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MS expands executive search services to meet the Gulf’s growing leadership demand 

Executive Search Launch

The leading CSP in the region can now provide services to private clients, corporates and institutions to foster growth and innovation in the Gulf region 

Dubai, 11 October 2024: UAE’s Premier Corporate and professional services provider MS has recently expanded its Executive Search portfolio to the wider Gulf region. This announcement stemmed from their extensive search expertise across the premier jurisdictions in the UAE – DIFC, ADGM & DMCC – in domains including Compliance, Finance, and Tax. 

With over 7 years of expertise in the region, MS has been assisting their clients and partners in finding leaders who not only meet their needs but genuinely connect with their vision. This expansion empowers MS to deliver executive search services for C-suite and senior-level roles, supporting private clients, corporates, and institutions looking to build a robust presence in the Gulf region. 

Mohammed Shafeek, Founder and Group CEO of MS, said,

“As a homegrown solutions provider in the UAE, we’ve always maintained a client-first, value-driven approach. Drawing from our strong legacy of operational excellence across the region, our search solutions enable clients to navigate the talent market strategically ensuring every hire is an informed, precise decision that aligns with their business objectives. This expansion reflects our proactive commitment to meeting the evolving needs of our clients and the shifting dynamics of the market. With Mr. Akhil and his team, we’re enhancing MS’s results-driven approach by seamlessly integrating search capabilities to deliver even greater value for our clients.”.  

The region has an active, accessible, leadership talent pool of professionals holding C-suite positions. The leadership team at MS leverages extensive experience and operational excellence to deliver effective executive search solutions. Their deep market understanding enables them to identify and connect clients with top-tier leaders who inspire and drive organizational success. 

Akhil Vijayan, Lead- Executive search at MS, stated that

“As the market is ever growing in recent times, talents are flowing in from all over the world, we would want to groom the talents and match with the client’s requirements. With a human-centric approach to headhunting, our team at MS will guide you through the evolving regulatory landscape in the region”.  

About MS 

MS is a corporate and professional service provider that brings together a team of multidisciplinary professionals to offer expertise in corporate, compliance, advisory, tax accounting services and executive search services to the private and international clients. With over 50+ experts and professionals serving across 4 offices which includes the significant presence at the prominent jurisdictions of the UAE, MS drives private clients, corporates, and institutions to take bold actions that stimulate growth and expedite results in the Gulf. 

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MS gains DIFC Corporate Service Provider License, inaugurates new office space

MS, Company Service Provider License, announcement, in, DIFC, Dubai

Dubai, 29 August 2024 – MS Corporate Services (DIFC) Limited is proud to announce the successful acquisition of a Corporate Service Provider license and the establishment of its physical presence in the Dubai International Financial Centre (DIFC). With this, MS can offer a broad range of services to the local and international clients within the DIFC jurisdiction.

With over seven years of exceptional service in the UAE, MS has evolved from its humble beginnings in Abu Dhabi to strategically expanding its presence with key offices in ADGM, DMCC, and now DIFC. The success of their initial office in Dubai, located in DMCC—a vital hub for MS’s diverse service offerings—has paved the way for the opening of their second Dubai office in this premiere financial centre. This expansion not only reflects MS’s commitment to addressing the needs of the emirates, but also significantly enhances the capacity to serve the financial services sector across the broader Middle East, Africa, and South Asia (MEASA) markets.

By leveraging the strategic advantages of both ADGM and DIFC, MS is well-positioned to deliver tailored solutions and exceptional service to the regional and international clients. The newly acquired DIFC license marks a significant milestone in MS Group’s journey, allowing them to substantially broaden their service offerings. Building on their established expertise in company incorporation, compliance advisory, tax, and accounting services, MS is now positioned to provide comprehensive support in the establishment of prescribed companies, family offices, and foundations. Additionally, the expanded capabilities include offering specialized Company Secretarial Services and Residency services within DIFC. This enhancement of MS’s service portfolio reinforces their commitment to delivering holistic solutions, ensuring that evolving client needs in the UAE and beyond are met.

