve the use of telecommunications and electronic media to conduct court proceedings. This includes the filing of lawsuits, exchange of documents, hearing of witnesses, and issuance of judgments—all conducted electronically. The UAE's approach to Smart e-Trials aims to save time, reduce costs, and increase access to justice by allowing litigants to participate in court proceedings remotely.
The Virtual Lawyer Project
The UAE announced the 'Virtual Lawyer' project during GITEX 2024, with a trial version expected to launch in 2025. The trial version will initially focus on aiding lawyers in cases with features such as voice-to-text conversion and document submission, with more complexity to come as the initiative progresses:
Unified National Legislative Text Database: The Virtual Lawyer will improve legal services by leveraging a unified national legislative text database. It will provide a digital platform for legal interactions, making legal services more accessible and efficient. Law firms using the Virtual Lawyer will need to feed into this database after registration with the Ministry of Justice.
Future-Ready Judicial Sector: The project aims to prepare the judicial sector for future opportunities and changes by employing advanced technologies and AI to create new government models that accelerate services and enhance user experience in a digital and interactive litigation environment.
Developing Legal Frameworks for AI Integration: Alongside the trial launch of the Virtual Lawyer, the UAE is working on establishing the legal frameworks required to facilitate AI integration within the legal profession. This involves a close study of the legal implications and drafting legislative texts to ensure the secure and efficient use of digital technologies in legal services.
As the UAE grows, there is a need to look at ways to streamline litigation, and this project is expected to remove some of the complexity and manual processes from the equation. Licensing requirements and regulations governing the Virtual Lawyer are expected to be published in 2025.
Bilingual courts
The UAE Civil Procedure Code came into effect last year and certain provisions of this law relate to the language of trials and judgments. We expect that these provisions will be implemented in mainland courts in 2025. Pursuant to Article 5 of the UAE Civil Procedure Code, the Chairman of the Federal Judicial Council or the Head of the Local judicial body can “decide that English be the language of trials, procedures, judgments and decisions in respect of certain tribunals that are assigned to hear the proceedings involving specialized matters, specific cases or particular proceedings.” Previously, Abu Dhabi court judgments were bilingual (Arabic and English) only in specific and complex cases where international experts were involved. In these cases, the experts attended the hearings and participated in the issuance of the judgments. In future cases, however, certain trials will be conducted in English and presided over by English-speaking judges. It is also important to note that the UAE has already established several international commercial courts, such as the Dubai International Financial Centre (DIFC) Courts and the Abu Dhabi Global Market (ADGM) Courts, which operate in English. The use of English in these courts ensures that they can effectively serve their purpose, providing a familiar legal environment for foreign litigants and legal professionals.
This move in relation to the mainland UAE courts is not merely a linguistic shift but a strategic decision with far-reaching implications for the country's legal landscape, economic environment, and international standing. Administering more cases in the UAE courts in English will make justice more accessible to a broader range of international parties, facilitating the participation of foreign qualified lawyers and international litigants. The UAE’s civil law framework, combined with the use of English language, will make the UAE Courts an attractive venue for resolving complex civil and commercial disputes.
The UAE's recent initiatives will have a positive effect on its judicial system. The introduction of the Virtual Lawyer Project, the establishment of bilingual courts, and the development of a judicial resources and services AI platform are poised to significantly enhance the efficiency, accessibility, and transparency of legal services in the UAE.
A Judicial Resources and Services AI platform
The introduction of a judicial resources and services AI platform in the UAE is expected to significantly enhance access to legal resources and information. Comprehensive access will empower legal professionals to stay informed about changes in the legal landscape and make well-informed decisions in the UAE. This AI platform can also support transparency and open justice by providing timely and effective access to information about court cases and proceedings. This promotes accountability and trust in the legal system, benefiting both the legal community and clients.
The UAE's recent initiatives will have a positive effect on its judicial system. The use of smart e-trials, introduction of the Virtual Lawyer Project, the establishment of bilingual courts, and the development of a judicial resources and services AI platform are poised to significantly enhance the efficiency, accessibility, and transparency of legal services in the UAE. These advancements are expected to streamline judicial processes, reduce the time required for legal proceedings, and make justice more accessible to a broader range of international parties. By leveraging advanced technologies and AI, the UAE is preparing its judicial sector for future opportunities and changes, ultimately promoting accountability and trust in the legal system.
Ammar HaykalPartner, Head of Northern Emirates
The real estate landscape in Sharjah has undergone a significant shift with the introduction of new property leasing laws in 2024. As we move into 2025, these changes are expected to have a profound impact on both landlords and tenants, shaping the future of property leasing in the Emirate. Here we delve into the key provisions of the new laws, their anticipated impact in 2025, and what stakeholders can expect in the coming year.
Law No. (5) of 2024 Concerning Property Leasing in the Emirate of Sharjah
Issued on 19 September, this law introduces numerous changes to the treatment of property leasing in Sharjah.
It will be imperative for all landlords and tenants to understand what these new provisions are, how they are affected, and what their rights are under the new law.
