UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for January 28, 2010

Frequently Asked Questions About Dubai Company Formation

FAQ’s published by the Department of Economic Development, Dubai, UAE:

  1. What are the licenses that require a local services agent?  All licenses of professional activities, whether for sole establishments or companies, which are not owned or subscribed to by a United Arab Emirates national require a local services agent except the following activities: engineering consultancy, legal consultancy, bank representation office.
  2. For how long will an initial approval be valid?  An initial approval will be valid for a period of 6 months from the date of issuance and it can be renewed ten days prior to the date of expiry.
  3. Can a Jebel Ali Free Zone Establishment Open a branch in the Emirate of Dubai?  A free zone establishment can only open a representation office in the Emirate.  Functions of such an office shall be restricted to promoting a company’s products, services or business, or to facilitating trading contracts between a company and its clients.  Such an office shall not be allowed to operate any commercial business or to conclude any commercial deals by itself.
  4. Can a Foreign Company’s branch existing  in the Jebel Ali Free Zone open a branch in the Emirate of Dubai?  A branch existing in the Free Zone can only obtain a license for a representation office in the Emirate of Dubai.  In order to open a new branch, it is required that the main company in the country of origin submits an application for a license.  Hence a new branch shall directly belong to the main company and not to the branch existing in the Free Zone.
  5. What is the maximum number of activities which can be included in one single license?  A license can include a maximum number of ten activities, provided however that they are all homogeneous. 
  6. Is it required to be a resident of the UAE in case of being an owner of a sole establishment or a partner in a license?  An owner of a trading individual establishment, who is a GCCC national, or a partner in a commercial company, who holds any other nationality, shall not be required to be resident of the UAE.  However, an owner of a professional sole establishment shall be required to carry on the activity in person, and this can be achieved by residing in the UAE.
  7. What are the requirements for opening a branch of an LLC existing in another Emirate?  Submit the following documents:  Board of Director’s decision of opening a branch and authorizing a manager-in-charge; a copy of the main company’s license; copies of all partner’s passports and of national registration cards of partners who are UAE nationals; Approval by the respective government authorities concerning the required activities; a copy of a lease of the premises at which the activity will be operated. 
  8. Is it possible to open a branch for an establishment existing in another Emirate?  A branch cannot be opened for an establishment, but only for other commercial companies.
  9. How many licenses can  be issued for the same premises?  More than one license can be issued for the same premises, provided that the requirements of the Department’s commercial Inspection Section and of Dubai Municipality’s Planning Department are fulfilled.
  10. What are the requirements of renewing a trade license?  The trade license or copy of it; photocopy of tenancy contract; details of employees accommodations (only for the licenses that include non-local partners); approval by the respective government authorities concerning the activity if necessary. 
  11. What are the requirements for an assignment of a license?   Documents required for the initial approval: Original license; typed registration and licensing application form; photocopy of buyer’s passport and UAE naturalization identification (for those without any previous licenses).  Documents required for final approval: All documents required for the initial approval; sale contract  duly authenticated by the Notary Public; The contract of appointment of local services agent duly authenticated by the Notary Public; Approval of the respective government authorities concerning the activity if necessary.
  12. What are the documents required to be presented by a liquidator?  Copies of the professional license; the registration certificate issued by the Ministry of Economy and Commerce, and a notarized signature. 
  13. What are the procedures involved in cancellation of all kinds of establishments?  The Department’s application form shall be signed and the license as well as a letter issued by the Ministry of Labor on cancellation and a letter indicating evacuation of the office or shop premises shall be submitted.
  14. What are the procedures involved in cancellation of a foreign company’s branch, whether registered or not registered with the Ministry of Economy and Commerce?  If a foreign company’s branch is registered, letters of cancellation issued by the Ministry of Economy and Commerce, the parent company and the Ministry of Labor and Social Affairs shall be submitted.  If it is not registered, then the Board of Directors resolution from the main company shall be submitted and a letter for the Ministry of Labor and Social Affairs.
  15. What are the procedures involved in cancellation of a company’s branch existing in another Emirate?  The same procedures involved in cancellation of establishments shall apply, whether it existed in another Emirate or the same Emirate.
  16. What are the services offered by the Department’s Commercial Permits Section?  This section issues permits of promotional campaigns, advertising signboards, exhibitions, conferences, and other additional activities in relation to a license.
  17. Is it allowed to conduct business at another additional office of the license without a permit?  Conducting business at an additional office is allowed after submitting a copy of the additional office’s lease and a copy of the trade license provided that the office exists at the same building of the main license.

Civil Courts in the UAE

Civil Courts, Extract from ‘Practical Guide to Litigation and Arbitration in the United Arab Emirates’ by Essam Al Tamimi, p. 9-12:

‘The courts in the UAE are constitutionally divided into the Federal court, which is supervised by the Federal Ministry of Justice and the local court, which currently only exists in the Emirates of Dubai and Ras Al Khaimah and which are supervised by the Judicial Authority in those Emirates.

Both branches are, however, governed to a large extent by the same law and procedure.  There are minor differences in procedure, for instance, the court fees in the Emirates of Dubai and Ras al Khaimah differ.  The substantive law may also differ because the local courts will apply local laws in addition to Federal Laws to the extent to which they are not in conflict with the Federal laws.  In the event of conflict, the Federal Laws prevail.  Both the Federal and local courts are divided into three main courts: the civil courts, the criminal courts, and the Sharia’h courts (Islamic court).

The UAE courts adjudicate civil matters in accordance with the Federal Law No. 11 of 1992 issuing the Law of the Civil Procedure. 

The civil courts in the UAE deal with civil matters of any nature including private suites, debt recovery, banking, maritime, bankruptcy, intellectual property, company, and insurance matters.  Any action with a claim of AED 100,000 or more will be heard before a bench of three Judges.  A claim amounting to less than AED 100,000.00 will be heard by one Judge.  Where the court consists of three Judges, judgment may be delivered by majority or unanimously.

Most of the arguments presented to the court are by way of written submissions or ‘memoranda’ and it is usual for a case to be adjourned several times while the parties exchange pleadings and documentation before the matter is reserved for judgment.  The civil courts may, upon the request of either party, call witnesses or refer the matter to an expert for an expert opinion on a factual or technical matter.

Any judgment delivered by a civil court is subject to the right of appeal to the court of appeal within 30 days calculated from the date following the day of judgment.  The civil court of appeal consists of three Judges and judgments of the civil court of appeal may be delivered by majority or unanimously.  The grounds of appeal can be based on either factual or legal matters and either party may submit further evidence or submit a request to hear witnesses to the civil court of appeal.  While arguments may be made orally, arguments are usually made to the court of appeal by written submissions.

Federal judgments delivered by the Federal Courts of Appeal (Abu Dhabi, Sharjah, Fujairah, Ajman, and Umm al Quwain) are subject to an appeal to the Supreme Court of Cassation based in Abu Dhabi.  Judgment delivered by the Dubai Court of Appeal are subject to an appeal to the Dubai Court of Cassation, there is no Court of Cassation in Ras Al Khaimah.  This right of appeal is automatic if the claim amounts to more than AED 10,000.00, if not, the leave of the court is required.  The grounds of appeal to the Supreme Court of Cassation and the Dubai Court of Cassation may only be based upon matters of law.  Generally the submission of further documents or evidence into court is not permitted, however, in very exceptional circumstances, the Court of Cassation may grant the parties leave to submit specific documents.’

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance