Tag: Corporate and Commercial

Capital of Capital: Inside the UAE’s Art Law Framework

The world’s most ambitious cultural art district is rising on Saadiyat Island, as is the legal framework behind it.

 

Dubbed the “capital of capital”, Abu Dhabi is home to the only Louvre museum outside of France. It is situated within the Saadiyat Cultural District alongside the newly opened Zayed National Museum and the Natural History Museum. Before 2027, this exclusive list of neighbours will be joined by Guggenheim Abu Dhabi, which is expected to be the largest Guggenheim museum worldwide. Frieze is set to bring its internationally acclaimed art fair to the Emirate in November of 2026.

 

This is indicative of the scale of capital inflow into the UAE – and particularly Abu Dhabi – in recent years, as well as the UAE’s positioning of arts and culture as a matter of national importance. Perhaps less visibly, it may also be connected to the enactment of UAE Federal Decree-Law 29 of 2024 on Empowering the Arts Sector (the Art Law).

 

The Art Law creates and regulates “Art Institutions”, which are defined as non-profit legal entities licensed to engage in activities related to the arts sector. “Art” is loosely defined as a product of human creativity and talent that translates emotions and inner sentiments or expresses perceptions, whether in an audible, visual or written form. Activities related to antiquities are not covered by the Art Law.

 

It is important to note that Art Institutions, including museums, foundations and similar institutions, must be non-profit in purpose. Ancillary revenue generating activities – including cafes, gift shops and ticketed programming – may be permitted to operate, provided that surpluses flow back into the institution. Galleries, dealers, advisories and other commercial entities are regulated by different UAE laws (including those applicable in its various free zones) and warrant separate analysis. They are also not able to benefit from certain tax, customs and import/export exemptions that may be available to Art Institutions under the Art Law. Regardless of the underlying objective, unless appropriately licensed, any entity seeking to engage in art activities (whether for-profit or not) must be appropriately licensed in the UAE.

 

Interestingly, the Art Law moves to designate Art Institutions as regulated entities subject to their own licensing, funding, corporate governance, taxation, profit distribution, insurance, intellectual property and reporting rules. Both the asset (“Art”, which is given a legal definition, including appropriate exclusions) and the market on which it operates (whether through non-profit “Art Institutions” or other commercial entities) are now brought within the realm of a defined regulatory framework and subject to designated licensing rules and governing authorities.

 

All Art Institutions must appoint a director who reports to a non-remunerated, non-permanent board of trustees. Subject to the board of trustees’ oversight, the director will be responsible for preparing internal annual budgets and accounts, as well as submitting annual budget summaries, performance evaluation reports and final accounts to the UAE Ministry of Culture. The Art Law also contains rules as to the eligibility of directors, trustees and founders. The requirements that apply to regular commercial entities are less stringent than those that apply to Art Institutions.

 

Certain UAE free zones, in addition to tax incentives, also offer art-grade storage facilities. Artworks stored within certain free zones may be transacted without physically moving them, reducing logistic, fiscal and customs pressure. The Dubai Free Port, for example, now contains a super vault combining world-class custody and security services with efficient airside customs exemptions. This is one of only a few in the Middle East.

 

Collectively, these measures have contributed to positioning the UAE as a jurisdiction that not only promotes arts and culture, but also allows professionals and enthusiasts alike to participate predictably in the multi-billion-dollar global art market – recognising that art is a matter of enjoyment and sentimental value as much it is a regulated asset class.

 

Nevertheless, follow-on legislation is expected to be implemented in the near term that will further elaborate upon the requirements set out in the Art Law. These developments are expected to affect commercial entities as well as non-profit Art Institutions.

 

Museums, galleries, dealers, patrons, advisors and collectors are therefore encouraged to monitor forthcoming developments, as well as their own activities in the UAE. This should allow them to assess how they may be affected by a market that is being regulated at the same pace as growing.

 

Afridi & Angell is in its sixth decade at the forefront of legal practice and is well placed to work with collectors, institutions, patrons and enthusiasts to navigate the art landscape in the UAE – from licensing and structuring to acquisitions, tax, and the finer details that come with each. ■

The New UAE Civil Code: Contract Formation, Consent, and Good Faith

The UAE’s new Civil Transactions Law (the New Code), coming into force on 1 June 2026, fundamentally changes the legal landscape for anyone doing business in the UAE — and the consequences of getting it wrong could be significant. For the first time, the law imposes express statutory obligations on parties engaged in pre-contractual negotiations: negotiate in bad faith, withhold information that is material to the other side’s decision, or misuse confidential information obtained during the process, and you may be liable even where no contract is signed. In short, contractual risk in the UAE now begins well before the contract is concluded, and businesses that continue to treat the negotiation phase as consequence-free do so at their peril.

 

1. What has changed

 

The New Code introduces, for the first time, an express statutory framework regulating party conduct at the pre-contractual stage. The New Code:

 

➢ requires that the proposal, conduct, and termination of negotiations be carried out in good faith (Article 121(1));

 

➢ imposes liability for negotiating, or terminating negotiations in bad faith (Articles 121(3) and 121(4));

 

➢ obliges the disclosure of information that is of “decisive importance to the other party’s consent” (Decisive Information) (Articles 122(1) and 122(2));

 

➢ allocates the burden of proof such that the party alleging concealment must prove it, while the other party must prove disclosure (Article 122(3));

 

➢ provides that clauses seeking to limit, waive, or exclude the obligation to disclose Decisive Information are null and void, and grants the aggrieved party the right to seek annulment of the contract (Article 122(4)); and

 

➢ imposes liability for the unauthorised use or disclosure of confidential information obtained during negotiations or through the contract (Article 123).

