General and Legal News from the UAE – February 2022 №1

published on 2 February 2022 | reading time approx. 3 minutes

The following provides a brief overview about the latest business, economic and legal news from all around the United Arab Emirates and GCC region.

Israeli president Isaac Herzog hails UAE-Israel friendship and looks forward to EXPO 2020 visit »
UAE Labour laws: All you need to know about the changes in February »
Dubai attracts $4.3bn in foreign direct investment in first nine months of 2021 »
Sheikh Mohammed bin Rashid approves $49.3bn Dubai budget for 2022 to 2023 »
UAE to introduce federal corporate income tax from June 2023 »

Israeli president Isaac Herzog hails UAE-Israel friendship and looks forward to EXPO 2020 visit

After the Emirates and Israel have officially normalized ties between their two countries by signing the Abraham Accords back in September 2020 and following Prime Ministers Naftali Bennetts visit to the Emirates in December 2021 – the first Israeli leader to visit the Emirates – Israeli President Isaac Herzog followed an official invitation by HH Sheikha Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.

President Herzog, in accompany of his wife, Israel´s first lady Mrs. Michal Herzog, has landed in the UAE on Sunday where he was welcomed by Sheikh Abdullah bin Zayed al Nahyan, Minister of Foreign Affairs and International Co-operation. He was later welcomed by Sheikh Mohammed bin Zayed at Qasr al Watan where artillery fired 21 rounds and both national anthems were played as guards saluted the Israeli President.

The official state visit of President Herzog to the UAE is a message of peace to the entire region with both, President Herzog and Sheikh Mohammed bin Zayed emphasizing the importance of the sons and daughters of Abraham residing and dwelling together in peaceful coexistence. During the two-day official state visit the two sides aim at further strengthening the peace agreement and advancing relations between the two countries and strengthening cooperation across all levels but especially in the field of economic, trade, development, investment, health, and technology.

UAE Labour laws: All you need to know about the changes in February

In February there will be a reshaping of the UAE Labour Law. The new amendments to the law concern the private sector and encourage a more flexible way of working as well as sharing jobs. The new laws were first introduced by the government in November of last year and will be officially introduced on 2nd February. As a result of the Covid-19 pandemic the reshaping of Labour laws foresees a strengthening of employees’ rights as new options that previously have not been available will be provided.

The most prominent changes include the following:

A 40-hour work week can under condensed hour options be worked over three days
Employees can work for more than one employer for a specified number of working hours or days
Shared jobs can be taken on by two people who split the hours after agreeing to the respective terms with their employer
Employers are given the option to choose the working time given to their employees on a more flexible time frame
Abolition of unlimited contracts as for most private sector employees fixed-term contracts (up to three years and renewable) will be introduced
Former employees will be allowed to stay in the country up to 180 days to find a new job (previously 30 days after cancellation of their residency visa)
New minimum wage will be set out in Article 27 of the new law
No more than two hours of overtime per day are acceptable and if required by the job, they must be paid 25 per cent more than their regular hourly rate
Employers can no longer withhold employees’ documents
Every employee must have at least one weekly rest day
Paid mourning leaves of between three to five days
45 days of full payment for mothers and 15 days of half pay

Our Lawyers are available at your convenience for advice and consultation on any of the above-mentioned amendments and laws.

Dubai attracts $4.3bn in foreign direct investment in first nine months of 2021

As Dubai’s economy keeps recovering from the Corona pandemic there has been foreign investment of Dh15.9 billion coming from 378 projects in the first nine months of 2021. The most foreign direct investment poured in from the UK, France, the US, Saudi Arabia, and India.

As the total number of FDI projects increased by 16 per cent to 378 projects during this period, a total of 58 per cent of the inbound FDI is in strategic sectors and 52 per cent in greenfield projects. Dubai is committed to further pursue policies that effectively sustain a growth- oriented business environment. Dubai has been ranked third of the top global FDI locations of the future in 2021 by the ‘FDI Global Cities of the Future 2021/2022’ report of the Financial Times.

Sheikh Hamdan bin Mohammed al Maktoum, Crown Prince of Dubai and Chairman of the Emirate’s Executive Council said that “Dubai has continued to introduce and implement initiatives that improve business confidence. Global investors have placed their faith in Dubai’s business ecosystem, making it among the most attractive FDI locations in the world.”

Sheikh Mohammed bin Rashid approves $49.3bn Dubai budget for 2022 to 2023

Sheikh Mohammed bin Rashid al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has approved the 2022 to 2024 budget of the emirate with a planned budget of $16.3bn (DH60bn) in expenditure for 2022 and prioritized spending in the social and infrastructure sector.

The budget is reflective of Dubai’s efforts to stimulate its macro economy and goals of Dubai Strategic Plan 2030 – which has a main aim to diversify the emirate’s economy from the oil sector – as well as to stimulate post-pandemic economic recovery. Sheikh Hamdan bin Mohammed al Maktoum, Crown Prince of Dubai was stated that “The Dubai government continues to consolidate the emirate’s position as a leading global commercial hub and raise its international competitiveness by creating new growth opportunities for vital sectors.”

The budget’s allocation will be: 42 per cent will go to the economic, transport and infrastructure sectors, 30 per cent to the social sector, 23 per cent will be allocated to the security and justice sectors and the remaining 5 per cent will go to the innovation and creative sectors.

UAE to introduce federal corporate income tax from June 2023

The Ministry of Finance has announced that as of 1st June 2023 a federal corporate tax on the profit of businesses in the UAE will be introduced. The tax rate will be globally competitively low with 9 per cent, where the average corporate tax rate in Europa amounts to 21,3 per cent and to 69 per cent in the G7. There will be no double taxation as foreign taxes will be credited against any payable UAE corporate tax.

To support small to medium size businesses, a zero-tax rate for taxable profits up to Dh375,000 will be introduced. Details on the corporate tax regulations will still need to be finalized. There will be no personal income tax.