UAE Legal Insights & Expert Commentary

Articles

  • UAE Solidifies E-Invoicing Mandate with New Ministerial Decisions and Amended VAT Regulations

      The United Arab Emirates (UAE) has taken a decisive step toward fully digitalizing its tax administration with the release of new Ministerial Decisions and amendments to the VAT Executive Regulation. These legislative updates confirm the scope, phased implementation timeline, and key compliance requirements for the nation’s new Electronic Invoicing System (EIS).
      The changes signal a transformative shift toward a standardized, real-time digital reporting model, aligning the UAE with global best practices for tax compliance.
      Key Legislative Updates
      On September 29, 2025, the Ministry of Finance (MoF) issued Ministerial Decisions No. 243 and 244 of 2025, clarifying the operational framework for the EIS. Concurrently, Cabinet Decision No. 100 of 2025 amended Articles 59 (Tax Invoices) and 60 (Tax Credit Notes) of the VAT Executive Regulations, setting the stage for the mandatory adoption of e-invoicing.

      1. Scope of Application (Ministerial Decision No. 243)
        The e-invoicing system applies to all Business-to-Business (B2B) and Business-to-Government (B2G) transactions conducted by persons operating in the UAE.
        Inclusions and Exclusions:
      • Included: All B2B and B2G transactions.
      • Excluded: Business-to-Consumer (B2C) transactions (until further notice) and transactions related to the sovereign activities of government entities.
        Mandatory Use of Accredited Service Providers (ASPs):
      • Both the issuer and the recipient of an electronic invoice or credit note are required to appoint a Ministry-accredited Accredited Service Provider (ASP). The ASPs will be critical for ensuring the invoices are validated, compliant, and transmitted securely through the system.
      • All e-invoices and e-credit notes must contain the full set of data fields as prescribed by the FTA’s technical specifications and must be stored securely within the UAE.
      1. Amendments to the VAT Executive Regulation (Cabinet Decision No. 100)
        The amendments to the VAT Executive Regulation (Cabinet Decision No. 52 of 2017, as amended) eliminate previous flexibilities and standardize compliance for the digital era:
      • Elimination of Simplified Invoices: The concept of simplified invoices (for supplies below AED 10,000) is eliminated. All e-invoices must now be full, structured tax documents.
      • Mandatory E-Invoicing for Zero-Rated Supplies: Issuing a full tax invoice for wholly zero-rated supplies (e.g., direct exports) is now mandatory, ensuring a complete and auditable digital trail.
      • Tax Credit Notes: Credit notes must be issued electronically and comply with the full e-invoicing data schema.
      • Input Tax Recovery: A new condition for input VAT recovery requires the taxable person to retain the tax invoice in the specified electronic format.
        Phased Implementation Timeline (Ministerial Decision No. 244)
        The EIS will be rolled out in a structured, phased approach, with deadlines staggered based on a business’s annual revenue. Voluntary adoption of the system is open to any business starting from July 1, 2026.
        Key Implementation Deadlines:
      • Pilot Program: The system will commence with a pilot program for a selected Taxpayer Working Group starting July 1, 2026.
      • Phase 1: Large Businesses (Annual Revenue equal or more than AED 50 Million)
      • ASP Appointment Deadline: July 31, 2026
      • Mandatory E-Invoicing Deadline: January 1, 2027
      • Phase 2: Other Businesses (Annual Revenue less than AED 50 Million)
      • ASP Appointment Deadline: March 31, 2027
      • Mandatory E-Invoicing Deadline: July 1, 2027
      • Phase 3: All UAE Government Entities
      • ASP Appointment Deadline: March 31, 2027
      • Mandatory E-Invoicing Deadline: October 1, 2027
        A Decentralized, Secure Model
        The UAE’s system adopts a decentralized 5-Corner Continuous Transaction Control and Exchange (DCTCE) model, which is based on the international Peppol network standard. This model enhances security and data integrity by requiring all transactions to pass through an Accredited Service Provider (ASP). The ASP validates the data, transmits it securely to the recipient’s ASP, and reports key information to the Federal Tax Authority (FTA) in near real-time, creating an immediate and secure audit trail.
        Call to Action for Businesses
        The legislative foundation for the e-invoicing mandate is now firmly in place, making preparation a critical priority. Businesses operating in the UAE are strongly advised to:
      • Assess Systems: Conduct a readiness assessment of current Enterprise Resource Planning (ERP) and invoicing systems.
      • Appoint an ASP: Identify and engage a Ministry-accredited Accredited Service Provider to handle the technical implementation and compliance.
      • Review Master Data: Ensure all customer and vendor master data (including VAT Registration Numbers and addresses) is complete and accurate, as the simplified invoicing relief is no longer available.
      • Integrate: Work with the ASP to map ERP data fields to the required UAE e-invoicing data dictionary and integrate the necessary APIs for real-time transmission and reporting.

