Dubai International Financial Centre (DIFC) has enacted amendments to the Employment Law, Trust Law, Foundations Law and Operating Law, following a period of public consultation in 2023. 

 

The legislative changes seek to ensure DIFC Laws remain in line with international best practice. Amendments to the Operating Regulations also enhance the Registrar of Companies’ (RoC) powers to regulate entities that operate outside of standard business hours.  

 

Jacques Visser, Chief Legal Officer at DIFC Authority, said: “DIFC’s world-class legal and regulatory framework is based on international standards and principles of common law. 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. 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.”

 

Amendments to the Employment Law

DIFC has made amendments to Part 10 of the existing Employment Law that will require DIFC employers to make “top-up” payments into a Qualifying Scheme (such as the DEWS Scheme) for their GCC national employees (in addition to making their GPSSA contributions) in circumstances where the amount of their GPSSA contributions are lower than what they would have received as monthly end-of-service contributions under the Employment Law if they were not GCC nationals. 

 

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. This “top-up” requirement is, however, subject to a de minimis monthly threshold of AED1,000 ($272.3).

 

Other 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. 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. 

 

Amendments to the Trust Law and Foundations Law

A series of changes to the Trust Law and Foundations Law relate to strengthening DIFC Courts’ jurisdiction over the administration of DIFC trusts and foundations, to the exclusion of foreign proceedings. 

 

In essence, these are what are known in the industry as firewall and ringfencing provisions to ensure that the provisions and requirements of DIFC Law in this regard are not circumvented by foreign courts or parties who do not want to submit to the jurisdiction of DIFC Courts in matters relating to DIFC trusts and foundations. 

 

In addition, changes to the Foundations Law expand the role of Registered Agents, allowing them to enter into an arrangement with the RoC to fulfil certain compliance related duties on behalf of a Foundation (as already permitted for corporate service providers under DIFC’s Prescribed Company and Family Office regimes). 

 

Amendments to Operating Law and Operating Regulations

Amendments 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”. 

 

The latter is now limited to communications emanating from the provision of professional legal advice or from the relationship of lawyer and client with the removal of the words “or other similar relationship” which was considered as too broad by the OECD.

 

Amendments have also recently been 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 cause a nuisance to other DIFC tenants through noise or other anti-social behaviour.

 

The updates to the Laws came into effect on March 8, 2024, with the changes to Operating Regulations effective from December 17, 2023. 

 

The legislative enactments reflect the Centre’s commitment to maintaining a transparent and robust legal and regulatory framework aligned with global best practice.--TradeArabia News Service