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DIFC Founding Laws Amended: Key Changes Include Functioning of Officials and Centre Bodies

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Staff Writer, TLR

Published on July 14, 2023, 17:40:59

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DIFC, FOUNDING  LAW

ummary: The ruler of Dubai has issued a new law which replaces the existing foundational law, with significant changes to the working of the centre officials, centre bodies and dispute resolution.

Furthermore, the new law seeks to promote sustainable development and values, while reiterating the independence of the Centre.

The ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, has issued Law No. (5) of 2021, which replaces the existing founding law [Dubai Law No. 9 of 2004]. The law focuses heavily on the independence, operational, financial and administrative, of the DIFC and sheds light on dispute resolution and application of law in the Centre. Dubai seeks to boost the centre's image as a global hub for businesses by expanding objectives and promoting efficiency, transparency, integrity and sustainable development. This may be observed from the expanded objectives which now include ‘advancing sustainable economic growth for Dubai, developing and diversifying the economy and increasing the GDP contribution of the financial services sector, to promote investment into Dubai and to attract regional and international entities to establish themselves in the Dubai International Financial Centre as their principal place of business'.

There have been significant amendments on the duties, powers and functions of the President, Governor, Centre Authority and Financial Services Authority. Furthermore, the new law elucidates on the laws applicable, under Article 13, and describes excemptions to the application of the same. The president is empowered, under the new law, to excempt certain federal & local government authorities, companies and entities from any centre laws; in such cases, only the Federal and Local Laws will be applicable. Moreover, the dispute resolution mechanism has also received clarity with the DIFC Courts and the Arbitration Institute coming under the same, hence splitting Dispute Resolution Authority.

Furthermore, the new law relaxes the rules governing activities of establishments outside the centre. Providing services and products, along with the marketing and promotion of their activities, are permitted outside the centre.

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