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UAE: What happened in 2021 and significant events in 2022

The Year to Come and Year in Review summarise a selection of major developments you should be aware of from 2021, and a selection of key developments expected in 2022.

Explore our overview of key developments below.

Updates in


key areas in 2021 and 2022

We have seen wide-ranging legal reforms across sectors this year, both onshore in the United Arab Emirates (UAE) and in the financial free zones - the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). Landmark changes to the foreign direct investment regime in the UAE enable foreign investors to wholly own local companies, subject to Federal restrictions protecting strategic sectors, and the legislation was significantly rewritten. The regulation of capital markets and banks continues to be a key focus of reform. Joint Fintech initiatives between the onshore and free zone regulators in the UAE are expected in 2022, as local regulators continue to craft a regulatory environment to support a Fintech ecosystem.

Scott Campbell, Managing Partner, Middle East

scott campbell

UAE law highlights in 2022


Joint Fintech initiatives between the onshore and free zone regulators in the UAE are expected in 2022.

Cryptoassets and tokens

The DIFC is expected to introduce a new cryptoassets and tokens regime in 2022, following the example of ADGM and onshore regulators.


Companies need to ensure they comply with new legal regimes as grace periods for compliance come to an end.

UAE Central Bank to collaborate with DIFC and ADGM on fintech initiatives: Increased collaboration between the Central Bank and the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC) is expected to further enhance the enabling environment for the fintech sector (in particular regarding sandbox testing environments), following agreements signed between the Central Bank and the two free zone regulators in October 2021. Areas of collaboration may include strategies to support fintech companies to scale, including through the DIFC’s Fintech Hive and the ADGM’s RegLab and Digital Sandbox.

A new digital currency is expected: The Central Bank is expected to further develop its plans to introduce a new digital currency, following the announcement of the new currency as part of its 2023-2026 strategy. “Central Bank Digital Currencies” are an electronic form of central bank currency, potentially accessible to all citizens and companies as an alternative to cash.

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Guidelines on the use of new technologies to be issued: UAE regulators are expected to issue guidelines for banks and financial institutions regarding the use of new technologies to offer innovative products and services, such as application programming interfaces (APIs), artificial intelligence and distributed ledger technology (DLTs). A joint consultation between the UAE Central Bank, the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) in the DIFC and the Financial Services Regulatory Authority (FSRA) in the ADGM was launched in June 2021.

Licensing of cryptoasset activities: In the coming year, we may see the first examples of licensing of entities under the new cryptoasset regulatory regime adopted by the SCA – activity may be focused on the Dubai Multi Commodities Centre (DMCC) and the Dubai World Trade Centre Authority (DWTCA) which are positioning themselves as cryptoasset hubs.

Grace period to upgrade SCA licences to end: SCA licence holders must upgrade their current financial services licences by 17 May 2022 in line with the new licensing regime set out in the SCA Rulebook and adopted by SCA Decision No.13/R.M of 2021. The Rulebook sets out the types of licences and categories of licensed financial activities. It also sets out provisions as to the licensing of financial activities (including financial promotion) and approved functions, and the conduct of business.

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Possible EIBOR replacement consultation: As the wave of global interest rate reform continues and interbank offered rates used in loans and other conventional and Islamic financial products are replaced with risk-free rates, 2022 may see the Central Bank consult on the process to replace the Emirates Interbank Offered Rate (EIBOR). To date, the Central Bank has not published any official communications on this point. All GBP LIBOR benchmark settings will cease immediately after 31 December 2021, requiring banks, asset managers and corporates to have transitioned any products which reference LIBOR to the new benchmark rates before that date.

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New regime for cryptoassets and security tokens expected: A new regulatory regime for “Security Tokens” – including cryptoassets or tokens using DLT or similar technology – is expected to be published following a consultation on the proposed regime in March 2021. The DFSA is expected to consult on the proposed regime for other types of tokens that are not “Security Tokens”, such as exchange tokens and utility tokens, in the coming months.

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Joint UAE and DIFC fintech initiatives: Increased collaboration between the DIFC and the UAE Central Bank to further enhance the enabling environment for the fintech sector is expected in the coming year, as initiatives under the agreement signed between the two regulators on 13 October 2021 take shape. Expected initiatives include the development of a sandbox programme under DIFC’s existing frameworks and joint regulations and guidance.

DFSA proposes leverage ratio adjustments in line with Basel III: Revised prudential rules for banks regulated in the DIFC may be adopted, to bring the regime in line with recent revisions to the rules outlined by the Basel Committee on Banking Supervision in Basel III (Consultation Paper No.139 – Updating the Leverage Ratio). The key reform would see the introduction of a minimum level for the Leverage Ratio (LVR) of 3% following the introduction of this minimum LVR by the Basel Committee on Banking Supervision, with effect from 1 January 2023.

