Author: afridi-angell

Economic Substance Notification – Deadlines

The UAE has introduced Cabinet Resolution 31 of 2019 (as amended) (the Economic Substance Regulations) which apply to UAE onshore and free zone entities that undertake, and earn an income from, any of the Relevant Activities (listed below):

 

  • Banking Business

 

  • Insurance Business

 

  • Investment Fund Management Business

 

  • Shipping Business

 

  • Holding Company Business

 

  • Lease-Finance Business

 

  • Distribution & Service Centre Business

 

  • Headquarters Business

 

  • Intellectual Property Business

 

The Regulatory Authorities (as determined by Cabinet Resolution 58 of 2019) are now requesting the submission of Economic Substance Notifications in accordance with Article 8(1) of the Economic Substance Regulations on the part of entities that are required to do so under the Economic Substance Regulations.

 

The following are the filing requirements and deadlines that are released by some of the Regulatory Authorities.

 

 Who?   How?
The form must be submitted via:		  Deadline 
 Onshore Entities

UAE onshore entity undertaking any Relevant
Activity(ies)

 The Ministry of Economy’s website:
https://www.economy.gov.ae/English/
economic-substance/pages/regulations.aspx		  30 June 2020

Dubai Multi Commodities Centre (DMCC)All DMCC entities		  The DMCC entity’s DMCC Portal.  30 June 2020

Dubai Development Authority (DDA)DDA entities undertaking any Relevant Activity(ies)		  The DDA entity’s AXS Portal.  30 June 2020

Dubai International Financial Centre (DIFC)All DIFC entities		  The DIFC entity’s DIFC Portal.  30 June 2020

Abu Dhabi Global Market (ADGM)All ADGM entities with a financial year ending
31 December 2019		  Email to economicsubstance@adgm.com  30 June 2020

Jebel Ali Free Zone Authority (JAFZA)JAFZA entities undertaking any Relevant Activity(ies)		  Email to jafza.lease-license@jafza.ae  30 June 2020

Sharjah International Airport Free Zone (SAIF)All SAIF entities		  The SAIF Zone website:
https://portal.saif-zone.com/AppRecordMP.
aspx?bo=1165&EditMode=New&templateID
=16		  30 June 2020


Penalties

Entities that:

 

(a) fail to submit the Notification by the deadline set out above
or
(b) knowingly provide inaccurate information to the Regulatory Authority

 

shall be subject to an administrative penalty ranging between AED 10,000 to AED 50,000 in accordance with Article 11 of the Economic Substance Regulations. Furthermore, the entities shall be deemed to have not met the requirements under the Economic Substance Regulations.

 

With respect to DIFC entities, failure to submit the ESR notification shall also result in an additional penalty of USD 25,000 in accordance with Article 31 and Schedule 2 of the DIFC Operating Law 7 of 2018.

 

It is therefore prudent that UAE entities take a “substance over form” approach to carefully assess their businesses and see if they undertake, and earn any income, from any Relevant Activity. The fact that the commercial license of a UAE entity does not state a Relevant Activity does not automatically mean that the UAE entity is not undertaking any Relevant Activity.

 

Afridi & Angell is able to assist with the business assessments and the filing of Economic Substance Notification forms. ■

Legal aspects of doing business in the Middle East

“Legal Aspects of Doing Business in the Middle East” provides comprehensive coverage on the requirements for doing business, prepared by local practitioners with expertise in business transactions. In this chapter, practical insights, commentary and analysis are offered on: regulation for business, forms of doing business, free zones, licensing of business by the Emirates, labour and immigration regulations and many needful topics you need to know for doing business in the UAE.

Recent measures implemented in Abu Dhabi in response to COVID-19

On 30 May 2020, the Abu Dhabi Media Office posted through Twitter that the Department of Government Support has eased restrictions on some activities and issued a set of guidelines for working from and visiting government entities in Abu Dhabi.

 

The guidelines below come into effect from today, 1 June 2020, and are limited to individuals between the ages of 12 and 60. All individuals must follow preventive measures including social distancing (ensuring two-metre distance from other individuals), wearing face masks and adhering to the daily National Disinfection Programme timing in Abu Dhabi (from 10:00 p.m. until 6:00 a.m. the following morning).

 

I.        Easing restrictions on some activities in Abu Dhabi

 

  • Capacity at malls and mall restaurants is increased to 40 percent.

