UAE new laws: Largest legislative reform in its history

His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, has approved a wide-ranging reform of the country’s legal system, which aims to strengthen economic, investment and commercial opportunities, in addition to maximizing social stability, security and ensuring the rights of both individuals and institutions.

The draft of new laws and legislative amendments came during the "Year of the 50th" and are intended to keep pace with the developmental achievements of the UAE and reflect the country’s future aspirations.

Over 40 laws are included in the changes, which together represent the largest legal reform in the young nation’s 50-year history.

The amendments aim to develop the legislative structure in various sectors, including investment, trade and industry, as well as commercial company, regulation and protection of industrial property, copyright, trademarks, commercial register, electronic transactions, trust services, factoring, and residency, in addition to laws related to society and personal security including as the Crime and Punishment Law, the Online Security Law, and a laws regulating the production, sale and use of narcotics and psychotropic substances.

The new legislative changes came after intensive coordination at both the local and federal levels, where teams comprising 540 specialists and experts from 50 federal and local authorities have worked together over the past five months in consultation with over 100 private sector organisations in order to reflect global best practice in the new legal provisions.

Electronic Transactions and Trust Services

The amendments to the Law on Electronic Transactions and Trust Services aim to keep pace with technological development and enhance ongoing digital transformation.

The law gives digital signatures the same weight as a handwritten signature, a step that obviates the need for personal presence in order to seal transactions and supporting the globally-based completion of government transactions such as contracts and agreements using a digital signature, provided that the country where the transaction originates has adopted sophisticated authentication mechanism and trust services similar to the UAE standards.

The Law of Electronic Transactions and Trust Services facilitates a wide range of civil and commercial transactions, including marriage, personal status, notary and real estate services such as renting, buying, selling and amending contracts.

Industrial property rights

The law aims to protect industrial property and regulate the procedures for its registration, use, exploitation, and assignment, to ensure support for knowledge and innovation and to enhance the UAE’s competitiveness in the field of industrial property rights while adopting best international practices and standards.

The UAE industrial property rights law is dedicated to patents, industrial designs, integrated circuits, non-disclosure agreements and utility certificates. It applies across the UAE (including free zones). The law is concerned with applications and details surrounding the eligibility for patents and utility certificates and provides details about the conditions for granting patents.

The law includes sections on compulsory licenses, addressing the rights of the license holder, the multiplicity of compulsory licenses, and the exception to the conditions of compulsory licensing by the court.

Copyrights and Neighbouring Rights

The amendments of the federal law concerning copyrights and neighboring rights maximizes the contribution of creative industries in the UAE economy and provide protection to authors of the works and the holders of the neighboring rights, in case an aggression against their rights occurs.

The amendments offer special benefits for people of determination in order to enhance their benefit and participation in this vital sector. The law covers all substantive issues pertaining to author’s rights and neighboring rights, including the right to determine first publication of the work, the right of writing the work in his name and the right to protest against alteration of the work if the alteration leads to distortion of the author’s intent.

Trade Marks

The federal law concerning Trade Marks was amended with the aim of expanding the scope of protection. The amendments offer protection to three-dimensional trademarks, holograms, sound trademarks such as musical tones associated with a company and that distinguish its products, and smell trademarks such as creating a distinctive scent for the company or brand.

The updates also include registering geographical names of trademarks or products whose name is associated with the names of specific geographic regions, countries or cities and are famous for producing this product, in order to enhance the UAE position in promoting its famous products like dates.

Among the changes is the abolition of the requirement to have a trade license to allow the registration of a trademark, and granting SME owners a temporary protection to protect the trademark of their products during participation in exhibitions.

Commercial Register

The Commercial Register Law has been amended allowing local authorities in each emirate to retain the right to establish and manage their commercial records, including registration, data monitoring and change.

A clearer scope for applying the law was also defined to include the registration of companies and economic institutions in all forms, whether commercial (companies) or professional, such as law firms, accountants, and others, to ensure the comprehensiveness of the data contained in the commercial registry for all economic establishments in the UAE.

The commercial register is an official log held by the Ministry of Economy containing details of all businesses operating in the UAE.

Factoring and Transfer of Civil Accounts Receivable

The law is the first federal regulation in the United Arab Emirates dealing specifically with factoring and the assignment of receivables, it provides a new regulatory framework which sets out the legal requirements for assignments and transfers of receivables, validity and perfection requirements, as well as the rules for determining priority amongst competing claims over assigned receivables.

Factoring, a financing arrangement that enables a business to sell its receivables, aims at further supporting the business environment and SME’s. Factoring is a type of financial transaction in which a business sells its invoices to a factoring company.

The law organizes factoring legal requirements including the assignment of receivables and perfection. The new law applies broadly to any assignment of receivables made as part of commercial or civil transactions.

Commercial Companies

The law allows investors and entrepreneurs to establish and fully own onshore companies in all sectors, excluding a small number of reserved "strategic activities". The amendment aims at boosting the country’s competitive advantage as a part of a wider UAE government agenda to economic diversification towards an innovation-led and knowledge-based economy.

The new Commercial Companies Law aims to increase foreign direct investment (FDI) and reaffirms the UAE’s standing as a leading business hub regionally and globally.

The law was issued to introduce certain amendments concerning Commercial Companies: it specifies the companies that are exempted from the provisions thereof, as well as corporate governance and strategic activities.

The law further details the approvals and licenses required by companies in order to undertake commercial activities within the UAE; in addition to the company’s name, contract, incorporation procedures, and conditions for increasing and decreasing the capital.

The law also clarifies the responsibilities of the board of directors, executive management, the authorities of the general assembly, the prerequisites for issuing bonds and instruments, acquisitions and the administrative penalties imposed on a person deemed to be in breach of its provisions.

Higher Education Law

The law aims to regulate the licensing of higher education institutions in the UAE, it sets the legislative framework to approve curricula, ensure effective governance and management of higher education institutions, improve the quality and competitiveness of higher education in the country, and encourage scientific research in educational institutions.

Provisions of the law apply to all higher education institutions in the country, with the exception of those operating in free zones, the law covers all levels of higher education, including diploma, higher diploma, bachelor, postgraduate diploma, master degree and doctorate.

As per the law, the Ministry of Education is tasked with licensing and accreditation of all higher education institutions, in addition to evaluating performance, quality of educational outputs, classification and monitoring.

Crime and Punishment Law

The UAE has ratified a new and updated Federal Crime and Punishment Law, a move intended to further develop and refine the legislative system of the United Arab Emirates.

The new legislation offers enhanced protections for women and domestic servants, strengthens public safety and security provisions and eases restrictions on extra-marital relationships and it will be fully enacted starting from January 2nd, 2022.

The office, which will be affiliated with the Cabinet, is responsible for a wide range of tasks that include proposing and preparing policies and legislations related to data protection, proposing and approving the standards for monitoring the application of federal legislation regulating this field, preparing and approving systems for complaints and grievances, and issuing the necessary guidelines and instructions for the implementation of data protection legislations.