Category: UAE

Top Grades for UAE Business Law Compilation

construction-workersThe UAE is doing very well with following the midday break rules.  According to the Ministry of Human Resources and Emiratisation, out of 29,000+ companies subject to the law that was launched last month, a mere 47 have not been following it.  This translates into a staggeringly positive 99.8 percent compliance level.

The law is that people are not allowed to work under direct sunlight between the hours of 12.30 to 3.00 pm. Between June and September to “ensure the safety and health of the workers.”  Those who violate the law will be fined AED5,000 for each worker found working during those hours and up to AED50,000 for a large amount of workers.

That’s great news but how will the UAE deal with the changes in the upcoming VAT law? At least – according to an announcement by the UAE Government – bicycles, education, 100 food items, health and social services will not be subject to the change.

GCC countries will be expected to follow the VAT changes, a year from their January 1, 2018 implementation.  The regions will be given flexibility to introduce VAT within that time frame and according to CEO of Barjeel Geojit Securities, C. A. Krishnan Ramchandran:

“There is still speculation on whether the VAT regime will add to inflation. At the ground level of the common man, the impact will be minimum. However, at the high end and luxury segment, the impact could be much higher (cars, real estate etc.).”

The consumer won’t be impacted too much either as IQI Holdings Malaysia Chief Economist, Shan Saeed said: “It would contribute merely 1-2 per cent in price inflation. It won’t make any impact on the consumer spending.”

Hopefully the law will be followed as well as the midday breaks one is currently being upheld.

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UAE: Liberalizing Fuel

fuelThe UAE is the first in the Gulf to liberalize the price of fuel. At the beginning of this month, fuel prices increased by around 24 percent. The government enforced that when it made a decision to remove fuel subsidies, rendering prices in line with that of the rest of the world.

Up until this point, both petrol and diesel have been subsidized by the government and UAE fuel has been set at a flat rate, irrespective of major fluctuations in oil prices around the world. But now, the Fuel Price Committee is going to be in charge of setting new prices on the 28th of each month, based on average worldwide prices as well as operational/transport costs.

The idea behind this new policy is a reaction to advice from the IMF, World Bank etc., which believes energy subsidies should be reduced in conjunction with their budgets.

 

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