Dubai: Law of Offshore
LAW NO. (1) OF 2000 OF DUBAI TECHNOLOGY, ELECTRONIC COMMERCE & MEDIA FREE ZONE
This Law shall be known as "Dubai Technology, Electronic Commerce and Media Free Zone Law No. (1) of 2000".
The following words and phrases shall have the following meaning appearing opposite each of them, unless the context implies otherwise.
There shall be established by this Law:
- a free zone to be known as Dubai Technology, Electronic Commerce and Media Free Zone, which location, area and boundaries shall be as set out in the map attached to this Law;
- a corporate entity known as Dubai Technology, Electronic Commerce and Media Free Zone, which shall be financially and administratively independent and may sue or be sued in this capacity. Its main premises shall be in the Free Zone, and it shall be part of the Government.
The Free Zone Authority shall be constituted of:
- a chairman;
- a director general;
- an executive body.
The Chairman shall be appointed by the Ruler, and shall undertake the supervision of the Free Zone. The Chairman shall have the power and authority to issue rules and regulations necessary for the operation and administration of the Free Zone, and for the implementation of this Law.
The Director General shall be appointed by the Ruler, and shall undertake the administration of the Free Zone, under the supervision of the Chairman in accordance with the provisions of this Law and the rules and regulations issued in relation thereto and shall represent the Authority towards third parties.
The Chairman shall issue a special regulation governing the recruitment and appointment of employees of the Authority’s Executive Body, and the terms and conditions of their employment, dismissal, salaries, duties, rights and other matters involving them.
The objects of the Authority shall be:
- to draw up strategies and policies, and methods of implementation thereof, in order to promote Dubai as a center for Technology, Electronic Commerce and Media;
- to prepare researches and advise the Government in relation to laws appropriate to the regulation and encouragement of Technology, Electronic Commerce and Media in the Emirate, including but not limited to:
1. data protection;
2. protection of intellectual property right;
3. control of crimes associated with Electronic Commerce.
- to establish, own and promote, either solely or with others, establishments in the Free Zones, including but not limited to, a University and a research centre;
- to co-ordinate with the other Free Zones in relation to matters of mutual interest.
To achieve its objects, the Authority shall undertake the following functions and responsibilities:
- procure infrastructure, buildings, management and any other services required to achieve the Authority’s objects;
- regulate business and activities within the Free Zone;
- provide telecommunications and Internet services;
- authentication of Internet and Electronic Commerce sites and issuing of the necessary terms and conditions in relation thereto. The Authority may also license other establishments within the Free Zone to perform the authentication process of such sites;
- establish and license establishments in the Free Zone;
- regulate commerce between establishments in the Free Zone and any other parties outside the Free Zone;
- enter into agreements with other Free Zones to enable the Free Zone establishments to carry on business in those other zones;
- provide the Free Zone establishments, upon request, with executives, managers technicians, craftsmen and other workers in accordance with the provisions of this Law, the regulations issued in relation thereto, and any terms and conditions agreed upon by the Authority and these establishments;
- enter into leases of plots and buildings that may extend to periods up to (50) years, with any establishment in the Free Zone, to enable it to carry on its activity according to terms and conditions agreed upon;
- provide of all kinds of services;
- levy and charge fees for the services it provides;
- establish an investment fund for providing capital to the Free Zone establishments, and for investing the Authority’s funds in the manner and method, and in the activities and projects, which the Chairman deems fit.
The business and activities carried on in the Free Zone shall include the following:
- the design, development, use and maintenance of everything relevant to Information Technology;
- business of Electronic Commerce;
- telecommunications and media services;
- provision of services through the Internet or through any other medium including banking, financial services, insurance, education, call centres, marketing operations, information and recreation services;
- integrated marketing and public relations services;
- assembly and packaging of products manufactured within or outside the Free Zone;
- import, export and storage of products;
- the development and manufacture of products;
- warehousing, logistics, distribution and redistribution services.
Subject to the provisions of Article (23) of this Law and the regulations issued in relation thereto, the Free Zone shall be open to all kinds of products from all sources, whether local or foreign.
The products brought, manufactured, produced or developed in the Free Zone shall be exempt from customs duties, and shall not be subject to any customs duties or any other fees when exported.
Products kept in the Free Zone, used in any process, or integrated in the manufacturing of any product in the Free Zone shall be exempt from customs duties.
Products exported from the Free Zone to the "Customs Zone" in Dubai shall be deemed to have been exported from abroad for the first time, and shall be subject to customs duties.
Free Zone establishments and employees shall be exempt from all taxes including income tax with regard to their operations within the Free Zone. They shall also be excluded from any restrictions on repatriation and transfer of capital, profits or wages in any currency to any place outside the Free Zone for a period of (50) years. This period may be renewed for further similar periods by a resolution issued by the Chairman. Such period shall be calculated from the date of the beginning of work of such establishments or employees.
Assets or activities of the Free Zone establishments shall not be subject to nationalization or any measures restricting private ownership, throughout the period of their activities in the Free Zone.