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Reforms to adopt aspects of international best practice: Further reforms to the ADGM’s regulations promise to adopt best practice emerging from the latest global developments, as the ADGM continues its efforts to position itself as a progressive, international financial centre. We expect that the adoption of legislative measures in the course of 2022 will continue to drive activity in the ADGM, especially in the Fintech space.

Fintech regulation: Further regulation to support the fintech ecosystem and promote technological innovation in the financial services industry in ADGM is expected, as the ADGM looks to cement its position as a global fintech hub. Payment systems are expected to be a particular focus as consumer preference for digital payments grows, accelerated by the Covid-19 pandemic, and government support for tech-focused solutions continues.

Joint UAE and ADGM fintech initiatives: Increased collaboration between the ADGM and the UAE Central Bank to further enhance the enabling environment for the Fintech sector is expected in the coming year, as initiatives under the agreement signed between the two regulators on 13 October 2021 take shape. Expected initiatives include the development of a sandbox programme under ADGM’s existing frameworks and joint regulations and guidance.

Companies to comply new data protection regime: ADGM companies must take action to ensure they comply with new ADGM Data Protection Regulations 2021 by the time the grace period for compliance ends on 14 February 2022.

UAE law highlights in 2021

Foreign investment

A new regime enables greater foreign investment in UAE companies, subject to special rules for companies engaged in activities having a strategic impact.

DIFC companies

DIFC companies are allowed to offer and provide their services onshore, subject to conditions.

Listing regime reform

Various reforms to the listing regime in the UAE enable free zone companies to list their shares on stock exchanges in the UAE and mandate listing in Dubai for certain public companies.

United Arab Emirates (UAE) UAE Federal Government enacts a range of reforms: Reforms to a range of laws governing matters such as commercial companies, commercial registration, electronic transactions and intellectual property were announced by the Federal Government in November 2021. New laws have also been announced which will introduce frameworks for data protection, factoring and receivables and cybercrime.

Greater foreign investment permitted for UAE companies: Subject to Federal restrictions protecting strategic sectors and applicable Emirate-level requirements, shares in companies incorporated in the UAE may now be owned by foreign investors with no limit on the percentage of a company’s share capital held.

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There are seven strategic sectors in which foreign investment is restricted or prohibited, according to Cabinet issued Decision No.55 of 2021 on the Determination of the List of Strategic Impact Activities. The restricted or prohibited sectors include security and defence, banks and insurance, and telecommunications. If the regulatory authority for the relevant sector approves the application by a foreign investor who wishes to invest in a company engaged in one of these sectors, it must determine the minimum percentage of share capital that must be held by UAE national(s)/the maximum percentage that may be held by the foreign investor. It may also determine any minimum participation of UAE nationals on the board of directors of a company. The only strategic sector in which any foreign investment is prohibited is fisheries-related services.

The Economic Departments in the Emirates of Dubai and Abu Dhabi have published lists of commercial and industrial activities which do not have a “strategic impact”. Companies incorporated in these Emirates which are engaged in these non-strategic activities are open to full foreign ownership.

Payment systems reform: New Central Bank regulations regulate financial infrastructure systems whose proper functioning is important to the monetary or financial stability in the UAE (Circular No.9 of 2021, Concerning the Large Value Payment Systems (LVPS) Regulations) and systemically important Retail Payment Systems (Central Bank Circular No. 10 of 2021 Concerning the Retail Payment Systems (RPS)). The regulations set out the licensing, designation and oversight framework for LVPSs and RPSs.

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Mandatory listing of public companies in Dubai: Dubai Decree No.3 of 2021 makes it mandatory for the following companies to list their shares on the Dubai Financial Market (DFM) or NASDAQ Dubai before the grace period ends at the beginning of February 2022:

  • public companies incorporated in Dubai (including free zones);
  • public companies incorporated in another Emirate, which have branches, assets or activities in Dubai if more than 50% of their annual profits are generated from business activities in Dubai or more than 50% of their assets are located there.

Dubai Decree No. 3 of 2021 does not specify the percentage of a company’s shares to be listed. It does not restrict companies from seeking dual listing on a foreign exchange.

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New SCA Rulebook issued: The new Rulebook issued by the SCA in May 2021, pursuant to SCA Decision No.13/R.M of 2021, consolidates the SCA’s rules and repeals certain previously issued regulations. The Rulebook sets out a new licensing regime and categories of licensed financial activities.

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Free zone companies can list shares on onshore UAE exchanges: Revised rules now enable companies established in a UAE free zone to offer their shares to the public on the DFM or Abu Dhabi Securities Exchange, provided certain requirements are met, following an amendment to SCA Resolution No.11/RM of 2016 on the Regulation of Offering and Issuance of Shares of Joint Stock Companies (SCA Resolution No.25/RM of 2020).

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The SCA and the ADGM Registration Authority signed a Memorandum of Understanding in October 2021 to enable ADGM registered entities to offer and list shares on UAE capital markets.