Protection from eviction
Article 13 of the law imposes new restrictions on landlords wishing to evict tenants. For residential leases, landlords may not evict the tenants unless 3 years have passed since the start of the lease, significantly enhancing tenants’ protection from arbitrary evictions by landlords.
For commercial and industrial leases, landlords can only request an eviction after 5 years have passed from the start of the lease. This provision will be important in securing longer-term investment from companies and businesses operating in Sharjah.
In terms of a landlord's right to evict, the law provides several instances where a landlord might request an eviction, with the most prominent instance being that of non-payment of rent within 15 days and the failure of the tenants to rectify any legal or contractual breaches of their lease within 30 days. Landlords will need to keep these dates in mind, particularly for a tenant’s breach of the lease agreement, as the 30day period will not run automatically from the date of the breach, but from the date of notification by the landlords. In comparison, the 15-day period for non-payment runs automatically from the first maturity date.
Formalization of lease agreement
Under the old law, a lease agreement was capable of being formed by oral and non-written agreement which, as can be expected, led to many disputes regarding the validity or existence of a lease agreement.
The provisions of the new law bring Sharjah in line with most other modern legal jurisdictions, as lease agreements must now be constituted either in writing or electronically. Additionally, the landlords must certify the lease with the Municipality within 15 days of its conclusion to be valid, or else the lease contract will not be legally recognized. Should a landlord fail to certify the lease within the 15 day period, the tenants may request the relevant authorities to enforce the agreement and compel the landlords to certify the lease.
Rent Increase
Landlords looking to increase rent can only do so after 3 years from the commencement of the lease agreement and must provide the tenants with a 90-day notice period before doing so. The increase in the rent following the 3-year period from the commencement of the lease agreement, must be at market value and it will also be important to note that after increasing rent, the landlords cannot raise the rent again for another 2 years from that date.
Law No. (6) of 2024 on the establishment and organization of the Rental Disputes Centre (RDC) in the Emirate of Sharjah
The establishment of the RDC paves the way for an efficient process of settling rental disputes in the Emirate. This is a welcome and progressive step, with the centre handling rental disputes – either through mediation or litigation – and subsequently enforcing judgments if needed.
The RDC is comprised of Primary Courts, Appellate Courts, and an Enforcement Department. The Primary Courts are responsible for resolving all rental disputes referred to it by the Litigation management office. The decisions issued by the RDC for cases valued below AED 100,000 are final and binding and may not be appealed. Even if a case is valued above AED 100,000, an appeal on the decision can only be made in limited circumstances.
The Enforcement Department is responsible for ensuring the enforcement of the decisions of both the Primary and Appellate Courts as well as any interim measures required by the RDC.
The changes brought about the new laws have brought a massive facelift to the real estate regime in Sharjah and have provided tenants in the Emirate with increased protection.
2025 impact and guidance
Clarity and Detail in Contracts: Stakeholders should ensure that lease agreements are in written or electronic form. Their leases must clearly specify the duration, rent amounts, increase schedules, responsibilities for maintenance and repairs, termination conditions, and renewal options. Clear terms can prevent misunderstandings and reduce the potential for disputes.
Leverage Eviction Protection Rules: Tenants should negotiate lease terms that fully utilize the protections against eviction. For example, they could negotiate terms that align with the minimum eviction notice period. Similarly, landlords should structure lease durations and terms in a way that aligns with their investment and property management strategies.
Anticipate Rent Increase Regulations: Both parties should negotiate rent increase terms well in advance and within the framework of the new regulations. This includes agreeing on how market value will be determined when a rent increase is permissible, and ensuring that any increases are justifiable, predictable, and transparent.
Compliance with New Regulations: Ensuring compliance with new regulations, such as timely registration of leases and adherence to rent control norms, is crucial. Non-compliance could lead to legal issues and financial penalties, affecting the profitability and legal standing of the property.
Utilize the RDC Effectively: Understanding and making use of the Rental Disputes Centre's resources can aid in efficiently managing disputes should they arise. The establishment of the RDC is expected to expedite the resolution of rental disputes, providing a more efficient and effective system for both landlords and tenants.
The changes brought about by the new laws have brought a massive facelift to the real estate regime in Sharjah and have provided tenants in the Emirate with increased protection. Landlords as well will welcome the new changes in providing greater clarity and procedures for increasing rents and evicting tenants. The establishment of the RDC will also be instrumental in ensuring a more effective system of settling rental disputes.
Divya Gambhir Partner
Praveena PechettiAssociateKamarya El YaagoubiProfessional Support Lawyer
2024 has been a pivotal year for the virtual assets sector, marked by transformative events accelerating global adoption. The year began with the U.S. Securities and Exchange Commission’s (“SEC”) approval of crypto-focused spot exchange-traded funds (“ETFs”), signaling the maturation of the sector. Following SECs decision, Bitcoin soared to an all-time high. These advancements, among others, have led to virtual assets becoming increasingly integrated into the mainstream financial sector.
