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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
David Bowman - Senior Counsel - Real Estate
Eliana Ugolini - Senior Associate - Corporate / Mergers and Acquisitions / Commercial
DHA and HAAD
While hospitals and healthcare centres outside free zones are governed by different authorities in Dubai and Abu Dhabi (the Dubai Health Authority (“DHA”) and the Health Authority–Abu Dhabi (“HAAD”) respectively), the regulations in relation to the location and building type for a hospital or healthcare centre are quite similar in both Emirates.
By way of background, the difference between a hospital and a healthcare centre, in both Dubai and Abu Dhabi, is determined on the services that will be provided. Generally, if inpatient services are provided, the operator must apply for a hospital licence; if not, then the operator must apply for a licence in their specialist area or areas.
The DHA Regulations stipulate the types of buildings that must be used for hospitals and healthcare centres, and lay down the location for these buildings.
The DHA Regulations specifically provide that a hospital must be located in an independent, standalone building, located on a main road with easy and convenient access for people using both public and private transport. As part of the licencing process the DHA will consider the plans for the premises and will also inspect the premises. If the premises do not meet the criteria set out in the DHA Regulations then the licence to operate will not be granted. A healthcare operator that is licensed as a hospital cannot use a villa for its premises regardless of whether the villa has been designated for commercial use. In practice the DHA will expect the building to have been created specifically for the purpose of being a hospital.
Unlike a hospital, a healthcare centre can have its premises at either an independent facility (such as a villa if it has been designated for commercial use), or in a mixed-use commercial building.
Guidelines issued by HAAD (the “HAAD Guidelines”) provide detailed information as to how different healthcare facilities are to be licenced. The HAAD Guidelines also provide information as to how the hospital or healthcare centre should be designed and fitted-out. When applying to HAAD for a healthcare licence part of the application process involves an examination by HAAD inspectors of the plans and drawings for the hospital or healthcare centre. The HAAD inspectors will assess the building and consider the fit-out design. Finally the HAAD inspectors will inspect the premises to ensure that the premises meets all the standards set out in the HAAD Guidelines.
Similarly to the position in Dubai, a hospital in Abu Dhabi must have its premises in an independent building. Previously in Abu Dhabi it was possible for a hospital to be located in a mixed-use building. Frequently such mixed-use buildings contained residential apartments or commercial offices in addition to hospitals. HAAD has now prohibited this.
Similar to the position in Dubai, a healthcare centre may use a villa as its premises, provided the villa has been granted permission to be converted from a residential villa to a villa allocated for commercial use. For such conversion to commercial use, it is necessary to obtain approval from the relevant local Municipality (there are three operating in Abu Dhabi: Abu Dhabi Municipality, Al Ain Municipality and the Western Region Municipality (the “Municipalities”)). Following the implementation in Abu Dhabi of Administrative Resolution No.32 of 2011 (which deals with privacy protection in residential areas), the Municipalities generally do not allow conversion of residential villas to commercial uses. Exceptions are however sometimes permitted if the villa is to be used as a healthcare centre, rehabilitation centre for those with special needs, or a care centre for the elderly.
NAMING A HEALTHCARE COMPANY
HAAD will not allow a company with the word ‘hospital’ in its name to apply to use a villa as its premises, irrespective of the fact that the company will not be using the premises as a hospital. This may mean that before applying a company may need to change its name. As the Department of Economic Development in both Abu Dhabi and Dubai have regulations in place which state that the name of the company should reflect the activity it is undertaking, it would be prudent for companies is Dubai to consider this as well.
In both Dubai and Abu Dhabi, if a healthcare company wishes to establish a hospital, it must ensure that its premises are in an independent building. A healthcare centre however can be located in either an independent building or a villa; however, if a villa is to be used it must be converted from residential to commercial use.
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