In 2021, the UAE announced the largest legal reform in its history by introducing a raft of new laws. The announcement came during the 50th anniversary of the UAE, as part of the government's 'towards the next 50' national strategy. Over 40 new laws are included in the reform, many of which align the UAE towards international best practice.
This guide provides a snap shot of the new laws concerning corporate, commercial, IP, projects and technology in the UAE and The Kingdom of Saudi Arabia (KSA). Our experts in these fields can help guide your business through these changes.
Legal updates for 2022
UAE Patent law
Law: Federal Law no. 11 of 2021 concerning the regulation and protection of Industrial Property Rights.
Effective as of: 1 December 2021.
Summary: The new UAE patent law is finally here. The published law introduces some welcomed changes and continues the reform of the UAE's legal framework to support the UAE Vision 2021 and its goals of developing a knowledge-based economy driven by entrepreneurship and innovation. Further details on the practical implementation of the law are expected to follow in the implementing regulations, which are yet to issue.
The main takeaways:
- Introduction of a novelty grace period of 12 months. This allows applicants to disclose an invention within 12 months of filing the UAE application and this will have no effect on the novelty requirement. Applicants need to be aware that many countries do not provide for a grace period (e.g. other GCC countries and most European countries) and that public disclosure can be harmful for patent protection in those countries.
- Positive changes in the UAE patent examination process including the option of filing divisional applications and accelerated examinations to speed up patent grants.
- Courts are recognising the importance of stronger enforcement measures and imposing higher penalties for patent infringement.
Read the full summary of provisions and a more detailed review of the UAE Patent Law in our recent article.
GCC Patents Law
Law: Law of Amendment of Certain Provisions of GCC Patents Law.
Effective as of: 1 November 2021.
Summary: The GCC patent office is no longer as we knew it. In January 2021, the GCC patent office stopped accepting new applications and the GCC patent regulation was amended to align with its new working model. Since then, the amended GCC patent regulation and its implementing regulations have published and confirmed the new patent 'outsourcing' model. The new working model is a positive step towards creating a stronger and more harmonised patent system in the region.
The main takeaways:
- GCC patent applications are no more. Applicants now need to file six separate national applications at the individual patent offices to obtain GCC patent protection.
- Patent offices can now outsource the handling of patent applications from filing to grant to the GCC patent office and benefit from reduced official filing fees.
- This patent 'outsourcing' arrangement means that the GCC Patent Office will no longer receive and grant applications independently of the national offices, avoiding the issues of double patenting.
UAE Commercial Companies Law
Law: New UAE Commercial Companies Law - Federal Law by Decree No. 32 of 2021.
Effective as of: 2 January 2022.
Summary: The new Commercial Companies Law (Federal Law No. 32 of 2021) seeks to further enable foreign investment and ownership, general corporate governance and increased focus on public market activity, including the introduction of new corporate vehicles, being Special Purpose Vehicles (SPVs) and Special Purpose Acquisition Companies (SPACs), aligning with those already available in the UAE's financial freezones. Both public and private companies are affected by the new law - public joint stock companies (PJSCs) will benefit from more control and flexibility over IPO processes and procedures, whilst private, limited liability companies (LLCs) will be subject to certain corporate governance changes, which will need to be reflected in their revised memorandum of association within a year of the new law's effect.
The last two years have fostered a global shift in the way business is conducted in the UAE through significant legislative change, with the new law (and its preceding legislative changes in 2020 and 2021) playing a major role in this.
The main takeaways:
- Consolidation of foreign investment regulations from previous legislative changes.
- New corporate governance/regulatory requirements for PJSCs and LLCs.
- New regulations (and corporate vehicles) to increase flexibility for public offerings, M&A and financing transactions.
Read the full summary of provisions and a more detailed review of the new UAE Commercial Companies Law.
UAE Data Protection Law
Law: Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data.
Effective as of: 2 January 2022.
Compliance period: There will be a compliance period of six months from the date of the publication of the executive regulations, which are due to be released in March 2022.
Summary:
The long awaited Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data (PDPL) provides on-shore companies in the UAE with a clear legal framework in which they must operate in terms of collecting, storing and processing personal data. The PDPL also has extra-territorial scope where companies outside the UAE process personal data within the UAE.
With similar themes to data privacy frameworks in other jurisdictions such as the EU, the PDPL reinforces the UAE's continued focus on innovation, data protection and cybersecurity.
We anticipate that the executive regulations (due to be released in March 2022) will provide further guidance for companies on how to effectively implement robust data privacy practices in order to remain compliant and competitive in this fast changing market.
The main takeaways:
- The PDPL brings the UAE in line with the global shift to protect personal data, similar to the GDPR in Europe.
- The UAE Data Office is established through the PDPL and will act as the federal data regulator in the UAE.
- The PDPL does not apply to government entities and government data, nor data which is already regulated by the ADGM or DIFC data protection laws, or pursuant to special legislation (e.g. personal health data and banking and credit personal data).
Read the full summary of provisions and a more detailed review of the new UAE Data Protection Law.
KSA Private Sector Participation Law Implementing Regulations
Law: Private Sector Participation Law Implementing Regulations.
Effective as of: 7 January 2022.
Summary: The National Center for Privatization & PPP (NCP) Board of Directors has approved the Private Sector Participation Law Implementing Regulations (implementing regulations). The implementing regulations are a major component of the regulatory framework governing private sector participation (PSP) projects in the Kingdom of Saudi Arabia, which also includes the Private Sector Participation Law (PSP Law), and the PSP Governing Rules.
