By Staff writer
Deloitte report identifies regulatory changes required to enable Dubai to reach next level as financial hub
Authorities in Dubai are being urged to relax the criminal implications of bankruptcy and bounced cheques as part of a strategy to enable the emirate, as a financial and trading hub, to reach the next level in terms of sustainability and competitiveness.
Deloitte has made several recommendations regarding regulatory changes which, it says, will help to attract more investment and promote export-oriented growth.
"Whilst much has been achieved by the emirate, there is still room for improvement in terms of enhancing economic performance and achieving sustainable growth, improving overall economic competiveness and attracting foreign investment," said Humphry Hatton, CEO, Deloitte Corporate Finance Limited, in the report.
As well as easing rules on bankruptcy and bounced cheques, which can result in jail sentences, Deloitte also recommends that Dubai relaxes foreign ownership restrictions in selected industries of non-national strategic importance.
It also urges that Dubai ease restrictions on freelance and part time employment which could further attract high skilled human capital, and relax the residency rights process and ease of travel within the GCC.
The report, supported by the Dubai Economic Council, said the recent Expo 2020 win and the MSCI announcement to upgrade UAE exchanges to emerging market status in Dubai have boosted investor confidence and improved market activity in the emirate.
Hatton added: "It is well established that a successful financial services sector is critically important to be able to develop efficient capital markets and also to encourage and grow the SME sector.
"Supporting the growth of start-ups and SME's by improving access to finance, combined with government initiatives promoting innovation, improving education levels and the use of latest technologies, are all important areas of attention to ensure that Dubai continues to build a sustainable and high-performance economy."
In addition to financial sector development issues, the report also analyses other related areas of public policies, such as, promoting capital markets, developing the business trading system and increasing the competitiveness of SMEs.
Most CIVILISED Countries make such bounced cheques and other financial matters Civil torts and NOT Criminal, unless there is a clear fraud. It is long overdue that UAE and others in Mena region made the same changes. In the UK it is 150 years or so since they abolished "debtor prisons" ,now they deal with it in Civil way in Civil Court. Maybe UAE will catch up shortly ?.
Well, it is easy to write what you like, But I have been cheated for nearly Dhs 300,000.00 by just giving a cheque, that is Non dated and Blank I know that court will take a very longtime, so what is your present counsel/ law in Dubai.
This person is an Expat.
The question, given the often vociferous resistance to changing the current system from local banks, is will the authorities listen?
As they stand the laws are a significant deterrent to investors, given the litany of jail sentences imposed since 2009, and impede future lending.
The ability to work to pay off debt rather than sit hamstrung in a prison cell is an essential shift.
I agree...its merely a civil matter between two parties..and should only be criminal after civil judgment passed...and the person does not fulfill the order...in Dubai u r guilty till proven innocence (lol) ...also..whats the point having..an "LLC" when there is no bankruptcy law...Dubai g0t to work on it....
My tenant is living in the house without paying the 4 bed villa rent ...he gave me a closed account cheques ...I have paid over 15,000 AED fees in Dubai court...nothing is being done ..no verdict . I have send him notary public notices all that could be done !
Tenant enjoys all the luxuries and the Landlord suffers ! There should be tougher laws and faster results on solving the disputes !
Chq bouncing should infact be dealt with very strictly to minimize losses and will restrict people to overtrade. Not only imprisonment defaulters company license should be cancelled and proprietor should be deported in case of expat. Also authorities should look into trade of counterfeit items in all business.
Dubai has progressed due to its firmness of the rules of bounced cheques. Most of the trading is carried by the post dated cheques. If this is eased, then the trading business in and outside UAE will suffer a lot and there will be no trust and this will not bring upword changes in the economic situation rather will affect adversely.
This is the only means left for the trading warranties.Better do not relax these conditions upon bounced cheques.
Dubai has to learn that economies fluctuate and we have to take the bad with the good. While things are positive the bounced cheque rules and lack of a cohesive bankruptcy law don't matter as much, since the frequency of defaults are low. When times are tough is when the importance of fair legislation comes to the forefront. The Emirate is an amazing place and so full of opportunity and excitement, it's high time some of the draconian laws get repealed and a strong civil code is implemented to protect all. Seriously, what good does it do to put someone who has a legitimate business cash flow problem in jail? It adds burden to the economy and ultimately doesn't solve anything.
Dubai has progressed DESPITE the rules on bounced cheques. Overconfidence in the strictness of the rules has led to many traders being far too lax about who they deal with, and how much credit they offer. The rules do nothing to deter a fraudster, who will be long gone by the time you present their cheque and instead criminalises people whose businesses hit hard times. I have lost count of the number of cases I have seen over the years where some guy runs a scheme where he buys ever-bigger amounts with pdc's from a group of traders, sells the goods off cheap and then flees the country when he's built up enough cash. The cheques bounce and the guy is nowhere to be found.
There are other credit management tools available but of course why would you use them when you can take a cheque for free and then use Dubai police as a no-cost debt collection agency?