 

  • Hotel beaches, museums and restaurants outside malls to reopen at 40 percent capacity.

 

  • Outdoor and singular sports activities including horseback riding, cycling, cricket, running, golf, tennis, and sailing will resume.

 

II.     Guidelines for working from and visiting government entities in Abu Dhabi

 

  • No more than 35 percent of office staff will be allowed to work in government offices.

 

  • Paperwork should be avoided.

 

  • Face masks and gloves are to be worn at all times.

 

  • Prayer rooms and shared areas are to remain closed.

 

  • Glass barriers must be installed to keep a distance between employees and customers.

 

  • Before leaving home, government employees in Abu Dhabi have been asked to take their temperature and avoid public transportation networks.

 

  • Once at work, their temperature will be taken again and a QR code scanned.

 

  • Employees who live with people who have tested positive for Covid-19, or who show symptoms, are exempt from having to return to offices, as are those who suffer from chronic underlying health conditions or who need to care for family members.

 

Restrictions on movement in and outside Abu Dhabi

 

Subsequently, on 31 May 2020, the Abu Dhabi Media Office posted restrictions announced by the Emergency, Crisis and Disaster Management Committee on movement in and outside the Emirate.

 

Movement between regions within Abu Dhabi (Abu Dhabi, Al Ain, and Al Dhafrah) as well as in and out of the Emirate of Abu Dhabi is banned for a period of one week starting tomorrow, 2 June 2020. The ban includes all residents including UAE nationals.

 

Exemptions from this movement restriction are available for employees of vital sectors, chronic disease patients visiting hospitals and the transportation of necessary goods.

 

Residents in each region are allowed to move within their region in line with the daily National Disinfection Programme timing in Abu Dhabi (from 10:00 p.m. until 6:00 a.m. the following morning). ■

 

Cram Down Financings in the Era of Covid-19

We are in unprecedented times. The Covid-19 pandemic has swept the globe like a tsunami and it continues to wreak havoc on countries, people and economies. The effects of the pandemic are evident now. For example, the US unemployment rate is presently at 14.7%. In the peak of the financial crisis of 2008, the unemployment rate was 10%. This rate is predicted to rise to 25% at the peak of the Covid-19 pandemic – equivalent to the unemployment rate of the US Depression of the 1930s!

 

Given the backdrop of the cataclysmic economic effects of the Covid-19 pandemic, it has also become increasingly harder to find willing investors for startup companies. Such a scenario will give rise to “cram down” financings. In such a cram down financing, only one or a few investors are willing to put any new money into a company. However, such money usually comes with a much lower valuation for the company (down round) and forced conversions from luxurious preferred shares to plain vanilla common shares which generally punish non-participating shareholders who end up ‘crammed down’ to a small ownership stake of the company in common shares.

 

Generally, such a cram down financing involves a few controlling venture capital investors increasing their control and ownership stake at the expense of the crammed down remaining investors who did not participate in the financing. In such circumstances, courts have held that controlling venture capital investors must satisfy the “entire fairness test” by proving that the transaction was fair to the minority crammed down shareholders. This means that a controlling venture capital shareholder may have a fiduciary duty to minority shareholders.

 

In such circumstances, controlling venture capital investors should insist on a broadly worded indemnity from the company to protect them against potential claims by the minority shareholders based on the entire fairness test and breaches of fiduciary duty.

 

The Covid-19 pandemic has resulted in a significant shortage of venture capital financing for companies. Such shortage can result in unique investment opportunities for those venture capital investors who are willing to invest in such uncertain times. However, such opportunities can result in potential liabilities that may be so significant as to wholly undermine such investment unless specific investor protections are negotiated. ■

Post Eid al Fitr Reopening Guidelines and Easing of Movement Restrictions

On 26 May 2020, Dubai Economy published the “Post Eid al Fitr” reopening Guidelines which took effect from Wednesday 27 May 2020 and include updates to the protocols for the wholesale and retail trade including salons and barbershops as well as valet parking. The Guidelines also provide tailored reopening protocols for cinemas, kids salons, auction houses, outsourced government service centres, and various entertainment sectors.

 

The Guidelines include the following:

 

  • Offices in Dubai will be allowed to reopen with 50 percent of their headcount capacity.

