Dubai: The legislative framework is a key pillar of the DIFC's efforts to develop itself into one of the world's leading global financial centres.
Drawn from best practices around the world and tailored to the region's unique needs, the DIFC's legislative and regulatory regime constitutes one of the most innovative and unique legislative initiatives ever undertaken in the region.
In a region characterised by civil law and Sharia, the DIFC introduced a common law framework that created an optimal environment conducive for financial sector growth.
The laws are modelled on the best practices of the world's major financial jurisdictions and embody the best of international financial and commercial law.
Some of the unique laws introduced by the DIFC include:
Data Protection Law
Data Protection Law was developed to provide a clear legal framework for personal data protection — a critical issue for banks and financial services firms processing sensitive personal and trade information electronically.
Collective Investment Law
The DFSA's Collective Investment Law was created to provide a comprehensive framework for regulating various types of collective investment funds in the DIFC including property funds, Islamic funds, hedge funds, fund of funds and private equity funds.
Investment Trust Law
This law recognises the important role that investment trust vehicles play in capital markets and in facilitating product innovation. The Law governs the creation, alteration and termination of investment trusts in the DIFC.
Single Family Office
The Single Family Offices (SFO) platform was introduced to encourage ultra-wealthy families to establish SFOs at the financial district.
Special Purpose Company Regulations
In November 2008, the Exempt Company Regulations, a new set of regulations proposed under the Companies Law of 2006 and the Insolvency Law of 2004, were enacted.
Payment Systems Law
The law provided the legal foundation for the launch of ‘Realtime Automated Payments in DIFC' (RAPID), a multi-currency payments and clearing system for US Dollar, Euro, and other international currency transactions.
Preferential Creditor Regulations
These were designed to protect employees of any company at the DIFC that becomes insolvent, by ensuring they receive a preferential right to payment upon the company's bankruptcy.
Strata Title Law
The Strata Title Law established a system of guaranteed freehold title to real estate units in the DIFC. The law combines the benefits of guaranteed title under the Real Property Law with an administrative structure designed to oversee the day-to-day management of buildings.
Trust Law
The Trust Law was aimed at regulating charitable and non-charitable trusts. It covers aspects such as a trust's choice of governing law, its place of administration, the hierarchy of foreign laws in relation to DIFC laws, the role and scope of judicial proceedings in the operation of a trust, the powers of the Court and the requirements for the creation of a trust.