 

Significantly, the New Code also regulates circumstances where a contract is not formed. The New Code provides that:

 

➢ negotiations do not, in themselves, oblige the parties to conclude a contract (Article 121(2));

 

➢ a party acting in bad faith may be liable for the actual damage caused to the other party, but does not extend to lost opportunities or lost profits (Article 121(3)); and

 

➢ clauses seeking to limit, waive, or exclude the obligation to disclose Decisive Information are null and void (Article 122(4)).

 

2. What was the position before

 

The current (and soon to be replaced) Civil Code does not contain an equivalent express statutory regime dealing with pre-contractual negotiations. The issue therefore fell to be addressed through general principles and case precedent rather than by a dedicated legislative framework.

 

Previously, Dubai Court of Cassation case no. 267/2016 (Civil) treated negotiations as a factual act which did not, by itself, create legal obligations. A party was generally free to withdraw from negotiations. Liability could nevertheless arise where the withdrawal was accompanied by fault, in which case the liability was treated as tortious (i.e. an Act Causing Harm as defined in the Civil Code) rather than contractual.

 

Similarly, while concepts such as misrepresentation, deceit, and bad faith were not foreign to UAE law, the current Civil Code does not contain a statutory duty to disclose material information during negotiation. Nor does it expressly address the unauthorised use or disclosure of confidential information obtained during negotiations as part of a dedicated pre-contractual framework.

 

The prior position was therefore less structured. Pre-contractual conduct sat in a grey area governed by broad principles, with less certainty as to the source, content, and limits of liability.

 

3. Why the change matters

 

Litigation risk

 

Parties may no longer assume that, absent a signed contract, the negotiation phase is inconsequential. If a party negotiates without genuine intention, withdraws in bad faith, withholds information of decisive importance, or misuses confidential information obtained during negotiations, there is now a clearer statutory route by which liability may be advanced. This may be particularly relevant in failed transactions where one party has incurred material costs in reliance on negotiations that later collapse.

 

Article 122(3) is also likely to be important in practice. Once concealment is alleged, the other party will need to prove disclosure. This is likely to increase the significance of contemporaneous records of what was disclosed, when, and to whom.

 

Therefore, these provisions are likely to generate disputes regarding:

 

➢ what amounts to “bad faith” in the negotiation context;

 

➢ what information is sufficiently “decisive” to require disclosure;

 

➢ when ignorance or reliance may be presumed;

 

➢ how actual loss is to be proved and distinguished from non-recoverable expectation loss; and

 

➢ whether certain types of differently worded contractual clauses can be considered as limiting, waiving or excluding obligations to disclose material and decisive information; and

 

➢ the extent to which entire agreement clauses, non-reliance wording, or clauses providing that the contract supersedes prior negotiations may affect claims based on pre-contractual conduct, without excluding mandatory statutory duties under the New Code.

 

In high-value transactions, this is likely to become a live area of litigation. The negotiation process itself may now become part of the pleaded case, and part of the evidentiary battleground.

 

Contract drafting impact

 

As clause limiting, waiving, or excluding the duty to disclose material and decisive information are null and void under the New Code, parties will need to review how they use entire agreement clauses, non-reliance wording, disclaimers, and other standard boilerplate protections. Such clauses may still serve a legitimate function, but they cannot override mandatory obligations imposed by the New Code.

 

The same applies to confidentiality. Many commercial parties rely on stand-alone NDAs, confidentiality undertakings, or restricted circulation protocols. Article 123 appears to add a statutory layer to that position. That increases the importance of ensuring that confidential information is properly identified, access is controlled, and negotiation documents are prepared on the assumption that misuse of information may later attract legal consequences.

 

Judicial discretion

 

Concepts such as good faith, decisive information, presumed ignorance, justified reliance, and unauthorised use of confidential information are inherently fact-sensitive. Their practical content will depend on judicial interpretation. The courts will likely be required to decide where legitimate commercial behaviour ends and actionable bad faith begins.

 

This is especially so in cases involving partial disclosure, strategic silence, exploratory negotiations pursued for informational advantage, or withdrawals engineered at a late stage after one party has incurred material time and cost.

 

The availability of annulment as a remedy for breach of the disclosure obligation is also likely to add weight to these disputes, particularly where the allegedly undisclosed information materially affected the other party’s decision to enter into the contract.

 

The New Code therefore gives the courts a more explicit mandate to scrutinise the contracting process itself, not merely the final written agreement.

 

4. Practical takeaways

 

Do’s

 

➢ approach negotiations on the basis that the pre-contractual phase may now carry direct legal consequences, and that entire agreement clauses, non-reliance wording, disclaimers, and other standard boilerplate protections may not have the same effect that they previously did;

 

➢ consider carefully whether information in your possession is of material and decisive importance to the counterparty’s consent and document analysis made in this regard;

 

➢ document negotiation stages, assumptions, reservations, and qualifications clearly;

 

➢ use confidentiality agreements and internal access controls when sharing sensitive information; and

 

➢ consider using structured disclosure processes, including disclosure schedules, tracked Q&A processes, and maintain records of disclosed materials.