 

  • Salons and barbershops will be allowed to reopen with 50 percent of their staff and customer capacity.

 

  • Malls and retails outlets will be allowed to increase their staffing and customer occupancy levels from the current 30 percent to 70 percent and they will be allowed to remain open from 6:00 a.m. until 10:00 p.m.

 

  • The Dubai Metro will operate from 7:00 a.m. until midnight from Sunday to Thursday and from 10:00 a.m. until midnight on Fridays.

 

  • Intracity buses will now operate from 6:00 a.m. until 11:00 p.m., with essential trips (to hospitals only) permitted on these buses between 11:00 p.m. and 6:00 a.m.

 

  • Intercity buses will continue to be suspended until further notice.

 

All individuals must follow preventive measures including social distancing (ensuring two-metre distance from other individuals) and wearing face masks.

 

On 27 May 2020 the Crown Prince of Dubai and Chairman of the Executive Council announced that 50 percent of all Dubai government employees will resume working from their offices today, Sunday 31 May 2020, and the remaining will do so on 14 June 2020.

 

Return to work of private sector employees will be implemented in accordance with the reopening Guidelines as discussed above, with 100 percent private sector employees’ return to work pending further announcement.

 

The UAE also announced on Friday 29 May 2020 that starting from Saturday 30 May 2020 the daily National Disinfection Programme across the UAE except in Dubai will begin at 10:00 p.m. until 6:00 a.m. the following morning. In Dubai, timing of the sterilisation programme was changed on 27 May 2020 and runs from 11:00 p.m. until 6:00 a.m. the following morning. ■

Further Changes to Civil Litigation in the UAE

In the latest in a series of amendments to Federal Law No. 11 of 1992 (the UAE Civil Procedure Law) the recently issued Cabinet Resolution No. 33 of 2020 (the Resolution) brings about some important changes to how matters will be litigated in the UAE courts. The Resolution amends certain provisions of the regulations to the UAE Civil Procedure Code introduced by Cabinet Resolution No. 57 of 2018 (the Regulations), which introduced some of the most recent changes to civil litigation in recent years.   This inBrief highlights some of the changes made by the Resolution that will significantly impact litigants.

 

1. The service of summons on parties has changed

 

The Regulations provided that a litigant or its attorney may personally affect service, including service through ‘modern technology’. However, following the Resolution, the ability of a litigant or its attorney to affect service through ‘modern technology’ is removed. Consequently, parties and their attorneys may no longer use audio or video calls, text messages, emails, etc. to serve summons.

 

The Regulations as amended by the Resolution also refers to a law (yet to be issued) on the service of summons via private process servers.

 

The Regulations as amended recognises that service may be (in addition to audio and video calls, text messages, etc., which were previously recognised) affected through smart applications which, among other things may include messaging platforms such as WhatsApp. As noted above however, summoning through such platforms will not be available to parties and their attorneys, but only to courts and authorised private process servers.

 

The process server is required to ensure that where ‘modern technology’ is used, the correct numbers, addresses, etc. are used. It will be interesting to see how this will be applied in practice.

 

The Regulations as amended provides that Service of summons on companies may be affected at a branch or office of the company in the UAE, if the dispute relates to such branch or office, or at the main office of the company to the legal representative of the company. Prior to the Resolution, service at the main office or on the legal representative was possible only if service at the branch or office was unsuccessful.  If the main office is closed, or summons is refused, the server may now affix the copy of the summons at the premises without requiring prior permission from the court, which was required previously.

 

2. The Case Management Office (CMO) has added powers

 

CMOs were created some time ago in order to make litigation more efficient, with the aim of having the parties fully plead their case before the matter is referred to the judge.

 

Under the Resolution, supervisory judges are empowered to apply sanctions on parties, and to offer the parties an opportunity to settle their dispute.

 

If a party wishes to assert an argument that the action has been filed in the courts of the wrong Emirate (i.e. a challenge to the local jurisdiction of the court) or that the dispute should not be heard or the matter should be discontinued for a reason other than public policy, it should do so before the CMO.

 

Pursuant to the Resolution, the decision of a supervising judge of the CMO to refer a case to be heard under summary procedures for payment orders is no longer appealable.

