Mohammad enacts changes to DIFC law

DIFC Law No. 5 of 2018 abolishes limited liability companies, introduces new categories

In his capacity as Ruler of Dubai, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, has enacted changes to the Dubai International Financial Centre (DIFC) Authority’s legal and regulatory framework.

Companies Law, DIFC Law No. 5 of 2018, abolishes limited liability companies and introduces new classifications of public and private companies.

It will also include the expansion of directors’ duties of DIFC companies and the introduction of restructuring and merger schemes to accommodate growing market consolidation activity.

In addition, it will provide levels of oversight for complex corporate arrangements, such as those associated with listed entities, mergers, schemes of arrangement and debt restructurings.

The changes to the Companies Law are accompanied by a complete revamp of the Centre’s companies and operating regulations to facilitate ease of doing business, whilst complying with the latest requirements of the Financial Action Task Force and the Organisation for Economic Cooperation and Development on transparency of beneficial ownership and anti-money laundering requirements.

The changes to the Real Property Law and Strata Title Law implement an updated property regime that ensures better protection for owners and mortgage holders of DIFC properties, and also introduces an off-plan register and escrow requirements for developers.

Full disclosure

The New Operating Law, DIFC Law No. 7 of 2018, standardises the general requirements and conduct of businesses operating within DIFC, while providing a framework for the role of the Registrar of Companies. The law also introduces enhancements to the licensing regime.

The DIFC Real Property, DIFC Law No. 10 of 2018, has also been amended to ensure that purchasers get full disclosure on the developments and units being bought.