Legislation Details
- Full Title: Federal Law Concerning Financial Free Zones
- Law Type: Federal Law
- Law Number: [no number] of 2004
- Issued Date: 14 Mar 2004
- Effective Date: 31 Mar 2004
- Official Gazette: No. 409
- Sector: Economy and Business
- Status: Active
- Number of Articles: 21
- Chapters/Parts: 0
- Amendments: 0
Summary
This Federal Law establishes and regulates the framework for Financial Free Zones in the United Arab Emirates. It defines the scope of permitted financial activities, licensing requirements, and oversight mechanisms for these specialized economic zones. The law aims to promote the UAE as a global financial hub by providing a tailored regulatory environment for banking, insurance, and other financial services. It is an important piece of legislation for businesses and individuals operating in or seeking to establish a presence within the UAE's Financial Free Zones. (Federal Law Concerning Financial Free Zones, 2004)
What is the scope and purpose of this law?
The Federal Law Concerning Financial Free Zones establishes and governs the creation of Financial Free Zones within the United Arab Emirates. These zones are defined as free zones where financial activities such as banking, insurance, and financial markets are permitted to be carried out. The law sets out the legal framework, regulatory requirements, and oversight mechanisms for these specialized economic zones. Its purpose is to promote the UAE as a global financial hub by providing a tailored regulatory environment for financial services businesses. (Federal Law Concerning Financial Free Zones, 2004, Art. 1-2)
What are the key definitions under this law?
The law provides the following key definitions:
- The State: The State of the United Arab Emirates
- Financial Free Zone: A free zone established in any Emirate of the UAE, in which Financial Activities are carried out
- Financial Activities: Banking, financial, insurance, financial markets activities and services, and the Ancillary Activities thereto that are licensed to be performed in a Financial Free Zone
- Ancillary Activities: Financial and currency brokerage services, consultancy, and the provision of services and supply of goods to Companies and Establishments and individuals inside the Financial Free Zones
- Financial Banking Activity: Financial banking operations and banking operations
- Companies and Establishments: Companies, branches of companies, and establishments that are established or licensed to operate in the Financial Free Zones
(Federal Law Concerning Financial Free Zones, 2004, Art. 1)
What are the main obligations and requirements?
The law imposes the following key obligations and requirements: 1. Financial Free Zones and all activities therein are subject to the Federal Law No. 4 of 2002 Concerning the Criminalization of Money Laundering. (Federal Law Concerning Financial Free Zones, 2004, Art. 3) 2. Financial Free Zones and Financial Activities are subject to all provisions of federal law, with the exception of federal civil and commercial laws. (Federal Law Concerning Financial Free Zones, 2004, Art. 3) 3. Financial Free Zones must not perform any activity that results in the breach of an international treaty to which the UAE is a party. (Federal Law Concerning Financial Free Zones, 2004, Art. 5) 4. Financial Free Zones must publish semi-annual reports on their activities and compliance with the provisions of this law. (Federal Law Concerning Financial Free Zones, 2004, Art. 7)
What licensing, registration, or approval requirements exist?
The law outlines the following licensing requirements for Financial Free Zones: 1. Licensing for Financial Banking Activities is limited to branches of Companies and Establishments, joint ventures, and wholly-owned companies, provided they have a strong financial position, complete organizational and management structure, and are managed by persons with expertise. (Federal Law Concerning Financial Free Zones, 2004, Art. 4) 2. Companies and Establishments licensed in the Financial Free Zones are prohibited from taking deposits from the national market and entering into transactions in the UAE Dirham. (Federal Law Concerning Financial Free Zones, 2004, Art. 4) 3. The licensing standards for companies and branches in the Financial Free Zones must not be lower than those applied in the UAE. (Federal Law Concerning Financial Free Zones, 2004, Art. 4) 4. Financial brokers licensed on an exchange in the UAE require the approval of the Emirates Securities and Commodities Authority and Market to transact business in a financial free market. (Federal Law Concerning Financial Free Zones, 2004, Art. 4) 5. Companies already listed on any of the exchanges in the UAE require the approval of the Emirates Securities and Commodities Authority and Market to be listed in the Financial Free Zones. (Federal Law Concerning Financial Free Zones, 2004, Art. 4)
Which authorities or bodies are responsible for enforcement?
The law establishes the following authorities and bodies responsible for the governance and enforcement of Financial Free Zones: 1. The Cabinet is responsible for defining the location and area of the Financial Free Zones. (Federal Law Concerning Financial Free Zones, 2004, Art. 2) 2. The competent authorities in the Federal government have the right to carry out inspections of Financial Free Zones to verify adherence to the provisions of this law and present the results to the Cabinet. (Federal Law Concerning Financial Free Zones, 2004, Art. 7) 3. The Cabinet is responsible for issuing the implementing regulations for the provisions of this law. (Federal Law Concerning Financial Free Zones, 2004, Art. 9)
What are the penalties for non-compliance?
The law does not specify any penalties for non-compliance. The legislation does not provide details on penalties or sanctions for violations of its provisions.
How does this law interact with other UAE legislation?
The Federal Law Concerning Financial Free Zones references the following related UAE legislation: 1. Federal Law No. 1 of 1972 Concerning the Jurisdiction of Ministries and the Authority of Ministers, as amended 2. Federal Law No. 10 of 1980 Concerning the Central Bank, the Monetary System and Organization of the Banking Profession, as amended 3. Federal Law No. 8 of 1984 Concerning Commercial Companies, as amended 4. Federal Law No. 9 of 1984 Concerning Insurance Companies and Agents, as amended 5. Federal Law No. 3 of 1987 Concerning the Penal Code 6. Federal Law No. 35 of 1992 Concerning the Criminal Procedure Code 7. Federal Law No. 4 of 2000 Concerning the Emirates Securities and Commodities Authority and Market 8. Federal Law No. 4 of 2002 Concerning the Criminalization of Money Laundering (Federal Law Concerning Financial Free Zones, 2004)
When did this law come into effect?
The Federal Law Concerning Financial Free Zones came into effect on the date of its publication in the Official Gazette, which was 31 March 2004. (Federal Law Concerning Financial Free Zones, 2004, Art. 10)
Source Documents
This article analyses Federal Law Concerning Financial Free Zones for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.