The Dubai International Financial Centre has introduced a Variable Capital Company regime, establishing the first framework of its kind in the UAE. The structure allows multiple pools of assets to sit within a single corporate vehicle while remaining legally separated.

The regime follows consultation undertaken in 2025 and forms part of the DIFC’s continued development of investment and wealth structuring frameworks. It introduces a flexible platform designed to support family offices, private investment platforms, and asset managers operating in or through the Centre.

By introducing the VCC, DIFC aligns itself with several leading international financial centres that offer similar variable capital or cell-based investment structures. Jurisdictions such as Singapore, Guernsey and the Cayman Islands have long used comparable vehicles for investment funds and private capital structures. The DIFC regime now provides a domestic alternative for investors seeking similar flexibility within the UAE.

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The Ministry of Human Resources & Emiratisation (MoHRE) has ramped up its programme of on-site inspections, both in frequency and scope, across the UAE’s private sector.

In 2023, the MoHRE conducted over 430,000 office inspections and flagged over 75,000 violations. The number of inspections rose to 668,000 in 2024. In the first half of 2025, the MoHRE conducted around 285,000 inspection visits and over 5,400 employers were found to be in breach of local regulations.

The MoHRE said these violations were primarily centred on non-compliance with wage payments, ‘fake Emiratisation’, failure to engage in the licensed activity, and registering workers without a genuine employment relationship.

The level of scrutiny has also increased. Employers are now being asked to provide evidence of who is working on site and in what capacity, including employee lists, employment contracts, annual leave records and proof of wage payments.

It is becoming clear that compliance is no longer just about ensuring you have the right paperwork, it is also necessary to demonstrate that employment relationships are genuine, that working conditions meet all the legal requirements and that employment is properly aligned with the licensed activity.

The UAE has been promoting efforts to integrate Emirati citizens into the private sector, a key pillar of its broader economic strategy aimed at building a more balanced labour market and achieving sustainable development.

The Nafis programme was introduced in September 2021 to ensure that Emiratis employees should increase to at least 10% of the private sector workforce over a five-year period. Employers in the UAE with at least 50 members of staff were required to meet a 4% target by the end of 2023, 6% by the end of 2024, 8% by the end of 2025 and 10% by the end of 2026.

In 2023, the government further expanded the Emiratisation campaign by directing that businesses employing between 20 and 49 people should have at least one Emirati staff member by the end of 2024, and two by the end of 2025.

The number of Emirati citizens working in the private sector reached 100,000 in May 2024 and rose to over 156,000 in October 2025. The MoHRE’s inspections are the main mechanism to ensure that the roles offered to Emirati’s are real, properly documented and legally compliant.

One of the main drivers of the MoHRE’s enhanced inspection programme is that it is increasingly data driven – inspections are often triggered by patterns and risk indicators, rather than random checks. The MoHRE’s Smart Inspection System (SIS) uses a risk matrix to analyse company data, classify establishments by risk level and sets priorities for inspectors.

In June 2025, the MoHRE said that SIS had detected around 1,800 employers who were not effectively practicing their licensed activities despite having registered workers without a genuine employment relationship. This resulted in fines totalling more than AED34 million (c. USD9.25 million), along with restrictions such as suspending new work permits.

What to look out for and how to be prepared?

Private sector employers in the UAE need to be aware that both the frequency and scope of the MoHRE’s programme of on-site inspections has risen. Businesses now need to verify who their active employees are, whether they are working physically on the premises or remotely, and whether their job titles and duties reflect the actual role being performed.

Employment contracts now matter more than ever because they are the baseline record for what the business states about the employment relationship. Salary slips or any other evidence confirming that salary was paid are also essential to evidence that wages are being paid correctly and on time through the correct channels, while leave records are a clear indicator of whether statutory entitlements of paid annual leave, sick leave and other leave entitlements are being provided to employees.

To prepare for the MoHRE inspections, employers must therefore ensure that they have clear documentation on their employees from the Ministry of Labour, that they maintain employment contracts and amendments, that they retain payslips to demonstrate wages are paid for the right amounts and at the right times, especially for those where the Wage Protection System (WPS) applies, and that they show leave approvals and balances in a way that is easy to follow and understand.

To help navigate these complex requirements, we list below some of the documents that employers are frequently asked for:

1. Company trade licence.
2. Establishment card.
3. VAT certificate.
4. Evidence of employee time attendance (sign in/out).
5. Evidence that employees are working – email and teams exchange may be required.
6. Labour card / MOHRE contract copy.
7. Visibility of leave and absences records.
8. Evidence of final settlement calculation and proof of payment for past employees.
9. Evidence of General Pension & Social Security Authority (GPSSA) registration and contribution payments for Emirati nationals.

It should be noted that MoHRE inspectors may request to speak with Emirati nationals to ensure that the employment relationship is genuine, that working conditions meet all the legal requirements and that employment is properly aligned with the licensed activity. In the case of any work-related injuries, they may also request to speak with the injured employee.

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The UAE leads the GCC region with its robust framework of employee leave entitlements, provided for under Articles 28 to 32 of the UAE Federal Labour Law (Decree Law No. 33 of 2021) and it’s 2022 Executive Regulations, which govern the labour rights of employees in the private sector.

It applies to all private sector employees working in the UAE, whether UAE nationals or expatriates, but does not apply to employees and workers of the federal government and local government entities; employees of the armed forces, police and security; or domestic workers.

Statutory Leave Entitlements under the UAE Labour Law

How Much Annual Leave Are Full-Time Employees Entitled To?

Under Article 29 of the Labour Law, every employee in the UAE is entitled to an annual leave with full wage, of not less than:

1. 30 days for each year of extended service.
2. Two days for each month if the service term is more than six months but less than a year.
3. A leave for parts of the last year spent at work if the service is ended before using the annual leave balance.

The UAE calculates annual leave based on ‘calendar days’ in employment rather than days spent working, which means that holidays prescribed by law or by agreement are included in the calculation of the annual leave period by default, unless the employment contract or company policies provide more favourable terms for the employee.

However, many employers choose to convert their leave entitlements to ‘working days’ for convenience, which means that weekends and public holidays are not then counted within the annual leave period.

Typically, 30 calendar days corresponds to about 22 working days of annual leave per year for those companies that follow a five-day working week, and 26 working days of annual leave per year for those companies that follow a six-day working week.

With the minimum annual leave entitlement under the UAE Law being 30 calendar days, employers that apply the ‘working day’ annual leave calculation therefore need to provide their employees with a minimum of 22 working days of annual leave per year.

For any employee who has not yet completed one year of service, the Law provides for two days of leave to be accrued per month (or 1.83 days per month if using the ‘working day’ calculation). Accrual begins on the first day of service, but it is at the discretion of the employer to decide whether this provision should be applied to employees during a probationary period.

In practice, this therefore means that employees are entitled to paid annual leave of:

1. 30 calendar days (or 22 working days) for each year of extended service.
2. Two days for each month (or 1.83 days if using the ‘working day’ calculation) if the service term is more than six months but less than a year.

There is no statutory entitlement to paid annual leave if the service term is less than six months, but many employers permit new employees to take unpaid leave or advance leave. If an employee leaves during a probationary period, they will be entitled to be compensated for accrued days via encashment at the basic salary level.

How Is Annual Leave Calculated for Part-Time Employees and Contractors?

Annual leave entitlement also extends to part-time employees or contractors, but this is on a proportional basis to their work hours. The extending regulations in Cabinet Resolution No.1 of 2022 provides a method to calculate leave accrual for such employees working alternate patterns, as follows.

In practice, if a part-time employee has worked 1,040 hours in the year and the employer provides 30 calendar days annual leave entitlement to full time employees, the calculation would be:

The Law further stipulates that for any part time employee, a minimum of five working days of annual leave must be provided even if, according to the calculation, the proportional amount falls below five working days.

Independent contractors, or freelance workers, who are neither on an employment contract with the employer nor are linked by a Work Permit or Visa, would fall outside the scope of the UAE Labour Law. Their leave rights would be dictated by whatever has been mutually agreed upon in their Service Agreement.

Who Controls Leave Scheduling and Carry-Over Rules?

All employers in the UAE should have conditions around scheduling leaves and carry-overs outlined and clearly defined in their company policies.

The UAE Labour Law provides that an employer may set the dates of leave according to work requirements, in agreement with the employee, or may grant leave in rotation among employees to ensure business continuity. Employers must notify the employee of the leave dates at least one month in advance.

Employees should utilise their entire leave entitlement in the year it is due. However, with the consent of the employer and in accordance with company’s regulations, they may carry over unused annual leaves (or part thereof) to the following year. In this case, If the employee chooses to receive an encashment for the unused days, they will be entitled to payment calculated on the basis of basic salary.

Employers have the right to refuse leave requests based on scheduling complications but may not prevent an employee from using their accrued annual leave for more than two consecutive years.

What Are an Employee’s Sick Leave Rights in the UAE?

The UAE Labour Law sets out a comprehensive framework for sick leave under Article 31. All employees in the UAE are entitled to up to 90 days, continuous or intermittent, of sick leave per year, on the following basis:

• First 15 days – full pay.
• Next 30 days – half pay.
• Remainder – unpaid.

An employee that is unable to work, due to a condition not arising from work injury, must inform the employer or representative about the sickness within a period not exceeding three working days and submit a medical report (sick leave certificate) from a healthcare professional.

In practice, most employers in the UAE only request a certificate for any sickness related absence that exceeds three days. Obtaining a sick leave certificate from a healthcare professional is, in most cases, is a chargeable service that the employee must bear.

The UAE Labour Law clarifies that entitlement to paid sick leave is only granted for illness or injury that does not arise from the misconduct of the employee, in accordance with the Regulations.

Employees in the UAE are not entitled to paid sick leave during the probationary period. However, the employer may grant a sick leave without pay, based on a medical report from a healthcare professional. Many employers elect to grant paid sick leave entitlement from day one of employment.

Under the UAE Labour Law, employers cannot terminate an employee either during their sickness, or due to their sickness, within the 90-day entitlement period. However, an employer can consider termination on medical grounds at the end of the 90-day entitlement period but must ensure that all financial entitlements are paid in line with the Labour Law and Regulations.

Employers should only agree to an employee returning to work if they provide an updated medical report stating the employee is now fit to work. For absences that are longer than seven days, or absences due to serious illnesses, employers can also consider phased returns before the employee resumes their normal hours.

As a best practice, companies should also conduct return to work (RTW) interviews with employees on their return to the office. RTW interviews are informal, supportive meetings between an employer and employee for ensuring the employee is fit to return, addressing any underlying health issues, updating them on workplace changes, and arranging necessary support or adjustments.

