Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, has proposed the enactment of amendments to the Employment Law, Trust Law, Foundations Law and Operating Law. The proposed legislative changes seek to ensure DIFC Laws remain in line with international best practice and OECD requirements. In addition, proposed amendments to the Operating Regulations seek to enhance the Registrar of Companies’ (RoC) powers to regulate entities that operate outside of standard business hours.
Amendments to the Employment Law:
DIFC proposes to make amendments to Part 10 of the existing Employment Law to place an obligation on DIFC employers of eligible GCC nationals to make “top-up” payments into a Qualifying Scheme, in addition to the GPSSA contributions. Effectively, this will require DIFC employers to pay the positive difference into a Qualifying Scheme where there is a shortfall between what would have been payable into a scheme if the individual had not been a GCC national, and what is paid under the GPSSA. Monthly payments are subject to a de minimis threshold of AED1000. In addition, further amendments to the Employment Law deal with situations where a Qualifying Scheme is prohibited from accepting contributions from an Employer, or in respect of an Employee, as a result of sanctions prohibitions.
Amendments to the Trust Law and Foundations Law:
A series of proposed changes to the Trust Law and Foundations Law relate to the DIFC Courts rights of jurisdiction over the administration of DIFC Trusts, to the exclusion of foreign courts. These changes align these laws with international best practice. In addition, proposed changes to the Foundations Law expand the role of Registered Agents, allowing them to enter into an arrangement with the RoC to provide certain compliance functionality on behalf of a Foundation (as already permitted for corporate service providers under the Prescribed Company and Family Office regimes).
Amendments to the Operating Law and Operating Regulations:
Proposed changes to the Operating Law relate to OECD requirements regarding record retention following the winding up of an entity and an update to the definition of “Privileged Communication”. Amendments are also proposed to the Operating Regulations to provide the ROC with specific powers to deal with Bars and Restaurants that operate at late hours and that may disturb other DIFC tenants through noise or other anti-social behaviour.
Jacques Visser, Chief Legal Officer at DIFC, said: “DIFC’s world-class legal and regulatory framework is based on international standards and principles of common law. The proposed amendments will ensure the Centre’s laws continue to meet global best practice while catering to the unique needs of the region. At DIFC, we are committed to providing an optimal regulatory environment for financial services and related industries to grow and develop, and will continue to maintain a transparent framework in line with international standards.”
The proposed regulations have been posted for a 30-day public consultation period with the deadline for providing comments ending on 29 September 2023.
The proposed amendments reflect DIFC’s commitment to maintaining a transparent and robust legal and regulatory framework aligned with global best practice.
About Dubai International Financial Centre:
Dubai International Financial Centre (DIFC) is one of the world’s most advanced financial centres, and the leading financial hub for the Middle East, Africa and South Asia (MEASA), which comprises 72 countries with an approximate population of 3 billion and an estimated GDP of USD 8 trillion.
With a close to 20-year track record of facilitating trade and investment flows across the MEASA region, the Centre connects these fast-growing markets with the economies of Asia, Europe and the Americas through Dubai.
DIFC is home to an internationally recognised, independent regulator and a proven judicial system with an English common law framework, as well as the region’s largest financial ecosystem of over 39,000 professionals working across over 4,900 active registered companies – making up the largest and most diverse pool of industry talent in the region.
The Centre’s vision is to drive the future of finance through cutting-edge technology, innovation, and partnerships. Today, it is the global future of finance and innovation hub offering one of the region’s most comprehensive FinTech and venture capital environments, including cost-effective licensing solutions, fit-for-purpose regulation, innovative accelerator programmes, and funding for growth-stage start-ups.
Comprising a variety of world-renowned retail and dining venues, a dynamic art and culture scene, residential apartments, hotels and public spaces, DIFC continues to be one of Dubai’s most sought-after business and lifestyle destinations.