    • Your Rights Protected: The Agencies and Courts Governing Real Estate in Dubai and Abu Dhabi

        The real estate sectors in Dubai and Abu Dhabi are vital to the UAE economy. To ensure market stability, transparency, and the protection of rights for all involved parties, both Emirates have established distinct, yet comprehensive, regulatory and judicial frameworks.

        1. Regulatory Agencies: The Market Guardians
          The foundation of a stable real estate market rests on robust regulation.
          Dubai: Real Estate Regulatory Agency (RERA)
          In Dubai, the principal regulator is the Real Estate Regulatory Agency (RERA), established in 2007 as an arm of the Dubai Land Department (DLD). RERA’s multifaceted role encompasses licensing all real estate brokers, developers, and property management companies. For developers, RERA manages trust accounts (escrow accounts) for off-plan sales, safeguarding buyer funds. It also mandates and oversees the Ejari system, which registers all tenancy contracts to legalize leases and provide a transparent framework for rental relationships.
          Abu Dhabi: Abu Dhabi Real Estate Centre (ADREC)
          Abu Dhabi’s property market is governed by the Abu Dhabi Real Estate Centre (ADREC), operating under the Department of Municipalities and Transport (DMT). ADREC is responsible for regulating, managing, and overseeing all real estate activities across the Emirate. It oversees the official tenancy contract registration system known as Tawtheeq, which is mandatory for all rental agreements. It aims to elevate the market’s status, enhance transparency, and ensure a competitive environment. Properties within the financial free zone of the Abu Dhabi Global Market (ADGM) are governed by the ADGM Real Estate and Infrastructure (RE&I).
        2. Dispute Resolution Mechanisms and Court Jurisdiction
          Both Emirates provide specialized, efficient, and legally binding channels for resolving property disputes, carefully dividing jurisdiction between specialized centers and general courts.
          Dubai: Specialized Centers and Courts
          Dubai uses a specialized court system for tenancy matters and the general court for other complex real estate claims.
          Rental Disputes
          The Rental Disputes Settlement Center (RDSC), a judicial arm of the DLD, holds exclusive jurisdiction over the majority of disputes between landlords and tenants concerning rental contracts, eviction notices, and rent increases. This offers a fast and specialized alternative to standard civil courts.
          However, the RDSC’s jurisdiction generally excludes long-term leases (over 10 years), ‘lease-to-own’ contracts, and properties located within free zones that have their own court system, such as the DIFC.
          Property Sales and Ownership Disputes
          The Dubai Courts (Property Court) maintain general jurisdiction over major real estate disputes. This includes claims concerning property ownership and title deeds, as well as complex contractual disputes between buyers/investors and developers (e.g., project delays or breach of sales agreements). Appeals from the RDSC, subject to certain value and criteria, are also heard by the Dubai Courts.
          The DIFC Courts hold exclusive jurisdiction over real estate physically located within the Dubai International Financial Centre (DIFC) free zone. Parties outside the DIFC can also agree to “opt-in” to the DIFC Courts’ jurisdiction for commercial matters.
          Abu Dhabi: Settlement Centers and ADJD Courts
          Abu Dhabi directs many real estate conflicts through conciliation centers before they can be escalated to the formal court system under the Abu Dhabi Judicial Department (ADJD).
          Settlement and Conciliation
          The Abu Dhabi Real Estate Settlement Centre (“Taswea”) focuses primarily on conciliation and amicable settlements for disputes involving project development, construction contracts, and delays in project completion. If a settlement is not reached, the dispute is referred to the relevant court within the ADJD.
          Judicial Resolution
          The ADJD Courts (Courts of First Instance) hold general jurisdiction over substantive real estate claims, including claims of property entitlement, ownership rights, and complex commercial disputes arising from real estate transactions. These courts also handle cases related to long-term leases. Disputes may proceed through the Court of First Instance, the Court of Appeal, and finally, the Court of Cassation.
          Within the financial free zone, the ADGM Courts have exclusive jurisdiction over real estate and transactions within the Abu Dhabi Global Market.
          Alternative Dispute Resolution (ADR)
          For complex commercial disagreements, both Emirates encourage arbitration. The Dubai International Arbitration Centre (DIAC) and the Abu Dhabi International Arbitration Centre (arbitrateAD) offer a fast, confidential, and internationally enforceable method for resolution, provided the parties have included an arbitration clause in their contract.

        Conclusion
        Both Dubai and Abu Dhabi have invested significantly in legal and administrative infrastructure to ensure their real estate markets operate with the highest levels of transparency and investor protection. By establishing regulatory agencies like RERA and ADREC, and specialized dispute centers like the RDSC and Taswea, the Emirates have created a robust, multi-layered system designed to minimize risks and provide clear, fair legal recourse for buyers, tenants, and investors alike. Understanding these frameworks is essential for anyone engaging in real estate transactions in the UAE.