C A Mohammed Shafeek, Founder & Group CEO, MS, said “Dubai and DIFC are at the forefront of global finance and innovation, making our expansion into DIFC a natural progression in our journey within the UAE. The city’s ‘speed to market’ and relentless drive for innovation have always inspired us, and we are committed to upholding these values with the same agility and responsiveness. As one of the region’s leading financial hubs, DIFC offers a wealth of experience, knowledge, and expertise, which will be instrumental as we enhance our service offerings. Our vision is to establish MS as the premier Corporate Service Provider and Professional Service Provider across the region, and this step forward is a key part of our strategy to expand our presence across all International Financial Centres (IFCs) in the region. We extend our heartfelt thanks to the DIFC authorities for their outstanding support during our journey to establish our presence in the DIFC. We look forward to collaborating closely with DIFC authorities, our clients, and partners, as we contribute to the ongoing success and growth of this vibrant financial ecosystem.”

MS’s Dubai office is at Level 1 Gate Avenue – South Zone, Dubai International Financial Centre (DIFC), Dubai, UAE.

About MS

MS is a corporate and professional service provider that brings together a team of multidisciplinary professionals to offer expertise in corporate, compliance, advisory, tax, and accounting services to private and international clients.

MS operates under the trading names of M S Chartered Accountants LTD (ADGM), M S Global Solutions DMCC and MS Corporate Services (DIFC) Limited.

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What’s New: Proposed Amendments to ADGM Employment Regulations Explained

What’s New: Proposed Amendments to ADGM Employment Regulations Explained

The Abu Dhabi Global Market (ADGM) is poised to update its Employment Regulations, initially enacted in 2019. These regulations were designed to set minimum employment standards, ensure a fair balance between employee and employer rights, and foster effective employment practices within ADGM. Since their inception, the Regulatory Authority (RA) has recognized the need for adjustments to better reflect evolving global work practices and to provide clearer guidance on rights and obligations for both employees and employers.

The RA has recently issued a Consultation Paper inviting public feedback on these amendments to ADGM Employment Regulations. This consultation is crucial for all ADGM-licensed employers, their employees, and prospective employees, as well as their legal advisors.

Here’s a breakdown of the key changes being proposed:

Proposed Amendments to ADGM Employment Regulations

1. Employee Entitlements and Definitions

  • Probationary Period Entitlements: Clarification on employee entitlements during probation.
  • Broadening the Definition of ‘Employee’: Updated to include full-time remote workers and flexible arrangements.
  • Part-Time Employee Definition: Introduction of a new definition and method for calculating entitlements.

2. Working Arrangements

  • Remote and Hybrid Working: Explicit permission for remote and hybrid working arrangements.
  • Simplified Overtime Calculation: Removal of complex overtime calculation methods.

3. Leave Entitlements

  • Enhanced Parental Leave: Additional entitlements for adopting parents and paid paternity leave for adopting fathers.
  • Nursing Breaks for Female Employees: Entitlement to nursing breaks.
  • Bereavement Leave: Leave entitlement for the death of close family members.

4. Employment Duties and Termination

  • Expanded Employee Duties: Broadening the list of employee duties.
  • Termination Due to Unauthorized Absence: Employers’ right to terminate employment for unauthorized absences.
  • Certificate of Experience: Eligibility for a certificate of experience upon employment termination.
  • End of Service Gratuity: Clarity on gratuity payments regardless of the reason for termination.

5. Discrimination and Compensation

  • Discrimination and Victimization: New provisions addressing these issues and vicarious liability.
  • Integration of Compensation Awards Rules: Integration of compensation awards rules into the main regulations.

6. Work Permit and Identity Card Requirements

  • Work Permit and Identity Card: Requirements for obtaining and canceling work permits and identity cards in ADGM.

Next Moves for Proposed Changes to ADGM Employment Regulations

The RA is seeking comments on these proposals by 26 August 2024. Following this, the RA and the ADGM Board of Directors will review the feedback and make any necessary adjustments before finalizing and enacting the updated regulations. These changes are set to enhance employment practices within ADGM, providing clearer guidelines and more equitable entitlements.

Stay tuned for further updates on the proposed changes to ADGM Employment Regulations and if you want to know more about the existing key requirements and best practices ADGM Employment Regulations, dive into our article.

