In a relentless pursuit of enhancing the quality of life for its residents and citizens, the United Arab Emirates (UAE) has implemented a series of groundbreaking laws in 2023. These legal reforms aim to solidify the nation’s standing as a global leader in expat lifestyle, economic prosperity, and family stability.
1. Corporate Tax Revolution
The UAE initiated a significant shift in its economic landscape on June 1, 2023, introducing a nine percent corporate tax rate. However, this tax applies exclusively to companies surpassing the Dh375,000 threshold. This strategic move supports small and medium enterprises, ensuring that only profitable businesses are subject to taxation based on accrued profits rather than total turnover.
2. Empowering Financial Stability: Bankruptcy Law Overhaul
Published on October 31, 2023, a new bankruptcy law is set to transform the financial landscape, effective May 1, 2024. The legislation prioritizes debtors’ and creditors’ rights and interests, streamlining the process to avoid separate enforcement proceedings. Courts can impose a moratorium on creditors’ actions, allowing debtors to enact a restructuring plan. Initially, the moratorium can be extended for three months, but debtors cannot request more than a six-month repayment period.
3. Safeguarding Livelihoods: Job Loss Insurance Scheme
Commencing January 1, 2023, the Involuntary Loss of Employment scheme became mandatory for all citizens and residents, excluding specific categories like juveniles, investors, domestic helpers, temporary contract workers, retirees with pensions, and free zone employees. Employees with a basic salary below Dh16,000 contribute Dh5 monthly (plus VAT), securing 60 percent of their average basic salary for three months in case of involuntary job loss. Those earning more than Dh16,000 pay Dh10 monthly (plus VAT).
4. Surrogacy Opens New Avenues
In a monumental move, the UAE now allows non-Muslim couples to pursue surrogacy, making amendments to accommodate unmarried couples. These changes extend access to in vitro fertilization (IVF) and other fertilization and implantation procedures.
5. Universalization of Marriage Laws: Civil Marriage Regulations
Implemented on February 1, 2023, the Federal Personal Status Law regulates marriage conditions and court procedures for non-Muslim foreigners. The law clarifies divorce procedures, child custody matters, inheritance protocols, and testamentary requirements for this demographic.
6. Financial Freedom Post-Employment: End-of-Service Scheme
Introduced on November 1, 2023, the End-of-Service scheme grants UAE employees the opportunity to invest their gratuity in various savings schemes. Employees can access both the principal and the accrued returns from the investment funds after terminating the employment relationship.
In conclusion, the UAE’s progressive legal reforms 2023 signify a commitment to fostering economic growth, financial stability, and inclusivity. These groundbreaking laws reflect the nation’s dedication to its residents and solidify its position as a global leader in shaping the future of expat living.