The implementing regulations will govern the processes required to undertake and implement PSP projects (both PPPs and Divestments), including the framework for concerned entities participating in such projects. In addition, they contain detailed provisions required to give substance to and implement the PSP Law itself. The Government of Saudi Arabia hopes the implementing regulations will play an important role in Saudi Arabia achieving its Saudi Vision 2030 goals.
The main takeaways
- The implementing regulations replace the Privatization Projects Manual and the Rules of Conduct of the Supervisory Committees of Privatization Targeted Sectors.
- The implementing regulations outline several principles in relation to the procurement and implementation of PSP projects: fairness, transparency, contractual enforceability, planning scrutiny and the identification of achievable outcomes that result in economic benefits to the public and private sectors.
- Along with the PSP Law, the implementing regulations represent a commitment to fostering a productive environment for PPP and divestment projects in the Kingdom, built on proper due diligence at every stage of the project lifetime, transparency, flexibility and rigorous selection processes.
UAE Trademarks Law
Law: Federal Trademarks Law No. 36 of 2021.
Effective as of: 2 January 2022.
Summary: In late 2021, the UAE Government issued the new Federal Trademarks Law No. 36 of 2021, which came into effect on 2 January 2022.
The new law takes on a number of the provisions of the GCC Trademarks Law, but there are some additional local elements.
The main takeaways:
Some of the main provisions of the new law are:
- It expands the definition of a trademark, so that more non-traditional forms of marks are potentially registerable;
- Increases the penalties for trademark infringement both monetary and custodial sentences;
- Makes provision for provisions measures (similar to an injunction) to prevent imminent infringement, which includes the ability to seize evidence as well as products and machinery to produce products; and
- Makes provision for multi-class filings (though we do not expect that this will be adopted in the short term).
Read the full summary of provisions and a more detailed review of the new UAE Trademarks Law.
UAE Labour Law
Law: Federal Decree - Law No.33 of 2021.
Effective as of: 2 February 2022.
Summary: The UAE Government announced a new framework of labour laws for the private sector under the Federal Decree - Law No.33 of 2021, coming into effect on 2 February 2022.
The new law repeals the previous law (Federal Law No. 8 of 1980) in its entirety. The new law is not exhaustive. Many important aspects of the new law require clarification and detail in the form of implementing regulations to be announced in the short to medium term.
The main takeaways:
Some of the main provisions of the new law are:
- Employers have until 1 February 2023 to adopt template forms of employment contracts that are for a fixed term (not to exceed three years). The template form will be provided by the Ministry of Human Resources and Emiratisation.
- The new law entrenches the right for female workers to be paid the same salary as male workers if in the same role or another role of equivalent value. Moreover, discrimination on the basis of race, colour, sex, religion, nationality, social origin or disability is illegal.
- The new law recognises part-time, temporary and flexible working (in addition to full-time working).
Read the full summary of provisions and a more detailed review of the new UAE Labour Law.
UAE Accedes to the Madrid Protocol & Nice Classification
Law: UAE Accedes to the Madrid Protocol & Nice Classification.
Effective as of: 28 December and 8 December 2021 (respectively).
Summary: On 8 December 2021, the UAE issued a Federal Decree in which it acceded to the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (The Nice Classification). This came into effect on the date of issue. On 28 December 2021, the UAE joining the Madrid Protocol came into effect.
The main takeaways:
- International brand owners are now able to include the UAE as a designation for any new international registration filings from 28 December 2021, or as a subsequent designation to any existing international registration.
- UAE brand owners, (including UAE nationals, UAE companies, or entities with a real and effective presence in the UAE) may now use their UAE home applications/registrations as a basis for international registrations through the Madrid Protocol. This presents a potentially more cost effective and efficient option to secure trademark rights in other Member States around the world.
- There are drawbacks to the system, so companies should take careful consideration as to whether using the system is the best option.
- In formally adopting Nice, this is likely to have been a requirement for acceding to the Madrid Protocol. We wait to see whether this will impact in anyway goods and services that have not been protectable in the UAE so far, such as Class 33 for alcohol products. We suspect that such items may still face objections, but this and other points should be clarified in the coming months.
Read the full summary of the UAE's accession to the Madrid Protocol and Nice Classification.
KSA Personal Data Protection Law
Law: Royal Decree M/19 of September 2021 on the Protection of Personal Data.
Effective as of: 23 March 2022.
Compliance Period: There will be a compliance period of one year from the date of the publication of the Executive Regulations, which are due to be released in March 2022.
Summary: Royal Decree M/19 of September 2021 on the Protection of Personal Data (KSA PDPL) provides companies in the Kingdom of Saudi Arabia (KSA) with a data privacy framework containing broadly consistent themes to those in other jurisdictions such as the EU.
The executive regulations, which are due to be released in March 2022, will provide further guidance for companies on how to effectively implement robust data privacy practices, in order to remain compliant and competitive in the KSA. In particular, the requirements for valid consent and circumstances in which written consent must be obtained will be set out in the executive regulations.
The main takeaways:
- The KSA PDPL brings the KSA in line with the global shift to protect personal data, similar to the GDPR in Europe.
- The KSA PDPL has extra-territorial scope and an entity outside the KSA which is processing personal data of any KSA resident will have to appoint a legal representative within the KSA.
- The financial penalty for an entity found to be in breach of the KSA PDPL can be up to 5 million SAR (approximately $1.35 million) with breaches of certain provisions attracting a criminal penalty of up to 2 years imprisonment.
- Saudi Data & Artificial Intelligence Authority (SDAIA) will be supervising the law's application in the KSA.
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