      • Trust & Transparency: UAE Law No. (8) of 2007 and the Escrow Account Mechanism

          The implementation of robust escrow regulations stands as a cornerstone of the United Arab Emirates’ commitment to a secure and transparent real estate sector. Designed primarily to safeguard investor funds in off-plan (under construction) property purchases, the escrow system mitigates risk and ensures project accountability.
          What is an Escrow Account?
          An escrow account is a financial arrangement where a third party, known as the Escrow Agent (typically a bank or financial institution approved by the regulator), holds funds related to a transaction. The agent acts as a neutral party, regulating the release of funds only after specific, agreed-upon contractual conditions are met.
          In the context of UAE real estate, the escrow account protects the buyer’s money by ensuring it is used exclusively for the construction and development of the specific project for which it was intended.
          The Regulatory Framework
          While various Emirates have local regulations, the system is strongest and most established in Dubai, governed primarily by Dubai Law No. (8) of 2007 Concerning Escrow Accounts for Real Estate Development in the Emirate of Dubai and subsequent regulations from the Real Estate Regulatory Agency (RERA), which operates under the Dubai Land Department (DLD).
          Key Mandates of the Law:

          1. Mandatory for Off-Plan Sales: Any developer selling units off-plan must establish a dedicated escrow account for that specific project before beginning sales or marketing.
          2. Project-Specific Funds: The account must be opened in the name of the project, ensuring that funds from one project cannot be diverted to finance another.
          3. Approved Escrow Agent: The account must be opened with an Escrow Agent (bank) that is officially accredited and approved by the DLD/RERA.
          4. No Creditor Seizure: Crucially, the funds held in the escrow account are legally protected from seizure by the developer’s creditors.
            How the Escrow System Works
            The escrow process is structured to tie the developer’s access to funds directly to verifiable construction progress, ensuring project completion.
            During the Initial Sales phase, the developer must first register the project, obtain a sales permit, and open the Escrow Account. The buyer then deposits all installment payments into this account, not the developer’s general company account.
            During Construction, the developer must execute the project as per the approved design and timeline. The developer commissions an independent, RERA-approved consultant to certify the completion of a specific construction milestone (such as the foundation or 50% superstructure). This certified progress report is submitted to RERA/DLD. Only after RERA/DLD reviews and approves the report is the Escrow Agent authorized to release a corresponding portion of the funds to the developer for approved project expenses.
            Upon Project Completion and handover of the unit to the buyer, a portion of the funds (typically 5% of the total project value) is retained in the escrow account for a period of one year post-completion. This retained amount is specifically to cover any defects or liabilities that may arise during the Defects Liability Period.
            Rights and Protection for Buyers
            The escrow system serves as the primary safeguard for off-plan investors:
          • Security of Investment: The buyer’s money is not mixed with the developer’s operating capital, making it secure even if the developer faces financial difficulties or bankruptcy.
          • Guaranteed Usage: Funds can only be released to cover approved costs directly related to the project (construction, consultancy, land payment, etc.).
          • Project Completion: In the event of significant project delay or cancellation, RERA can intervene. The Escrow Agent, in coordination with the DLD, is empowered to take necessary measures, including managing the project’s completion or ensuring buyers receive full refunds from the remaining escrowed funds.
          • Transparency: Buyers have the right to request proof that the developer has a registered escrow account before making any payments, and payments should always reference the buyer’s unique unit number.
            Developer Obligations and Penalties
            Developers face strict obligations and serious penalties for non-compliance:
          • Financial Discipline: Developers must demonstrate financial capability, often by having a percentage of the construction cost available as a guarantee before starting sales.
          • Accurate Reporting: Regular financial and construction progress reports must be submitted to the regulator.
          • Penalties: Selling off-plan units or collecting payments without a registered escrow account and necessary DLD/RERA approvals can lead to significant fines (starting at AED 500,000 or more) and other legal sanctions, including imprisonment or cancellation of the developer’s license.
            In summary, the UAE’s escrow account framework ensures that the relationship between property buyers and developers is structured, transparent, and legally protected, solidifying investor confidence in the nation’s real estate market.

        • The New Era of Taxation: Understanding the Introduction of UAE Corporate Tax

            The United Arab Emirates has embarked on a fundamental shift in its fiscal policy with the introduction of a federal Corporate Tax (CT) regime. Effective for financial years commencing on or after June 1, 2023, this landmark move aligns the UAE with global standards for tax transparency and fairness, and marks a significant step in diversifying government revenue beyond oil. 
            The Corporate Tax is levied on the net income or profits of corporations and other entities derived from their business activities. 
            Key Features and Rates
            The UAE’s Corporate Tax regime is characterized by a globally competitive, tiered rate structure designed to support small and medium enterprises (SMEs). 

