UAE announce sweeping legislative reforms to strengthen economic, investment and commercial opportunities
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 new laws and legislative amendments are intended to keep pace with the developmental achievements of the UAE and reflect the country’s future aspirations. Reform includes over 40 laws that represent the largest legal reform in the 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.
The new legislative changes came after intensive coordination at both the local and federal levels, where teams of specialists and experts from federal and local authorities have worked together over the past five months in consultation with over private sector organisations in order to reflect global best practice in the new legal provisions.
Here are some of the key takeaways from the announcement relevant to businesses.
Electronic Transactions and Trust Services
The amendments to the Law on Electronic Transactions and Trust Services 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. This will facilitate 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 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.
The federal law concerning Trade Marks was amended to 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.
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. The commercial register is an official log held by the Ministry of Economy containing details of all businesses operating in the UAE.
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 law was issued to introduce certain amendments concerning Commercial Companies: it specifies the companies that are exempted from the provisions, 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.
Online Security Law
The law regarding cyber-crimes and combatting online harassment, bullying and ‘fake news’ will become effective January 2nd, 2022, it is one of the first comprehensive legal frameworks in the region to address concerns raised by online technologies and their applications and abuse.
The law aims to enhance community protections from online crimes committed through the use of networks and information technology platforms, protecting public sector websites and databases, combatting the spread of rumors and ‘fake news’, safeguarding against electronic fraud and preserving personal privacy and rights.
The new law addresses online false advertising or promotions, including unlicensed trading in crypto-currencies and medical products and supplements.
The law contains provisions related to fake news and misleading information, using online tools, networks and platforms to broadcast, publish, republish, circulate or recirculate fake news, including false and misleading information, false reports purporting to originate from official sources or that falsely misrepresent official announcements.
The law gives courts powers to confiscate devices, software, content or other means used in the pursuit of a crime, in addition to the deletion of such information.
Data Protection Law
The Personal Data Protection Law constitutes an integrated framework to ensure the confidentiality of information and protect the privacy of community members by providing proper governance for optimal data management and protection, in addition to defining the rights and duties of all concerned parties.
The provisions of the law apply to the processing of personal data, whether all or part of it through electronic systems, inside or outside the country.
The law prohibits the processing of personal data without the consent of its owner, with the exception of some cases in which the processing is necessary to protect the public interest, or that the processing is related to the personal data that has become available and known to all by an act of the data owner, or that the processing is necessary to carry out any of the legal procedures and rights.
The law defines the controls for the processing of personal data and the general obligations of companies that have personal data and defines their obligations to secure personal data and maintain its confidentiality and privacy.
It also defines the rights and cases in which the owner has the right to request correction of inaccurate personal data, restrict or stop the processing of personal data. The law sets out the requirements for the cross-border transfer and sharing of personal data for processing purposes.
UAE Data Office
The law establishing the UAE Data Office aims at ensuring the full protection of personal data.
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.
Check with your legal team to find out the ones that are most relevant for your business.