As 2024 has come to an end, the UAE has seen numerous changes to its legal provisions in the way of new laws and amendments to existing provisions. These changes have either been implemented in 2024 or became effective as of 1 January 2025.
BSA Law has been at the forefront of witnessing the evolving legal landscape in the UAE and adapting accordingly.
These are some of the highlights of the past year, reflecting the dynamic legal landscape we are involved in.
A. Bankruptcy Amendments
Introduction of Bankruptcy Court and Administration
Cabinet Resolution No. (94) of 2024 Concerning the Executive Regulation of the Financial Restructuring and Bankruptcy Law Promulgated by Federal Decree-Law No. (51) of 2023 (the Bankruptcy Amendment), was a notable amendment because it will govern how bankruptcy proceedings will proceed within the UAE.
Improved from the 2016 Bankruptcy law, the amended provisions will allow the majority of bankruptcy related matters to be strictly dealt with by specialist bankruptcy courts presided over by judges specializing in bankruptcy matters . This will ensure that court proceedings are always overseen by judges with specialized experience and knowledge on the intricacies of bankruptcy.
In addition to the Bankruptcy courts, a bankruptcy administration, headed by an Appeal Division Judge will be developed to support the bankruptcy courts in dealing with the administrative tasks stemming from the transition. The Bankruptcy administration will ensure correct filing procedures, and that notification measures and meetings are compliant with the relevant regulations.
Threshold changes
The creditors voting process on restructuring plans are now in line with international standards. Compared to the previous rule requiring majority of the creditors to approve a restructuring plan, the Bankruptcy courts will ratify a restructuring plan based on two-thirds of the creditor's approval based on value of debts, rather than creditors. In some cases the Bankruptcy Court can approve plans even with no creditor approval.
The revised debt thresholds have been introduced for initiating bankruptcy proceedings to ensure the focus of judicial resources on complex cases rather than simple debt disputes. The applications can be brought and led by debtors, creditors or by the regulatory authority. These updated thresholds aim to protect businesses from falling within the impediments of bankruptcy and insolvency unnecessarily.
Deposits
For debtor and creditor led applications, the relevant parties must deposit; at the Bankruptcy Court's treasury, a bank guarantee or cash equivalent to the value of 5% of the debts or assets, or the creditor's claimed debts. Discretion lies in the hands of the Head of the Bankruptcy Administration to reduce or delay the requirement payment of the deposit..
Broadening of Trustees powers.
Trustees have been granted broader powers to complete bankruptcy proceedings in that they will now be conferred with all the powers that directors of the debtor would be entitled to exercise. This is a significant step, as what has occurred in the past, is that it is common for debtors in the region to lack functioning boards of directors which results in court applications to ensure that Trustees can exercise the necessary powers. This leads to unnecessary delays both procedurally and with the implantation of bankruptcy plans. By having the Trustees having these inherent powers, these unnecessary delays can be avoided resulting in plans implemented as soon as possible and resolving the bankruptcy proceedings.
Shareholder Approval
Shareholders of the debtors are now required to approve the restructuring plan before being passed on to the creditors for an approval. This is a slight deviation from what appears to be the intention to make bankruptcy proceedings smoother and more efficient as bankruptcy proceedings tend to especially disenfranchise shareholders of their rights. By giving the shareholders the express approval requirement, the risk of delays in proceedings is increased.
It remains to be seen how the bankruptcy court will deal with cases where the trustees require approval of a plan the shareholders refuse to approve. In such cases the bankruptcy court may be inclined to grant the trustees the necessary power to approve a plan even without the approval of shareholders.
Details on the amendments introduced by the 2024 Bankruptcy Law is covered within https://www.bsalaw.com/insight/key-provisions-from-the-latest-executive-regulations-of-the-uae-bankruptcy-law-no-51-2023/ , by our lawyers at BSA Law.
B.UAE Mandates Women on Boards of Private Joint-Stock Companies Starting 2025
In a move to promote gender equality in the corporate sector, the UAE has mandated that private joint-stock companies allocate at least one seat on their boards to women, effective from January 2025. Issued by the Ministry of Economy.
