State: The United Arab Emirates State.

Financial Free Zone: The free zone established in any of the State emirates practicing financial activities.

Financial Activities: The banking and financial services and activities, insurance and reinsurance, financial markets, and supporting activities licensed to be practiced in the financial free zone.

Supporting Activities: Monetary and financial brokerage services, consultations, the provision services and merchandise to companies, institutions and individuals in the financial free zones.

Financial Banking Activity: Financial banking activities and banks activities.

Companies and Institutions: Companies and branches thereof, and institutions established or licensed to work in the financial free zones.

The financial free zone shall be established by virtue of a federal decree. It shall have a juridical personality and shall be duly represented by the Chairman of the Board of Directors thereof.

It shall be solely liable for the commitments resulting from the practice thereby of the activities thereof.

The Cabinet shall specify the location and area thereof.

1- The financial free zones, and all operations carried out therein shall be subject to the provisions of the Federal Law no. 4 of 2002 regarding the Incrimination of Money Laundering

2- All financial zones and activities shall be subject as well to the provisions of the Federal Laws, with the exception of the civil and commercial federal laws.

The financial free zones shall commit to the following:

1- With regard to the financial banking activities:

a- The license shall be restricted to the branches of companies and institutions, participating companies, and companies owned entirely by any thereof, provided that it enjoys a strong financial status and a complete organizational and administrative structure. It shall be managed by experts in such kind of activity.

b- Licensed companies and institutions in the financial free zones must not deal in deposits from the State market or in the Emirati Dirham.

c- Standards of licensing of companies, branches of companies, and institutions must not be lower than the ones applied in the State.

2- Financial brokers licensed in exchange market in the State may not be licensed to practice the activities thereof in the financial free markets unless after the obtainment of the approval of the Emirates Securities and Commodities Market Authority.

3- Companies listed in any of the exchange markets in the State may not be listed unless after the obtainment of the approval of the Emirates Securities and Commodities Market Authority.

4- The limitation of the practice of the insurance activity in the State to reinsurance.

5- The actual presence of the companies and institutions licensed to work through the free zones shall be limited to the scope of such zones. Such companies and institutions may be licensed to work outside the State.

The financial free zones shall undertake not to carry out any work that may lead to any breach of the international conventions ratified or to be ratified by the State.

The financial free zones may conclude memorandums of understanding and cooperation with similar entities and centers, provided that such memorandums do not contradict the conventions to which the State is party.

1- The financial free zones shall undertake to publish bi-annual reports regarding the activities thereof and the abidance thereby by the provisions hereof.

2- Competent authorities in the federal government may carry out inspections of the financial free zones to verify the abidance thereby by the provisions hereof. The outcome of such inspections shall be submitted to the Cabinet to take adequate action in this regard.

3- Subject to the provisions of Article 3, the pertinent emirate – within the scope of the purpose behind the establishment of the financial free market – may issue necessary legislations for the performance thereby of the work thereof.

Upon a Cabinet decision, and for a period not exceeding four years from the date of establishment thereof, the financial free zones may grant licenses to companies and institutions to practice the works thereof outside the administrative and geographical borders of such zones in the State.

The Cabinet shall issue the Implementing Regulation of the provisions hereof.

The present Law shall be published in the Official Gazette, and shall come into force as of the date of publication thereof.