            1. The Rate Structure
              The statutory tax rates are applied to a business’s Taxable Income (net profit):
              Taxable Income Threshold Corporate Tax Rate Notes
              Up to AED 375,000 0% Supports start-ups and small businesses.
              Exceeding 9% The standard
              Large Multinational Enterprises (MNEs) 15% Applicable to MNEs meeting specific criteria related to the OECD’s Pillar Two initiative (Global Minimum Tax).
            2. Implementation Timeline:
              The FCT applies to the financial year that starts on or after June 1, 2023. 
            3. Taxable Persons
              The FCT generally applies to two main categories of taxable persons:
            • Resident Juridical Persons: Companies and other legal entities established or incorporated in the UAE (including Free Zones). 
            • Non-Resident Juridical Persons: Foreign companies that have a Permanent Establishment (PE) in the UAE or derive income from real estate located in the UAE. 
            • Natural Persons (Individuals): Individuals are subject to FCT only if they conduct a business or business activity in the UAE and their total annual turnover from such activities exceeds AED 1 million. 
              Key Exemptions and Reliefs
              The new law includes several provisions to maintain the UAE’s competitive edge and encourage specific types of investment. 
            1. Free Zone Persons (Qualifying)
              Free Zone entities can benefit from a 0% Corporate Tax rate on Qualifying Income if they meet certain criteria, including:
            • Maintaining adequate substance in the UAE. 
            • Deriving “Qualifying Income” (as defined by the Cabinet). 
            • Not having elected to be subject to the standard 9% rate. 
              Income derived from transactions with UAE mainland entities or real estate may be subject to the standard 9% rate.
            1. Exempt Entities and Income
              A number of entities and types of income are specifically exempted:
              Exempt Entity Category Exempt Income Category
              Government Entities and Government-Controlled Entities. Dividends and Capital Gains from qualifying shareholdings.
              Extractive and Non-Extractive Natural Resource Businesses (if subject to Emirate-level tax). Personal Income (salaries, wages, employment income, personal investments).
              Qualifying Public Benefit Entities (charities, non-profits). Income derived from real estate investment by individuals in their personal capacity.
              Qualifying Investment Funds and Regulated Public/Private Pension Funds. Qualifying Intra-Group transactions and reorganizations.
            2. Small Business Relief
              Small businesses that meet certain revenue thresholds (less than AED million in a relevant tax period) may elect to be treated as having zero taxable income and a 0% FCT rate. This is designed to reduce the compliance burden for the smallest businesses. 
              Compliance and Administration
              The Federal Tax Authority (FTA) is responsible for the administration, collection, and enforcement of the Corporate Tax. 
            • Registration: All taxable persons, including Qualifying Free Zone Persons, must register with the FTA and obtain a Corporate Tax Registration Number. 
            • Tax Return Filing: A single Corporate Tax return must be filed annually within nine months from the end of the relevant tax period. 
            • Payment: The deadline for payment of any FCT liability is generally the same as the tax return filing deadline (nine months from the end of the tax period). 
            • Transfer Pricing: The law introduces Transfer Pricing rules that require transactions between Related Parties to adhere to the “arm’s length principle.” 
            • Basis of Taxation: The tax is calculated on the accounting net profit, based on financial statements prepared in accordance with International Financial Reporting Standards (IFRS), with specific adjustments mandated by the FCT Law. 
              The introduction of the Corporate Tax solidifies the UAE’s standing as a major global business hub, demonstrating its commitment to international fiscal governance while maintaining a highly competitive and investor-friendly environment.

          • From Zero to Nine: How the UAE Corporate Tax is Reshaping Real Estate Ownership in Dubai

              The United Arab Emirates (UAE), including Dubai, has historically been known for its minimal tax environment. However, the introduction of a federal Corporate Tax Law (Federal Decree-Law No. 47 of 2022) (FCT), effective for financial years starting on or after June 1, 2023, marks a significant shift, bringing new compliance requirements and implications for the real estate sector. 
              The FCT aims to align the UAE with international tax transparency standards and applies a standard rate of 9% on taxable income exceeding AED 375,000. Income up to this threshold is taxed at a 0% rate. 
              Impact of Corporate Tax on Real Estate in Dubai
              The FCT does not apply to the value of the property but rather to the income derived from real estate activities, and the impact varies significantly depending on the nature of the owner and the activity: 

