INSITE - UAE- March 2026
- sukhwinder21
- 2 hours ago
- 6 min read
KUWAIT’S DIGITAL COMMERCE LAW ISSUED
Summary: Kuwait has introduced a significant new regulatory framework for the digital economy through Decree by Law No. 10 of 2026 (“Digital Commerce Law”), published on 1 March 2026. The law establishes a comprehensive regime governing online commerce, including mandatory registration requirements and strict enforcement measures. It aims to create a secure, competitive digital marketplace aligned with Kuwait Vision 2035 and the country’s broader digital transformation goals.
In Detail: The State of Kuwait has enacted Digital Commerce Law, marking a major shift in the regulation of online business activities. Published in the Official Gazette on 1 March 2026, the law reflects Kuwait’s commitment to strengthening its digital economy and fostering a safe and innovation-driven commercial environment.
Comprising more than 45 articles, the Digital Commerce Law introduces a comprehensive legal framework that governs the operation, supervision, and enforcement of digital commerce activities within the country. A key requirement under the law is that all individuals and entities engaging in digital commerce must be registered with the Ministry of Commerce and Industry. This formal registration regime is intended to enhance transparency, accountability, and regulatory oversight across the sector.
The law also establishes robust enforcement mechanisms. Non-compliance with its provisions may result in significant penalties, including imprisonment and/or fines of up to KD 10,000 (approximately USD 33,000). In cases of repeated violations, penalties may be doubled, underscoring the authorities’ strict approach to enforcement.
Overall, the Digital Commerce Law is designed to promote consumer protection, support fair competition, and attract investment in Kuwait’s digital marketplace. It aligns closely with Kuwait Vision 2035, reinforcing the country’s strategic objective of achieving comprehensive digital transformation and economic diversification.
UAE LAUNCHES PHASE 1 OF RESEARCH AND DEVELOPMENT TAX INCENTIVES PROGRAMME
Summary: The United Arab Emirates (“UAE”) has launched its first research and development (“R&D”) tax credit regime, marking a major step toward strengthening its innovation ecosystem. Introduced by the Ministry of Finance and effective from 1 January 2026, the regime offers a tiered, non-refundable tax credit of up to AED 5 million on qualifying R&D expenditure, subject to headcount thresholds and pre-approval requirements.
As Phase 1 of a broader R&D Tax Incentives Programme, the regime is designed to attract investment, promote innovation, and align with the UAE’s ambitions to become a global technology and knowledge hub. Further enhancements, including potential refundable credits, are expected in future phases.
In Detail:
Introduction and Scope
On 18 March 2026, the UAE Ministry of Finance introduced a comprehensive R&D tax credit regime under Cabinet Decision No. 215 of 2025 and Ministerial Decision No. 24 of 2026. The regime applies to tax periods beginning on or after 1 January 2026 and represents a significant development in the UAE’s corporate tax and innovation landscape.
The credit is available to UAE-incorporated entities (including certain Free Zone entities) and foreign entities with a taxable presence in the UAE, provided they are subject to UAE corporate tax and engaged in qualifying R&D activities. Notably, entities benefiting from the 0% Free Zone tax rate and not subject to top-up tax are excluded.
Key Features of the R&D Tax Credit
1. Tiered Credit Structure
The regime provides a non-refundable tax credit based on qualifying R&D expenditure and workforce thresholds:
15% on the first AED 1 million (minimum 2 R&D staff)
35% on expenditure between AED 1–2 million (minimum 6 R&D staff)
50% on expenditure between AED 2–5 million (minimum 14 R&D staff)
The credit may be offset against corporate tax and/or top-up tax liabilities, with unused credits carried forward to future years.
2. Eligibility and Qualifying Activities
To qualify, activities must meet internationally aligned criteria (based on OECD principles), including being:
Novel and creative
Subject to technical uncertainty
Systematic and structured
Transferable or reproducible
Only R&D conducted within the UAE qualifies, and certain fields such as social sciences, humanities, and arts are excluded.
3. Qualifying Expenditure
Eligible costs include:
Staff costs (including salaries, benefits, and training, with a 30% uplift for overheads)
Consumables (e.g., materials, utilities, and certain licence fees)
Subcontracting costs (subject to strict conditions and UAE nexus)
Cost contribution arrangements (CCAs)
Certain capitalised R&D costs
A minimum expenditure threshold of AED 500,000 per R&D project applies.