 

3. Summary proceedings and the powers of the minor circuit courts have been expanded

 

Article 22 of the Regulations as amended provides that civil, commercial and labour claims of not more than AED 500,000 in value and claims challenging the validity of signatures are to be heard by the minor circuit of the court and disposed of in one hearing. This hearing must be fixed by the CMO within 15 days of the case being registered. A further 15-day extension may be made by the supervisory judge of the CMO, but no further extensions are permitted. If the court appoints an expert, a hearing must be fixed within three days of receiving the expert’s report.

 

Minor circuit courts may now hear disputes up to AED 10 million in value. The jurisdiction of the minor circuit court used to be AED 1 million.  In disputes below AED 50,000, the judgment of the minor circuit is final and binding.

 

4. Changes are made to the payment order process

 

One of the more significant changes that the Regulations introduced was the broadening the availability of payment orders, which was previously limited to debts arising out of certain commercial instruments, to include debts which are confirmed in writing (as set out in our inBrief of 11 June 2019). The Resolution introduces further changes:

 

• Damages may now be sought as relief in payment order applications. Prior to the Resolution, only the outstanding debt and interest thereon could be claimed. This significantly increases the scope of payment orders.

 

• An application for a payment order may now be filed where the underlying agreement between the parties was concluded or performed (or had to be performed). Previously, the application could only be filed where the debtor was resident.

 

• Where a payment order is granted, and the debtor files an objection, the decision on the objection is not subject to appeal if the value of the order is less than AED 50,000.

 

• Where the value of the order is more than AED 50,000, an appeal on an objection may be filed to the Court of Appeal. The Resolution provides that the Court of Appeal must make a decision on the merits, and cannot return the matter to the Court of First Instance.

 

5. The requirements for applying for a travel ban have been clarified

 

The Resolution amends the Regulations to give further clarity with respect to travel bans issued by the court. In summary:

 

• The debt owed must be for a specified amount (for example, a claim for damages will not qualify), which is unconditional and not be less than AED 10,000.

 

• There must be ‘serious reasons’ to believe that the debtor is a flight risk.

 

• The claim for payment must be supported by documentary evidence.

 

• The applicant must submit a guarantee to the court to cover losses or damages the debtor may suffer if the application for a travel ban is later found to be wrongful.

 

6. Provision has been made for conducting litigation more efficiently

 

The grounds for which a postponement may be sought is now limited. Postponement must be for an urgent reason, such as death, loss of capacity of a litigant, intervention of a third party, allegation of forgery, or to submit evidence of a criminal action being filed which is relevant to the merits of the dispute. Each postponement can be no more than two weeks. The Regulations have also been amended so that a court is required to issue its final judgment within 100 days from the matter being referred to it from the CMO. It will be interesting to see how strictly the courts comply with this deadline in practice.

 

7. Execution judges have broader discretion to accept payment plans 

 

Following the Resolution, execution judges have the discretion to accept instalments plans spanning up to three years to satisfy a judgment debt. Previously, it was limited to one year. This will be seen as a welcome development, particularly in the current economic circumstances.

 

If a party wishes to object to execution of a judgment, however, a deposit of AED 5,000 is payable. The deposit is forfeit if the objection is unsuccessful.

 

8. Representing a corporate entity

 

A person who appears in Court on behalf of a company must have a power of attorney attested by the Notary Public. Previously, an attested power of attorney was not required. In addition, a person (who is not an Advocate) representing a company must be an Emirati possessing a law degree, and who has been employed by the company for at least one year.

 

The Resolution came into effect on 1 May 2020. ■

Revised Measures in Response to COVID-19: Sterilisation and opening timings and an updated list of violations and fines

Timings

 

On 18 May 2020, the UAE government announced the following timings with effect from today, 20 May 2020:

 

 

  • the National Disinfection Programme will take place between 08:00pm (not 10:00pm) to 06:00am the following day.

 

  • working hours of butchers, mills and cafes will be from 06:00am to 08:00pm.

 

  • commercial centres and malls will be open from 09:00am to 07:00pm (with new opening hours to be announced after the upcoming Eid.) People over 60 years old and children below 12 years old will continue to be denied access to these premises.

Retail stores, cooperatives, groceries, supermarkets and pharmacies will remain open for 24 hours, seven days a week during the National Disinfection Programme.

