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The United Arab Emirates (UAE) Cabinet has recently issued resolutions (Cabinet Resolution No. 96 of 2023 and Ministerial Resolution No. 668 of 2023) unveiling an innovative voluntary end-of-service system for the private sector in the UAE, including entities within free zones. Dubai: Following the initiation of the Dubai Employee Workplace Savings Scheme in DIFC in February, 2020, there has been considerable anticipation regarding the launch of a comparable scheme within the UAE federal system. This development occurred with the issuance of Cabinet Decision No. 96/2023, introducing an optional alternative system for end-of-service benefits. This groundbreaking scheme offers employers and employees a choice between the traditional end-of-service gratuity (ESG) model and a new, optional alternative system (the "Scheme").The Scheme is designed to empower employees by providing them with diverse investment options, allowing them to maximize returns. Simultaneously, employers gain a strategic tool for more effective financial planning regarding employment liabilities. Enrolled employees can benefit from higher returns, protection against inflation, and insulation from risks associated with company insolvency or bankruptcy.KEY FEATURES OF THE SCHEME•Employer Options: Employers can choose licensed investment funds for the Scheme and select specific employee categories and professional levels for inclusion. While participation is voluntary for employers, employees selected to join are mandated to participate.•Transition from ESG to Scheme: Employers opting for the Scheme must calculate the ESG accrued up to the changeover date. This amount, based on the employee's basic salary at the changeover date, remains on the employer's balance sheet and is paid out upon termination.•Mandatory Subscription Amounts: Employers committing to the Scheme must subscribe for a minimum of one year, paying a monthly premium based on a percentage of the employee's basic wage. Monthly premiums are standalone obligations, not deducted from the employee's wage.•Voluntary Employee Contributions: Employees can make voluntary contributions to the Scheme from their wages, with the option to withdraw partially or fully during their service period. Employers may also contribute on behalf of employees, up to 25% of the total monthly wage.•Investment Options: The Scheme offers various investment options, including a capital guarantee portfolio and a risk-based investment option. Employees are responsible for any losses from their chosen investment option, unless service providers act in bad faith or breach obligations.•Fund Management Flexibility: Employers can switch fund managers with approval from the Ministry of Human Resources and Emiratisation (MOHRE) and the Securities and Commodities Authority (SCA). Withdrawal from the Scheme is possible under specific conditions and MOHRE approval.•Supervision and Control: MOHRE and SCA supervise and control the Scheme, handling monitoring, inspection, and complaint resolution. Fund service providers must adhere to anti-money laundering provisions.IN CONCLUSIONFor companies interested in the Scheme, MOHRE has initiated the enrollment process. Representatives can call MOHRE to begin the application, providing essential company details. Further details, including the enrollment procedure for free zone companies and options regarding fund managers and administrators, are anticipated.ALKETBI TOUCHALKETBI team is highly skilled and frequently provides legal assistance specializing in labor and employer, employee cases in the UAE. If you would like to know more or request further guidance with relation to the end of service gratuity and its alternatives, Let us know!
