April 2022 / United Arab Emirates

Law No. 4 of 2022 Concerning the Regulation of Virtual Assets in the emirate of Dubai aims to create an advanced legal framework to protect investors and design the much-warranted international standards for virtual asset (VA) industry governance to promote responsible business growth, under prudential regulations. The law is applicable throughout the emirate, including special development zones and free zones, but not Dubai International Financial Centre.

Dubai Virtual Assets Regulatory Authority (VARA)

Dubai Virtual Assets Regulatory Authority (VARA) was set up to achieve the goals of the above law. The authority has a legal personality and financial autonomy and is linked to the Dubai World Trade Centre Authority (DWTCA). VARA will be responsible for licensing and regulating the sector across Dubai’s mainland and the free zone territories (excluding DIFC).

It will provide a full range of services in coordination with Central Bank of the UAE and Securities and Commodities Authority. It is mandated with organising and setting the rules and controls for conducting virtual assets-related activities including management services, clearing and settlement services, in addition to classifying and specifying types of virtual assets.

VARA’s tasks

The following are the tasks of VARA:

• organising issuance and trading of virtual assets and virtual tokens
• organising and authorising virtual asset service providers
• ensuring the highest standards of protection for beneficiaries’ personal data
• organising the operation of virtual assets’ platforms and portfolios
• monitoring transactions and preventing price manipulation of the virtual assets.

VARA’s activities

The following activities are subject to authorisation from VARA:

• operating and managing virtual assets’ platforms services
• exchange services between virtual assets and currencies, whether national or foreign
• exchange services between one or more forms of virtual assets
• virtual assets’ transfer services
• virtual assets’ custody and management services
• services related to the virtual assets’ portfolio
• services related to the offering and trading of virtual tokens.

Read related news coverage on WAM and the website of Dubai Media Office.

Useful links:

• FATF focus on virtual assets - The Financial Action Task Force (FATF)
• Virtual Asset Activities - Abu Dhabi Global Market
• Virtual Assets – Dubai World Trade Centre

ABU DHABI, 9th May, 2022 (WAM) -- The UAE Cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has adopted resolutions and incentives package to enhance the participation of Emirati talents in the private sector.

The resolutions come within NAFIS, the federal program that aims to increase the competitiveness of the Emirati workforce and to facilitate the private sector employment of UAE citizens.

The incentives include reducing the service fees of the Ministry of Human Resources and Emiratisation by 80 percent for private sector establishments, which accomplish major achievements in terms of recruitment and training of Emirati citizens.

The Cabinet approved increasing the Emiratisation rate to 2 percent annually from High-skilled jobs in establishments that employ 50 workers or more. The step aims at creating more than 12,000 job opportunities annually for citizens in all economic sectors.

Non-compliant companies will have to pay an amount of AED6,000 monthly, starting from January 2023, for every citizen who has not been employed.

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said that the benefits offered by NAFIS support Emirati talents in the private sector.

Dr. Al Awar added that reducing 80 percent of the service fees of the Ministry for establishments that accomplish substantial achievements in terms of recruitment and training of Emirati citizens will further contribute to achieve NAFIS objectives.

Al Awar stressed that the new resolutions will increase the participation of Emirati talents in the private sector by creating more than 12 thousand jobs annually, with an annual increase of 10 percent for the 5 coming years.

Ghannam Al Mazrouei, Secretary-General of the Emirati Talent Competitiveness Council, said that NAFIS ensures the efficiency of the Emiratisation approach, while offering significant incentives to private sector establishments that achieve substantial milestones in terms of recruitment and training of Emirati citizens.

Al Mazrouei expected that private sector establishments will commit to the new resolutions and will increase Emiratisation by 2 percent for high-skilled jobs until achieving the 10 percent target by the 2026, stressing that private sector establishments will benefit from NAFIS.

NAFIS offers various benefits including the Emirati Salary Support Scheme where UAE citizens will be offered a one-year salary support of up to Dh8,000 per month during training and a monthly support of up to Dh5,000 will be paid for up to five years for university graduates.

The program provides UAE citizens specialised in fields such as coders, nurses and accountants with a top-up on their existing salaries.

The program also offers a subsidised five-year government-paid contribution on the company’s behalf against the cost of pension plans for Emirati staff and full support for the Emirati’s contribution across the first five years of their employment.

NAFIS also offers Private Sector Child Allowance Scheme. The scheme is monthly grant made to Emirati staff working in the private sector of up to Dh800 per child up to a maximum of Dh3,200 per month.

Data discussed in the meeting revealed that the total number of new Emiratis who joined the private sector since the launch of NAFIS in September 2021 till March 2022 amounted to 5,558, while the number of companies that hired new employees increased to 1,774.

The NAFIS data indicate that the number of citizens registered on the platform and eligible to benefit from the NAFIS initiatives reached 25,876, and that the number of job opportunities on the platform reached 2,524, while the number of beneficiaries increased to 4,074 people.

To fulfill its goals of boosting the competitiveness and efficiency of UAE citizens, NAFIS developed two bundles of initiatives as part of the "Projects of the 50". The first was released in September 2021, followed by the second in March 2022.

