Dubai International Financial Centre (DIFC) has implemented significant amendments to the Employment Law, Trust Law, Foundations Law and Operating Law. These legislative changes, spearheaded by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, aim to foster an optimal regulatory environment for financial services, innovative technologies, and related industries.
“The latest legislative updates enacted by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, ensure the Centre’s laws continue to meet global best practice while catering to the unique needs of the region,” said Jacques Visser, Chief Legal Officer at DIFC Authority. “At DIFC, we are committed to providing an optimal framework for financial services, innovative technology and related industries to grow and develop with legal certainty as an utmost priority.”
Employment Law
The amendments to the Employment Law introduce measures to bolster the rights of GCC nationals employed within the DIFC. DIFC employers must now make “top-up” payments into a Qualifying Scheme for their GCC national employees, ensuring parity in end-of-service benefits. “Effectively, this levels the playing field for GCC nationals in DIFC that otherwise would have received less in the form of their monthly GPSSA benefits,” it said. “This “top-up” requirement is, however, subject to a de minimis monthly threshold of Dh1,000.”
Additionally, provisions have been made to address situations where sanctions prohibit contributions to such schemes, safeguarding employees’ entitlements during periods of restricted access. According to the statement, “the result of these amendments is that where an Employer or Employee is subject to sanctions that prohibit a Qualifying Scheme or its service providers to receive end-of-service contributions on behalf of an Employee, the Employer’s obligation to make such contribution on a monthly basis to a Qualifying Scheme is suspended and replaced with an obligation on the Employer to accrue such benefits on behalf of the relevant Employee/s until the sanctions related prohibition falls away or when an employment relationship is terminated, whichever is the earlier.”
Trust Law
Changes to the Trust Law and Foundations Law reinforce the jurisdiction of DIFC Courts over matters pertaining to trusts and foundations, preempting attempts to bypass DIFC laws through foreign proceedings. These amendments include provisions aimed at enhancing the role of Registered Agents, enabling them to fulfil compliance-related obligations on behalf of foundations.
Operating Law
In line with international standards, amendments to the Operating Law mandate adherence to OECD guidelines on record retention post-entity winding up and refine the definition of “Privileged Communication” to align with best practices. Moreover, amendments to the Operating Regulations empower the Registrar of Companies (RoC) to regulate late-night establishments, addressing concerns of noise and anti-social behaviour within DIFC premises.
These legislative updates took effect on March 8, 2024, and adjustments to Operating Regulations took effect on December 27, 2023.