What Maternity Leave Entitlements Apply Under UAE Law?

Female employees in the UAE are entitled to paid maternity leave under Article 30 of the UAE Labour Law. This entitlement is not tied to a minimum service period and is available to all female employees from day one of employment.

The maternity leave entitlement is currently 60 calendar days in total, of which the first 45 days is fully paid and the remaining 15 days at half pay. It must be granted upon the employee’s request, at any time starting from the last day of the month preceding the month in which she is expected to give birth.

Employees may also, after using the maternity leave, be absent from work without a wage for a period of up to 45 days (continuous or intermittent) if it is due to sickness or the child’s sickness resulting from pregnancy or childbirth, which does not allow her to return to work.

In such cases, a medical report from a healthcare professional is required and the period of absence will not be included within the service term for which the female employee is entitled to end of service benefits or the period of contribution in the retirement scheme.

The Law also extends the statutory maternity period for a further 30 days of fully paid leave and a subsequent 30 days of unpaid leave if the baby is born sick or with a disability that requires constant care. A medical report is again required to support this extended leave.

The statutory maternity leave entitlement applies to female employees in the UAE in cases where a miscarriage or still birth occurs after six months of a pregnancy, or to female employees who adopt an infant that is under six-months old.

Female employees are also entitled to utilise their annual leave entitlement in conjunction with their statutory maternity leave period and to utilise their statutory sick leave entitlement (15 days full-paid and 30 days half-paid) before they utilise the additional 45 days of unpaid leave in instances where the employee falls ill or suffers a medical complication due to the pregnancy.

It is not permissible to terminate the service of a female employee (or notify of termination) due to pregnancy, taking maternity leave or being absent from work in accordance with the provisions of the Law.

After returning from maternity leave and for a period of not more than six months from the date of delivery, the female employee will be entitled to one or two breaks per day to breastfeed her child, provided that the two nursing breaks do not exceed an hour.

How Does Shared Parental Leave Work in the UAE?

The UAE Labour Law further provides for a paid parental leave period of five working days, continuous or intermittent, to allow both parents to take care of a newly born child. It is available to both the father and the mother during the six months after the date of the child’s birth.

The Law provides no length of service condition for an employee to be granted this leave, so it is available from day one of employment. In the case of female employees, the parental leave entitlement is in addition to the maternity leave entitlement.

Whilst this is a statutory entitlement, many employers offer flexibility around the birth of a child to their male employees and may, at their discretion, grant more than five days.

When Is Bereavement (Compassionate) Leave Granted?

The UAE Labour Law provides paid bereavement leave (also known as ‘compassionate leave’) to enable employees can take time off to mourn and manage family affairs in the event of a death in the family. All employees are entitled to:

• Five days paid leave on the death of a spouse.
• Three days paid leave on the death of an immediate family member ¬– parents, children, siblings, grandparents or grandchildren.

The bereavement leave period starts from the date of death and must be taken immediately. The employee is paid full salary, and the leave period does not affect their annual leave entitlement.

Any additional leave required must be taken from annual leave or as unpaid leave unless the employer grants an exception at their discretion. Some employers may require proof (like a death certificate) for their records.

Who Qualifies for Statutory Study Leave?

To encourage continuous learning and development, the UAE Labour Law provides study leave for employees who are furthering their education. An employee is entitled to 10 working days per year of paid study or exam leave provided they have at least two years of service with the employer and are enrolled in an approved educational institution in the UAE.

What Is Sabbatical Leave for National Service?

The UAE Labour Law provides a special sabbatical leave entitlement for all Emirati nationals employed in the private sector who are called up for National Service (typically, military service). This is to ensure that Emirati employees do not lose employment or salary while serving their country.

The sabbatical leave entitlement, which typically lasts for 12 months or more depending on National Service requirements, is for fully paid leave and the employer must hold their job open for them until they return.

How Is Leave Pay Calculated and Encashment Handled?

Leave salary during the period of employment is generally calculated at the gross salary level (basic salary plus all additional components). This also applies to other types of leaves such as maternity leave and sick leave, where there are full-pay or half-pay stipulations.

Calculating leave salary will depend on whether a UAE employer has adopted the ‘calendar days’ or the ‘working days’ formula.
For a ‘calendar days’ employer, the calculation is:

• (Monthly Gross Salary x 30 x 12) ÷ 365 = Daily Salary Rate
• Monthly Gross Salary ÷ 30 = Daily Salary Rate

For a ‘calendar days’ employer, the calculation is:

• (Monthly Gross Salary x 12) ÷ 260 = Daily Salary Rate
• Monthly Gross Salary ÷ 22 = Daily Salary Rate

However, leave salary for encashment purposes – for unused days of a statutory entitlement or when an employee is being off-boarded – are always calculated at basic salary level only. Some employers choose to extend the gross salary calculation for off-boarding employees as an enhanced benefit.

What Leave Benefits Go Beyond UAE Statutory Minimums?

Beyond the mandatory leaves outlined above, many employers in the UAE offer additional leave benefits to their employees as part of their talent recruitment and retention strategies. These leaves are not required under UAE Federal regulations, but are governed by internal company policies and procedures, and are mostly offered as an additional supplement to the statutory leaves.