4. Pre-Approval and Compliance
A distinguishing feature of the regime is the requirement for pre-approval of R&D projects by the Emirates Research and Development Council. Claims must be submitted with detailed supporting documentation, including:
Pre-approval confirmation
Audited financial statements
Breakdown of qualifying expenditure
Management certification
Entities must also maintain extensive technical documentation for at least 7 (seven) years.
As a non-refundable credit, the incentive reduces covered taxes and may lower the Effective Tax Rate (ETR), potentially triggering top-up tax under Pillar Two rules. The UAE has indicated awareness of OECD developments, including the potential adoption of “Qualified Tax Incentives” to neutralise such effects in future phases.
The Ministry of Finance has positioned this regime as Phase 1 of a broader R&D incentives programme. Future enhancements may include refundable credits and expanded eligibility, depending on market response and policy evolution.
The introduction of the UAE’s R&D tax credit regime is a landmark development that reinforces the country’s commitment to innovation-led growth. While the framework offers substantial opportunities, it also introduces complexity, requiring careful planning across tax, legal, and operational functions.
Businesses engaging in R&D activities in the UAE should proactively assess their structures, documentation, and innovation strategies to fully leverage the benefits while ensuring compliance.
QATAR INTRODUCES NEW LICENSING REQUIREMENTS FOR E- COMMERCE ACTIVITIES
Summary: The Minister of Commerce and Industry has issued Decision No. 25 of 2026, introducing a regulatory framework for conducting commercial activities online without a physical storefront. The Decision requires businesses to obtain an e-commerce license, comply with specified operational and disclosure requirements, and adhere to consumer protection standards.
It establishes a structured approach to regulating digital commerce, with permitted activities to be published by the Ministry of Commerce and Industry (MoCI). The framework aims to enhance transparency, accountability, and consumer trust in online business operations.
In Detail: Qatar Minister of Commerce and Industry has issued Decision No. 25 of 2026, which sets out the conditions and limitations governing the conduct of commercial activities through websites where no physical premises are required. The Decision reflects a broader regulatory effort to formalise and oversee e-commerce activities and ensure that businesses operating online meet consistent legal and consumer protection standards.
The Decision adopts a broad definition of a “website,” encompassing any technological platform used to facilitate transactions or communications, including social media platforms.
“E-commerce” is defined as the sale of goods or provision of services through such platforms, while “commercial activity” refers to any activity permitted to be conducted online under an e-commerce license.
The specific activities that may be carried out via e-commerce will be determined by the MoCI, in coordination with relevant sectoral regulators, and published on its official website following ministerial approval.
Licensing Framework
A central feature of the Decision is the requirement to obtain an e-commerce license before conducting any commercial activity online.
To obtain a license, applicants must:
Be registered in the MoCI commercial registry
Clearly specify the commercial activity to be conducted online
Obtain any necessary regulatory approvals for that activity
Identify the website through which the activity will be conducted
Where multiple websites are used, a separate license is required for each platform, and any amendments to the license require prior MoCI approval.
Consumer Protection and Disclosure Obligations
The Decision places significant emphasis on consumer protection in the digital space.
Licensed entities must:
Provide electronic payment options
Clearly display key information on their website, including:
Commercial registration and e-commerce license details
Customer service contact information
Product/service descriptions and return or exchange policies
Complaint handling procedures and customer protection mechanisms
These requirements aim to align online business practices with established consumer protection standards applicable to traditional commerce.
Exclusions
The Decision does not apply to transactions conducted for personal use, provided such transactions do not involve commercial quantities. This carve-out ensures that occasional or non-commercial online activity remains outside the regulatory framework.
Regulatory Scope and Applicability
The framework primarily applies to businesses registered with the MoCI, as holding a commercial registration is a prerequisite for obtaining an e-commerce license.
Entities operating under alternative regulatory regimes such as financial centres or free zones may fall outside the direct scope of the Decision. However, applicability should be assessed on a case-by-case basis, particularly where activities are directed at the local market.
Decision No. 25 of 2026 represents a significant step toward regulating and formalising e-commerce activities. By introducing licensing requirements, clear operational standards, and enhanced consumer protection obligations, the framework promotes transparency and accountability in the digital marketplace.
Businesses engaging in online commercial activities should review their current operations to ensure compliance with the new licensing and disclosure requirements, particularly where multiple platforms or jurisdictions are involved.
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