The first bundle included the "Emirati Salary Support Scheme", the "Merit Program", the "Pension Program", the "Child Allowance Scheme", the "Unemployment Benefit", and the "Job Offers Program".

The second bundle of initiatives was launched in March 2022, which focuses on training programs including the "Talent Program" to develop specialised vocational skills for Emiratis through internationally recognised certifications, and the "National Healthcare Program", which aims to upskill 10,000 UAE nationals in the field of nursing and healthcare via paid scholarships. The 'Apprentice Program,' which provides training and professional development opportunities in the private and semi-government sectors, and the 'Vocational Counseling Program,' which provides UAE nationals with access to career coaching and counseling services were also included in this package of initiatives.

Source: wam

Expo 2020 Dubai awarded AED 6.8 billion of contracts to small and medium-sized enterprises (SMEs), providing a significant contribution to a vital sector of Dubai’s vibrant economy and exceeding a commitment made in 2016 to award at least 20 per cent of all direct and indirect spend to SMEs. The figure represents more than a quarter of all Expo 2020 Dubai contracts in terms of value. Of the 3,245 suppliers awarded Expo 2020 Dubai contracts, 66 per cent (2,150) were SMEs, with 64 per cent (1,390) of these comprising domestic SMEs, reflecting the calibre and diversity of UAE-based enterprises and supporting the UAE’s wider drive towards a thriving private sector and more resilient economy. The majority of the 760 overseas SME suppliers hailed from the United Kingdom (24 per cent), the United States (16 per cent), France (4 per cent), India (4 per cent) and Australia (4 per cent). Overall, suppliers from outside the UAE were sourced from 94 countries, indicative of the World Expo’s global reach and impact. Mukhtar Safi, Chief Financial Officer and Deputy CEO, Expo 2020 Dubai, said: “Our commitment to SMEs has been embedded into our planning since the very beginning of our World Expo journey, honouring the visionary leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to support and empower SMEs – the lifeblood of economies across the world, including the UAE, where they are an important driver of economic growth and a vital source of job creation. “The integration of SMEs into the delivery of what has been a truly exceptional World Expo will be an important part of Expo’s legacy for the UAE and wider region, stimulating employment, strengthening existing industries, enhancing SME competitiveness and ultimately contributing to sustainable economic growth.” From construction firms to event organisers, retail stores to food and beverage outlets, SMEs played a key role in the success of Expo 2020 Dubai, which awarded AED 1.06 billion to UAE-based SMEs in 2021 alone. Of this, AED 161.7 million (USD 44 million) in contracts were awarded to Dubai SMEs, strengthening Dubai’s Government Procurement Programme, which requires UAE Government entities and establishments where the government holds equity of 25 per cent or more to allocate 10 per cent of their purchasing to Emirati firms that are members of Dubai SME – part of the Department of Economic Development that provides support, information and outreach for the growing SME sector. The Expo 2020 Dubai procurement process itself was based on three principles: Simplicity, Transparency and Inclusivity, allowing business of all sizes to do business with Expo 2020 Dubai as easily and competitively as possible. In 2018, Expo 2020 Dubai became the first World Expo and only the second ever mega-event to secure an Excellence in Procurement Award from the Chartered Institute of Procurement & Supply. Expo 2020 Dubai defines SMEs as any enterprise that falls within employee headcount and turnover thresholds, depending on the relevant sector, as classified by Dubai SME.

Source: Media Office

The Ministry of Finance (MoF) has launched a digital public consultation on the federal corporate income tax applicable to financial years beginning on or after 1 June 2023. The objective of the public consultation is to gather feedback from the business community and other interested stakeholders on the design and implementation of the UAE corporate tax regime.

The MOF's public consultation document covers the following aspects:

• taxable persons;
• tax base;
• calculation of taxable income;
• transfer pricing;
• international Tax Developments; and
• administration.

Public comments must be submitted online by 19 May 2022, using the public consultation on corporate tax submission link available here. Comments received after this date or not submitted via the prescribed online submission form will not be considered.

The public consultation on the federal corporate income tax was published on 28 April 2022 on the MoF's official website and is accessible here.

The Federal Tax Authority (FTA) has published the user's guide for the whistleblower programme on tax offences and evasion.

The programme called Raqeeb aims to raise awareness in the community about compliance with tax legislation. The main features of the Raqeeb initiative are set out below.

Whistleblowing is a new mechanism that mandates "the FTA to receive and process leads on non-compliance with tax legislation by natural or legal persons, as well as to offer a monetary reward to whistleblowers when certain conditions are met".

An informant is a natural person who informs the FTA that a natural or legal person:

• is engaged in illegal tax activities; or
• has not fulfilled its tax obligations.

The identity of the informant remains confidential and protected by the FTA and will not be disclosed in the context of legal proceedings against the informant. Nonetheless, it is not permitted or possible to submit anonymous leads to the FCA.

The programme provides informants with monetary rewards if the following conditions are met:

• the information provided is credible, accurate and has not been previously obtained by the FTA;
• the whistleblower form is completed accurately, completely and sufficiently;
• the FTA has collected tax amounts in excess of AED 50,000; and
• the reported person has exhausted all forms of objections and appeals.

The informant is required to provide the information through the FTA's website.

The FTA published the guide for the use of the whistleblower programme in April 2022 on its official website.