Examples of non-statutory enhanced leaves would include:

• Birthday Leave – some UAE employers have adopted the discretionary practice of offering a day of leave on or around an employee’s birthday.
• Religious/Cultural Leave – as the UAE’s official public holidays only cover Islamic holidays, some 25% of UAE employers have adopted the discretionary practice of offering a day or two of leave for employees to observe their own important religious or cultural holidays, such as Christmas or Diwali. Such leave periods cannot be provided as a replacement to statutory public holidays. Any employee who works during a statutory public holiday must be compensated with overtime payments or time off in lieu (TOIL).
• Marriage Leave – the UAE government has introduced marriage leave entitlement in the public sector, but it remains as a non-statutory leave in the private sector. A typical discretionary practice would be to grant three to five days of paid leave to employees who are getting married.
• Dependent Care Leave – a few UAE employers have adopted the discretionary practice of offering leave to employees specifically to care for a sick family member where there is a lack of other care available. This might involve a number of paid or half-paid days per year, or simply the flexibility to work from home.
• Voluntary Leave – many UAE employers now offer employees one or two days paid leave per year to volunteer for charitable causes or purposes as part of their Corporate Social Responsibility (CSR) commitments.
• Wellness Days – as employee welfare continues to grow in importance in the UAE, some 20% of UAE employers have adopted the discretionary practice of offering wellness leave days or mental health breaks for employees. Typically, employers offer employees a few days of paid leave per year to recharge without using up their annual leave.
• Enhanced Maternity/Paternity Leave – some UAE employers have adopted the discretionary practice of introducing more European-style parental leave entitlements. This can be in the form of extending maternity leave to a period of up to six months or extending paternity leave by an additional month.
• Enhanced Annual Leave – many UAE employers have adopted the discretionary practice of offering employees enhanced annual paid leave entitlements that are beyond the UAE statutory entitlement of 30 calendar days (or 22 working days).
• Unpaid Leave – employees may, at the discretion of the employer, request to take unpaid leave for personal reasons if their statutory entitlement is exhausted. Under the UAE Labour Law, an unpaid period of absence is not included within the service term for which the employee is entitled to end of service benefits or the period of contribution in the retirement scheme.

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The Dubai International Financial Centre (DIFC) is one of the world’s leading financial hubs, offering unmatched opportunities for businesses, family offices, and investors across the Middle East, Africa, and South Asia.

Join us for this webinar to explore:

• Why DIFC is a strategic choice for growth
• The different structures available and how to choose the right one – Innovation Hub to Prescribed Companies
• Private and Corporate Client Case study examples of successful DIFC setups

Whether you’re an entrepreneur, advisor, or multinational executive, this session will provide practical insights and strategies to help you set up and thrive in DIFC.

Speakers

Matthew Boyd – Business Development Manager

Zana Jablan Musa – Operations Director – Middle East

Date and Time

Tuesday 21st October 2025

09h00 UK time, 12h00 Dubai Time, 16h00 Hong Kong time.

Click below register for this free webinar

The post LIVE WEBINAR – Opportunities in the DIFC: Structures, Strategy & Success appeared first on The Sovereign Group.

The UAE’s Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) signed a strategic partnership in August to align regulatory frameworks for virtual assets across the country.

The agreement, which aims to eliminate duplication and strengthen supervision, sets out a unified mechanism for registering virtual asset service providers (VASPs), enabling mutual recognition of licences and facilitating the exchange of information between the two regulators. It also introduces joint oversight and operational coordination.

The move comes after months of coordination between the two authorities and reflects broader efforts by the UAE to build a streamlined, globally credible regulatory environment for digital assets.

Aligning legislation and policy for virtual asset regulation

Alongside the agreement, the SCA Board approved the creation of a Coordinating Committee for Legislative Review, which is to be chaired by the SCA. This committee will work closely with VARA to review draft laws and regulatory updates in the virtual asset space, ensuring they are consistent with international standards and relevant to the UAE market.

This approach is designed to ensure a legislative framework that can adapt to industry changes without losing sight of investor protection or financial system stability. Both authorities said it will be an ongoing process, supported by shared systems, joint supervisory work and coordinated enforcement where necessary.

How the UAE is strengthening its position as a digital asset hub

Virtual asset oversight has been identified as a priority within the UAE’s broader economic and financial strategy. The country is looking to establish itself as a centre for blockchain development, tokenised products and digital asset markets, and the SCA-VARA partnership is intended to provide greater clarity and give confidence to both domestic and international market participants.

By presenting a coordinated position and aligning their supervisory models, the two regulators are also signalling that the UAE intends to maintain full alignment with the expectations of bodies such as the Financial Action Task Force (FATF), the global anti-money laundering and countering the financing of terrorism watchdog.

What the new framework means for virtual asset service providers

For VASPs, a single registration route should mean less administrative complexity, especially for firms active across more than one Emirate. However, they will still be required to comply with each authority’s operational, governance and technical requirements, as well as to meet all applicable anti-money laundering and counter-terrorist financing obligations.

The new arrangement also makes it clear that the SCA and VARA will be coordinating their monitoring, inspection and enforcement activities more closely. Firms that work across both jurisdictions should take time now to confirm that their licences, internal procedures and reporting processes are ready for this more integrated approach.

How the unified framework will be implemented

The shift will involve aligning application procedures, standardising supervisory methods and linking up data-sharing systems. Both regulators confirmed that the rollout will take place in phases, with additional instructions to be issued to the market as these changes are introduced.