              1. Corporate Entities and Businesses
              • Taxable Activities: Income derived from the ownership, use, or disposal of real estate by corporate entities—including rental income, capital gains from sales, and profits from real estate development, construction, agency, and brokerage—is generally subject to the 9% FCT rate if the net profit exceeds the AED 375,000 threshold. 
              • Net Basis Calculation: The tax is calculated on a net basis, allowing for deductions of expenses incurred in generating the income, such as maintenance costs, interest, and depreciation. 
              • Depreciation: The UAE government has introduced a key provision allowing taxable entities to claim a 4% annual tax depreciation on the original cost of investment properties held at fair value, which can help reduce taxable income. 
              • Commercial vs. Residential: Income from both commercial properties and residential properties held for business/investment purposes by a corporation is typically subject to FCT. 
              • Free Zone Entities: Real estate companies in Free Zones that qualify as Free Zone Persons may benefit from a 0% FCT rate on qualifying income. However, holding or managing property on the mainland, or transacting with mainland clients, may lead to partial or full exposure to the 9% tax. 
              1. Individual Investors (Natural Persons)
              • Personal Investment Exemption: A crucial distinction is made for individuals. Real estate investment income earned by individuals in their personal capacity is generally exempt from Corporate Tax, provided it is not part of a licensed business activity and the individual does not exceed a set annual turnover threshold (currently AED 1 million) from other business activities. 
              • Non-Taxable Income Streams for Individuals (in a personal capacity):
              • Income from the sale, leasing, or renting of property that does not require a commercial license. 
              • Personal investment income (e.g., dividends, capital gains from shares). 
              • Wages and salaries. 
              • Taxable Income for Individuals: An individual who undertakes real estate activities that are considered a “business or business activity” (e.g., activities requiring a license, such as real estate management or high-volume short-term leasing) and whose turnover from all business activities exceeds the AED 1 million threshold may be subject to FCT on the profits exceeding AED 375,000. 
                Understanding UAE Real Estate Tax Regulations (Non-Corporate Tax)
                Beyond the Corporate Tax, investors in Dubai’s real estate market must navigate other established regulations:

              Tax/Fee Rate Applicability Key Details
              Annual Property Tax 0% None Dubai does not impose an annual recurring property tax on owned real estate.
              Dubai Land Department (DLD) Transfer Fee 4% On the purchase price Payable to the DLD upon property transfer, typically split between buyer and seller, though often borne entirely by the buyer.
              Value Added Tax (VAT) 5% Commercial property sales and leases. Applied to the sale and leasing of commercial properties (offices, shops, warehouses).
              VAT Exemption/Zero-Rated 0% / Exempt Residential property The sale of new residential property within the first three years of completion is Zero-Rated (allows for VAT recovery). Subsequent sales and all residential leases are Exempt from VAT.
              Municipality Housing Fee 5% Annual Rental Value A fee paid by the tenant (or owner-occupier) on the annual rental value, often collected via the utility bill.
              Capital Gains Tax 0% Individuals There is generally no personal capital gains tax on the sale of property by an individual. Corporate entities are subject to the 9% CT on capital gains.

              In conclusion, the UAE’s Corporate Tax primarily impacts corporate entities and individuals who operate real estate as a formal, licensed business activity. For the typical individual investor holding property in their personal name, Dubai remains a low-tax environment, free from annual property taxes and personal income tax on rental or capital gains. However, professional advice is essential to correctly structure real estate holdings and ensure compliance with the new Corporate Tax law.

            • Protect Your Investment: Your Legal Rights for Delayed Property Delivery in Dubai

                Investing in off-plan property in

                Dubai is often exciting, but encountering a significant delivery delay can be financially stressful. Fortunately, the UAE’s legal framework, governed by the Dubai Land Department (DLD) and its regulatory arm, RERA (Real Estate Regulatory Agency), provides robust protection for buyers.
                If your anticipated handover date has passed, understanding your legal rights and available remedies is the critical first step.
                Key Legal Recourses for the Buyer
                When a developer fails to meet the agreed-upon completion date (ACD), the buyer generally has three main legal options, depending on the severity of the delay and the terms of the Sale and Purchase Agreement (SPA):