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DIFC’s Milestone Achievements in H1 2024: Paving the Future of Finance

DIFC's Milestone Achievements in H1 2024: Paving the Future of Finance

Dubai International Financial Centre (DIFC) is marking its 20th anniversary with a resounding declaration of its financial prowess. The DIFC has unveiled exceptional performance metrics for the first half of 2024, underscoring its pivotal role in shaping Dubai’s trajectory as a global financial titan.

This milestone achievement is a testament to the visionary leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. With two decades of consistent growth and innovation, DIFC has not only solidified Dubai’s position on the world financial stage but has also emerged as a catalyst for regional economic development.

“Consistent with the goals of the Dubai Economic Agenda D33 to establish the city as one of the world’s top three urban economies and double its GDP over the next decade, we will continue to expand and diversify the financial services community in DIFC. We are also steadfast in our commitment to driving the growth of emerging sectors and advanced financial technologies. Over the coming years, we seek to further enhance DIFC’s industry ecosystem to meet the evolving needs of the global economy and enable businesses, entrepreneurs and investors to tap promising new opportunities,” said His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum.

Record-Breaking Growth and Innovation

For the first time, the number of active registered companies in DIFC has surpassed 6,000, representing an impressive 24% growth. This expansion includes 820 new companies joining DIFC in just six months. The Centre’s focus on FinTech and Innovation is evident, with firms in these sectors growing by 33% year-on-year. Attracting global talent, DIFC companies have created 4,647 new jobs over the past year, bringing the total workforce to 43,787.

Leading the Financial Sector

DIFC is home to the largest cluster of financial firms in the MEASA region, outperforming the market with remarkable growth. Over 370 wealth and asset management firms, including more than 50 pure play hedge funds, are now based in DIFC, originating primarily from the GCC, Europe, UK, and the US. The Assets Under Management in DIFC have surged by 58%. The insurance and reinsurance sector has also seen significant growth, with 125 companies now operating, up from 110, representing a 14% increase.

Accelerating AI Adoption with Dubai AI Campus

The recently launched Dubai AI Campus at the DIFC Innovation Hub is set to propel the Centre’s next phase of growth by fostering AI adoption across industries. The Dubai AI Campus offers dedicated co-working spaces to tech start-ups, including AI businesses, with 75 companies already operating there. Phase two of the campus expansion aims to attract 500 companies and create 3,000 jobs by 2028.

Pioneering Digital Asset Laws

DIFC continues to introduce groundbreaking laws, enhancing market confidence and certainty in FinTech and digital asset classes. The recent introduction of the world’s first Digital Assets Law exemplifies DIFC’s commitment to innovation and regulatory excellence.

Expanding Commercial Space

With properties in high demand, DIFC is addressing the need for A-grade, LEED certified commercial premises by adding 1.6 million sq. ft. of commercial space over the next three years. The DIFC has recently commenced construction on DIFC Square, a landmark development featuring three interconnected buildings, scheduled for handover in Q1 2026.

DIFC’s outstanding achievements in the first half of 2024 underscore its pivotal role in driving the future of finance and innovation. As it embarks on its next chapter, DIFC remains a beacon of growth, opportunity, and excellence in the global financial landscape and the the world watches with anticipation as the hub continues to redefine the future of finance.

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ADGM announces fee revision for non-financial and retail licenses effective from 2025

non-financial and retail license fees
non-financial and retail license fees

The Abu Dhabi Global Market (ADGM) has announced a significant reduction in its existing commercial license fees as part of its ongoing support for businesses transitioning to Al Reem Island. The new fee structure will take effect from 1st January 2025, featuring substantial reductions of 50% or more for obtaining non-financial and retail licenses within its jurisdiction.

Revised non-financial and retail license fees – key updates

The initiative’s intention is to enhance ADGM’s business ecosystem making it accessible and attractive for various businesses. Under the revised schedule:

  1. Registration fees for new businesses in the non-financial category will be reduced from $10,000 to $5,000.
  2. The annual license renewal fees for the same category will be lowered from USD 8,000 to USD 5,000.
  3. Registration fees for the retail category have been slashed from USD 6,000 to USD 2,000.
  4. License renewals for the retail category will also see a 50% reduction, lowering annual fees to USD 2,000.