The UAE will also keep engaging with overseas regulators and global standard-setting organisations to ensure that its framework can operate effectively across borders. This includes its continued involvement with FATF and regional working groups so that domestic rules keep pace with developments in other jurisdictions.

What this means for businesses entering the UAE market

The SCA-VARA agreement is a notable development for the UAE’s digital asset sector that offers greater regulatory clarity and a more streamlined route to compliance. For companies already licensed, as well as those exploring market entry, the unified approach should reduce procedural repetition and improve certainty when planning operations.

Sovereign PPG advises virtual asset businesses and investors on structuring, licensing and compliance in the UAE. Taking the time to choose the right legal structure, managing filings accurately and anticipating where approval steps may vary between Emirates can be critical to long-term success, particularly for foreign-owned or specialist sector businesses.

To discuss your UAE virtual asset strategy, or to explore opportunities in other GCC markets, contact Sovereign PPG at sovppg@SovereignGroup.com, call +971 (0)4 456 1761 (Dubai) or +971 (0)2 448 5120 (Abu Dhabi), or complete the enquiry form below.

The post UAE Unifies Virtual Asset Regulation Under SCA and VARA Framework appeared first on The Sovereign Group.

Sovereign, the UAE’s leading business formation and corporate services provider, has secured a licence to operate within the Dubai International Financial Centre (DIFC), further expanding its footprint across the country. Now with seven operational licences spanning free zones, offshore, and mainland, Sovereign strengthens its position as the UAE’s most comprehensive partner for global investors, entrepreneurs, and family offices.

The announcement comes as Dubai accelerates its rise as the world’s fastest-growing financial hub and a global magnet for wealth. DIFC recently reported its strongest half-year on record, with 1,081 new companies joining in the first six months of 2025 – a 32% increase year-on-year. At the same time, the UAE is set to attract a net inflow of 9,800 millionaires this year, more than any other country worldwide, according to Henley & Partners’ 2025 Private Wealth Migration Report. These new residents are expected to bring an estimated USD 63 billion in investable wealth.

This wave of capital and talent is reshaping Dubai’s business landscape. Wealth managers, family offices, and multinationals are relocating to benefit from the UAE’s favourable tax regime, progressive legal framework, and long-term residency incentives. At the centre of this activity is DIFC, with its independent regulatory and judicial system based on English common law, global-standard governance, and unrivalled access to the Middle East, Asia, and Africa.

By establishing a presence in DIFC, Sovereign reinforces its ability to deliver market-leading solutions across all levels of corporate structuring and compliance. The new licence enables the firm to support clients in setting up prescribed companies (PCs), active enterprises, special purpose vehicles (SPVs), family offices, foundations, holding companies, and proprietary investment entities. Combined with its existing ADGM, RAK ICC, DMCC and mainland jurisdictions, Sovereign now offers the most comprehensive and flexible corporate services platforms across the UAE.

“Dubai has become a magnet for capital, talent, and corporate leadership at a scale we have never seen before,” said Zana Jablan Musa, Operations Director at Sovereign. “With DIFC at the heart of this transformation, our new licence allows us to give clients the tools they need to establish themselves with confidence in one of the world’s most dynamic business environments. Whether it’s a family planning succession, an investor building a regional hub, startups seeking a supporting ecosystem for growth or a multinational seeking operational presence, Sovereign is uniquely positioned to deliver solutions that align with the UAE’s economic vision and long-term growth strategy.”

The announcement also comes amid a sharp rise in family office activity. Recent reports suggest that more than 200 family offices have opened in Dubai in the past year alone, many relocating from traditional wealth centres such as Hong Kong, Switzerland and the UK. Sovereign’s enhanced capabilities in DIFC will enable it to play a central role in this shift, supporting clients with both governance and long-term legacy planning.

With this milestone, Sovereign reinforces its standing as one of the UAE’s most trusted partners for entrepreneurs, corporations, family offices, and high-net-worth individuals seeking to navigate the country’s evolving financial and regulatory landscape.

The post Sovereign secures DIFC licence, marking new chapter in serving global investors amid global wealth migration surge appeared first on The Sovereign Group.

Global philanthropic giving is a major economic force, with cross-border philanthropy totalling USD70 billion in 2023.* And not only is the scale of private capital dedicated to charitable purposes around the world growing, but philanthropists are also moving away from ad hoc donations towards structured, strategic giving through family offices and foundations that are more focused on qualifiable impacts.

The Dubai International Financial Centre (DIFC) Foundation provides an effective vehicle to do this. Operating under the DIFC’s internationally recognised common law framework, DIFC Foundations can be established to manage donations, charitable trusts and broader non-profit activities, while maintaining full control of the distribution of funds.

DIFC charitable foundations: what legal form do they take and how do they operate?

Under the DIFC Foundation Law No. 3 of 2018, a DIFC Foundation is a legal person in its own right. It can hold assets, enter contracts and operate independently of its Founder. Control is maintained through the Foundation’s charter and by-laws, which define the purpose and decision-making framework. The Founder can retain certain powers or delegate them to a Council, which functions as the main supervisory body.

DIFC Foundations can be set up for charitable, non-charitable or mixed purposes. Charitable foundations must state a specific public benefit and appoint a Guardian to oversee compliance. This gives structure to private philanthropy, especially when donations are intended to support causes across multiple jurisdictions. Non-charitable Foundations, which are often used for wealth management, can also still support charitable activity as part of a broader mandate.

