Welcome to the Saudi Arabia focus edition of Law Update.
One of the key markets in the Middle East and North Africa (MENA) that continues to lead from the front is the Kingdom of Saudi Arabia (KSA). As the largest country in the Middle East and the 18th largest economy in the world, the progress KSA continues to make is underpinned by its Vision 2030 that envisions developing the country as an investment powerhouse and hub that ultimately connects Asia, Europe, and Africa. Given Saudi Arabia’s significance to the regional economy, our team of experts have prepared a range of pertinent articles that provide insights into new laws, regulations, and the legal landscape in the Kingdom.
This edition will provide you with an up-to-date guide on matters such as; the framework issued by the Saudi Central Bank on IT governance, the anti-corruption landscape under Vision 2030; we also provide practical tips for dispute avoidance. This is only a snapshot; there are many more articles within the KSA focus section for you to read, which we hope you will find valuable and enjoyable.Read the edition
Maha Dahoui - Associate - Real Estate
This article discusses the new requirements for licensing as a developer in Abu Dhabi, including the conditions, procedures, deadlines and penalties set out by the Law and its implementing regulations.
Developers operating in Abu Dhabi must apply for a licence and register on the Real Estate Development Register at the relevant Municipality no later than 31 March 2016.
The Law provides that no person may engage in real estate development in Abu Dhabi unless they have been registered in the Real Estate Development Register and licensed as either a master developer or a sub-developer. Developers who fail to apply for a licence and register by 31 March 2016 risk penalties of between AED 100,000 and AED 2,000,000. In addition, the Law provides that developers who are not licensed and registered will not be entitled to any fees, profits or rewards in return for the activities they undertake. If any fees, profits or rewards are received by a developer that is not licensed and registered, those fees, profits or rewards must be returned to the purchaser or, if it is not possible to return them, the developer must suitably compensate the purchaser.
The registration of developers in the Emirate of Abu Dubai is regulated by the Department of Municipal Affairs (“DMA”). Only companies with real estate development activities permitted by their trade licence and registered with Abu Dhabi Chamber of Commerce and Industry may apply to the DMA for a licence to be recognised as a developer in Abu Dhabi.
The following documents must be submitted to the relevant municipality in the Emirate in order to apply to be registered as a developer:
A licensed developer may open one or more branch offices, in addition to its head office, to carry out any of its licensed activities provided it gives prior notification to the DMA. A developer’s licence will be valid for one year from the date of issue and must be renewed annually.
As it could take some time for developers to comply with the requirements for obtaining a licence and registering on the Real Estate Development Register, developers need to act quickly to avoid incurring a penalty after 31 March 2016.