The revised licensing fees will take effect on 1st January 2025, aligning with the conclusion of the current transition period on 31st December 2024. This new fee structure will apply throughout ADGM’s jurisdiction, covering both Al Maryah and Al Reem Island.

Hamad Sayah Al Mazrouei, the CEO of ADGM RA said “To facilitate a seamless transition, ADGM and its Registration Authority have proactively introduced various initiatives, prioritising our business community at the core of every decision. We assessed the financial impact on different business categories and previously implemented a fee waiver for qualifying non-financial and retail businesses on Al Reem Island. Building on these efforts, we have now revised our fee structure to include significant reductions for the same categories starting next year. Our aim is to minimise potential disruptions for businesses transitioning to an ADGM licence, enabling them to operate efficiently within our jurisdiction.”

Changes across categories

The fee exemption for qualifying non-financial and retail businesses on Al Reem Island ends on October 31, 2024. In other categories, ADGM’s financial registration fees will rise to USD 20,000 with renewals at USD 15,000 annually. Tech and fintech startups will experience minor adjustments in fees, with both new registrations and renewals set at USD 1,500. Fees for Special Purpose Vehicles (SPVs) remain steady at USD 1,900. A detailed fee schedule applicable from January 1, 2025, will be published in December.

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ADGM Strengthens Market Trust with New Whistleblower Framework

ADGM Strengthens Market Trust with New Whistleblower Framework
ADGM Strengthens Market Trust with New Whistleblower Framework

Abu Dhabi Global Market (ADGM), a key financial hub in the UAE, has introduced a new whistleblowing framework to strengthen the market integrity. This initiative aims to promote transparency and accountability across ADGM entities and is a combined initiative of the ADGM authorities. The framework outlines a comprehensive system for reporting suspected breaches of ADGM laws or financial crimes while ensuring protection for whistleblowers who come forward with information about misconduct.

Key Features of the ADGM Framework

Clear Regulations: ADGM has established specific rules to protect and encourage the reporting of ‘protected disclosures’ made in good faith.

Reporting Channels: Both internal and external reporting channels are available for reporting suspected breaches of ADGM laws or financial crimes.

Anonymous Reporting: Protection is ensured for those who report misconduct anonymously and in good faith.

Non-Retaliation: Stricter employment regulations safeguard employees across all ADGM entities from retaliation for whistleblowing.

Governance Standards: All ADGM entities must adhere to good governance requirements that support effective whistleblowing practices.

Written policies and procedures: Required for firms licensed by the Financial Services Regulatory Authority, designated non-financial businesses or professions, and large entities within the financial centre.

Requirements for ADGM Entities

  • By May 31, 2025, all entities within ADGM must establish proportionate systems to facilitate whistleblowing.
  • These systems must be documented, particularly for larger entities and those with higher financial crime risks.

This framework underscores ADGM’s commitment to uphold global business standards and continuously improve its regulatory environment. It provides a solid foundation for maintaining trust and integrity in the financial markets.

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DIFC Announces Consultation of Updated Prescribed Company Regulations

DIFC Announces Consultation of Updated Prescribed Company Regulations
DIFC Announces Consultation of Updated Prescribed Company Regulations

The Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa, and South Asia (MEASA) region, proposes to enact amendments to the Prescribed Company Regulations. The proposed regulations seek to significantly expand and simplify the current Prescribed Company (“PC”) regime in the DIFC.

Jacques Visser, Chief Legal Officer, of DIFC Authority, said: “Since the introduction of the Prescribed Company Regulations in 2019, DIFC has committed to keeping the regime under review. In response to continued market demand for greater access to holding company vehicles that can be used for structuring purposes in and from the Centre, DIFC is proposing a significant expansion and enhancement of the existing regime.”

Prescribed Company Regulations

The Prescribed Company Regulations were enacted in 2019 and were further updated in 2020 and 2022. In both cases to expand the regime to a wider base of applicants. Despite these amendments, DIFC has been met with continued demand to further expand the regime. DIFC has sought to balance the objective of operating as a jurisdiction of substance against the demand for access to special purpose style vehicles used for legitimate structuring purposes and transactions. With the introduction of UAE Corporate Tax, concerns around substance requirements are reduced and DIFC is of the view that further expansion of the PC regime is now appropriate.