Unlike contractual arrangements or offshore equivalents, the DIFC Foundation creates a ring-fenced legal structure with statutory safeguards. It functions without shareholders or beneficiaries in the traditional sense, which keeps focus on the stated purpose rather than individual entitlements.

Who typically uses a DIFC charitable foundation and for what objectives?

These structures are typically used by high-net-worth individuals and families that have assets or commitments in multiple jurisdictions. Some use them to formalise long-standing charitable efforts, others to create new vehicles with specific cultural, religious or personal aims.

The by-laws, which are typically used to direct how funds are disbursed, which causes are eligible and what conditions apply, can remain private. Founders can retain oversight or pass decisions to the Council, while still defining broad goals through the charter.

Foundations can also be used by family offices as part of succession planning, particularly where giving is intended to continue across generations. Their appeal generally lies in the flexibility to set rules without being tied to one national regime. In some cases, they also help avoid exposure or scrutiny that would follow direct gifts or public structures elsewhere.

DIFC vs UAE federal charitable structures: what is the practical difference?

Under the UAE Federal Law No. (5) of 2018 on Waqf, charities and endowments must register through the General Authority of Islamic Affairs and Endowments or the local Waqf authority. This involves religious board oversight, public reporting, and restrictions on how assets may be managed or used. In cases where philanthropic activities span multiple jurisdictions, this structure may not be appropriate.

The DIFC takes a different approach. Foundations are formed under its own legal framework, based on common law principles and administered by the DIFC Registrar. There is no requirement for religious supervision, and the Founder sets the terms through private documentation. Control stays with the Council or Founder, subject to the charter and by-laws.

With its focus on legal personality, asset protection and purpose-based governance, the DIFC model can therefore be used effectively for private giving, cross-border grants and long-term endowments that fall outside the traditional charitable categories under UAE Federal law.

How is a DIFC charitable foundation established in practice?

Setting up a foundation in the DIFC involves submitting a charter and by-laws to the Registrar. These documents name the Founder, set out the purpose and define how the foundation will be run. At a minimum, there must be one council member. If the purpose is charitable, a guardian must be appointed to supervise its activities. A protector can also be named, though this is optional.

Once filed, the Registrar issues a certificate of incorporation. Most applications are processed within a few working days, though timelines can vary depending on structure and the approvals required. Documents do not require notarisation unless so requested by a third party.

Some founders prepare additional internal governance rules or set limits on disbursements through the by-laws. Again, these do not need to be filed publicly. Foundations must keep proper records and meet ongoing filing requirements with the DIFC Authority.

Why is the DIFC a preferred jurisdiction for structured philanthropy?

Structures established in the DIFC benefit from legal personality, a clear statutory regime and confidential internal governance. Foundations operate under common law, with English used as the working language, and enjoy recognition in many jurisdictions that do not typically recognise trusts. Documents are not made public unless the Founder chooses to disclose them.

For international families, this can simplify succession planning across borders or help structure giving across regions with different reporting rules. Control, purpose and confidentiality can be separated and formalised, while the Foundation’s assets are held independently from individual beneficiaries or executors.

The result is a structure that holds under pressure. It serves the Founder’s intent but does so through a legal form that remains consistent regardless of jurisdiction, beneficiary status or political change. These are crucial factors when putting long-term plans into practice.

How can Sovereign PPG support DIFC charitable foundation structuring?

Whether you are establishing a charitable foundation, structuring long-term giving or managing cross-border philanthropic commitments, Sovereign PPG can support you with formation, compliance and regulatory engagement within the DIFC. Our team works directly with private clients, legal advisers and institutions to deliver clear, practical solutions that meet both regulatory and strategic priorities.

To speak with Sovereign PPG in Dubai, call +971 (0)4 456 1761 or, for Abu Dhabi, call +971 (0)2 448 5120.
You can also email to sovppg@SovereignGroup.com or use the contact form below.

*According to the Global Philanthropy Indices compiled by IU Indianapolis.

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The European Parliament approved, on 9 July, a proposal by the European Commission to remove both Gibraltar and the United Arab Emirates (UAE) from its list of high‑risk jurisdictions regarded as having strategic deficiencies in their national anti‑money laundering and countering the financing of terrorism (AML/CFT) regimes.

EU entities covered by the AML framework are required to apply enhanced vigilance in transactions involving listed countries. In addition to the reputational damage, a listing adds costs to transactions involving people or entities from listed countries.

The EU listing process shadows the work of the Financial Action Task Force (FATF), the international anti-money laundering watchdog, in particular its ‘grey list’ of jurisdictions subject to increased monitoring. The Commission is mandated to update the high‑risk list regularly, but its proposals require the assent of both the European Parliament and individual member states.

This is not the Commission’s first attempt to delist Gibraltar and the UAE. It proposed doing so in March 2024 after both jurisdictions had been delisted by the FATF, but the proposal was vetoed by the European Parliament. This meant that the EU high-risk list was out of line with the FATF grey list for over 18 months, causing confusion and legal uncertainty for entities that must apply anti-money laundering rules.

“EU operators have to comply with divergent lists which increase their compliance burden, adds additional costs and impacts their global competitiveness,” EU Commissioner for Financial Services Maria Luis Albuquerque told the Parliament. “The fact that countries listed by the FATF are still not listed by the EU exposes the EU’s financial system to vulnerabilities and can create loopholes that need to be addressed.”

