GCC Solutions – September Update

Legislative Updates

On the 19th of August, the UAE Cabinet issued a Ministerial Decision (No. 100 of 2020) concerning Economic Substance Requirements (the “Decision”). This Decision is issued pursuant to Article 20 of the ESR Regulations and repeals and supersedes Ministerial Decision No. 215 of 2019 on the issuance of Directives for the Implementation of the Provisions of Cabinet Decision No. 31 of 2019 concerning Economic Substance Requirements. The Decision is intended to clarify certain grey areas of the previous decision issued in 2019 and to offer additional guidance in regard to exemptions, definition of the Licensees and core income generating activities (CIGAs) and reporting obligations. More detail can be found on our website.

The Dubai International Financial Centre has announced it has expanded the applicant criteria for its Prescribed Companies regime, which was first introduced in 2019. The expanded regime includes a wider list of qualifying applicants which is aimed at attracting a broader range of companies to establish in the DIFC in a way which aligns with international best practices. The expanded Prescribed Company regime is open to all DIFC non-retail companies, along with their shareholders, Ultimate Beneficiary Owners and affiliates. It can now also be used by family businesses with a large presence in the UAE.

The DIFC has enacted the new DATA Protection Law no.5 of 2020(the “Law”). The Law and its implementing regulations aim to strengthen the approach DIFC has taken in regards to data protection. The main takeaways from the new law and the implementing regulations focus on mandatory reporting by entities registered in DIFC of any data transfer to another jurisdiction and ensuring the jurisdiction of transfer is adequate and has sufficient mechanisms to ensure data protection at a level similar to the DIFC regime. The Law also increases responsibilities of the appointed Data Controller and provides guidance regarding purposes for when data processing may be allowed differentiating between data subjects and classes of data subjects. Certain notification requirements have also been put in place together with guidelines regarding mediation, fines and means of enforcement.

Economic Updates

The Dubai Multi Commodities Centre has announced the extension of the business support package until 20 October 2020. This announcement will be welcome news for the circa 17,500 companies registered in the DMCC, and follows the first support package launched by the Centre during the month of March which was well received. This business support package is the largest commercial incentive package launched by the DMCC since its inception, and aims to reduce expenditures and facilitate doing business at the Centre in light of the economic challenges posed by the “Covid-19” pandemic. Support measures include multiple discounts on licence renewals and exemption from fines related to delayed renewals.

Dubai has launched a Retirement Programme for resident expatriates and foreigners over the age of 55. An initiative of Dubai Tourism, eligible applicants will obtain a retirement visa which is renewed every 5 years.  Applicants must meet one of three criteria in order to qualify:- monthly income in excess of AED20,000, savings in excess of AED1m; or property ownership in Dubai in excess of AED2m. The initial phase will focus on UAE residents who have reached retirement age.