Understand the Dubai Sharia Law and follow them while in Dubai

For doing business in Dubai, or for simply staying for sometime either for work or pleasure, it is important to understand Sharia law. This law is the basis for Dubai’s legal system (although constantly changing to meet modern needs).  When the constitution of the UAE was developed, it was written that Isla (the predominant religion) is the state religion (unlike the USA where the separation of church and state is emphasized). All legislation was initially derived from the religion, whether civil, criminal, and business. Sharia law is now most commonly used in social cases like divorce. As the time progressed, it became less pertinent to civil cases. But there are several components of the Sharia law which are valid to business deals.

The important components that should be familiarized with are as follows:

Interest Rate is a perfect no. Interest or Riba or free money as seen in the Muslim world is considered as Haram or unearned or forbidden or cursed. Muslims do not believe in receiving income that is not earned or getting free money.

Full Disclosure: All contracts must take account of as much detail as possible. Basically, there should be no surprises and both parties must have every single detail clear (values, dates etc). This is also referred to as Gharar in Arabic. There should be no vagueness at all in other words.

Passive Investments are also a no. Passive Investments are very well tied with the interest issue. Muslims do not believe in getting free money on investments. Any investment must apportion equivalent peril and recompense to each investor concerned. An investment is always risky as it’s not necessary that one get the investment capital back. This is just a small list, not an inclusive one.

Other aspects of Sharia Law which are common to most legal systems globally are not included in this list. For example, it is a given that there is a component that all parties in a contract must be proficient and not enter into a contract by force. It has to be an agreeable contract and both sides have to be competent.

The Dubai legal system is complicated to begin with as it has different court systems for different purposes. All legal documents, contracts, all court proceedings (including transcribing) and court legislation (law) are written in Arabic. It is needless to say that this system is different from the Western world. The underlying principles of the local law in Dubai are logical and they can be understood why they are the way they are.

As Dubai and the UAE have evolved, so has the law. This system is getting less and less confusing over the years, as there is more published guidance issued on the various common cases affecting businesses and individuals. This string is due to the mass expatriate population that works and lives in Dubai.

It is always best to hire a qualified professional to guide through the legal needs as the legislation is instinctively intricate and ever changing. Remember while in Dubai you will have to follow the Sharia law.

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