Host
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Host
Our guest today is Ludmila Yamalova from Yamalova & Plewka. Ludmila, how are you doing today?
Ludmila Yamalova
Very well, thank you, and good afternoon.
Host
Well, our topic today is all about wills. This was prompted by a question from last week. Pete texted in saying there was an announcement about wills, and he wants to know what’s changed. We’ll get to the topic shortly, but we’ve already got lots of questions. Let me kick off with this one, Ludmila. It says, where do I stand with a work residence visa when the company I work for has an expired trade license?
Ludmila Yamalova
As an employee, you’re not directly or immediately affected when a company’s trade license expires. The expiration of a license does not automatically affect the validity of the company or its rights and obligations, including those to its employees. Typically, there is a grace period for renewing the license, and after that, penalties are accrued.
A company does not disappear or get suspended immediately after the license expires. Depending on the licensing authority and jurisdiction, companies can sometimes operate with an expired license for over a year, and employees will continue to be sponsored unless a specific issue arises—such as the need to renew a visa. That’s when problems start, as it involves authorities.
If you suspect the license isn’t being renewed due to financial difficulties or greater issues within the company, it may be wise to protect your interests. For example, employees can preemptively file a case with the Labour Court to register their claim for employment dues.
Host
Okay, so let’s say the worst happens, and the owners of the company run away, leaving the company in financial trouble. What can employees do if their residence visas are at risk, including those of their dependents?
Ludmila Yamalova
If the company’s owners or managers abandon their responsibilities, employees need to act proactively. Authorities, such as immigration, won’t cancel visas on their own initiative until much later.
In this case, employees should:
- Register a claim with the Ministry of Labour to safeguard their employment dues, such as unpaid salaries and benefits.
- Ensure that someone—usually the company manager listed on the trade license—executes the necessary visa cancellations.
If the manager is also unavailable, the process becomes complicated, leaving employees in a limbo. Authorities, such as Labour Courts or immigration, need to be informed so they can step in.
Host
Got it. Let’s move on to the next question. This one says, “I’ve purchased a property on a payment plan, but we’ve now organized a mortgage before the second payment has kicked in. Both the developer and the bank are giving conflicting information on how to get the title deed registered. What’s the right process?”
Ludmila Yamalova
This sounds like an off-plan property. If that’s the case, the Oqood system, which is used for interim property registrations, would apply instead of a title deed. The title deed will only be issued after the property has been completed and handed over.
For now, the bank needs to register its interest in the Oqood system, which typically involves a tripartite agreement between the investor, the bank, and the Dubai Land Department. The bank won’t release funds until their interest is registered, ensuring their financial stake is protected.
Host
It seems like the listener may be confusing Oqood with a title deed. Could that be the issue?
Ludmila Yamalova
Possibly. If the bank is insisting on a title deed, they may not be able to finance the property until it’s complete. Some banks are reluctant to offer mortgages on off-plan properties, so that might also be a factor here.
Host
Thanks, Ludmila. Let’s circle back to our main topic: wills. Pete has texted in again to ask if we’ll get an update on wills today.
Ludmila Yamalova
Yes, absolutely. A new law, Law No. 15 of 2017, has been introduced in Dubai. This law provides non-Muslim expats with an additional option for registering their wills, alongside the existing DIFC Wills and Probate Registry (WPR).
The new law allows wills to be registered with the Dubai Courts, offering an alternative to the DIFC system. Both systems allow non-Muslim expats to include real estate in their wills, something that wasn’t previously available under older systems.
However, there’s a key distinction: the DIFC system also allows expats to address custody and guardianship for their minor children. This is not currently addressed by the Dubai Courts system under the new law.
Host
That’s helpful. So, if someone was thinking about registering a will, would they choose one system over the other?
Ludmila Yamalova
Exactly. Expats can choose based on their needs. If guardianship provisions for minor children are critical, the DIFC system is the better choice. However, cost might also be a deciding factor. The DIFC WPR is often criticized for being expensive, as it involves both legal fees and registration costs.
Additionally, language could be a factor. The DIFC operates entirely in English, whereas wills registered with the Dubai Courts may need to be in Arabic or possibly bilingual.
Host
Thanks for clarifying. Let’s move on to a VAT question. Kathy has texted in to ask: “I took out car insurance in September, but I’ve now received a notice saying I have to pay VAT for 2018. Is that correct?”
