Table of Contents
The United Arab Emirates (the UAE) is comprised of seven emirates including Abu Dhabi, Dubai, Ajman, Ras Al Khaimah, Sharjah, Fujairah and Umm Al Quawain. The federal government and the government of each emirate get their powers from the overall umbrella of UAE federal constitution; expect Dubai and Ras Al Khaimah. The two have their own judicial systems independent from federal constitution. However, Dubai is under federal law but it enjoys some exclusive rights and privileges, and administers its own affairs
UAE legal system is founded on the Egyptian law from which it heavily borrows from. It also borrows from civic law and the Islamic Shari’a law; which provides a guiding principle and basis of law. Legislation here takes the form of major codes which pave the way for more general principles of law and other numerous affiliate legislation. Federal codes of law have been established to comprehensively look into the ever increasing numbers of domestic and foreign sectors in the last 30 years.
The codes deal with civil and civil procedures, commercial, immigration, companies, intellectual property, employment and banking laws. Administrative rules are enacted by the ruler of Dubai, for example, formation and operationalization of government related entities.
As earlier stated Dubai has its own self-regulating courts and judges which are not answerable to the UAE federal Judiciary. The Dubai courts give priority to federal laws especially in civil code companies law, and laws ratified by Dubai’s Ruler , in cases where federal law is missing or inactive. Except in Ras Al Kaimah, the courts in UAE have three courts, Court of First Appeal, Court of Appeal, and Court of Cassation. Further, each of the three has the following court divisions, criminal, civil and Shari’a divisions.
The civil attends to civil claims, the criminal to criminal cases while Shari’a attends to Muslim issues like family matters, divorce and inheritance. Also the non-Muslims are expected to pay respect to Shari’a law and carry themselves accordingly. The Labor court is also found in UAE which deals entirely on conflicts between employees and employers. There is a Property court tackling real property rows.
UAE courts handle their matters which can be heard by one or more judges. There doesn’t not exist a precedent system in Dubai and juries are not used here. To come up with a resourceful and offer a more clear judicial interpretation and practice, publication of higher courts judgments are done, not because they obligatory in lower courts. Its worth noting that UAE court are conducted in Arabic language and its advisable to use legal representatives who are well conversant with Arabic and who are legalized to appear before this courts.
There are some milestone projects that characterize the UAE legal system. This has been pushed by the need to push the legal structure to accommodate, develop and adapt to the dynamic demands of local and foreign businesses which continue being more complex. In law and by-law, Dubai has come up with free zones which have different laws and by-laws. They include; Jebel Ali Fee Zone, Dubai Media Centre and the famous Dubai International Financial Center (the DIFC). Terms for conducting business in the free zones are highly lucrative and attractive where total (100%) international ownership of business is permitted. This compares lowly with the 49% requirement for businesses integrated from the free zones. Other benefits include tax concessions, liberty over import duties and exchange restrictions, and no limitations on the deportation of capital and profits.
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These free zones have been crucial in building UAE image as a smart place to start a business. Apart from given exceptions, setting up a company in the free zone requires a physical establishment of business within the geographical borders of that particular free zone. This implies that foreign firms lay strong foundations in the region enhancing longevity and sustainability due to commitment invested.
When one wants to set up a business in the free zones, one needs to register a domestic entity under the civil code and companies’ law, index as a branch or representative of an international company, or get into a commercial agency relationship with a UAE national. Apart from starting a business in the free zone, other requires different involvement of the UAE nationals, such as 51% share capital. Licensing is a crucial part for any kind on business in UAE, which indicates the range of business one is expected to be doing.
Tax and corporate governance
In matters of tax, there is no state corporate or income tax charged in UAE apart from overseas banks and oil companies. Exchange control remittances on profits, as well as value added tax and sales tax are not found in Dubai and UAE and there are no limitations on foreign trade. UAE has adopted the need to come up with and nurture governance that is principled. Hawkamah Corporate Governance Institute was set to give globally competitive governance structures. This has led to a transparent culture and good corporate governance and anti-money laundering policy attracting foreign investment.
Laws are keenly observed and followed in UAE. This includes being in possession, using, trading any drugs other than the prescribed drugs; which should be verified if they are permitted in UAE before arrival. In addition, UAE has zero tolerance to driving under influence of alcohol which can lead to heavy fine, confinement and even deportation. Another issue is the mode of dressing and behavior, where visitors are advised to take note of Dubai Code of Conduct to ensure one stays sensitive on the issue.
Over a short period, UAE has established a healthy and dynamic legal control structure which makes foreign investors at ease when doing their business. This also allows local businesses to burst up into life under the conducive environment. Dynamism in approaching