The first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.Read the full edition
Recently, the UAE Cabinet enacted Cabinet Resolution No. (109) of 2023 (“New Resolution”) whereby the previous Cabinet Resolution 58 of 2020 (“Old Resolution”) was repealed, and in its place amended by the New Resolution. The New Resolution concerns the Regulation of Real Beneficiary Procedures.
Under the New Resolution, new practices and processes are put in place to regulate the minimum obligations of the registration authorities and legal persons in the UAE.
The New Resolution applies to all entities registered and licensed in the UAE, yet excludes entities registered in Financial Zones (DIFC and ADGM), and government entities and subsidiaries.
In this alert, we would like to highlight the key fines that could be imposed towards onshore limited liability companies (“LLCs”).
The competent authority supervising the register of commercial names of different establishments registered in the relevant emirate and/or freezone (“Registrar”) has increased discretion and onus to determine the Real Beneficial Owner in cases with complex structures.
If you are a shareholder or a manager of an LLC, you should be mindful of the following actions that have been introduced under the New Resolution:
While the New Resolution does not specify the exact monetary values or types of administrative sanctions that can be imposed but refer to an external “Administrative Sanctions Regulation”, these can be found in the Cabinet Resolution No. (53) of 2021 Concerning the Administrative Penalties against Violators of The Provisions of the Cabinet Resolution No. (58) of 2020.
The fines vary depending on the type and frequency of the violation, and can range from AED 1,000 to AED 100,000, as well as suspension or restriction of the trade license or the powers of the board members or directors of the legal person.
Notably, there are two fines in particular to be aware of:
Failure of the legal person to create Register of Beneficial Owner and maintain its data:
Failure to maintain adequate, accurate, specific and updated data of the beneficial owner or fails to correctly record down the beneficial ownership:
We recommend you assess practices adopted by your UAE company, to reduce the risk of finding yourself/ your company in breach of UAE Companies Law and New Resolution, such breach can result in fines being imposed by the authorities.
In the instance your corporate structure is rather complex, we recommend seeking advice to ensure compliance with the relevant regime.
We would be delighted to conduct a “health check” review of your company, to assess its UAE law compliance.