Book an appointment with us, or search the directory to find the right lawyer for you directly through the app.
Find out moreWelcome to the latest edition of Law Update titled “Rise of Generative AI.”
In this edition, we dive into the dynamic world of Technology, Media, and Telecommunications (TMT) across the Middle East and North Africa (MENA) region. TMT continues to play a vital role in positioning the region as an international business and social hub, driving significant growth and innovation.
Our focus in this Law Update is on the sector’s ongoing potential to advance and propel the region toward a more digital economy. We explore the benefits of embracing a digital transformation and how local authorities have responded by enhancing regulations to accommodate the evolving TMT landscape.
This edition covers a range of topics, including – the new Telecommunications & Information Technology Law in Saudi Arabia, the intricacies of trademarks in the Metaverse, and the legal challenges faced by the video game industry. Additionally, we take a regional perspective, discussing jurisdictions such as Kuwait, Saudi Arabia, UAE, Oman, and Bahrain to provide a comprehensive understanding of the TMT landscape.
We hope you thoroughly enjoy this packed issue of Law Update, filled with captivating articles that address key legal issues within a vital sector for the region.
Read the full editionPursuant to the Cabinet of Ministers Resolution No. 31 of 2019, the UAE has introduced economic substance regulations (“Regulations”) which set out the requirements for entities to have an actual economic presence in the UAE. The introduction of the Regulations follows the UAE’s commitment to comply with EU requirements in order to be removed from the EU’s list of non-cooperative tax jurisdictions (“EU Tax Blacklist”) .
The Regulations came into effect on 30 April 2019.
The key obligations imposed on UAE companies under the Regulations are as follows:
Failing to meet the Economic Substance Test:
Should a Licensee fail to meet the Economic Substance Test for a financial year, an administrative penalty of between AED 10,000 and AED 50,000 can be imposed by the Regulatory Authority. Repeated failure to meet the Economic Substance Test may lead to a penalty of up to AED 300,000.Failing to provide information or providing inaccurate information:
Licensees who fail to provide information or provide inaccurate information under the Report may be subject to an administrative penalty of up to AED 50,000.
As the framework prescribed under the Regulations is of a high-level nature only, we expect:
It is important for your UAE businesses to (i) understand the economic substance requirements and the obligation to annually prepare the Report and file it with the Relevant Authority; and (ii) undertake a “health check” on your existing level of economic substance in the UAE.
The key areas of your operation that the Regulations may impact concern corporate structuring and tax aspects.
As the largest law firm in the Middle East and with strong corporate structuring and tax expertise and significant corporate structuring and tax experience across all industry sectors in the Middle East, Al Tamimi & Company is well placed to assess the impact of the recently introduced Regulations on your organisation and assist you to comply with the new Regulations.
Please do not hesitate to contact Al Tamimi’s Corporate Structuring Team and Tax Team if you require any assistance.
Click here to follow Al Tamimi’s Tax Team’s LinkedIn page for more updates on tax developments in the Middle East.
Izabella Szadkowska
Partner, Corporate Structuring
i.szadkowska@tamimi.com
Shiraz Khan
Head of Taxation, Tax
s.khan@tamimi.com
To learn more about our services and get the latest legal insights from across the Middle East and North Africa region, click on the link below.