 

List of Violations and Fines

 

On 18 May 2020, the Emergency, Crisis and Disasters Prosecution Department of the Public Prosecution announced an updated list of the violations and fines that were originally set out in Resolution 38 of 2020. The changes take effect from 18 May 2020.

 

The list below follows the numbering of Resolution 38 of 2020. Some violations and fines have remained the same, others have been revised, and new violations have been introduced. For ease of reference, the new changes and additions are in red.

 

The list of violations and fines under Resolution 38 of 2020 appeared in our previous InBrief dated 29 March 2020.

 

No.

 Violation Fine
1
  • Violating an order for mandatary hospitalisation.
 AED 50,000
2*
  • Failing to abide by home quarantine or re-testing instructions.
 AED 50,000
  • Failing to abide by quarantine instructions at private quarantine facilities or re-testing instructions.
 AED 50,000
2 bis*
  • Failing to install a smart application or carry an electronic tracking device for home quarantine cases.
  • Destroying, losing or disrupting the network of electronic tracking device for home quarantine cases.
 AED 10,000

The offender will also bear the cost of the electronic device, if lost or damaged.
  • Hacking, destroying, deleting, damaging or changing the program of the smart application or electronic tracking device.
  • Illegally obtaining data or information in the smart application or electronic tracking device.
 AED 20,000

The offender will also bear the cost of all damages.
  • Failing to notify the relevant contact centre, without an acceptable excuse, that the electronic tracking device is lost, damaged or malfunctioned within 24 hours of such event.
 AED 10,000
3
  • Violating the closure or operating hours of an educational institution, movie theatre, gym, nightclub, commercial center, outdoor market, park, leisure centre, cafe, shopping mall, retail shops, gardens, beaches, public swimming pools, hotel swimming pools, and restaurant (the Facilities).
  • Receiving any visitors in any of the Facilities in violation of the instructions.
 AED 50,000 for the owner of a shopping centre and closure of the facility for one month.

AED 5,000 for the owner of a retail shop outside a shopping centre.
  • Failing to install thermal cameras, or taking any other precautionary measures as required by the relevant authorities, at any of the Facilities.
 AED 20,000
  • Failing to temporarily suspend sailing cruises.
  • Violating procedures or measures imposed by the relevant authorities when resuming the operations of sailing cruises.
 AED 10,000
4
  • Violating prohibitions or restrictions on gatherings, meetings, private and public celebrations, and on gathering or being present at public locations, private farms, or agricultural estates.
 AED 10,000 for whoever invites or organises the same, and AED 5,000 for participants.
5
  • Violating measures of the Ministry of Health & Prevention regarding those coming to the UAE from countries infected by any communicable diseases.
 AED 5,000 (which was previously AED 2,000). 
6
  • Failing to take the appropriate health procedures regarding the regulation of markets, roads, and other public locations exempt from temporary closure.
  • Failing to implement an order for removal of any temporary structure or the disposal of goods, clothes, or other items are believed to have been contaminated or potentially contaminated with any disease agent and cannot be disinfected.
 AED 3,000
  • (Applicable to accredited health laboratories) Failing to link the data of tested individuals to relevant authorities
 AED 20,000
  • Failing to clean and sterilise equipment, devices, machines within establishments as per the instructions of the relevant authority.
 AED 5,000
  • Violating instructions of the relevant authority relating to cleanliness and personal hygiene practices of workers within establishments or shared housing accommodations.
 AED 1,000
  • Failing to use chemicals (for cleaning, sanitisation and disinfection purposes) or any other material as per the instructions of the relevant authority.
 AED 1,000
  • Failing to preserve the health and safety and prevent spread of communicable diseases as per the decisions and instructions of the relevant authority.
 AED 2,000
7
  • Failing to take precautionary measures for the crew of accommodation vessels.
 AED 10,000
8 (This fine under Resolution 38 of 2020 is cancelled.)
9
  • Violating the provisions of the Implementing Regulations for the Law on the Prevention of Communicable Diseases as regards the burial or transport of the body of any person who dies from a communicable disease.
 AED 5,000 (which was previously AED 3,000). 
10
  • Exceeding the maximum permitted number of passengers in a car by more than three persons. (This does not apply where members of the same family or second-degree relatives are in a car.)
 AED 3,000 for the  driver (which was previously AED 1,000).
  • Using a vehicle to transport goods, objects or other items against its authorized purpose and in violation of health and safety regulations.
 AED 5,000 and the vehicle will be impounded for a month.
11
  • Failing to wear medical or cloth facemasks in closed public places, shopping centres, public transportation, crowded public areas, high traffic areas, or private vehicle.
 AED 3,000 (which was previously AED 10,000).