In the United Arab Emirates (UAE), post-divorce financial responsibilities for spouses and parents are governed by UAE Federal Law No. 28 of 2005 on Personal Status. This legislation outlines the regulations for alimony and child support, safeguarding the financial welfare of ex-spouses and children. Dubai: Divorce can be an emotionally challenging period for individuals. However, it's crucial to recognize that financial matters, such as alimony and child support, hold significant importance. In the UAE, the personal status law allows expatriates to select a law based on various factors, and selecting the appropriate legal framework is of utmost importance. We offer insights into alimony and child support in the UAE, elucidating the legal framework and the duties of each party involved. 1.ALIMONY: Alimony, also referred to as spousal support or maintenance, denotes the financial aid provided by one spouse to the other after divorce. In the UAE, the husband might be obliged to offer alimony to his former spouse, contingent upon her financial needs and the husband's financial capacity. Factors taken into account when determining alimony comprise the duration of the marriage, the wife's financial resources, and the marital lifestyle. Article 63 of Federal Law No. 28 of 2005 Concerning Personal Status (the "Personal Status Law") discusses the provision relating to Alimony of wife under Personal Status Law in the UAE. It reads as follows:(1) The wife's maintenance should include food, clothes for the home, medical care, a servant if she lives with her family, and whatever the marriage requires.(2) Maintenance should be set following the maintainer's financial capacity, the dependent's health, and the local and global economic conditions. Maintenance must, however, not fall below the necessary level.(3) The exploration (inspection) certificate is adequate for determining the types of maintenance, the quantity of custody, the residence, and the circumstances on which any decision about the above is dependent.2.CHILD SUPPORT: Child support is the monetary contribution made by both parents to cover child-rearing expenses following divorce. Typically, in the UAE, the father assumes primary financial responsibility, encompassing costs related to food, clothing, housing, education, and healthcare. The mother may also be required to contribute financially if she possesses the means to do so.3.ALIMONY & CHILD SUPPORT AMOUNTS: Calculating alimony and child support amounts in the UAE is contingent on multiple factors, including the recipient's financial requirements, the payer's ability to provide support, and the standard of living during the marriage. Other considerations may involve the parties' age, health, marriage duration, and any prenuptial agreements. 4.ALIMONY & CHILD SUPPORT ENFORCEMENT: UAE courts legally enforce alimony and child support payments. Should a spouse fail to fulfill payment obligations, the recipient can petition UAE courts for enforcement. The court has various options to ensure compliance, such as wage garnishment, asset seizure, or imprisonment for non-payment. 5.EXPATRIATES ALIMONY & CHILD SUPPORT: Expatriates residing in the UAE are subject to the country's family laws concerning alimony and child support. Nevertheless, specific rules and procedures governing these payments may vary based on the couple's nationality and religious affiliation. Expatriates are encouraged to seek guidance from legal experts well-versed in UAE laws and their home country's laws to establish a just and legally enforceable alimony and child support arrangement. Therefore, Under Article 63, the husband is obligated to financially support his wife starting from the moment they enter into a legally binding marriage contract, as long as she complies with her marital duties, even if she is financially independent. This obligation is compulsory and cannot be evaded until fulfilled or legally discharged. Therefore, spousal alimony is considered a financial obligation owed by the husband from the date of their marriage and continues until it is settled or legally resolved.Furthermore, as stipulated in Article 67 of the Personal Status Law, which states that 'the wife's entitlement to alimony begins when the husband ceases to provide for her,' a wife is entitled to receive alimony whenever her husband stops fulfilling her essential needs. This entitlement is considered a financial obligation on the husband's part, and it does not require the involvement of the judicial system or the consent of both parties. It can be settled through payment or legal dischargeIN CONCLUSION Alimony and child support play pivotal roles in upholding the financial stability of former spouses and children post-divorce in the UAE. An understanding of the legal framework and associated responsibilities empowers individuals to navigate the process, ensuring the protection of their rights and obligations.ALKETBI TOUCH: Seeking expert assistance from a seasoned alimony lawyer in Dubai is essential. Our team frequently extends its legal expertise and advice on all matters related to family law, marriage, divorce, trust, wills and alimony and child support for expatriates. Let us know your dilemma and we are sure to provide the right legal answer.
