His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President of the UAE and Prime Minister, in his capacity as Ruler of Dubai, issued Law No. (5) of 2021 regarding the Dubai International Financial Centre (DIFC), which replaces Law No. (9) of 2004 concerning the DIFC and its amendments. In line with global best practices, the new law provides greater clarity regarding the responsibilities and tasks of the Centre's Chair and Governor as well as its bodies. It ensures the Centre's independence in operational, financial, and administrative matters, which is essential for the continued growth and success of the financial centre in achieving its objectives, thereby ensuring compliance and adherence to the highest principles of governance and accountability.
The new law expands the strategic objectives of the DIFC, emphasizing the enhancement of Dubai's position as a global financial services hub while establishing values of efficiency, transparency, and integrity. These objectives also include promoting sustainable economic growth in Dubai, diversifying its economy, increasing the contribution of the financial services sector to GDP, and encouraging investment in Dubai to attract regional and international entities to establish and launch their operations in the DIFC as a primary business hub.
The Dispute Resolution Authority, which previously had legal personality under the former law, will operate as two separate entities under the new law in the form of "DIFC Courts" and "The Arbitration Institution." This will allow each entity the best opportunity for growth and appropriate resource allocation concerning their assigned mandates.
The new law also clarifies what DIFC entities can do outside the geographic jurisdiction of the centre. These entities may provide services and products to clients outside the DIFC, provided that this is primarily conducted from their offices in the financial centre. They may also engage in marketing and promoting their activities outside the DIFC.
Furthermore, the new law permits the Chair of the DIFC to exempt certain federal and local government entities and companies from the application of any laws or regulations that may apply when present in the financial centre, in which case only the federal and local laws of the UAE will apply to them. This is an important addition, allowing an increasing number of federal and local governmental authorities within the DIFC to be exempt from certain laws and regulatory provisions in the financial centre that would otherwise not apply to them.