 

Don’ts

 

➢ assume that the absence of a signed contract eliminates legal risk;

 

➢ rely on broad disclaimers or non-reliance wording to exclude pre-contractual exposure;

 

➢ use negotiations to obtain confidential information without a genuine transaction purpose; or

 

➢ terminate negotiations in a manner that could later be characterised as abusive, misleading, or opportunistic.

 

For businesses and their advisers, the practical message is clear. Contractual risk may now arise well before signature. Parties should therefore negotiate, disclose, and document accordingly. ■

Amendments to the UAE Federal Companies Law – Key Changes

The UAE recently introduced Federal Decree-Law 20 of 2025 (the CCL Amendment) amending several provisions of Federal Decree-Law 32 of 2021 regarding commercial companies (the Companies Law). Certain key provisions of the Companies Law have been amended in order to: give clarity on its scope; introduce common law principles and rules surrounding non-profit companies, as well as flexibility in structuring shareholding arrangements. These amendments came into effect on 15 October 2025.

 

Applicable to free zones

The CCL Amendment provides that the provisions of the Companies Law apply to branches or representative offices of free zone companies established on mainland UAE (i.e. outside of the free zone areas). The Companies Law does not apply to companies incorporated in UAE free zones where the relevant free zone’s laws and regulations contain specific provisions disapplying the provisions of the Companies Law.

 

Most free zones of the UAE have their own laws and regulations. However, if a free zone’s laws and regulations do not contain specific provisions excluding the provisions of the Companies Law, the provisions of the Companies Law may apply in addition to its own laws and regulations. Furthermore, there are certain free zones in the UAE that do not have their own laws and regulations and, in those cases, the provisions of the Companies Law may apply. When addressing any corporate law issues, it is crucial for a free zone company to consider if the Companies Law will apply to that free zone company and the impact of those provisions on its company.

 

The CCL Amendment re-affirms that free zone companies are considered to hold the nationality of the UAE. This aspect is important from the perspective of UAE corporate tax and double taxation treaties which may be entered into between the UAE and other countries.

 

Flexibility in shareholding and share transfers

 

One of the most notable changes is the introduction of shareholder-rights mechanisms. Limited liability companies (LLCs) and private joint stock companies may now include drag-along and tag-along rights in their Memoranda of Association and by-laws. Further, the CCL Amendment provides for a structured succession approach where, in the event of a shareholder’s death, remaining shareholders have a right of first refusal over the shares of the deceased shareholder, with valuation determined, by agreement, with the legal heirs or by the competent court (in the case of non-agreement). The Memoranda of Association and by-laws must include provisions regarding the right of first refusal.

 

Classes of shares

 

The CCL Amendment now permits the issuance of different classes of shares. These shares may, for example, have different rights and restrictions in terms of value, voting rights, redemption rights, priority in the distribution of profits or liquidation, etc. Memoranda of Association and by-laws of LLCs will be required to have specific provisions regarding the issuance of different classes of shares. The Cabinet will determine the categories of different classes of shares and set out the respective conditions of each category of those shares.

 

Companies looking at restructuring their shareholding and issuance of different classes of shares would be advised to wait for the issuance of further guidance by the Cabinet. It is worth noting that there are free zones in the UAE where the issuance of different classes of shares is currently permitted.

 

Re-domiciliation and cross-jurisdiction mobility

 

The CCL Amendment introduces the concept of re-domiciliation of companies. This new option permits a company to move its corporate registration from one jurisdiction to another without dissolving the company or creating a new legal entity. Subject to the satisfaction of certain criteria, a company may transfer its jurisdiction of incorporation from one Emirate to another or from a free zone to mainland or vice-versa.

 

The provisions are silent on foreign companies transferring their jurisdiction of incorporation to mainland UAE. However, there are certain free zones in the UAE where a foreign company can transfer its domicile.

 

Non-profit companies

 

The CCL Amendment specifically provides for the incorporation of non-profit companies. The net profits of a non-profit company are required to be reinvested in the company in order to achieve the company’s objectives. The profits cannot be distributed to its partners or shareholders. The Cabinet is expected to issue further clarification regarding the prescribed purposes of such non-profit companies as well as regulations governing such non-profit entities.

 

Improved governance mechanism

 

The CCL Amendment introduces a more expedient approach for resignation, removal, and continuity rules for mainland LLCs’ managers. A decision on a manager’s resignation must be taken by the shareholder(s) within 30 days of the submission of such resignation otherwise the manager’s resignation will be considered automatically effective. This period has been reduced from the initial 40 days to 30 days.

 

It remains to be seen if the local licensing authorities will record a resignation by a manager and remove a manager’s name from an LLC’s license in the absence of an appointment of a replacement by the shareholders.

 

Conclusion

 

The CCL Amendment is important in that it expands the scope of mainland LLCs and offers greater flexibility.

 

Previously, when structuring a joint venture entity with complex shareholding arrangements, shareholders tended to opt for an offshore jurisdiction or free zone for ease of doing business and flexibility. Now however, the CCL Amendment provides the option to structure these same arrangements locally without the need for a holding company structure. It will be interesting to observe how these provisions are practically implemented by local authorities. ■

UAE Introduces New Humanitarian and Sector-Specific Visa Categories

The UAE continues to reform and expand its immigration framework with the issuance of Federal Administrative Decision 74 of 2022 as amended by Federal Administrative Decision 51 of 2025 (the Decision).