Key changes to the regime:

Under the existing regime, establishing a PC is limited to Qualifying Applicants (for the most part those that can establish an existing nexus to the DIFC and certain other low-risk applicants), or otherwise where the PC is carrying out a Qualifying Purpose (such as a Structured Financing). Under the proposed regulations, it will be possible to establish a Prescribed Company in the following scenarios.

Where the PC is:

a) Controlled by one or more:

i) GCC citizens or entities controlled by GCC citizens; ii) an Authorised Firm; or iii) a DIFC Registered Persons, other than a PC or an NPIO (in line with the existing regime).

b) Established or continued for the primary purpose of holding legal title to, or controlling, one or more GCC Registrable Assets (i.e. assets that are registered with a GCC Authority).

c) Established or continued for a Qualifying Purpose (in line with the existing regime).

DIFC is of the view that these changes considerably enhance and simplify the current regime, opening up access to this type of vehicle to a far wider base of applicants than is currently the case. This expansion may be of particular benefit to interested parties, as there is no requirement for a local corporate service provider (in circumstances where the applicant has alternative means of providing a registered address in the DIFC), or to have any local representation in the management or board of the company.

Other Important Amendments

The proposed amendments also provide that a Prescribed Company must only be used for either its Qualifying Purpose or as a holding company vehicle and, may not employ any employees. These changes ensure that Prescribed Companies are used as true holding company vehicles, rather than operational entities. Transitional arrangements will be communicated to existing PCs that may not continue to meet this criteria if the amendments are adopted in their proposed form.

Further details about the proposed Prescribed Company Regulations can be found in Consultation Paper No. 2 of 2024, available here. The proposed regulations have been posted for a 30-day public consultation period with the deadline for providing comments ending on 1 June 2024.

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ADGM Wins the ‘Most Trusted Financial Centre Brand’ at Global Brand Awards 2024

ADGM Wins the 'Most Trusted Financial Centre Brand’ at Global Brand Awards 2024
ADGM Wins the 'Most Trusted Financial Centre Brand’ at Global Brand Awards 2024

ADGM secures the prestigious title of the ‘Most Trusted Financial Center Brand’ in the Middle East, winning the esteemed 2024 Global Brand Award.

On April 2, 2024, the global stage was set alight with the prestigious Global Brand Awards Ceremony, hosted annually by Global Brands Magazine (GBM), bringing together a precious gathering to celebrate international brands that excel across diverse industries. Among the awardees, ADGM stood out, proudly securing the esteemed title of the ‘Most Trusted Financial Centre Brand, Middle East’ for the distinguished year of 2024.

ADGM’s outstanding performance was showcased through GBM’s assessment of factors like Customer Trust, Innovation, Regulatory Compliance, and Brand Value. This recognition emphasizes ADGM’s dedication to excellence and integrity, solidifying its reputation as a trustworthy leader in the Middle East’s financial sector. This recognition from GBM not only acknowledges ADGM’s past successes but also serves as a guiding force directing its future endeavors toward sustained growth and prominence in the global financial arena.

Jay Reddy, Director, Global Brands Magazine mentioned that “We are delighted to recognize ADGM as the winner of the ‘Most Trusted Financial Centre Brand’ in the Middle East. ADGM’s commitment to excellence, innovation, and integrity has positioned it as a beacon of trust and reliability in the region’s financial landscape, setting a benchmark for others to follow.”

Salem Mohammed Al Darei, CEO of ADGM Authority said, “Trust is not just a value but the cornerstone of ADGM’s identity. Being recognized by the reputed Global Brands Magazine as the ‘Most Trusted Financial Centre Brand, Middle East’ underscores the remarkable growth of ADGM and Abu Dhabi as a financial powerhouse, extending our influence beyond regional boundaries. We are on a path to keep soaring high as we set new ambitious goals and elevate Abu Dhabi as the ‘Capital of Capital,’ solidifying its position among the world’s premier international financial centres.”