Every year, the UAE strives to enhance the living experience for its residents by implementing significant legal changes. In 2023, Crucial Developments affected the residents in the UAE ranging from small adjustments to bigger ones.Dubai: Resident in the UAE should be aware of the following new changes in UAE1. Reduction in Tourism Tax in Abu Dhabi:The Department of Culture and Tourism in Abu Dhabi has declared changes in government fees within the tourism sector, effective from September 1, 2023. Notably a reduction in the tourism fee for guests from 6% to 4%. Additionally, the municipality fee of Dhs15 per room per night will no longer be applicable. The 4% municipality fee on hotel restaurants and the existing 6% municipality fee will also be eliminated. However, it's important to note that the four percent municipality fee based on the value of the invoice issued to the customer will persist.2. Simplified Procedures for Updating Emirates ID:Residents now have the convenience of updating their Emirates ID details online. This includes changes in their visa which will be reflected: name, occupation, employer, passport details, and even nationality. Any alterations made to residency information will prompt the issuance of a new Emirates ID card. The process can be completed through the official website or the smart application, requiring only UAE Pass log-in details. Alternatively, residents can visit a customer happiness center or an approved typing center to facilitate the issuance of their new Emirates ID.Staying abreast of these updates is crucial for residents in the UAE, ensuring they can make the most of the evolving regulatory landscape and enjoy an enhanced quality of life in the UAE.3. Removal of Grace Period for Dubai Tourist Visas:The Federal Authority for Identity, Citizenship, Customs, and Port Security (ICP) confirmed in May 2023 that the 10-day grace period for Dubai tourist visas will no longer be applicable. Previously, visitors had an additional 10 days beyond the visa expiry date to stay in the emirate before incurring overstay fines. As of now, anyone overstaying their Dubai visit visa will be immediately fined Dhs50 per day.4. Extension of UAE Work Permit Duration:The Federal National Council (FNC) announced in May 2023 that the current two-year work permit in the UAE will be extended to three years. This move aims to reduce the associated costs of obtaining work permits. All work permits are issued by the UAE’s Ministry of Human Resources and Emiratisation (MOHRE), although a specific timeline for the rollout was not provided.5. Removal of 30% Tax on Alcohol:Effective from January 1, 2023, the 30% tax on all alcohol purchases was eliminated. This significant change has led to immediate price reductions at liquor stores such as African & Eastern and MMI. Consumers buying from these shops can now enjoy alcohol without the additional tax burden.These updates in Dubai's visa regulations and taxation policies reflect the government's commitment to enhancing the visitor experience, supporting the workforce, and making certain commodities more accessible to residents and tourists alike. Staying informed about these changes is crucial for a smooth and compliant stay in Dubai.6. Introduction of the Involuntary Loss of Employment (ILOE) Scheme in the UAECommencing on January 1, 2023, the Involuntary Loss of Employment (ILOE) Scheme represents a pivotal development in the social security landscape of the UAE. This scheme is designed to offer a safety net to workers facing job loss by providing compensation for up to three months. Applicable to both private and public sector employees, enrollment in the ILOE Scheme is mandatory for all workers, with an extended deadline for registration until October 1, 2023.Key Highlights of the ILOE Scheme:Universal Coverage: The ILOE Scheme is inclusive, covering workers across the private and public sectors. This broad scope ensures that a wide spectrum of the workforce benefits from the scheme's protective measures.Enrollment Deadline Extension: Recognizing the significance of the scheme, the enrollment deadline has been extended to October 1, 2023. This extension offers employees additional time to complete the mandatory enrollment process.Compensation Calculation: Workers enrolled in the ILOE Scheme are eligible for compensation calculated at up to 60% of their salary. This financial support aims to mitigate the immediate economic impact of involuntary unemployment.Penalties for Non-Compliance: As outlined in Cabinet Resolution No. 97 of 2022, employees failing to subscribe to the insurance within the grace period will incur a fine of Dhs400 imposed by the Ministry. Additionally, a fine of Dhs200 will be levied if the insured individual fails to pay the prescribed insurance premiums for more than three months.The introduction of the ILOE Scheme aligns with the UAE's commitment to enhancing social security measures and providing a safety net for workers during challenging times. Workers are encouraged to ensure timely enrollment to secure the benefits of this scheme and avoid potential penalties. IN CONCLUSION To sum up, the UAE has always been considered as a major hub in the MENA and the leader in embracing reforms while accompanying the international standards and practices, ensuring its residents are living in an enhanced place. ALKETBI TOUCH: Our team has excelled in providing accurate advice and supported individuals and businesses in the UAE to navigate through the changes in legal landscape and rules while mitigating any risk that may impact them. We will happy to assist you, let us know.
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