 
  • Failing to wear medical or cloth facemask at a company, workplace, housing accommodation.

 

 AED 5,000 for the employer or owner of company, establishment or worker’s accommodation.

AED 500 for the employee.
  • Failing to observe the safe distance between individuals.
 AED 3,000 (which was previously AED 10,000). 
  • Failing to take necessary measures to ensure social distancing and permitting overcrowding and assembling within establishments, cafes, restaurants, beaches, gyms, public swimming pools, hotel pools.
 AED 5,000 for the owner of such facilities. 
  • Exercising, taking part in sports or recreational activities in open places or hotel beaches, walking or gathering in gardens or public places in violation of the preventative measures imposed by the relevant authority.
 AED 3,000
  • Violating the maximum number of employees allowed within a facility, commercial establishment or workplace.
 AED 3,000 for the owner of the company or establishment. 
12
  • Failing to take sterilisation procedures in means of public and private transport.
 AED 5,000 for the manager of the company or establishment. 
13
  • Approaching or going to healthcare facilities in cases other than the prescribed ones.
 AED 1,000
14
  • Refusing to undergo a medical test upon demand.
 AED 5,000
  • Re-taking a laboratory test for Coronavirus at accredited health laboratories within two weeks without a valid reason
 AED 1,000
15
  • Leaving home or travelling during the curfew times announced by the relevant authority for a reason other than to buy food and medicine and to attend to health emergencies.

(This is not applicable to employees within the vital sectors who are permitted to move during curfew times, which includes medical, technical and administrative personnel working within governmental and private health facilities.)

 AED 3,000
16
  • Violating the ban on transferring workers between Emirates. (This is not applicable to workers of exempted categories.)
 AED 10,000 for the owner of the company or establishment and driver of the private vehicle. 
(Applicable to workers within the exempted category)

  • Exceeding the maximum capacity imposed by the relevant authority (being half capacity of vehicles) when transporting workers between Emirates or within an Emirate.
  • Failing to wear masks, and social distance when boarding and disembarking from the vehicle.
 AED 5,000 for the owner of the company or establishment

AED 500 for the employee or worker. 
17
  • Carrying on private lessons at home, or public or private places (with direct contact), whether for or without compensation.
 AED 30,000 for the individual offering, organizing and mediating private lessons. 

AED 20,000 for the owner of the private place where the private lesson was held. 
18
  • Collecting, copying, broadcasting, disclosing, publicizing, transmitting or circulating health data or information of individuals that tested positive, are undergoing treatment or examination with the health authorities.

 

  • Cancelling, deleting, destroying, or altering any such data or information.
  

 

AED 20,000

 

 
  • Violating information security standards approved by government or private health facilities.
 AED 5,000

 

Violators of Article 2 and 2 bis (marked with an asterisk (*) above) will be referred to the Emergency, Crisis and Disasters Prosecution Department of the Public Prosecution to be charged for a criminal offence under Article 40 of the Federal Decree Law 2 of 2011 on the Establishment of the National Emergency and Crisis Management Authority. The penalty of such offence is imprisonment for a period not exceeding six months, or a fine not exceeding AED 100,000, or both.

 

The Attorney General has the authority to order the publication of the pictures and name of violators in media sources as it deems necessary. ■

 

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The ADGM Companies Regulations 2020

The Abu Dhabi Global Market has announced amendments to its Companies Regulations. The Companies Regulations 2020 (2020 Regulations) repeal the Companies Regulations 2015 (as amended). We have summarised below the key changes under the 2020 Regulations.