 

This latest round of reforms introduces new visa categories, clarifies and re-evaluates eligibility conditions, and introduces more flexible humanitarian pathways for resident visas.

 

What’s New

 

1. Residence on Humanitarian Grounds Broadened

 

The UAE now offers a renewable one-year residence permit to foreign nationals from countries affected by war, natural disasters, or unrest without the need for a local sponsor.

 

Applicants must already be present in the UAE and meet certain housing and financial requirements at the time of application. While permits may be renewed after the initial first-year period, they will be automatically cancelled in the event the permit holder travels outside the UAE.

 

The Decision also expands family reunification options, allowing citizens and residents to sponsor a broader group of relatives, including parents and siblings. The number of individuals that can be sponsored is dependent on the sponsor’s monthly income, which should be at least AED 10,000 to sponsor up to five individuals and AED 15,000 per month to sponsor six or more. Sponsors are also required to evidence adequate housing for their relatives.

 

Notably, the Director General of Identity and Foreigners Affairs has the discretion to waive the financial and housing requirements set out in the Decision.

 

Another key update is that widows and divorcees may apply for residence for themselves and their children if they were resident in the UAE and sponsored by their husband at the time of the death or divorce. Applications must be made within six months of the death or divorce and be supported by documents such as the certificate of marriage, certificate of death or divorce, proof of sponsorship and evidence of financial solvency and adequate housing.

 

2. New Visa Categories to Drive Economic Activity

 

The reforms also introduce several new visa categories to support different industries:

 

i. Business Exploration Visa – For foreigners seeking to explore business opportunities in the UAE. The applicant must demonstrate financial solvency and be engaged in the relevant activity through a foreign business or as a qualified professional.

 

ii. Event Visa – For those attending exhibitions, festivals, or seminars. The visa must be sponsored by the host of the event.

 

iii. Entertainment Visa – For visitors participating in commercial gaming activities, sponsored by an entity fully licensed to organise commercial gaming activities in the UAE.

 

iv. Cruise Tourism Visa – A multiple-entry visa for passengers aboard cruise ships as well as permits for cruise ship workers.

 

v. AI Specialist Visa – Single or multiple-entry visas may be issued to professionals specialising in the field of artificial intelligence sponsored by an entity that specialises in the field of technology.

 

vi. Revised Truck Driver Visa – Visas for foreign truck drivers issued on a single or multi-entry basis. Applicants must be sponsored by licensed shipping or transport companies and hold health insurance.

 

These visa categories reflect the UAE’s focus on innovation, tourism, and logistics in furtherance of its economic and developmental goals.

 

3. Visa-on-Arrival Access for Indian Nationals

 

The recent reforms also facilitate easier entry for Indian nationals and their accompanying family members, who may now obtain visas on arrival in the UAE if their passports are valid for at least six months and they hold a valid visa, residence permit, or green card issued by the United States of America, the United Kingdom, the European Union, Canada, Japan, Australia, New Zealand, Singapore, or South Korea.

 

4. Grace Periods and Validity Extensions

 

The Decision also introduces more flexible post-expiry grace periods, which allow residents to continue to stay in the country without incurring financial penalties after their residence permits have expired. These include a 180-day grace period for Golden, Green (issued to self-employed, skilled professionals and freelancers) and Blue (issued for individuals who have made significant contributions to the protection of the environment) visa holders, widows, divorcees and graduates. A 90-day grace period is available for skilled workers and property owners and a 30-day grace period for all other categories of visa holders.

 

Family members of Golden, Green and Blue visa holders are also permitted to retain their residency even if they remain outside the UAE for more than 180 days. The UAE generally requires residence permit holders to enter the country every 180 days.

 

Why It Matters?

 

The Decision reflects the UAE’s forward-looking immigration policy, commitment to harmonising talent attraction, humanitarian sensitivity, and administrative ease. In a world grappling with displacement, technological transformation, and evolving mobility norms, the UAE continues to position itself as both a safe haven and a hub of opportunity. ■

DIFC Variable Capital Company Regime

Introduction

 

In June 2025, the Dubai International Financial Centre Authority (DIFCA) published Consultation Paper No. 2, setting out a proposed regulatory framework for the introduction of Variable Capital Companies (VCCs) in the DIFC (VCC Regulations).

 

The VCC Regulations (once issued) are expected to provide for a flexible corporate vehicle for proprietary investments and are particularly well suited to private equity firms, family offices and high net worth individuals.

 

Overview: what is a Variable Capital Company (VCC)

 

A VCC is a private limited company that may be established as either a standalone entity or an umbrella structure housing multiple entities known as “cells”, with the idea being that the assets and liabilities of each cell will be ring-fenced from each other. The VCC acts as a platform for the underlying cells, centralising compliance, reporting and management functions. A distinguishing feature of a VCC is its capital flexibility, which, in contrast to traditional fixed capital companies, allows for dividends to be paid out of capital and for its capital to adjust in line with its net asset value.

 

Segregated Cells vs Incorporated Cells

 

A VCC can be established with one of two different types of cells: (i) segregated or (ii) incorporated. A VCC cannot be established with both types of cells. A segregated cell will not have a separate legal personality from the VCC, and all segregated cells (and the VCC) shall together form a single body corporate. By contrast, each incorporated cell shall be a standalone body corporate, distinct from every other incorporated cell and from the VCC itself, with each incorporated cell also having its own set of articles of association. It should be noted that, in either case, the VCC will not itself own shares in an incorporated cell and accordingly there shall be no parent/subsidiary relationship.