ADGM: The Financial Powerhouse

Founded on October 21, 2015, Abu Dhabi Global Market (ADGM) serves as the international financial center (IFC) of the United Arab Emirates’ capital city.  In 2023, ADGM emerged as a true financial powerhouse. Positioned as a strategic link between the flourishing economies of the Middle East, Africa, South Asia, and the world, ADGM has elevated Abu Dhabi’s prominence as a leading financial hub and a dynamic business gateway in the region for two consecutive years.

With ADGM’s strategic expansion to Al Reem Island, international companies started embracing this tax-friendly jurisdiction. This development not only strengthens ADGM’s position but also elevates Abu Dhabi’s status as the ‘Capital of Capital’.

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Non-Dom Tax in the UK Repealed: Global Impact on the UAE and Beyond

UK's non-dom tax repealed: UAE welcomes influx of High-Net-Worth migrants
UK's non-dom tax repealed: UAE welcomes influx of High-Net-Worth migrants

Jeremy Hunt, United Kingdom’s chancellor of the Exchequer, shook up headlines with a game-changing move in the Spring Budget – waving goodbye to the non-domiciled tax regime in the UK and unveiling an exciting, revamped ‘tax holiday’ for those making the move to the kingdom. The significant transformation is likely to impact not just the UK tax system but also other tax-friendly nations, including Western European jurisdictions such as Greece, Malta, and Ireland, as well as countries in the MENA region.

Before that, let us journey through the story of the epic non-dom tax.

Tracing the history of non-dom tax in the UK

The origin of the non-dom tax regime can be traced back to the inception of income tax in 1799 when residents were solely taxed on income earned abroad if it was received within the country. This marked the introduction of the ‘remittance Basis’ of taxation, a concept that underwent modification in 1914, restricting eligibility to residents not domiciled or ordinarily resident in the UK. The ‘remittance Basis’ regime, utilized by non-domiciled individuals, has largely retained its core principles since the 1900s, with significant reforms in 2008 and 2017. Despite these changes, the fundamental principle persists that non-doms are only taxed on overseas income and capital gains to the extent that funds are brought into or used in the UK. Since 2017, non-domiciled individuals have had the option to elect for the remittance basis of taxation for 15 years. Beyond this period, they are treated as ‘deemed domiciled’ for tax purposes, and subjected to worldwide taxation. However, a non-dom can establish a non-UK trust before the 15-year term expires, theoretically exempting the trust from UK tax concerning non-UK sources. The concept that one’s domicile should determine their tax assessment is unusual. Domicile, inherited from one’s father at birth, is often considered an outdated and complex concept. In recent years, Her Majesty’s Revenue and Customs (HMRC) has increased inquiries to ascertain non-UK domicile status, revealing a degree of subjectivity in the assessment process.

But now the non-dom tax has been phased out and the recent changes have introduced new players into the game.

UAE’s attraction for global migrants: A boon amidst UK tax reforms

With its tax-friendly regime, the UAE is emerging as an irresistible destination for high-net-worth individuals (HNWIs), promising both fiscal efficiency and a top-notch quality of life. The UAE’s magnetic appeal is drawing UK millionaires and professionals with its blend of lower living costs, enticing salary benefits, economic stability, and global hi-tech prominence. Offering long-term residence visas, a high quality of life, and public safety, the UAE stands out as the ideal destination. Meanwhile, the UK grapples with a 50 percent surge in living costs, triggering an exodus of HNWIs. The Henley Private Wealth Migration Report 2023 predicts the loss of 3,200 more HNWIs in 2023, adding to the 12,500 already departed between 2017 and 2022.

Also, the UAE’s real estate sector is set to flourish, fuelled by UK nationals contributing 21.2 percent to international property transactions in 2023. As Abu Dhabi emerges as a bridge between East and West, UK entrepreneurs flock to set up businesses, injecting diverse investments into the thriving UAE economy. This shift signifies the UAE’s ascent as the top choice for migration, driven by economic growth, political stability, and abundant job opportunities. The existing English Common Law system of ADGM in Abu Dhabi can also be an add-on to the migrants for seamless shifts. The traditional allure of the UK, especially London, for migrating millionaires has waned in the face of Brexit and the declining importance of the London Stock Exchange. Being a solution for that, the UAE stands as a global financial hub, beckoning with unprecedented opportunities for these migrating individuals.

