Health Insurance Law: Mandatory Health Insurance for UAE employees
Health Insurance is now considered as one of the requirements that all employers need to consider for their employees in order to continue business in the UAE. The Dubai Health Authority (DHA) has made it clear to the public that all employers have to provide health coverage to their staff and failure to do so will be handled seriously.
Failure by employers to provide insurance carries fines of between AED 500 and AED 150,000. Repeated breaches carry a maximum fine of AED 500,000.
The Law aims to build a unified health system in the UAE based on a sustainable financial plan that protects the interests of all participants in the health insurance scheme.
Responsibility of Employers:
- Responsible to enroll their employees in the mandatory health insurance scheme based on their current health insurance policy, and in accordance with the law and regulations.
- They should bear the cost of health insurance coverage and this should not be deducted from employees’ salary.
- They should ensure the validity of the health insurance coverage throughout the period of their employment.
- In the event that employees have no health insurance coverage, Employers are required to bear all the costs of health care and emergency services.
- Required to provide health insurance card to their employees.
- Required to submit proof of health insurance coverage when applying for new or renewal of residence visas for their employees.
- Any other responsibilities assigned by DHA as issued in the regulations.
SPMC-Dubai can assist for the compliance to this requirement.
The New UAE Commercial Companies Law (CCL)
Federal Law No.2 of 2015 on Commercial Companies was published in the Federal Gazette and came into effect on July 2015. This law replaces the old Federal Law No. 8 of 1984.
Key provisions of the new CCL compared to old CCL.
| New CCL | Old CCL |
| Foreign Ownership Restriction New provision explicitly invaliding any transfer of shares which may affect the minimum UAE national shareholding of 51% (article 10 of New CCL). |
No provision clearly invaliding any transfer of shares that will be in breach of the minimum UAE national shareholding of 51%. However, the Old CCL did prohibit any assignment of UAE national shareholding below the 51% threshold. |
| Holding companies LLCs and JSCs are now permitted to be established as holding companies in order to conduct business activities solely through their relevant subsidiaries (article 266 of the New CCL) |
The concept of a “holding company”was not recognized. |
| Director’s / manager’s duties A director/manager is a person authorized to manage the company and must preserve the rights and works of the company with care of a precise person (article 22 of the New CCL). In addition, any provision in the company’s memorandum and articles of association exempting any director / manager from personal liability (that he / she bears in his / her capacity as an officer) is voidable (article 24 of the New CCL). |
Limited duties and obligations imposed on directors / managers. |
| Companies Registrar The Minister of Economy shall issue a regulation setting out the activities and functions of the Companies Registrar. In particular, the Companies Registrar shall supervise the trade name register (to avoid double registration), hold company records and enable concerned parties to inspect the relevant company records (articles 33 –38 of New CCL). |
No Companies Registrar |
| Accounting requirements All companies are required to keep accounting records at their relevant head offices for a minimum period of five years (article 26 of New CCL). In addition, all companies shall apply international accounting standards and practices when preparing their relevant accounts in order to give a clear and accurate view of the profit and loss of the relevant companies. |
Limited accounting requirements imposed on companies. |
| Free zone companies Generally, the New CCL shall not be applicable to free zone companies. However, if the laws of the free zone permit certain free zone companies to operate outside the relevant free zone (i.e. onshore), then the New CCL shall be applicable to such free zone companies (article 5 of New CCL). |
Not applicable to free zone companies. |
| Sole shareholder One natural person, or corporate entity, may be the sole shareholder of a LLC (article 71 of the New CCL), and one corporate entity may be a sole shareholder of a Private JSC (article 255 of the New CCL) |
A company with sole shareholder is not permitted. |
| Share pledges Allows shareholders in LLCs to pledge their shares, and such pledges must be made in accordance with the company’s memorandum and articles of association, and be notarized. Such pledges shall only be valid (against the company and/or relevant third parties) from the date of its entry on the commercial register (article 79 of New CCL) |
No provision permitting shareholders in LLCs to pledge their shares. |
| Maximum number of directors /managers The management of an LLC can be undertaken by one or more directors / managers as determined by the company’s memorandum and articles of association or the general assembly of the company (article 83 of New CCL). |
A maximum of 5 directors / managers. |
| Non-compete by directors / Managers Other than with the consent of the general assembly of the company, a director / manager is not permitted to manage another competing company (including another company with objects similar to the company) (article 86 of New CCL). |
No provision clearly restricting directors / managers from managing competing businesses |
All companies are required to review their MOA and AOA, the wording should comply with the new law and must be formally amended and filed accordingly.
SPMC-Dubai would be delighted to help you comply with the requirement of the new CCL.
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