From a regulatory standpoint, 2024 has been a year of progress, with many countries re-evaluating their stance on virtual assets. In this context, the UAE stands out as a pioneering jurisdiction, offering a bespoke regulatory framework and licensing options for Virtual Asset Service Providers (“VASPs”) while drawing on years of experience in supervising the sector.Looking ahead to 2025, regulators in the UAE are expected to enhance their regulatory frameworks to address emerging areas such as decentralized finance (“DeFi”), real-world tokenization, and regulatory hosting. As a result, significant regulatory advancements are anticipated in the UAE.
Snapshot of UAE regulatory framework for virtual assets activities
The UAE offers unique options for VASP setup and licensing, with the choice to operate in mainland UAE (where virtual assets activities fall under the regulatory purview of SCA, Central Bank UAE and VARA) or within one of the financial free zones (i.e., Abu Dhabi Global Market (“ADGM”) and Dubai International Financial Center (“DIFC”) where virtual assets activities are regulated by the Dubai Financial Services Authority (“DFSA”) and the Financial Services Regulatory Authority (“FSRA”) respectively. Each jurisdiction offers distinct benefits with specialized licenses for various types of VASPs, including crypto exchanges, broker-dealers, advisory firms, custodians (including those offering custodial staking), and asset managers. We now turn to the key regulatory developments in the UAE in 2024.
The Central Bank issued the Payment Token Services Regulations
In July 2024, the Central Bank issued the Payment Token Services Regulations, establishing a framework for services related to Payment Tokens (generally referred to as stablecoins). The key activities covered under the Regulations are (i) payment token issuance, (ii) conversion; and (iii) custody and transfer.
The regulations prohibit merchants and service providers in the UAE from accepting non-dirham-denominated virtual assets as a means of payment. On the other hand, the Regulations offer a clear pathway for issuing dirham-backed stablecoins, with some players already licensed by the Central Bank, reflecting its proactive stance on supporting the digital economy.
Overall, the Regulations brought forth substantial changes in the UAE’s virtual asset landscape.
SCA’s new Guidelines for Virtual Assets and VASPs
In July 2024, SCA released the new Guidelines for Virtual Assets and Virtual Asset Service Providers. The Guidelines explain SCA’s regulatory approach in relation to governance, customer asset custody, customer protection, anti-money laundering obligations and other conduct of business aspects.
Also, in September 2024, SCA and VARA entered into a cooperation agreement to further strengthen the UAE virtual assets sector. Both regulators agreed that VASPs operating in or from Emirate of Dubai, or wishing to service the Emirate of Dubai, must obtain a license from VARA and can be by default registered with the SCA to operate across the wider UAE. On the other hand, VASPs wishing to operate in any other Emirates must be licensed by SCA.
This collaboration enhances efficiency for VASPs operating in mainland UAE.
The UAE's progressive approach to the virtual assets sector, combined with its thriving ecosystem, has firmly established the region as a leading global hub for VASPs.
The DIFC has strengthened its regulatory framework to keep pace with the ongoing developments in the virtual assets sector.
In June 2024, the DFSA enhanced its regulatory framework aiming to create a more enabling environment for VASPs. Key amendments include: (i) permitting offer of units of foreign funds that invest in crypto tokens within the DIFC, subject to certain conditions; (ii) permitting DIFC-domiciled Qualified Investor Funds to invest in unrecognized crypto tokens, with restrictions; (iii) expanding anti-money laundering and Travel Rule compliance requirements; (iv) clarifying that staking activities can be conducted by DFSA-licensed custodians for virtual assets; and (v) prohibiting Representative Offices from marketing crypto tokens, related investments, and services
VARA overhauled its marketing regulations
In October 2024, VARA overhauled its marketing regulations for virtual assets (“VAs") and related activities, issuing updated Marketing Regulations and a "Guidance on the Marketing of Virtual Assets 2024." The regulations establish standards for accuracy, fairness, and ethical conduct in VA marketing. They define marketing broadly, outlining various scenarios that will be considered as marketing in the UAE, and specify exemptions.
VARA’s new marketing regime is one of its kind, offering comprehensive and practical guidance to VASPs on responsible marketing practices.
ADGM has issued new regulatory framework for issuance of Fiat-Referenced Tokens
In December 2024, ADGM introduced a regulatory framework for the issuance of Fiat-Referenced Tokens (“FRTs”), expanding its regulated digital asset offerings. The framework outlines standards for FRT issuers, covering reserve assets, governance, transparency, prudential safeguards, and redemption rights. FRT issuance is now a distinct regulated activity within ADGM’s financial services regime. Additionally, ADGM released a consultation paper proposing enhancements to its virtual assets framework. These developments follow the 2023 introduction of ADGM's Distributed Ledger Technology (DLT) Regulations, tailored for blockchain foundations, DAOs, and DLT-focused entities.
Overall, 2024 has been a dynamic year for the UAE's virtual assets sector. In addition to significant regulatory developments, several globally renowned VASPs were licensed by various authorities in the UAE. The UAE's progressive approach to the virtual assets sector, combined with its thriving ecosystem, has firmly established the region as a leading global hub for VASPs. This momentum is set to continue, with further regulatory advancements expected to address emerging trends.