This decision is in line with the 2021 decision regarding Public Joint Stock Companies and aims to increase female representation in leadership roles within the private sector.
Insights provided by our experts in this article earlier this year, UAE 2025: Infrastructure Enhancements and Mandatory Boardroom Gender Diversity for Private Joint-Stock Companies
C. Updates to VAT Regulations
In November 2024, the UAE introduced updates to the VAT Executive Regulations. These changes primarily affect businesses in the financial services sector, digital assets, composite supplies, and cross-border services. This changes include:
- Article 42(2) The expansion of the definition of "financial services" to include "services provided by the fund manager independently for a consideration, to funds licensed by a competent authority in the State, including but not limited to, management of the fund's operations, management of investments for or on behalf of the fund, monitoring and improvement of the fund's performance".
Article 42(3) further declares the funds management services as defined in Article 42(2) to be exempt from VAT starting from 15 November 2024.
- The inclusion of a "Virtual Asset"
definition and exemption
- Virtual Assets are defined as "Digital representation of value that can be digitally traded or converted and can be used for investment purposes, and does not include digital representations of fiat currencies or financial securities."
- Article 42(2) further includes the expanded definition of financial services to "transferring ownership of Virtual Assets, including virtual currencies, the conversion of virtual assets and keeping and managing Virtual Assets and enabling control thereof."
- Article 42(3) includes the transference of Virtual Assets as outlined in the definition under Article 42(2) to be exempt from VAT backdated to 1 January 2018.
- Additionally, the amendments have narrowed the zero rating of export of services bringing them in line with the initial policy intention set out in Article 34(1)(d) of the GCC VAT Framework by ensuring that there will be no zero rating of services where the supply is deemed to be within the UAE, in accordance with the special rules set out in Articles 30 and 31 of the UAE VAT Law.
- Zero rating of the exporting of goods has conversely been simplified and clarified.
Businesses will need to reconsider their systems, procedures and documentation to remain compliant with the new regulations and accordingly make changes to their companies if so required.
Detailed expert guidance on compliance been provided by our tax experts within UAE Corporate Tax: Key Obligations and Compliance Strategies for Businesses. [TH1]
D. Dubai's Taxation on Foreign banks
In March 2024, Dubai law No. (1) of 2024 on the 'Tax of Foreign Banks in the Emirate of Dubai', was introduced.
The amendment reaffirmed the existing 20% tax on foreign banks operating in the Emirate, with a key exemption for those based in the Dubai International Financial Centre (DIFC). The amendment, issued by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, applies to foreign banks in special development zones and free zones across Dubai but excludes those licensed by the DIFC. Including fine and penalties for violators.
This tax rate is separate from the Corporate Tax rate.
Our lawyers have provided a detailed insight on this Dubai's taxation on foreign banks – BSA LAW.
E. UAE's Bold Move: New 15% Tax for Multinationals and Exciting Corporate Incentives
The UAE is ushering in significant tax reforms with the introduction of a 15% domestic minimum top-up tax (DMTT) starting in January 2025, targeting large multinational companies with global revenues exceeding 750 million euros. This aligns the UAE with the global minimum tax framework under the OECD's Two-Pillar Solution, ensuring that multinational enterprises (MNEs) contribute their fair share to the countries where they operate.
The move, designed to combat tax avoidance and enhance non-oil revenue, is complemented by potential new tax incentives aimed at promoting innovation and economic growth. These include a refundable R&D tax credit, which could offer companies up to a 50% tax break, and a refundable tax credit for high-value employment activities, benefiting businesses that contribute significantly to the UAE's economic competitiveness. At BSA law, we are poised to play a crucial role in helping clients navigate these changes, unlocking new opportunities for tax efficiency and growth.
We are still awaiting draft legislation from the authorities. Detailed insights on this can be found in Evolving Tax Landscapes in the GCC: Key Developments and Strategic Implications for 2025 .