Free Zone establishments may employ or hire whomsoever they choose in their operations in the Free Zone, provided that such employees are not subject to any countries politically or economically boycotted by the UAE.
The operations of Free Zone establishments or employees, within the Free Zone, shall not be subject to the laws and regulations of Dubai Municipality, the Department of Economic Development of the Government of Dubai, or the powers and authority falling within their jurisdiction.
Companies with limited liability may be incorporated in the Free Zone in accordance with the Free Zone Regulations, and shall be considered as Free Zone establishments. These companies may have one or more shareholders, whether natural or corporate persons, local or foreign.
The Authority shall have the power to approve the establishment and registration of the Free Zone establishments, and to regulate all procedures and matters relating thereto, including incorporation and registration of companies referred to in Article (19), levying registration fees, setting out terms and rules governing such companies, regulations regarding their liquidation or any other matters as the Authority deems necessary for the proper supervision and control of such companies.
Every limited liability company incorporated in accordance with Article (19) of this Law, shall set out beside its name the following particulars, in all its activities, contracts, notices invoices, correspondence and publications:
- that the company is incorporated in accordance with this Law, and that it is a limited liability company;
- that it is a company in the Free Zone.
in the cases where clause (a) and/or clause (b) of this Article are disregarded, the company’s owner or owners shall be personally liable for the obligations of the company.
The Chairman, the Director General or the employees and workers of the Authority shall not be liable to any third party for the operations or obligations of the Free Zone Establishments or their employees.
The following products, goods and services shall be prohibited in the Free Zone:
- goods and services in violation of intellectual property law, including those in violation of laws and rules relevant to trademark, patent, copyright and design rights;
- products boycotted by the UAE;
- all goods, products and services prohibited under the laws in force in the Emirate and/or the UAE.
The Authority shall have power to specify or amend the list of prohibited products and services in accordance with the laws of the Emirate, as well as the power to grant exemptions from such prohibitions.
The following activities shall be prohibited within the Free Zone:
- any unlicensed activity by any natural or corporate person, which requires a license within the Free Zone;
- any activity contrary to the Free Zone Regulations;
- any willful activities designed to disrupt computer networks & software such as the creation and distribution of computer viruses.
Assignment of the license issued by the Authority, to another party, shall be prohibited without the prior written consent of the Authority.
The Authority shall have the power to control and inspect the activities of Free Zone establishments which are suspected to be in breach of the provisions of this Law or any other regulation.
The Ruler may establish a court and/or an arbitration tribunal with the jurisdiction of hearing claims and suits arising out of, or in connection with, activities carried out by Free Zone Establishments within the Free Zone, including claims and suits between these establishments and any other parties outside the Free Zone.
The Director General may impose civil penalties on any person who is in breach of any provision of this Law and the Regulations issued in relation thereto, or in breach of the terms and conditions of the license issued by the Authority, all in accordance with a special regulation to be issued by the Chairman. Following is an artist's impression of the proposed Dubai Internet City site plan. The site is located on Sheikh Zayed Road, next to the American University. This area overlooks the Emirates hills golf course development.
In May 2003, the Dubai Technology and Media Free Zone announced that the Private Companies Regulations for Free Zone Limited Liability Companies had been issued.
The regulation was designed to provide a comprehensive regulatory base for Free Zone Limited Liability companies, and further enhance the business environment that the Free Zone’s companies enjoy.
Two other laws developed by the Free Zone’s legal department in conjunction with international agencies had already been accepted as Dubai Law at the time – the Facilitation of Electronic Transactions Law and the Electronic Crimes Law.
In December 2008, The Dubai International Financial Centre released its proposed Electronic Transactions Law for public consultation. The Law is a move towards creating an efficient, secure legal environment for companies to undertake electronic transactions. The law creates clear rules, regulations, and standards for authenticating electronic messages, records and signatures.
Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC) and Vice Chairman of the UAE Central Bank said:
"In furtherance of DIFC's efforts to be a catalyst for the growth of financial and capital markets, the new law helps to ensure a strong and supportive legal framework for electronic transactions undertaken from within DIFC. The new law forms part of DIFC's efforts to provide a modern, world-class regulatory framework that offers the certainty necessary for financial services companies to carry out a range of transactions at the level of DIFC's global counterparts. The Electronic Transactions Law reinforces DIFC's strong emphasis on integrity, transparency and efficiency."
The proposed Electronic Transactions Law (ETL) is based on the Uniform Electronic Transactions Act (1999) (UETA) drafted by a committee of the National Conference of Commissioners on Uniform State Laws in the US and adopted by most states in the US. The UETA contains provisions derived from, among others, the UNCITRAL Model Law on Electronic Signatures and Canadian law.
The ETL is not a general contracting statute. The substantive rules of contracts remain unaffected by the ETL. The ETL does not apply to all writings and signatures, but only to electronic records and signatures relating to commercial transactions.
Following the consultation process, the Electronic Transactions Law was to be presented to the Ruler of Dubai for enactment in accordance with Dubai Law No. 9. The Law was expected to be made official by January 2009 but has so far not made it onto the statute book.