                1. The Right to Compensation
                  If you choose to proceed with the purchase despite the delay, you are entitled to claim financial compensation for the losses incurred.
                • Liquidated Damages: Most SPAs include a penalty clause (often calculated as a percentage of the purchase price or a daily rate) that the developer must pay for each day the delivery is delayed after the expiry of any contractual grace period (usually 6 to 12 months).
                • Actual Losses: If the SPA does not specify liquidated damages, or if your actual losses exceed the penalty amount, Dubai Courts may award compensation for quantifiable damages. This commonly includes:
                • Alternative Accommodation Costs: Rent paid for another property due to the inability to move into the purchased unit.
                • Cost of Funds: Interest or costs incurred on financing (mortgage payments) during the delay period.
                1. The Right to Contract Termination and Full Refund
                  For substantial or unjustified delays that go far beyond the contractual grace period, you may be entitled to terminate the SPA entirely and reclaim all your invested capital.
                • Legal Basis: Under the UAE Civil Code and established case law, if the delay is deemed a material breach of the contract, the buyer can request the court to annul the agreement.
                • The Refund: If termination is granted due to the developer’s fault, you are typically entitled to a full refund of all payments made, along with any accrued interest or damages.
                1. The Right to Specific Performance
                  In some cases where the buyer still wishes to obtain the property, they can petition the Dubai Real Estate Court to compel the developer to complete the construction as originally agreed and deliver the unit.
                  The Process: Steps to Take When Facing a Delay
                  Navigating a dispute requires meticulous documentation and adherence to formal procedures.
                  Step 1: Review Your Sale and Purchase Agreement (SPA)
                  The SPA is the governing document. Immediately check the following:
                • Anticipated Completion Date (ACD): The official handover date.
                • Grace Period: Any specified extension period the developer is allowed beyond the ACD.
                • Penalty Clause: The specific terms for liquidated damages in case of delay.
                  Step 2: Formal Notice and Negotiation
                  If the ACD (and any grace period) has expired, you must formalize the complaint:
                • Issue a Formal Written Notice: Send a registered legal notice or a Notary Public notice to the developer, clearly stating the breach (the delay) and demanding a precise new completion date or compensation. This step is often necessary to establish the developer’s default before moving to court.
                • Document Everything: Keep copies of all correspondence, payment receipts, and any costs incurred due to the delay (e.g., tenancy contracts for rented housing).
                  Step 3: File a Complaint with the Regulator (RERA)
                  If direct negotiation fails, the Dubai Land Department (DLD) provides mechanisms for dispute resolution.
                • RERA Complaint: You can file a formal complaint with the DLD/RERA to initiate mediation. RERA can investigate the project status, fine the developer for non-compliance, or facilitate an amicable settlement.
                  Step 4: Litigation in the Dubai Real Estate Court
                  If a resolution cannot be reached amicably or through RERA mediation, the final recourse is to file a case before the Dubai Real Estate Court.
                • Seek Legal Counsel: Given the complexity of contract law and the need to quantify losses accurately, hiring a lawyer specialized in Dubai real estate disputes is essential.
                • Court Outcomes: The court can grant the termination of the SPA, award compensation, or order specific performance, based on the evidence presented.
                  Protecting Yourself from Future Delays
                  While the law protects buyers after a delay occurs, taking precautionary measures is always advisable:
                • Verify Registration: Ensure both the developer and the project are registered with RERA and that your purchase is recorded in the Interim Real Estate Register (Oqood).
                • Check Escrow Accounts: Confirm that the developer has a RERA-approved escrow account where your payments are securely held, as required by law.
                • Developer Track Record: Research the developer’s history of project completions and customer satisfaction before signing the SPA.
                  By knowing your rights under the UAE’s robust real estate laws, you can effectively protect your investment and seek appropriate legal remedies when property delivery is delayed.

              • Dubai Court of Cassation Rules: LLC Managers Personally Liable for Withholding Shareholder Dividends

                  In a rare judicial precedent that signals an evolution in corporate governance jurisprudence within the UAE, the Dubai Court of Cassation issued a landmark ruling. This decision marks a significant turning point in interpreting the fiduciary obligations of management within Limited Liability Companies (LLCs). The Court mandated that the company and its managers are jointly liable to pay approximately AED 28 million to a shareholder, citing the managers’ continuous breach of their legal duties, primarily their refusal to convene Annual General Assemblies and the withholding of declared profits for nearly two decades.
                  Piercing the Corporate Shield: From Entity Liability to Personal Accountability
                  What makes this ruling distinct is its decision to circumvent the traditional legal principle of separating the financial liability of the company from that of its directors. The Court chose to impose direct personal liability on the managers alongside the corporate entity, a legal action commonly referred to as “Piercing the Corporate Veil.”
                  Case Summary: Silent Shareholder Claims Entitlement
                  The case originated from a shareholder holding a 34% stake in a Dubai-based LLC. The shareholder sought legal recourse after years of managerial silence and a severe lack of financial transparency. From 2003 until 2022, no Annual General Assembly was held, and no dividends were distributed, despite the company’s consistent financial performance. A court-appointed financial expert confirmed the existence of substantial undistributed profits, unequivocally supporting the claimant’s position.
                  Judicial Endorsement at All Levels
                  Despite the appeals lodged by the company and its managers, both the Court of Appeal and the Court of Cassation upheld the initial judgment. They unequivocally affirmed that Corporate Governance is not merely a theoretical framework but a binding legal obligation with tangible consequences, and that managers bear fiduciary duties toward shareholders.
                  Legal and Regulatory Ramifications:

                  • Reinforcing Fiduciary Duty: The judgment strengthens managers’ obligations under Federal Law No. 32 of 2021 concerning Commercial Companies, particularly regarding governance and financial disclosure.
                  • Expanded Scope of Liability: Liability is no longer confined to the company’s legal entity but extends to the managers personally in cases of gross breach of duty.
                  • Investor Assurance: The ruling boosts confidence for shareholders, especially minority holders, in the capacity of the UAE judiciary to deliver justice even in complex and protracted disputes.
                    Implications for the Business Environment:
                  • A Warning to Managers: Breaching statutory duties is no longer a simple administrative violation but can lead to personal financial liability.
                  • Call for Institutional Compliance: Companies are now strongly urged to activate governance mechanisms, convene General Assemblies, and meticulously document all financial decisions.
                  • Enhancing Investment Appeal: The judgment reflects the UAE judiciary’s commitment to international standards of transparency and accountability, thereby strengthening the trust of both local and international investors in Dubai’s business environment.

                • Dubai Court of Cassation Rules: Reinforcing the “Absolute Prohibition” of Late Payment Interest in Islamic Finance

                    The judgment issued by the Dubai Court of Cassation on July 8, 2025 (Commercial Case No. 595/2025) marks a significant advancement in Islamic banking litigation in the UAE, firmly establishing the principle of absolute prohibition against any form of interest or financial benefit tied to delayed repayment of Islamic financing obligations. The ruling overturned the Court of Appeal’s decision, which had previously allowed an Islamic bank to claim statutory late payment interest.

                    Core of the Cassation Court’s Decision:
                    The Court of Cassation ruled that Article 473(1) of the Federal Commercial Transactions Law must be interpreted comprehensively and literally, thereby cementing three key principles:

                    1. Absolute Prohibition of Any Benefit: The Court affirmed that the Article imposes an absolute prohibition on any form of interest or financial benefit (regardless of the amount) arising solely from delay in repayment.
                    2. Sharia Substance Over Legal Form: The legal classification of the claim (whether “statutory interest” or “contractual penalty”) is irrelevant. As long as the claim originates from a delay in settling an obligation arising from Sharia-compliant finance (e.g., Murabaha), it falls within the scope of the prohibition.
                    3. No Compensation for Delay: Islamic financial institutions cannot claim any interest, even if intended as compensation for damages resulting from the customer’s delay, as this contradicts Sharia principles that forbid earning a profit merely from the passage of time on a debt (Riba).

                    Legal and Practical Implications of the Ruling:

                    • Final Clarity for IFIs: The judgment provides unambiguous legal clarity that Islamic Financial Institutions (IFIs) cannot claim statutory interest (currently applied at 5%) or any other financial compensation arising from delayed payment.
                    • Strengthening Sharia Governance: The decision underscores the UAE judiciary’s commitment to upholding the foundational principles of Islamic finance, thereby promoting integrity and trust in Sharia-compliant contracts and products within the state.
                    • Contractual Review Necessity: Islamic banks are now required to meticulously review the “default and delay” mechanisms in all their contracts to ensure that alternatives used (such as requiring the customer to donate to charity) do not conflict with the literal and broad interpretation of Article 473.
                      This ruling serves as a critical signal that the judicial system in Dubai and the UAE prioritizes Sharia principles over general legal classifications when it comes to Islamic financing.

                  • Pivotal Court Ruling in Dubai: Cryptocurrencies are Recoverable In-Kind or in Cash at Market Value on the Date of Enforcement

                      Pivotal Court Ruling in Dubai: Cryptocurrencies are Recoverable In-Kind or in Cash at Market Value on the Date of Enforcement
                      In a judicial precedent considered the first of its kind in the United Arab Emirates, the Dubai Commercial Court issued a landmark ruling in May 2025 addressing the legal complexity of dealing with cryptocurrencies in civil and commercial disputes, particularly given their sharp volatility and ease of transfer and concealment.

                      Background of the Dispute: A Digital Investment via “WhatsApp”
                      The case revolved around an investment agreement concluded via the “WhatsApp” application, through which the defendant received 29 Bitcoin and 102 Ethereum from the claimant, in exchange for a promise of a fixed 2% monthly return, a guaranteed principal sum, and the option for redemption at any time. When the claimant demanded the return of his assets, the defendant defaulted, prompting the claimant to seek legal recourse.

                      Dual Legal Strategy: Specific Performance or Cash Compensation at the Date of Enforcement
                      Before the court, the claimant asserted his right to the return of the cryptocurrencies in-kind (Specific Performance), based on the distinct nature of these digital assets as more than just a store of value, but unique assets that must be restored in their current form. Alternatively, if specific performance was impossible, the claimant sought monetary compensation, provided that it was calculated according to the market value of the currencies on the date of judgment enforcement, rather than the date of contract or filing the lawsuit.