F. Accelerating Fairness: 2024 Labor Dispute Resolution Reforms
- The role of the Ministry of Human Resources and Emiratisation
In 2024, significant reforms to labor dispute resolution were introduced under Federal Decree No. 9, streamlining the process and ensuring quicker, more efficient outcomes for workers. The Ministry of Human Resources and Emiratisation (MOHRE) now has greater authority to resolve disputes, particularly those under AED50,000, reducing the strain on the judicial system.
- The payments of salary
The MOHRE can order the employer to not stop salary payments whilst the dispute is ongoing for up to two months if the dispute stopped the payment of the employee's salary.
- Preventing collective disputes
In the public interest of order and stability, the MOHRE can take preemptive actions to avoid individual disputes growing into collective, larger-scale disputes.
- Appeals Process
Upon receiving notification of MOHRE's decision, the Parties may make an appeal to the Court of Appeal (CA) within 15 working days. The Appeal will be final and is supreme over the MOHRE's decision.
- Statute of limitation
A one-year time limit has been introduced for employment claims. The limitation period starts from the date the right in question becomes due. This means that regardless of the merits of the case, it will not be able to filed or heard after the limitation period passes.
Details on this is provided within this article published by our lawyer, UAE Labour Law Amendments: Enhanced Penalties and Strengthened Employee Protections in 2024 – BSA LAW
G. Overview of Recent Changes in Corporate Governance Norms
Corporate governance in the UAE has evolved significantly, with the introduction of the new Commercial Companies Law (Federal Decree Law No. 32 of 2021), reflecting the changing demands of the business environment.
Key changes include
- Enhanced Shareholder Rights: The law offers greater protection for minority shareholders, ensuring fairer treatment and influence.
- Board of Directors' Responsibilities: Emphasis on board independence, diversity, and expertise, ensuring decision-making is effective and informed.
- Improved Financial Transparency: Companies must now comply with international accounting standards, promoting reliability and investor confidence.
- Board members roles: This has moved beyond mere oversight and requires active involvement, requirements to meet certain skill set criteria and adaptability.
- In addition far more emphasis has been placed on ESG and sustainability in the manner in which entities operate.
Our corporate lawyers at BSA law our well equipped to provide you with further guidance on these matters.
H. UAE's first gambling license issued: Wynn Resorts
Reported by Reuters, Wynn Resorts has been issued the UAE's first gambling license. This follows the new regulations surrounding gaming. The General Commercial Gaming Regulatory Authority's (GCGRA) chairman is Jim Murren and chief executive is Kevin Mullally.
The move is nothing less than a strategic move for the UAE to retain its competitive advantage as a logistical, trade and touristic hub in the GCC region. The implementation of the GCGRA will foster a "socially responsible and well-regulated gaming environment, ensuring that all participants adhere to strict guidelines and comply with the highest standards. It will coordinate regulatory activities, manage licensing nationally and facilitate unlocking the economic potential of commercial gaming responsibly," WAM (a state news agency) said.
This was previously commented on by our managing partner Mr. Jimmy Houla, in this article, Wynn Resorts: RAK deal raises a few eyebrows – BSA LAW.
I. Dubai's DIFC launches 'groundbreaking' Digital Assets Law
Dubai's Digital Assets Law (DLA) was effective from March 8, 2024, establishing a legal framework for digital assets within the Dubai International Financial Centre (DIFC). The law defines digital assets as a form of property, providing clarity on their control, transfer, and management.
This was discussed in detail within an article published by BSA law earlier this year, in Dubai's DIFC launches 'groundbreaking' Digital Assets Law – BSA LAW.
J. UAE Triumphs in Combating Financial Crime: Removed from FATF's Grey List
In restoring global confidence, the UAE had been removed from the Financial Action Task Force's "grey list" this year. This stemmed from the strengthening of the country's anti-money laundering and terrorism financing measures.
Detailed article covered by our lawyers at BSA law in, The UAE's Removal from FATF Grey List: A Victory of Public-Private Partnership and Promising Economic Prospects – BSA LAW
K. UAE Repeals Anti-Fronting Law
On 30 September 2024, the UAE enacted Federal Decree-Law No. 26 of 2024, repealing Federal Law No. 17 of 2004 on Combating Commercial Concealment, also known as the Fronting Law. This law previously restricted foreign nationals from engaging in "fronting," a practice where foreign entities could indirectly evade the UAE's ownership laws, leading to penalties including hefty fines, imprisonment, deportation, and business license revocation.
