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Investment laws and regulations are evolving in the United Arab Emirates UAE and are expected to become more conducive to foreign investment. At present, the regulatory and legal framework favors local over foreign investors.
There is no national treatment for investors in the UAE and foreign ownership of land and stocks is restricted. The UAE maintains non-tariff barriers to investment in the form of restrictive agency, sponsorship, and distributorship requirements. The UAEG has publicly declared its commitment to cut red tape for foreign investors with the intent of not only becoming the most competitive economy income in forex trading dubai legal the Gulf but one of the top economies globally.
Regulation of the establishment and conduct of business in the UAE is shared at the federal and emirate levels, with the ultimate authority at the federal level on most matters. The UAE Income in forex trading dubai legal Cabinet will from time to time send draft laws to the emirate governments for comment and definition, which must then be resubmitted for full promulgation by the federal government.
Many federal government functions, such as customs enforcement, are enforced primarily by emirate level authorities. There is no personal income tax in the UAE.
Foreign banks, outside of the free zones, pay 20 percent tax on their profits. Foreign oil companies with equity in concessions pay taxes and royalties on their proceeds. There are no consumption taxes, and the GCC states formally implemented a single import tariff of five percent on most goods January 1, Companies located in the numerous "free zones" across the UAE are exempt from the tariff on imports and re-exports that do not leave the zones.
The exceptions to the five percent tariff in the UAE area 50 percent tariff for alcohol, a percent tariff for tobacco, and duty exemptions for 53 food and agricultural items. There are significant restrictions on importation of firearms and pork products. Import tariffs are collected and retained by each emirate. Dubai imposes a rental housing tax on expatriates equaling five percent of the rental charges.
However, according to local government officials, a VAT is unlikely to be imposed in next few years. Currently, there are four major laws affecting foreign investment in the UAE: These laws, especially the Federal Companies Law, are seen as the largest obstacles to foreign direct investment in the UAE.
Regardless, profits may be apportioned differently and often are negotiated at fixed amounts. Branch offices of foreign companies income in forex trading dubai legal required to have a national agent income in forex trading dubai legal the foreign company has established its office pursuant to an agreement with the federal or an emirate government.
All general partnership interest must be owned by UAE nationals. The new draft Companies Law, as reported by government media, is near final form and awaits the final determinations from the President before it is decreed and published in the national gazette.
However, the revised draft has been under consideration for several years and there has been no guidance given as to how quickly the new law might be issued and implemented.
Companies on the exchanges are subject to the Federal Companies Law, thus foreign investors are allowed to own up to 49 percent of a company. However, some company by-laws prohibit foreign ownership. The international financial crisis and foreign speculation contributed to significant declines in the values of local shares since, but the markets showed some signs of stabilizing in late The foreign principal can appoint one agent for the entire UAE or for a particular emirate or group of emirates.
The Ministry of Economy handles registration of commercial agents. It remains difficult, if not impossible, to sell in UAE markets without a local agent. The federal Industry Law stipulates that industrial projects must have 51percent UAE national ownership. The law also requires that projects either be managed by a UAE national or have a board of directors with a majority of UAE nationals.
Exemptions from the law are provided for projects related to extraction and refining of oil, natural gas, and other raw materials. Additionally, projects with a small capital investment or projects governed by special laws or agreements are exempt from the industry law. In Septemberthe Ministry of Economy announced that 19 federal laws were in draft status and government leaders say that these laws would address a number of concerns that have discouraged foreign investment in the UAE.
Industry experts have noted that some of these 19 income in forex trading dubai legal laws are near promulgation, and could be passed and implemented in The latest draft of the Companies Law was reported by government media to be in near final income in forex trading dubai legal and awaits some final determinations on ownership structure proposals and exceptions that would be included in the Presidential decree promulgating the law.
The UAE restricts foreign ownership of land, with rules varying from emirate to emirate. Individual emirate policies allow non-GCC nationals to have freehold or leasehold rights in designated areas, but do not give property owners permanent residence visas or an automatic right to work in the emirate. Through the electronic exchange of data and information, the MoU gives ZonesCorp the authority to issue, amend and renew Chamber of Commerce Certificates for industrial businesses operating in the industrial cities, as well as collect fees on income in forex trading dubai legal Chamber's behalf, streamlining the process and saving time for investors.
ZonesCorp has also established a one-stop-shop for investors. InAbu Dhabi Chamber of Commerce and Industry also created a one-stop shop for investors, with the exception of investors dealing in Israeli currency and the currencies of those countries subject to United Nations sanctions. Inthe UAE Cabinet amended the law regarding ownership income in forex trading dubai legal insurance companies to state that insurance income in forex trading dubai legal must be 75 percent owned by a UAE national or percent by UAE legal persons, i.
No new insurance companies or new branches have been authorized since Any new companies entering the market are required to meet high level international rating criteria and must complete a viability study to prove that it income in forex trading dubai legal be offering new products to the market.
About half of the insurance companies in the UAE are foreign. The UAEG passed comprehensive anti-money laundering legislation following the attacks of September 11, that imposes strict documentary requirements on large wire transfers. Travelers entering the UAE must declare currency amounts of more than ,Dirhams approximately USD 27, as part of these measures. The exchange rate is 3. Every bank transaction in U. Foreign investors have not been involved in income in forex trading dubai legal expropriations in the UAE in recent years.
