Sheikh Mohammed Bin Rashid, Ruler of Dubai and Vice President and Prime Minister of the UAE enacted the DIFC’s legal framework changes, which includes the abolishment of limited liability companies. At the same time, the changes include the introduction of new categories among public and private companies.
The new laws, which involve an update on the DIFC’s property and companies’ regimes, as well as regarding businesses in the Centre’s operating environment, aim to ensure that the DIFC remains the region’s most pro-business Common Law jurisdiction.
The new DIFC Companies Law will follow a public and private company administration after consultation and global benchmarking to enable flexibility, most especially among small private companies.
Additionally, DIFC has also introduced the restructuring and merging schemes that will greatly contribute to the growing partnerships in the corporate market.
Moreover, the framework changes are also comprised of new regulations for complex corporate arrangement faults including associated units, mergers, and debt restructurings.
These implemented changes are in line with the DIFC companies revamp. The framework changes aim to simplify business and comply with the latest requirements of the Financial Action Task Force and the Organisation for Economic Co-operation and Development on anti-money laundering and transparency of beneficial ownership.
His Excellency Essa Kazim, Chairman of DIFC Authority Board of Directors and Governor of DIFC, stated: “A robust and comprehensive legal framework is one of the foundations of a major financial hub, such as the DIFC, as it ensures businesses and investors can operate easily and with confidence. We continue to develop and adapt our legislative system, in line with international best practices, reinforcing our position as one of the world’s top financial centres.”
He further 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.”
Companies Law, DIFC Law No. 5 of 2018, abolishes Limited Liability Companies and creates new categories for public and private companies.
On the other hand, the New Operating Law, DIFC Law No. 7 of 2018 regulates the main requirements and conduct within DIFC, as well as creating a framework for Registrar of Companies’ role. It also has introduced improvements to the licensing rule, which will allow more company formations within, or from, the Centre.
Amendments to the DIFC Real Property, DIFC Law No. 10 of 2018 guarantee that clients get full disclosure on the properties being bought. Additionally, escrow accounts are now required among developers for the collecting sums paid in an off-plan development.
The Strata Title Law Amendment Law, DIFC Law No. 11 2018, shall increase the functions of the Registrar of Real Property (RORP) to oversee parties that breach their duties. The modification will also enable DIFC Courts to directly communicate with interested parties so that disputes are dealt with efficiently.
Additionally, the DIFC has announced the Ultimate Beneficial Ownership Regulations (UBO), which entail all DIFC units to provide beneficial ownership information while maintaining their accuracy.
The changes were announced after the enactment of DIFC Regulatory Amendment Law, No. 6 of 2018, which aims to improve the Centre’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) rule, ahead of the UAE Financial Action.
With all these amendments, it will promote further enhancements on Dubai’s growth and investment.