In recent years, the UAE has introduced business-friendly reforms, relaxing the need for UAE national ownership in onshore companies, attracting significant foreign investment. The repeal of the Fronting Law aligns with the country's vision to foster a flexible, investor-friendly environment and attract global businesses. These changes reinforce the UAE's commitment to economic diversification, transparency, and creating a competitive, welcoming business landscape.
Foreign investors can now operate in the UAE with greater confidence, supported by a regulatory framework that encourages growth and aligns with the nation's long-term goals. This strategic shift signals the UAE's ongoing efforts to solidify its position as a leading global investment hub.
Expert detailed guidance provided by our lawyers in Repeal of anti-fronting law: The UAE continues to optimize its reputation as an investor friendly destination.
L. UAE's Green Economy and Digital Transformation: A Blueprint for Legal and Industrial Innovation
The UAE is setting the stage for a sustainable future with bold investments in clean energy, smart technologies, and digital transformation. At the G20 Summit in Brazil, the country reaffirmed its global leadership with a $100 million commitment to combat hunger and poverty, and a groundbreaking $19 billion sustainable development partnership with Brazil. These developments offered exciting opportunities to advise clients on innovative green infrastructure projects, renewable energy investments, and digital transformation strategies. The UAE continues to champion sustainability and technological advancements, here at BSA Law, we are uniquely positioned to guide businesses through complex legal frameworks, regulatory compliance, and strategic partnerships in this rapidly evolving, cross-border landscape.
Related insights provided by our lawyers in these articles, The renewable energy transition and Its inherent challenges coupled with the role of the UAE in this sector and The UAE's Remarkable Achievements in 2024: Progress for All.
M. UAE to Enforce Stricter Traffic Penalties in 2025
The UAE is set to implement stricter traffic regulations under Federal Decree-Law No. 14 of 2024, effective from March 29, 2025. These new rules aim to enhance road safety and deter serious traffic violations, with penalties that include fines of up to Dh200,000 and potential jail time.
This includes either new or stricter penalties for
- Jaywalking
- DUI (drugs or alcohol).
- Hit and Run or failure to co-operate.
- Driving with suspended or invalid driving licenses.
- Negligent driving leading to fatalities.
- Misuse of License Plates
- Only being permitted to blow the hooter to avoid an accident.
N. Dubai to Reinstate 30% Alcohol Sales Tax from January 2025
Dubai will reintroduce a 30% municipality tax on alcohol sales, effective 1st January 2025. The tax was removed in 2023 and renewed for the following year of 2024. This is expected to signal a change in consumer habit spending on alcohol purchases. Business are advised to update their systems to ensure compliance with the reintroduced tax regime for alcohol sales.
REGIONAL KEY DEVLOPMENTS
O. Saudi's Personal Data Protection Law
As Saudi Arabia accelerates its digital transformation under Vision 2030, the newly enacted Personal Data Protection Law (PDPL) is setting the stage for a data-driven economy. Designed to align with global standards like the EU's GDPR, the PDPL introduces stringent requirements for data collection, storage, and transfers. Businesses must navigate this regulatory landscape to unlock opportunities in AI, fintech, and smart cities, all key sectors of the Kingdom's ambitious economic diversification plan.
At BSA Law, we are uniquely equipped to guide businesses through the complexities of these new regulations. Our in-depth understanding of the legal, technological, and cultural nuances of data protection in Saudi Arabia enables us to craft compliance strategies that protect your business. Whether navigating cross-border data transfers, securing AI data, or managing cybersecurity risks, BSA Law is committed to delivering exceptional service and helping businesses capitalize on Saudi Arabia's emerging data-driven economy.
Insights previously provided by BSA law, The Rise of AI in Saudi Arabia: Importance and Regulatory Framework – BSA LAW and The KSA personal data protection law is in effect: Now what?
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