Update on cryptoasset regimes: The SCA issued an Explanatory Guide to the Crypto Assets Activities Regulation (Administrative Decision No.11 of 2021 concerning Guidance for Crypto Asset Regulations), following the adoption of a new regulatory regime pursuant to SCA Board of Directors’ Decision No.23 of 2020 concerning Crypto Assets Activities Regulation. The guide assists entities engaged in cryptoasset activities, including initial coin offerings (ICOs) or token offerings in onshore UAE.

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Two free zones in Dubai regulated by the SCA intend to support activity in the cryptoasset space. The DMCC announced the launch of their Crypto Centre as the new cryptocurrency and blockchain hub in May 2021. The DWTCA and the SCA signed an agreement in September 2021 which establishes a framework enabling the former to issue the approvals and licences for the conduct of financial activities relating to cryptoassets within DWTCA free zones.

First-of-its-kind trusts law: The revolutionary new trusts law, Federal Law No.19 of 2020, enables a trust to be created that allows for the separation of legal and beneficial ownership rights in assets and the establishment of trust relationships in the UAE.

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DIFC companies allowed to provide services onshore: DIFC companies can now offer and provide their services to clients located onshore in the UAE, provided that (i) such services are primarily provided from their premises within the DIFC (subject to exceptions) and (ii) they comply with the DIFC laws and regulations, and the law applicable to the non-DIFC entity. The reform, set out in Dubai Law No.5 of 2021, provides welcome clarity to DIFC companies on the scope of the activities they can carry out onshore.

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Restructuring and insolvency regime for DIFC banks: Banks and certain other authorised financial institutions in the DIFC which experience financial difficulty can make use of a new recovery and resolution regime, overseen by the DFSA. The new regime is set out in the Regulatory Law (DIFC Law No.1 of 2004) (as amended by Regulatory Law Amendment Law, DIFC Law No. 1 of 2021) and the Recovery and Resolution (RAR) Module of the DFSA Rulebook.

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Employment law reform: The DIFC enacted reforms to the Employment Law (DIFC Law No.2 of 2019, as amended by Employment Law Amendment Law No. 4 of 2021) and new Employment Law Regulations. Modernised in 2019, the latest changes refine the regime by addressing issues such as the duration of the probationary period for short term fixed-term contracts and workplace health and safety requirements to account for working from home arrangements and the accrual of vacation leave.

Consolidation of arbitration institutions in Dubai: The DIFC-LCIA Arbitration Institute (DIFC-LCIA) and its administering body will no longer operate as an independent arbitration institute in accordance with the Dubai Decree No.34 of 2021. Instead, three arbitration institutes in Dubai – the DIFC-LCIA, the Dubai International Arbitration Centre (DIAC) and the Emirates Maritime Arbitration Centre – have been consolidated under the umbrella of DIAC. This development affects ongoing arbitration proceedings under the DIFC-LCIA Rules (as now administered by the DIAC) and agreements which select arbitration under DIFC-LCIA Rules (where, unless otherwise agreed by the parties, the DIAC will become the administering institution).

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Guidance on referral of cases to mediation by DIFC Courts: DIFC Practice Direction No.1 of 2021 on the Referral Of Cases To Mediation sets out the circumstances in which DIFC Court Judges may exercise their discretion to refer parties to mandatory mediation to resolve their dispute, or particular issues in it, in accordance with Rule 27.3 of the Rules of the DIFC Courts.

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Electronic transactions regulations: New regulations facilitate electronic transactions and the use of digital technologies, by confirming that electronic signatures, contracts, records and documents are legally enforceable in the ADGM in the same way as physical signatures and paper-based documentation.

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Regulation of fintech firms providing third-party services: Fintech firms which act as intermediaries between customers and financial institutions by providing third-party services (i.e. accessing, processing and transferring specific types of customer data) must now be licensed and regulated in accordance with the ADGM Financial Services and Markets Regulations 2015 (as amended by Financial Services and Markets (Amendment No.2) Regulations 2021).

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Uncertificated securities regime: The Uncertificated Securities Rules 2021, and related amendments to the Insolvency Regulations 2015, Companies Regulations 2020 and Financial Services and Markets Regulations 2015, came into force to regulate the issue, registration and transfer of securities into uncertificated form, and the procedure for the conversion of certificated securities into uncertificated form and vice versa.

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Data Protection reform: Companies in the ADGM must comply with new Data Protection Regulations 2021. The new Office of Data Protection has issued guidance to assist ADGM entities in complying with the new regime.

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Download your copy of the UAE Law: Year to Come 2022 and Year in Review 2021


Important note: This publication highlights certain key developments in the laws and regulations in the UAE. The legislative process in the UAE can be opaque. Draft legislation is generally not made publicly available nor the subject of official consultations. Timescales for enactment of legislation are not typically published. In practice, laws and regulations may come into effect without being published. Accordingly, it is difficult to anticipate the pace and scope of legislative change.


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