Month: December 2023

Virtual Assets in the U.A.E. have been classified as fully regulated, by the U.A.E. Ministry of Economy – Anti-Money Laundering Department. 

• According to the Ministry, the U.A.E. has created a regulatory ecosystem for Virtual Assets, which:
  • Synchronises the country’s federal and local regulatory landscape and
  • Aligns 1) supervisory and 2) enforcement levers.
    
    
• The ecosystem, which is meant to be, at the same time: 1) progressive and 2) secure, is based on the comprehensive set of Guidelines, which:
  • Set out supervisory controls, to ensure: 1) market growth, on the one hand, and 2) investor protection, on the other.
  • With the objective of operating Virtual Assets, with agility, and yet, mitigating and managing risks, associated with Virtual Assets.

The Guidelines further qualify the previously passed UAE Cabinet Decision No. (111) of 2022 on Regulation of Virtual Asset Activities and Service Providers in the UAE.

• Which was drafted in collaboration with the:
  • 1) the UAE Securities and Commodities Authority, for investment purposes; and
  • 2) the Central Bank of UAE, for payment purposes,

The U.A.E.’s designation of Virtual Assets as a regulated category was announced by the Ministry of Economy-Anti-Money Laundering Department in a press release on April 18, 2023.

Muslims in the UAE, who wish to have a civil marriage, can now do so in the Abu Dhabi Civil Family Court. Which is part of the Abu Dhabi Judicial Department or ADJD. 

This service is available to all Muslims, who are not A.E. citizens.

Notably, unlike in marriages under the Sharia Law, civil marriages under ADJD do not require: 1) the guardian’s approval or 2) medical tests. The application process is the same as it is for all other couples who wish to have a civil marriage under the ADJD.

In short, the civil marriage service is 1) available through the ADJD website, 2) by logging in through the UAE Pass and 3) then, filling out the Civil Marriage Application, 4) with a copy of passport or Emirates ID. After the marriage ceremony, it is highly recommended to attest the civil marriage certificate by the UAE Ministry of Foreign Affairs (MOFA).

Civil marriage under ADJD are governed by Law No. 14 of 2021 Concerning Civil Marriages and its Effects in the Emirates of Abu Dhabi.

Corporate Tax in the U.A.E. applies 1) not only to mainland businesses, but also to 2) all of the Free Zones. This includes even specialized and independent free zones such as 1) the DIFC (or Dubai International Financial Center), 2) as well as ADGM (otherwise known as the Abu Dhabi Global Markets).  

This is so, although, these 2 Free Zones are, for the most part, independent legal jurisdictions, with their own laws and their own courts. However, for the purposes of the UAE Corporate Tax, the DIFC and ADGM are subject to the Federal Law, much the same way as other free zones are. 

Therefore, moving businesses from a free zone into the DIFC or ADGM jurisdictions, for potential tax optimization – as some businesses have considered – will be of no utility, as the laws will apply equally. 

This is in accordance with the UAE Corporate Tax Law – No. 47 of 2022 as well as Cabinet Decision No. 55 of 2023 regarding the Qualifying Income of Qualifying Free Zone Entitie,

As a reminder, the UAE Corporate Tax has come into effect as of June 1, 2023 and the rate is 9%. 

The UAE Corporate Tax, which is 9%, applies not only to mainland businesses, but also to all of the free zones, across the country.

However, qualifying free zone persons can be subject to a corporate tax rate of 0%. 

This is as long as the free zone entity meets the following criteria: 

1. The free zone person derives qualifying income; 
2. The free zone persons maintain adequate substance in the U.A.E.  Which means – conduct their core income-generating activities, maintains adequate assets, employees and expenditure, etc.
3. Or, the free zone person did not choose to subject itself to the 9% corporate tax rate; and
4. If the free zone entity is a multinational company, it must 1) adhere to the arm’s length principle and 2) maintain adequate transfer pricing standards and documentation.

This is as per Articles 18, 34, and 55 of Federal Decree-Law No. 47 of 2022 regarding Corporate Tax Law,as well as Articles 3 and 7 of Cabinet Decision No. 55 of 2023 regarding the Qualifying Income of Qualifying Free Zone Entities.