Gibraltar was first identified by the FATF as a jurisdiction under increased monitoring in June 2022 and placed on the ‘grey list’, despite rating as ‘Compliant’ or ‘Largely Compliant’ with 39 of the 40 FATF Recommendations and rating as ‘Partially Compliant’ with only one.

The Gibraltar government made a high-level political commitment to work with the FATF and Moneyval, the permanent monitoring body of the Council of Europe, to further strengthen the effectiveness of its AML/CFT regime by May 2023. Its agreed FATF Action Plan consisted of only two recommended actions, the fewest of any previously grey-listed country or jurisdiction.

In October 2023, the FATF made the initial determination that Gibraltar had substantially completed its action plan and warranted an on-site assessment. Following this assessment, in February 2024 the FATF stated that Gibraltar had resolved its strategic deficiencies within the agreed timeframe and was no longer subject to increased monitoring. It was removed from the FATF grey list.

Sovereign Trust (Gibraltar) Head of Business Development Ejaz Niazi said this could be a game-changer. The 2024 FATF delisting confirmed that Gibraltar was in compliance with global AML standards, but the continued EU high‑risk listing meant that European financial institutions were still required to apply enhanced due diligence (EDD).

“Formal removal from the EU list of high‑risk jurisdictions will reduce the compliance costs and barriers for clients wishing to use Gibraltar and reassure global investors, banks and counterparties about Gibraltar’s regulatory integrity,” said Niazi.

“This will make it easier for Gibraltar-regulated firms to engage with EU banks, law firms and fund managers and for Sovereign offices around the world to confidently refer clients to Gibraltar structures with fewer compliance frictions. It strengthens Gibraltar’s case as a viable jurisdiction for wealth structuring, fund domiciliation and corporate services.”

The UAE was added to the grey list in March 2022 after it had made a high-level political commitment to work with the FATF and the Middle East & North Africa Financial Action Task Force (MENAFATF) to strengthen the effectiveness of its AML/CFT regime to address the deficiencies identified by the FATF in its 2020 Mutual Evaluation.

At its October 2023 plenary, the FATF made the initial determination that the UAE had substantially completed its Action Plan and therefore warranted an on-site assessment. Following this assessment, it concluded that the UAE had met the commitments in its Action Plan. It was removed from the FATF grey list in in February 2024.

The UAE government has continued to sustain implementation of AML/CFT reforms. Last August, it amended its AML/CFT laws by adding measures to assist with investigations, to impose sanctions in cases of non-compliance by financial institutions and to increase the number of prosecutions to combat money laundering.

Last September, it also set out a 2024-27 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing, which has 11 goals focused on risk-based compliance, effectiveness and sustainability.

“The EU delisting is very good news for the UAE, which should be congratulated for taking strong and credible steps to ensure its removal,” said Simon Gordon, Managing Director of Sovereign Corporate Services Dubai.

“The UAE has continued to implement significant legislative and structural reforms in areas including financial crime compliance, whistleblowing and virtual assets regulation. It is reassuring that the government is continuing to prioritise AML/CTF governance in 2025, particularly in view of the next FATF assessment in 2026.”

The European Commission also removed Barbados, Jamaica, Panama, the Philippines, Senegal and Uganda from its list of high‑risk jurisdictions, while a further 10 third‑country jurisdictions were added to the list – Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela.

The post European Commission removes Gibraltar and the UAE from ‘high-risk’ list appeared first on The Sovereign Group.

Since late 2022, the UAE has been overhauling its visa system as part of a broader shift towards more flexible, visitor-friendly policies. It grants multiple-entry or single-entry visas that allow people to visit the country for a specific purpose.

The purpose of the ‘visit visas’ includes tourism, visiting a relative, attending to a mission, exploring business or job opportunities, getting medical treatment, studying and training, and for transiting through the UAE.

While these visas have been streamlined, and many short-term entry permits can now be renewed from within the UAE, the visa rules still vary by category and penalties for overstaying are strictly enforced. It is therefore essential to understand the extension rules, application process and grace periods.

Who is eligible to extend a visa in Dubai?

If you’re in the UAE on a visit visa, you may be eligible for an extension. Some visa-on-arrival categories also allow limited extensions. Residents of Gulf Cooperation Council (GCC) member states can generally renew once, subject to approval. The duration and terms of an extension will depend on how you entered the country and which authority issued your visa.

How long can a Dubai visa be extended for in 2025?

A 30-day tourist visa can typically be extended twice, providing for up to 90 days in total. A 60-day visa is usually extendable once for an extra 30 days. If you’re on a 90-day visa, extensions are generally not available.

A job-seeker visa allows foreigners allows foreigners to search for a job in Dubai without requiring a host/sponsor in the country, for one trip. You can apply for a job-seeker visa with a validity of either 60, 90 or 120 days.

Other categories, including visiting a relative, attending a mission, exploring business opportunities, getting medical treatment, studying and training, can be extended in monthly blocks, up to 180 days total.

It is important to note that the total stay in Dubai cannot exceed 180 days in a calendar year, including the original visa period and any extensions.

It is also important to apply for any extension before your current visa expires because the previous 10-day grace period after your visa expiration has been removed. Overstaying will result in a AED50 (c. USD14) penalty for each additional day.

What’s the process to apply for a visa extension in Dubai?

You can apply for an extension without leaving the UAE. This is the most convenient option, saving you the trouble of exiting and re-entering the country. The required documentation simply comprises a passport that is valid for at least six months from the application date and a copy of the existing visit visa.