Crafting strategies in the face of changing tax landscapes

The impending non-dom tax changes hold substantial implications, particularly for clients in the MENA region, with a specific emphasis on the UAE. Individuals in the UAE and elsewhere should assess their UK residence intentions and seek professional advice to proactively plan for these tax adjustments. Keep in mind that these changes might continue to evolve, especially with the upcoming UK general election set before January 28, 2025, which precedes the implementation of most of these rules by April 2025.

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DIFC Dubai sets new standard in financial regulation with world’s first Digital Assets Law

regulatory clarity in the rise of Digital Assets in DIFC
regulatory clarity in the rise of Digital Assets in DIFC

In a move that solidifies its position as a global financial powerhouse, the Dubai International Financial Centre (DIFC) enacted the world’s first Digital Assets Law on March 8th, 2024, alongside significant amendments to existing legislation. This landmark legislation, DIFC Law No. 2 of 2024, aims to regulate and provide legal certainty for investors and users of digital assets in the Middle East, Africa, and South Asia (MEASA) region. The change is signaling DIFC’s proactive approach to embracing technological innovation and providing regulatory clarity in the rapidly evolving digital asset landscape.

Why is there a need for regulatory clarity in the rise of Digital Assets in DIFC?

Digital assets have emerged as a trillion-dollar asset class with immense potential for innovation and market opportunities. However, the legal framework surrounding them has been a subject of debate and uncertainty. Recognizing the need to adapt to rapid technological developments, DIFC embarked on an extensive review of legal approaches in various jurisdictions before crafting its own comprehensive Digital Assets Law. The Digital Assets Law addresses fundamental questions regarding the legal nature of digital assets and establishes clear guidelines for their control, transfer, and dealing by interested parties. By enacting this legislation, DIFC aims to provide a robust legal framework that fosters innovation while ensuring investor protection and regulatory compliance.

Any impacts on other existing laws in DIFC?

DIFC has updated existing laws, including the Contracts Law, Law of Obligations, and Law of Security, to accommodate the implications of the new digital assets regime. These amendments reflect DIFC’s commitment to keeping pace with international developments and maintaining a transparent environment for businesses and investors.

“The revised regime is modeled on the UNCITRAL Model of Secured Transactions and significantly enhances DIFC’s securities regime to keep pace with international developments in this field and to ensure DIFC remains at the forefront of best practice.”

Jacques Visser, Chief Legal Officer, DIFC

Electronic Transferable Records

Updates to the Law of Obligations now incorporate provisions for the utilization of electronic transferable records. These records serve as digital counterparts to traditional paper trade documents like bills of lading, bills of exchange, promissory notes, and warehouse receipts. Acknowledging these electronic documents streamlines cross-border digital trade, enhancing the pace and security of document transmission and enabling the automation of specific transactions via smart contracts. Through this, DIFC is embracing technological advancements to streamline business processes.

Digital Assets Law in DIFC: Key Provisions

In conjunction with the Digital Assets Law, DIFC has repealed the 2005 Law of Security and replaced it with a new Law of Security aligned with international best practices according to the UNCITRAL’s Model Law on Secured Transaction. This move enhances DIFC’s securities regime, particularly concerning the taking of security over digital assets, and ensures that DIFC remains at the forefront of global financial standards. The DIFC is also moving towards the repeal of the Financial Collateral Regulations, consolidating the financial collateral provisions into a fresh chapter within the revised Law of Security.

What is in it for the budding digital asset ventures landing in DIFC, Dubai?

DIFC’s enactment of the Digital Assets Law and related legislative amendments marks a significant milestone in the evolution of global financial regulation. Clear regulations in the digital asset sector offer numerous benefits for blockchain technology businesses majorly CRYPTO and NFT. The guidelines reduce ambiguity, providing a solid foundation for businesses while enhancing consumer protection and fostering trust. These guidelines also boost market confidence and attract inward investment, stimulating economic growth and innovation. Proactive regulation aligns with global trends and these frameworks reinforce the DIFC’s global leadership in the digital asset sector, positioning the DIFC as an innovation hub.