There are no set rules governing compensation if expropriations were to occur, and individual emirates probably would treat this differently. In practice, authorities in the UAE would not expropriate unless there was a income in forex trading dubai legal development or public interest need to do so, and in such cases compensation would likely be generous. The Embassy is aware of a few income in forex trading dubai legal investment disputes during the past few years involving U.
Dispute resolution can be difficult and uncertain. Disputes generally are resolved by direct negotiation and settlement between the parties themselves, by recourse in the legal system, or arbitration.
Small, medium, and some larger enterprises continue to fear being frozen out of the UAE market for escalating payment issues through civil or arbitral courts, particularly when politically influential local parties are involved. Some firms may feel compelled to exit the UAE market as they are unable to sustain pursuit of legal or dispute resolution mechanisms that can add months or years to the dispute resolution process. Arbitration may commence by petition to the UAE federal courts on the basis of mutual consent a written arbitration agreementindependently by nomination of arbitratorsor through a referral to an appointing authority without recourse to judicial proceedings.
Enforcing arbitration judgments rendered in the UAE requires court certification. Judicial proceedings may continue for several years and can be invalidated for procedural considerations.
A leading American technology contractor recently reported that it is having trouble collecting a significant amount of money on an arbitral judgment it won against a government income in forex trading dubai legal developer in a UAE-based court on monies owed from the economic crisis.
An arbitration award issued in the UAE is now enforceable in all states that have acceded to the Convention, and any award issued in another member state is directly enforceable in the UAE. The Convention supersedes all incompatible legislation and rulings in the UAE, and should be welcomed by many businesses that consider arbitration the most advantageous form of dispute resolution.
The Embassy does not yet have any experience with U. A case in the emirate of Fujairah was the first reported recognition of a foreign arbitral judgment but its collection status is unknown. Concerns have been raised about delays and other obstacles encountered by firms seeking to enforce their arbitration income in forex trading dubai legal in the UAE despite the recognition of progress in compliance with this convention.
More recently, an appeal on a foreign arbitration award in the Dubai Court of First Instance was upheld. The UAE constitution established a federal court system while acknowledging the right of the individual emirates to opt out, which Abu Dhabi, Dubai and Ras Al Khaimah have done.
However, some issues must be heard in the federal court system, namely: There is no independent judiciary in the UAE. The Ministry of Justice appoints judges to the income in forex trading dubai legal courts, while judges in Abu Dhabi, Dubai and Ras Al Khaimah are appointed by the respective rulers of those emirates.
The majority of judges are non-Emirati. Each emirate applies federal law in its judicial system. While there is some variation, each system generally consists of the courts of first instance, courts of appeal, and a court of cassation.
The federal Supreme Court sits in Abu Dubai. The court of first instance consists of civil, criminal, and Sharia Islamic law courts. Sharia law income in forex trading dubai legal applicable to both Muslims and non-Muslims, but is focused primarily on family, inheritance and personal status matters.
Courts will interpret statutory law and Sharia law in deciding cases. Commercial disputes involving foreign parties tend to come before the civil courts in the federal system; a panel of three judges ordinarily hears commercial disputes. Commercial disputes might also come before income in forex trading dubai legal criminal courts, if one of the parties alleges criminal fraud or theft arising from a contractual dispute. The Embassy is aware of a number of such cases, which also may include travel bans against parties to the dispute until the case is resolved in court.
All cases involving banks and financial institutions are required to be heard by civil courts. If the parties are unable to reach a settlement, they can begin legal proceedings in the court of first instance. The Code of Civil Procedure contains comprehensive rules regarding the various types of preventive and provisional remedies prior to litigation and the issuance of income in forex trading dubai legal, including the attachment of property, confiscation of the defendant's passport and prohibitions on travel, as well as the detention of the defendant in certain instances.
However, the courts must certify all arbitration decisions, and though they do not review substantive claims, they can invalidate decisions based on procedural considerations. Parties can also appeal certification decisions thus prolonging enforcement indefinitely.
In Junethe Abu Dhabi Judicial Department Income in forex trading dubai legal established commercial directories, including directories for bonds and shares, banks, construction and real estate disputes, insurance, and financial papers.
The directories provide a one-stop reference for legal conduct of business in the UAE and most of them are available on line. The Center has jurisdiction to conciliate or arbitrate commercial disputes. The Center's executive regulations govern the conciliation and arbitration procedure.
Income in forex trading dubai legal referral by the parties to the Dispute Center ostensibly requires them to accept the finality of the Center's decision, the courts must still certify the decision and enforcement can be delayed. The Center conducts proceedings in Arabic or any other agreed upon language. The Dubai Chamber of Commerce and Industry DCCI have promulgated similar commercial conciliation and arbitration rules that permit parties to have conciliation or arbitration proceedings under the auspices of the Chamber.
The Arbitration Center aims to bring international standards of arbitration to business in Dubai, and has been heavily involved in real estate disputes during the last few years. Regional businesses have begun to take advantage of this new capability. Creditors who have received favorable settlements in these courts have reported limited success in obtaining payments from these judgments. In a few instances over the last few years and especially during the debt crisis, expatriate investors, property owners, and business partners involved in commercial disputes in the UAE have found themselves the object of criminal legal proceedings.