There are two main ways to apply. The first is online via the ICP (Federal Authority for Identity, Citizenship, Customs & Port Security) Smart Services Portal or mobile app. You will need to log in using UAE Pass, select the relevant service, upload a copy of your passport and pay the required fees.

The second option is to apply in person at an Amer Centre or a Customer Happiness Centre. Bring your documents, take a queue ticket and submit your application at the counter. If your visa was arranged through a sponsor or travel agency, they may need to handle the renewal on your behalf.

How much does a visa extension cost in Dubai and how do you pay?

The base extension fee is AED600 (c. USD165), plus a 5% VAT charge. If you apply from inside the UAE, there is an additional AED500 processing charge. The application will also be subject to both the AED10 Knowledge Dirham and Innovation Dirham fees, which are levied on every transaction to support educational and cultural projects and to foster innovation respectively.

The total may differ slightly depending on the visa type and how you submit the application. Always double-check the fees on the ICP portal or at an Amer Centre before you apply.

What happens if you overstay your visa in Dubai?

If you overstay a tourist visa, fines begin from the day it expires. There is no longer any grace period and you will be required to settle any penalties before you can make any further application or you leave the UAE.

UAE residents get more leeway. Golden and Green Visa holders, and their dependants, can stay for up to 180 days after expiry. Most other residents get between 30 and 60 days, but it is essential to check your grace period through the ICP portal or visit an Amer Centre to confirm the rules for your case.

What should you remember about visa extensions in Dubai in 2025?

Before planning to extend a stay in the UAE, you should check whether your visa qualifies for an extension. Not all types do and the grace period, if any, will depend on the particular visa. Always apply before your visa runs out and if you are thinking about switching to a residence or employment visa, seek advice as early as possible. It’s much easier to do things right than fix problems later.

Need help managing your Dubai visa status? Here’s how Sovereign can assist.

Sovereign PPG supports individuals and businesses across the UAE with visa services, corporate structuring and regulatory compliance. Whether you need assistance extending a visit visa, managing staff sponsorships or navigating a change in immigration status, our team can provide clear, reliable guidance at every stage.

Call us (+971 4270 3400 for Dubai or +971 2448 5120 for Abu Dhabi) or send an email to Dubai@SovereignGroup.com, or complete the contact form below. We are here to help.

The post How to Extend Your Visa in Dubai – Everything You Need to Know appeared first on The Sovereign Group.

The Dubai International Financial Centre (DIFC) recorded a 35% rise in gross written premiums (GWPs) in 2024, reaching USD3.5 billion generated by 125 insurance-related entities, compared to USD2.6 billion in 2023.

DIFC’s insurance sector is an important component of its financial ecosystem, encompassing a wide range of activities from traditional insurance and reinsurance to captive insurance. The DIFC regulatory framework provides a stable and secure environment for insurance businesses to provide essential risk management solutions, attracting both regional and international players.

The 2025 record figure was announced by DIFC chief operating officer Alya AlZarouni at the opening of the Dubai World Insurance Congress, the largest industry gathering in the region’s history. Hosted in partnership with Global Reinsurance, the event drew 1,700 attendees from 82 countries, up from 1,300 in 2023.

The DIFC also launched, in collaboration with Asia House, its first dedicated industry report titled ‘Embedding Resilience: Opportunities for the Global Insurance Industry’. The report highlights the growing global insurance market, now worth over USD8 trillion, and the increasing demand for coverage against extreme weather, cyber threats and evolving economic risks.

The Middle East insurance market is booming, fuelled by capital inflows into mega construction, tourism, and energy projects. Dubai, for instance, led the world in greenfield FDI projects in tourism during H1 2024. Rising consumer awareness and product diversification are also expanding insurance uptake in the region.

DIFC continues to attract more captive insurers, InsurTechs, and build on its role as a global hub for managing general agents (MGA) due to a favourable regulatory environment.

As insurers explore the integration of artificial intelligence (AI) in daily operations, InsurTechs, once seen as a potential competitor, are shifting to collaboration with incumbents to mitigate regulatory and investment costs. Meanwhile, Web3 and crypto assets offer insurance growth opportunities as decentralised finance emerges as a key global finance trend.

DIFC continues to invest in strengthening its ecosystem through transparency, talent development, access to timely data and education, positioning Dubai as a global hub for insurance and reinsurance.

“DIFC is well-positioned to broaden and deepen its role as the region’s leading insurance hub, thanks to its progressive and proportionate laws and regulations,” said DIFC Authority chief executive Arif Amiri.

“Over 125 insurance and reinsurance entities call DIFC their home, and we urge them to capitalise on the themes identified in our first-ever report on opportunities for the global insurance industry.”

How can Sovereign PPG help?

Obtaining the permits to conduct insurance activities in Dubai can be challenging. Navigating regulations, obtaining licences and building trust with local partners is crucial for success. Sovereign PPG has an experienced team with in-depth knowledge of business practices in the UAE and close connections with key government departments.

We can advise applicants on the most appropriate business activity, licence and jurisdiction for establish an insurance company and assist with incorporating the company, making regulatory registrations and obtaining all necessary visas and approvals.

If you need assistance with this or with any company set up, restructuring, local partner or Visa and PRO support in UAE, or any other related service, please contact us on +971 4 270 3400, email to sovppg@sovereigngroup.com , or complete the contact form below. We will be delighted to help.

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