Dubai: In his capacity as Ruler of Dubai, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, has enacted changes to the Dubai International Financial Centre (DIFC) Authority’s legal and regulatory framework.
Companies Law, DIFC Law No. 5 of 2018, abolishes limited liability companies and introduces new classifications of public and private companies.
It will also include the expansion of directors’ duties of DIFC companies and the introduction of restructuring and merger schemes to accommodate growing market consolidation activity.
In addition, it will provide levels of oversight for complex corporate arrangements, such as those associated with listed entities, mergers, schemes of arrangement and debt restructurings.
The changes to the Companies Law are accompanied by a complete revamp of the Centre’s companies and operating regulations to facilitate ease of doing business, whilst complying with the latest requirements of the Financial Action Task Force and the Organisation for Economic Co-operation and Development on transparency of beneficial ownership and anti-money laundering requirements.
The changes to the Real Property Law and Strata Title Law implement an updated property regime that ensures better protection for owners and mortgage holders of DIFC properties, and also introduces an off-plan register and escrow requirements for developers.
Eisa Kazim, chairman of the Board of Directors at Dubai International Financial Centre Authority, said: “In addition to elevating transparency standards and protecting purchasers and investors, the changes will continue to enhance our business environment and reduce barriers to entry, while increasing the cost-efficiency and flexibility of small businesses, which constitute an increasing number of companies operating within DIFC.”
The New Operating Law, DIFC Law No. 7 of 2018, standardises the general requirements and the conduct of businesses operating within DIFC, as well as providing a framework for the role of the Registrar of Companies.
The new law also introduced enhancements to the licensing regime, which will enable entities to conduct more business within, or from the Centre, while ensuring whistle-blower protection provisions are in place.
The DIFC Real Property, DIFC Law No. 10 of 2018, has also been amended to ensure that purchasers get full disclosure on the developments and units being bought.
Additionally, developers are now required to set up escrow accounts for the purposes of pooling sums paid by purchasers in an off-plan development.
The Strata Title Law Amendment Law, DIFC Law No. 11 2018, will expand the powers and functions of the Registrar of Real Property (RORP) to govern parties that are in breach of their obligations. The amendment will also allow DIFC Courts to hear directly from interested parties, allowing for disputes to be dealt with efficiently and impartially.