 

Whether a VCC is established with segregated cells or incorporated cells will depend on the investment (and other) objectives of the VCC. While segregated cells are anticipated to be simpler, more cost-efficient and to entail less administrative burden, incorporated cells are expected to be more easily “detached” from the VCC structure, making them the preferred option where there is a high likelihood of a future restructuring.

 

Flexible Share Capital

 

The share capital of a VCC is proposed to be equal to its net asset value (NAV). Accordingly, the share capital of a VCC shall be variable and expand or contract in line with the NAV of the VCC. This is in contrast to a traditional fixed capital company whose share capital is equal to the nominal value of each share multiplied by the number of shares issued. The payment of distributions to shareholders is also tied to NAV, allowing more flexibility when compared to fixed capital companies which permit such payments to be made from realised profits only.

 

VCCs are also expected to be simpler from a corporate governance perspective. The issuance and buyback of shares and the payment of distributions can all be authorised by the board of directors, negating the usual requirement for shareholder approval.

 

Other Key Features

 

> Qualifying requirements: the VCC and all of its cells must satisfy the DIFC Registrar of Companies (the Registrar) that either it is: (i) proposed to be controlled by GCC Persons, Authorised Firms or DIFC Registered Persons; (ii) is being established to hold GCC Registerable Assets; or (iii) is being established for a Qualifying Purpose. Examples of Qualifying Purposes include aviation, crowdfunding, intellectual property, maritime structures and so called “Secondaries Structures”, which have been newly introduced by the VCC Regulations as a Qualifying Purpose and are defined as: “a corporate structure established for the purpose of facilitating the transfer of investment assets, partnership interests or Securities from primary investors to secondary investors or for any subsequent transfer”;

 

> Share register: A VCC must keep a share register in respect of itself and each cell. A VCC may appoint a “Register Keeper” which must be a corporate service provider or someone approved by the Registrar as suitably experienced;

 

> Duties and liabilities of officers: the usual directors’ duties under DIFC Law 5 of 2018 shall apply to a VCC and directors of any incorporated cells, with additional duties particular to the unique legal and structural nature of a VCC.

 

Conclusion

 

Following an initial public consultation period, the deadline for providing feedback on the draft VCC Regulations passed on 24 July 2025. The DIFCA is now in the process of reviewing the comments received and considering if any further refinements are required to the draft regulations. Upon their enactment, the VCC Regulations promise to offer a versatile structure that will appeal to investors in the DIFC and the wider GCC region. ■

UAE Increases Regulation of Influencers and Finfluencers: New Rules for Violations and Penalties of Media Content

The influencer and digital content creation industry has witnessed significant growth in the UAE, prompting the introduction of new regulations by UAE authorities. A key piece of legislation in this space is the Media Law (Federal Decree-Law 55/2023), which came into force on 1 December 2023, and its implementing regulations (Cabinet Resolution 68 of 2024), which expand the legal framework beyond traditional media to include content creators, influencers, advertising agencies, and digital platforms. To supplement the Media Law, two new regulations have been issued recently: (i) Cabinet Decision 41/2025 updating the fee structure for media services; and (ii) Cabinet Decision 42/2025 establishing the list of violations and penalties for breaches of the Media Law, both of which came into effect on 29 May 2025.

 

This represents a wider move by the regulators to push for structure and accountability across digital content creation platforms, including the recent regulation of “finfluencers” (i.e., financial influencers) by the Securities and Commodities Authority (SCA) under Decision 10/RM/2025.

 

This inBrief focuses on media content violations and penalties, and the regulation of “finfluencers.”

 

Media Content Violations and Penalties under Cabinet Decision 42 of 2025

 

Notably, this decision applies not only to content creators based in the UAE but to all individuals and entities engaged in media activities across both mainland UAE and its free zones. This includes content creators on social media platforms, influencers, and advertisers. The decision outlines the violations of the Media Law and corresponding penalties across two schedules:

 

1. Schedule 1 targets violations related to the licensing of media activities. For example, advertising without a permit, providing false or misleading information to obtain a license or permit, and violating the conditions of advertising content through social media platforms. Penalties for violations under Schedule 1 range from written warnings to fines up to AED 100,000, with higher penalties applicable for repeat offences.

 

2. Schedule 2 targets a wider list of violations of the “media content standards.” Those violations are classified into three categories and are ranked by severity from first to fourth degree.

 

(i) Category (a): covers eight violations with penalties ranging from AED 30,000 to AED 1,000,000, which include:

 

– disrespecting God, Islam or other religions, the UAE’s regime, its institutions and policies;

 

– publishing content that may harm the foreign relations of the UAE;

 

– publishing content that offends the UAE’s national unity, including the UAE’s legal, economic and judiciary systems; and

 

– inciting sectarian or regional strife, violence, hatred and terrorist acts, or spreading discord and animosity within society.

 

(ii) Category (b): covers five violations with penalties ranging from AED 20,000 to AED 150,000, which includes, among others:

 

– disrespecting the UAE’s culture and heritage, offending community values, or infringing on the privacy and private life of individuals;

 

– publishing content that incites the commission of crimes, including rape, murder, and use of narcotic drugs; and

 

– publishing content that offends the UAE’s national currency or economic status.

