United Arab Emirates

08 Dec 2020
Legislation and cases

In the UAE, we are seeing a positive move towards a more developed and sophisticated business and human rights infrastructure.

In accordance with the UAE’s ongoing endeavours to develop its legislative foundations and its status as a global destination for foreign expertise and investment, the President of the UAE has issued a number of decrees amending certain articles in the Federal Penal Code, Personal Status Law, and the Federal Penal Procedural Law, which are summarised below:

  • The requirement for commercial companies to have a major Emirati shareholder or agent has been removed, providing full foreign ownership to expats of onshore companies.
  • Going forward, 'honour crimes' will now be treated the same way as any other assault. Previously, male relatives could receive lighter sentences on the grounds they were protecting the family honour.
  • For the first time, unmarried couples will be allowed to cohabit legally.
  • Alcohol consumption in the UAE will no longer be considered a criminal offence. Prior to this change in the law people were required to obtain licences to possess, consume, or sell alcohol in authorised areas. The need for individual licences will now cease, although drinking alcohol will only be allowed privately or in licensed public areas and the minimum age for alcohol consumption remains 21.
  • Divorce laws will be overhauled and separating couples will now be subject to the divorce laws pertaining in the country where they were married, rather than those existing in the UAE.
  • The laws governing inheritance will also be overhauled and disputes will no longer be settled according to Sharia law. A deceased person’s division of assets among their next of kin will now be determined by the prevailing laws in their home country. The one exception will be property purchased in the UAE, which will still be governed by UAE laws.
  • An automatic right to translators for defendants in court who do not speak Arabic is now enshrined in law.
  • Acts of suicide and attempted suicide are now decriminalised.
  • A 'Good Samaritans' law has been introduced whereby “any person who is committing an act out of good intention, that may end up hurting that person, will not be punished".

Lifting of the Israel Boycott

In addition to the above, the UAE recently repealed its Israel Boycott Law that had previously prohibited all dealings between individuals and companies in the UAE and Israel. These restrictions had been in place since 1972, shortly after the foundation of the UAE as a state.

Business practices

The UAE has made efforts to push sustainability forward in the region. Earlier this year, the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) both issued ESG Reporting Guides, which are corporate governance manuals used to assist listed companies to voluntarily disclose ESG information and encourage responsible behaviours.

To complement these guides, both the DFM and ADX have also issued an ESG Index, creating a highly productive investment climate which will attract international investors and encourage sustainable investment while sustaining environmental and social development.

Both the DFM and ADX issue annual sustainability reports, showing their commitment to helping align the UAE’s financial system with global best practice and advance the implementation locally of the United Nations’ Sustainable Development Goals.

In addition to the advances in sustainability, there are a growing number of free-trade zones in the UAE. These are areas that have a special tax, customs and import regime, and are governed by their own framework of regulations (with the exception of UAE criminal law).

Finally, the removal of the requirement for commercial companies to have a major Emirati shareholder to provide for full foreign ownership to expats of onshore companies will facilitate doing business in the country and attract foreign investment.

What do you predict for 2021?

All these changes show a positive step for the UAE towards a more developed and sophisticated business and human rights infrastructure in the country and we believe this trend is set to continue. In particularly, ahead of Expo 2020, a global fair that was scheduled to be held in Dubai this October but was postponed until 2021 because of the coronavirus pandemic.

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Orlando Vidal
+971 4 369 6398

Hannah Bradshaw
+971 4 369 6398