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January 24, 2022|
The United Arab Emirates has revamped its laws relating to charitable donations and funds constitution. The new law, namely, the Federal Law No. 3 of 2021 concerning the Regulations of Fundraising and Donations (the ‘new law’), aims to regulate all charity funds and imposes restrictions and stricter control measures. For instance, the new law imposes fines ranging from Aed 200,000 to 500,000 for any person profiting or misappropriating the donations. In its applicability the proposed new regulatory law shall apply to any entity that wishes to collect or provide donations in the State, including the free zones (Article 2).
Lawful methods to set up a charity in the UAE:
The following methods can be adopted in order to set up a valid charitable organization in the UAE:
In Dubai, the entities that can provide recognition as well as license for charitable organizations or NGO’s or other humanitarian organizations, include:
Stricter checks incorporated by the new law:
In line with the international best practices for anti money laundering, the new law imposes the following strict measures on all registered charitable entities:
Obligations of the charities (Article 24):
The new law has imposed strict compliance measures for all registered charitable organization in the UAE, which include amongst others:
The proposed new law is focused to ensure stricter regulatory control in fundraising, and aims to support social development and humanitarian donations by aligning them with the traditional Emirati values and ethos. The new law also proposes to ensure that charitable fronts are not utilized for any illicit means such as money laundering, tax evasion or similar criminal acts.
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