 

(iii) Category (c): covers seven violations with penalties ranging from AED 5,000 to AED 100,000, including:

 

– broadcasting, publishing or sharing fake news or rumours, or content/opinions that breach public morals, corrupt the morals of the youth or promote destructive thoughts;

 

– failing to host appropriate individuals for interviews in media outlets;

 

– disrespecting the UAE’s culture, identity or values in advertisements; and

 

– failing to adhere to the age classification requirements for artistic works, and respect children’s rights under UAE legislation.

 

New Committee for Content Oversight

 

A permanent ‘Committee for the Violations of the Media Content Standards’ (the Committee) has been established under the UAE Media Council to oversee and assess violations and penalties. The Committee is responsible for identifying violations of media content standards within the UAE and for enforcing the administrative penalties. Content creators, influencers, or advertisers will be formally notified by the Committee of any violation, and will be given a timeframe to modify or remove the offending content.

 

For violations listed in Schedule 2, the Committee will take into account the impact of the violation when determining the severity of the penalty. A mechanism is available to contest the penalties imposed by the Committee, which may be filed with the UAE Media Council or the competent authority (i.e., local government entity concerned with the licensing of media activities).

 

Regulation of Finfluencers under the SCA Decision 10/RM/2025 (SCA Decision)

 

In parallel, the SCA issued a decision for the regulation of finfluencers’ activities, which came into effect on 21 May 2025. The regulations mandate that finfluencers must register with the SCA before advertising for or conducting any of the financial activities which are covered by the regulations, subject to the conditions outlined under Article 3, which include, among others: to be an independent financial analyst accredited by the SCA, or to hold a CFA certificate and to be an influencer among market traders subject to a specific criterion set out under Article 3(2). Engaging in activities that fall within the scope of the regulations without registration may result in fines or blacklisting by the SCA.

 

The regulations apply to any person registered with the SCA in mainland UAE who provides a financial recommendation to the public, related to domestic or foreign issuers[1], financial products, virtual assets, or financial services inside or outside the UAE. The regulations also apply to issuers and entities licensed by the SCA if they enter into a contract with a finfluencer.

 

In addition to obtaining registration with the SCA, finfluencers’ obligations include disclosure of financial interests and paid partnerships, avoiding misleading or biased content, and distinguishing between facts, opinions, and promotional material. Issuers of financial products and licensed entities are also under an obligation to vet any such content before publication by a finfluencer. The regulations do not apply to the publication of information previously approved by the SCA or persons providing financial recommendations within a UAE financial free zone.

 

Why this matters to content creators, influencers and finfluencers?

 

The message is clear. The UAE expects greater professionalism and accountability from digital content creators as well as finfluencers. These recent changes not only broaden the applicability of the regulations to include digital platforms, social media content creation, and advertising agencies, but also impose strict guidelines and penalties for non-compliance. Influencers, finfluencers, marketing and advertisement teams and digital platforms should seek legal guidance regarding their exposure to liability under the newly implemented regulations. With regulators monitoring and overseeing what is said and how it is said, compliance with applicable regulations is the strongest safeguard. ■

 

[1] Article 1 of the SCA Decision, defines an ‘Issuer’ as “a legal person established inside or outside the State, or within a financial free zone in the State, that offers, issues, or lists financial products within the State or on the market.”

Dubai Executive Council Resolution No. 11 of 2025: Expanding Free Zone Opportunities

The Dubai Government has introduced Dubai Executive Council Resolution No. 11 of 2025 (Resolution), marking a significant advancement aimed at enhancing economic growth and offering greater business flexibility for Dubai free zone entities (Entities). The Resolution offers new opportunities for Entities to operate in mainland Dubai subject to meeting certain regulatory requirements.

 

Scope of the Resolution

 

The Resolution applies to all Entities that intend to conduct business activities outside of their respective free zone on Dubai’s mainland, except for financial institutions licensed by the Dubai International Financial Centre.

 

Prior to the introduction of the Resolution, Entities were only permitted to conduct their business from within the boundaries of their relevant free zone. Entities whose business required them to operate onshore in Dubai were therefore necessitated to contract with a third-party agent, register a branch or incorporate a separate onshore presence. Of course, the establishment of an onshore branch or company came with additional compliance requirements, the expense of maintaining premises within the Emirate of Dubai and also capital requirements (in the case of an onshore company).

 

Under the Resolution, Entities may apply to the Dubai Department of Economy and Tourism (DET) for one of three types of licence/permit:

 

License Type

Requirements

Fees (AED)

Validity of License

Branch of an entity

Existing requirements to register an onshore branch to be followed.

As per existing requirements

One year

Branch of an Entity with its headquarters in the relevant free zone.

- Submission of the required documentation of the Entity to the DET.

- Approval of the DET.

- Approval of any other relevant UAE authority which regulates the activities of the Entity.

10,000

One year

Temporary permit for the Entity to practice certain activities onshore in Dubai

- Submission of the required documentation of the Entity to the DET.

- Approval of the DET.

- Approval of any other relevant UAE authority which regulates the activities of the Entity.

5,000

Six months

 

Additional Considerations

 

– The Resolution mandates that the DET, in collaboration with the relevant licensing authorities, shall publish a list of the economic activities that an Entity may carry out onshore in Dubai within six months from the effective date of the Resolution (i.e. by 3 September 2025). The economic activities will depend on which of the three licence options (see above) an Entity applies for.

 

– Any Entity that wishes to operate onshore in Dubai must comply with the relevant federal and local rules and regulations for the activity it wishes to practice. Consequently, Entities will need to ensure that they keep abreast of legislation and developments applicable to it both within the relevant free zone and onshore in Dubai.