 

Companies Regulations 2020 Effect of amendment
Section 3 One of the ways in which a restricted scope company can be incorporated is if the founding members are a group of people who are from the same family (as approved by the Registrar). What constitutes being a member of the same family has been broadened under the 2020 Regulations to include grandchildren, great grandchildren and adopted children (and their spouses).
Section 450 This section now clarifies that a financial institution which is a FinTech Participant will not be excluded from the small companies’ exemption from audit.
Part 23 (sections 778 – 783) The regulations now use the term “confirmation statement” as opposed to “annual return”. The contents of the confirmation statement and the timelines for delivery of the confirmation statement remain the same.
Section 937 The amendments to the regulations state that the Registrar will continue to authenticate paper copy documents with an official seal however the amendments clarify that electronically generated documents will not require to be sealed.
Section 940 The right to request a certificate of incorporation has been amended under the 2020 Regulations such that all certificates of incorporation will now be electronically generated as opposed to signed and authenticated by the Registrar. However, a request can still be made for a paper copy certificate of incorporation and such request may be subject to a fee as determined by the Board of Directors of the Abu Dhabi Global Market (Board).
Section 960 Continuing the theme under section 940 of the 2020 Regulations, electronic as opposed to paper copies of publicly available information on the register will be made available by the Registrar on request. If a request for a paper copy of such information is required, the provision of such information may also be subject to fees as imposed by the Board.

 

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Afridi & Angell’s corporate department works with many ADGM companies and has extensive experience in advising such companies. Should you have any questions with respect to the changes under the 2020 Regulations or more generally on ADGM companies, please contact the author, Danielle Lobo (partner), or your usual Afridi & Angell contact. ■

DMCC Employment Guidelines during the COVID-19 Precautionary Measures Period

The DMCC Authority recently passed DMCC Guidelines 1 of 2020 (DMCC Guidelines) setting out what actions DMCC employers can take with respect to their employees during the COVID-19 Precautionary Measures Period.

 

DMCC entities can:

 

• Request employees to work remotely and implement means to monitor them (without infringing their privacy). Working remotely does not however apply to key employees working in Vital Industries. “Vital Industries” are the key industry sectors as announced by the Supreme Committee of Crisis and Disaster Management from time to time, which are eligible for a work-related movement permit (now required for movement around Dubai between 10:00 p.m. to 6:00 a.m.), available from the Dubai Police website. The Supreme Committee of Crisis and Disaster Management was established under the leadership of the Commander of the Dubai Police pursuant to Dubai Decree 22 of 2006 and Dubai Rule 14 of 2006. For the Vital Industries, please see the list of Vital Sectors and Support Sectors in our InBrief dated 6 April 2020.

 

• Place employee(s) on paid leave without employee’s consent.

 

• Temporarily reduce employee’s basic salary for a defined period (which must be mutually agreed). In spite of this temporary reduction, the employee’s end of service gratuity will remain unaffected, and will continue to accrue according to the employee’s basic salary prior to the temporary reduction.

 

• Place employee(s) on unpaid leave for a period (which must be mutually agreed).

 

• Collect and share employee’s personal data with competent UAE authority (if requested) as reasonably required for the health, safety and wellbeing of their employees.

 

DMCC employers are discouraged from filing absconding reports against terminated employees who may be facing delays in cancelling their visas during the COVID-19 Precautionary Measures Period.

 

Where the DMCC Guidelines are silent, the DMCC entities shall remain subject to the UAE Labour Law. In contrast, the DMCC has not made DMCC entities subject to the requirements of Ministerial Resolution 279 of 2020 (on employment stability in the private sector) and Ministerial Resolution 281 of 2020 (on maintaining safe places of work), either in the DMCC Guidelines or on its website. Accordingly, the specific requirements imposed in those Resolutions would not apply to DMCC entities, unless the DMCC decides at a later date to make them applicable. For details of these Resolutions, please see our InBriefs dated 1 April 2020, 3 April 2020 and 6 April 2020 and our Legal Alert dated 6 April 2020.

 

As to accessing office premises of DMCC entities, the DMCC Authority has followed the decision of the Supreme Committee of Crisis and Disaster Management dated 23 April 2020 whereby a maximum of 30% of the workforce of all organisations would be allowed to work from the office premises. For more details of this decision, please see our InBrief dated 26 April 2020. DMCC entities based in the DMCC Business Centre (i.e., those with flexi desks, serviced desks or serviced offices leased from DMCC Business Centre) (Business Centre Members), however, are additionally subject to the recently issued DMCC Business Centre Health & Safety Policy, which restrict them to having one employee present at the office unit at any one time (and such employee must not be 60 years and older, or pregnant, or have chronic diseases). Such employee must also undergo thermal scanning available in designated areas within the DMCC Business Centre facility. ■

 

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