                      The Verdict: Judicial Flexibility and Economic Realism
                      The Court ruled as follows:

                      • Termination of the investment agreement.
                      • Ordering the defendant to return 29 Bitcoin and 102 Ethereum in-kind.
                      • In the event of non-compliance, ordering the defendant to pay the equivalent market value in UAE Dirhams as of the date of judgment enforcement.

                      Legal Implications of the Ruling:

                      1. Official Recognition: Judicial recognition of cryptocurrencies as recoverable and justiciable assets, enhancing legal confidence in digital transactions.
                      2. Protection from Volatility: Adoption of the date of enforcement as the benchmark for valuing monetary compensation, which protects the creditor from market fluctuations.
                      3. Enforcement Possibilities: Opening the door for enforcement against virtual wallets, including the possibility of compelling platforms like Binance to comply with judgments.
                      4. Addressing Concealment: The Court’s acknowledgment of the difficulty in tracing digital assets, granting the claimant flexibility to opt for cash compensation if specific performance proves difficult.

                      This ruling constitutes a turning point in the UAE legal environment, affirming that cryptocurrency-based claims are justiciable and enforceable, provided they are structured and argued effectively before the judiciary.

                    • Abu Dhabi Redefines Annual Leave Entitlements: Landmark Ruling Grants Compensation for 13 Years of Unused Leave

                        A prominent judicial development set to transform employee rights management in the UAE has emerged from the Abu Dhabi Court of Cassation. The Court issued a ruling granting an employee compensation for all unused annual leave accrued during his 13 years of service, establishing a legal precedent that significantly reinforces employee protection.


                        Case Background: Lack of Documentation Favors the Employee
                        The lawsuit (Case No. 73 of 2024) involved an employee who worked for a private entity from 2009 until June 2022. Following the termination of the employment relationship, the employee claimed compensation for annual leave he had not taken. The employer failed to provide any documents proving that the employee had utilized the leave or received cash compensation for it.
                        Judicial Shift: From Restriction to Extension
                        While the Courts of First Instance and Appeal limited compensation to the last two years only, in line with the traditional interpretation of Article 29 of the Labour Law, the Court of Cassation adopted a divergent stance. It relied on Articles 29(8) and (9) of the Federal Labour Law and Article 19 of the Executive Regulations to rule that the employee was entitled to full compensation for all unused leave throughout his entire service period.
                        The Court stressed that the burden of proof lies with the employer; in the absence of this proof, it is legally presumed that the leave was not utilized.
                        Contrasting Judicial Interpretations: Abu Dhabi vs. Dubai
                        This ruling marks a deviation from the traditional approach often followed by Dubai Courts, which typically restrict compensation to two years unless the employee provides written evidence justifying carry-over. This reflects a difference in the interpretation of Article 29(8):

                        Read more: Abu Dhabi Redefines Annual Leave Entitlements: Landmark Ruling Grants Compensation for 13 Years of Unused Leave
                        • Dubai Courts view it as a time limit on the claim.
                        • Abu Dhabi Court views it as a tool to protect the employee against the employer’s failure to maintain proper documentation.
                          Regional judicial approaches tend to be more conservative: Saudi Arabia and Kuwait typically impose the burden of proof on the employee and apply temporal restrictions, with Kuwait even suspending cash compensation in the public sector. Qatar, Oman, and Bahrain adopt intermediate positions but still require the employee to prove that the leave was not utilized.
                          Legal Amendment Reinforces the Employee’s Position
                          This expanded interpretation aligns with Federal Decree-Law No. 9 of 2024, which came into effect on July 31, 2024. This law stipulates that the statute of limitations (two years) begins from the date of service termination, rather than the date the right accrued. This grants employees a longer window to claim their rights and strengthens their legal standing.
                          Key Takeaways for Employers (Compliance and Governance)
                          The ruling’s impact extends beyond a single employee’s compensation; it redefines the legal framework for annual leave entitlements in the UAE. It reflects a more progressive judicial trend focused on employee protection and reinforces the principles of transparency, accountability, and sound governance in HR management.
                        • Financial Liability Risk: Lack of proper documentation can lead to significant financial liability, as the Court may now presume leave was unused for the entire service period.
                        • Mandatory Documentation: Companies must maintain meticulous records of annual leave utilized or compensated, and enforce clear internal policies that encourage employees to take their leave within the entitlement year.
                          This judgment represents a qualitative shift in the philosophy of labour jurisprudence in the UAE, reflecting a fairer and more realistic approach to employee rights. It raises legitimate questions about the readiness of other Gulf states to adopt a similar approach that balances rights protection with institutional compliance.