 

– Under the Resolution, Entities which are permitted to operate in mainland Dubai must maintain separate financial records for their operations conducted in mainland Dubai. This also links into the tax treatment of these arrangements as it implies that the standard 9% corporate tax rate will apply in respect of the onshore business of the Entity (unless the income is otherwise exempt). This is in comparison to the 0% corporate tax rate offered to qualifying Dubai free zone companies on qualifying income.

 

– The Resolution sets out a one-year transitional period during which Entities currently operating outside of their free zone in the Emirate of Dubai must comply with the provisions of the Resolution.

 

Strategic Advantages

 

– Direct engagement in government contracts and onshore business activities without intermediary involvement.

 

– Reduced administrative overhead and financial burden associated with setting up a separate mainland entity.

 

– Enhanced market accessibility, fostering direct relationships with consumers and business partners.

 

The Resolution is expected to promote economic growth and business flexibility in Dubai. Entities should evaluate their current corporate structure in light of this Resolution to ensure that they capitalise upon the advantages of now being able to operate onshore in Dubai from a Dubai free zone in a more flexible manner. ■

Ministerial Decision on Registration of Branches and Representative Offices of Foreign Companies

On 30 July 2024, the UAE Ministry of Economy (Ministry) issued Ministerial Resolution No 138 of 2024 on the Controls and Procedures for Registering Branches and Representative Offices of Foreign Companies (the Decision). The Decision abrogated and replaced the earlier Ministerial Resolution No 377 of 2010.

 

The Decision provides detailed process and guidelines on the registration of branches (Branch) and representative offices (Office) of foreign companies in the UAE. All applications for registration, renewal of registration, amendment of registration, suspension of registration, deletion of registration or re-registration of a Branch or an Office must be filed through an online electronic platform on the Ministry’s website.

 

One of the key changes under the Decision is that the requirement to submit to the Ministry (at the time of establishment of the Branch/Office) a bank guarantee of AED 50,000 issued by a bank licensed in the UAE has been removed. Under the old Ministerial Resolution No 377 of 2010, an entity (eg: foreign entity or a free zone entity) establishing a branch in mainland UAE was required to provide a bank guarantee for an amount of AED 50,000 during the process of establishment of the Branch/Office. Now, a bank guarantee of AED 50,000 is not required to be submitted to the Ministry. Existing branches who had submitted bank guarantees at the time of their registration should contact their banks for cancellation of the bank guarantees.

 

Additionally, the key provisions under the Decision are as follows:

 

(1) Licensing requirement: A foreign company shall conduct its business from the UAE only after obtaining a license from the local authority in the Emirate (Authority) and after obtaining the Ministry’s approval. The foreign company must license and register each additional Branch or Office in the UAE.

 

(2) Registration process: The foreign company must obtain an initial approval from the Ministry prior to obtaining the license from the Authority. The initial approval from the Ministry shall be valid for a period of eight months. After obtaining initial approval from the Ministry, the foreign company must obtain the license from the Authority as per the procedures prescribed by the Authority. Upon receiving the license from the Authority, the foreign company must file an application with the Ministry and obtain a certificate of registration within one month from the date of issuance of the license by the Authority. The certificate of registration shall be valid for a period of one year. Failure to complete the registration with the Ministry within one month from the date of issuance of the license by the Authority may attract penalties.

 

(3) Authentication of documents: All documents required to be submitted to the Ministry on the online electronic platform must be duly certified and authenticated. Generally, this process involves attestation up to the level of the UAE Embassy in the relevant foreign jurisdiction, followed by attestation by the Ministry of Foreign Affairs in the UAE. Further, the documents are required to be translated into Arabic and attested by the Ministry of Justice. This process sometimes causes delays for foreign companies as certification and authentication of documents can take up to four to five weeks in certain jurisdictions. However, under the Decision, the Ministry may now accept temporary registration applications for documents that have not yet completed certification and authentication, with a maximum grace period of three months to complete the authentication process. Failure to do so shall result in cancellation and deletion of the application.

 

(4) Appointment of Auditor: Every Branch must appoint an auditor licensed to practise in the UAE. The auditor shall be appointed for a period of one year, renewable by a decision of the foreign company, so long as the renewal / term does not exceed six consecutive financial years. In such case, the partner in charge of auditing the Branch must be changed after three financial years. The auditor may be re-appointed after at least two financial years from the end of its previous term.

 

(5) Renewal of registration: A Branch or Office must renew its registration within one month prior to the expiry of its registration. At the time of renewal of the registration, in addition to the copy of the Branch or Office license, a certificate of incumbency/extract of commercial register of the foreign company and the audited financial accounts of the Branch and/or Office are required to be submitted to the Ministry. While the Decision does not specifically state that an Office is also required to appoint an auditor, as per the Decision, the audited financial accounts of an Office are required to be submitted for renewal of registration of an Office with the Ministry.