Ludmila Yamalova
This is a common question, and the short answer is yes. Since the insurance policy spans into 2018, VAT applies to the portion of the policy covering 2018, starting January 1.
The VAT is not an additional fee charged by the insurance company for their benefit; it’s a government-mandated tax. While you could make a contractual argument against this, it’s unlikely to succeed because the insurance company is simply acting as a collector of VAT for the government.
Host
Great insight. We’ve got a few more VAT-related questions coming up, along with one about bounced checks. Ludmila, we’ll tackle those after the break.
Host
Welcome back to Drive Live Talks Legal. Our guest today is Ludmila Yamalova from Yamalova & Plewka. Ludmila, we’ve got a few more questions to get through. Here’s one from Kumar: “With the recent announcement that bounced checks up to AED 200,000 will result in a fine rather than a prison sentence, what happens if someone issues multiple checks below AED 200,000 but cumulatively they exceed AED 200,000? Would that result in a fine or a prison sentence?”
Ludmila Yamalova
Great question. Let’s break it down. If one person issues multiple bounced checks, those checks are now treated as part of a single claim rather than separate claims. This is a shift from the previous approach where each bounced check could be treated individually.
Under the new rules, if the total amount of the bounced checks exceeds AED 200,000, the case falls outside the scope of the fine-only system. In this scenario, the issuer of the checks could still face a prison sentence in addition to the obligation to pay the checks.
It’s also important to clarify that the new law does not eliminate the obligation to pay the bounced check. The penalty system has simply replaced prison time with a fine for minor offenses. However, the issuer is still legally required to settle the outstanding amount, and the criminal case remains open until the checks are honored.
Host
Interesting. So, can the recipient of a bounced check take civil action in addition to pursuing the criminal case?
Ludmila Yamalova
In most cases, there’s no need for a separate civil case. The criminal case is sufficient to ensure that the issuer is held accountable and forced to pay. The bounced check serves as irrefutable proof of debt, so the recipient doesn’t need to go through the process of proving their claim in a civil court.
However, if there are additional contractual disputes, such as penalties or damages related to the bounced check, the recipient may choose to file a civil claim. This would be handled separately from the criminal case.
Host
Thanks for clearing that up. Let’s move on to a question about medical insurance. This listener says: “I want to add my wife to my company’s medical insurance, but her employer is asking her to drop her existing policy. Is it legal for her to have coverage from both her employer and mine?”
Ludmila Yamalova
The law does not prohibit having multiple medical insurance policies, but in practice, most insurance companies don’t allow overlapping coverage. This is primarily a policy decision by the insurance providers, not a legal mandate.
If your wife’s employer is asking her to waive her existing coverage before being added to your policy, it’s likely a requirement of their insurance provider. Unfortunately, there’s not much you can do except negotiate with both companies or search for an insurance provider that allows multiple policies.
Host
The listener followed up to say that their wife’s company is asking her to sign a waiver to confirm she won’t be on another policy. Is this standard practice?
Ludmila Yamalova
Yes, it’s standard practice, but it’s rooted in the terms of the insurance policy, not in law. Employers typically include such clauses to avoid conflicts between policies or double claims. It’s a contractual matter, so the waiver is a condition of the insurance coverage rather than a legal requirement.
Host
Good to know. Moving on to our final topic for today, Pete has asked if we could discuss the recent VAT implications for car insurance. He wants to know if VAT is charged once for the policy or multiple times if it’s purchased through a broker.
Ludmila Yamalova
Great question. If you’re purchasing multiple separate policies, such as for your car, home, and life, each policy will incur VAT as they are treated as individual transactions. However, if all policies are bundled through the same broker and processed as a single transaction, VAT will typically be charged once, based on the total value of the transaction.
It’s important to carefully review the breakdown of charges in your policy documents to ensure there’s no duplication of VAT.
Host
Thanks, Ludmila. One final question before we wrap up: “If I buy insurance now for the next year, will I still have to pay VAT starting in January?”
Ludmila Yamalova
Yes, VAT applies to the portion of your insurance coverage that extends into 2018. Even if you’ve already paid for the policy, the insurance company is required to collect VAT on services provided after January 1. So, expect an additional charge for the remaining months of your policy in the new year.
Host
Thanks for that clarification. Unfortunately, that’s all the time we have for today. Ludmila, as always, it’s been a pleasure having you with us.
Ludmila Yamalova
Thank you so much. It’s always a pleasure to be here.