 

(6) Data of foreign companies: Data of foreign companies that have established Branches or Offices in the UAE can be obtained through the online electronic platform. A certificate containing details such as name of the foreign company, nationality of the foreign company, name of manager, activities of the foreign company, number of Branches of the foreign company (including date of registration and expiry) shall be issued to the applicant. However, as of now, only details such as the name of the Branch (in English and Arabic); registration number; registration date; and status of the Branch is publicly available (without payment of a fee). ■

Agents, dealers and service providers beware: UAE regulators to focus on DNFBP’s

Speaking at a recent conference in Dubai, representatives of several of the UAE’s regulatory authorities indicated that they will be significantly increasing their focus on the so-called Designated Non-Financial Business or Profession (DNFBP) sector. Senior members of the Dubai Financial Service Authority (DFSA), the UAE Ministry of Economy, the Securities and Commodities (SCA) and the Abu Dhabi Global Market Financial Services Regulatory Authority (FSRA) were unanimous in their commitment to cracking down on perceived weaknesses in the DNFBP sector, particularly in the context of anti-money laundering (AML) compliance.

 

The UAE is perhaps unusual in the number and variety of regulatory organisations with similar or overlapping remits, and businesses operating in the UAE are required to familiarise themselves with a number of different obligations, depending on where they fall in the regulatory mix. The precise definition of DNFBP therefore varies across the UAE, but broadly captures the following:

 

– Real estate agents;

 

– Dealers in precious metals and/or stones;

 

– Issuers and service providers in the field of virtual assets (crypto, tokens etc);

 

– Legal businesses, including notaries;

 

– Accounting, audit and insolvency firms; and

 

– Corporate service providers.

 

Anyone active in any of the above businesses in the UAE should be aware of their ongoing registration and reporting obligations. This includes all anti-money laundering (AML), Know Your Customers (KYC) and counter terrorist financing (CTF) obligations. The UAE regulators, not unreasonably, consider the DNFBP sector to be particular vulnerable to exploitation by both criminals and terrorist financiers.

 

Companies active in the UAE in any of the above businesses should ensure that they are properly registered where required as a DNFBP, and that their compliance policies and procedures adequately reflect their current obligations. The UAE regulators have expressly stated that they will be taking enforcement action in the sector in the coming months and years. Afridi & Angell can advise and assist in this area. ■

The new DIFC prescribed company regulations

The Dubai International Financial Centre (DIFC) has introduced the DIFC Prescribed Company Regulations 2024 (the 2024 Regulations), replacing the DIFC Prescribed Company Regulations 2019 (as amended in 2020 and 2022) (together the Former Regulations). The 2024 Regulations came into effect on 15 July 2024 and expand the range of applicants eligible to incorporate a so called “prescribed company” in the DIFC.

 

Evolution of eligibility criteria

 

Under the Former Regulations, the following could establish a prescribed company in the DIFC:

 

1.) Qualifying Applicants: entities that could demonstrate an existing nexus to the DIFC, such as already being registered within the DIFC or affiliated with a DIFC-registered entity, or meeting specific criteria (e.g., being an ‘Authorised Firm’ or a ‘Government Entity’).

 

2.) Qualifying Purpose Applicants: applicants engaged in specific activities such as ‘Structured Financing,’ ‘Aviation,’ or ‘Crowdfunding Structures’.

 

Key changes

 

Expanded eligibility

 

The 2024 Regulations require that an applicant wishing to incorporate or continue a prescribed company in the DIFC must satisfy the DIFC Registrar of Companies of one of the following criteria:

 

1.) the prescribed company is controlled by:

 

GCC Persons: individuals who are citizens of a GCC member state, bodies corporate controlled by citizens of a GCC member state, entities with securities listed on a GCC exchange, and so called ‘Government Entities’;

 

Registered Persons: a body corporate incorporated, registered, or continued within the DIFC, excluding prescribed companies and non-profit organisations incorporated or continued within the DIFC; or

 

Authorised Firms: any person holding a license granted by the Dubai Financial Services Authority or by a recognised financial regulator within the UAE or certain other jurisdictions.

 

2.) the prescribed company is established or continued in the DIFC for the purpose of holding legal title to, or controlling, one or more GCC Registrable Assets[1].

 

3.) the proposed prescribed company is established or continued in the DIFC for a Qualifying Purpose[2].

 

4.) the prescribed company established or continued in the DIFC has a director who is an employee of a “Corporate Service Provider[3]” and that Corporate Service Provider has an arrangement with the DIFC Registrar of Companies in accordance with Regulation 3.3.2 of the 2024 Regulations.

 

Employment restriction

 

The 2024 Regulations have introduced an express prohibition on a prescribed company employing staff. This restriction does not extend to the appointment of directors.

 

Conclusion

 

The 2024 Regulations mark a significant shift in the DIFC regulatory landscape, making it more inclusive and flexible for a wider range of applicants and purposes. We anticipate that the 2024 Regulations will make the DIFC prescribed company more attractive for use in corporate structuring. ■

 

 

 

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[1] A GCC Registrable Asset is defined in the 2024 Regulations as: an asset or property interest that must registered with a GCC Authority to establish legal ownership, secure rights, or encumbrances against it, and to provide public notice of such interests, including: (a) land and real property; (b) shares in companies; (c) partnership interests; (d) intellectual property; and (e) aircraft and Maritime Vessels.

 

[2] A Qualifying Purpose is defined in the 2024 Regulations as being any of the following: (a) an “Aviation Structure”; (b) a “Crowdfunding Structure”; (c) an “Intellectual Property Structure”; (d) a “Maritime Structure”; (e) a “Structured Financing.

 

[3] A Corporate Service Provider is defined in the 2024 Regulations as: a person registered with the DFSA as a Designated Non-Financial Business or Professional that undertakes corporate services business in the DIFC.