UAE Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Abuorabi and Habiba Wahdan, GLA & Company
tion Law is significantly based) as the total value of sales of goods or services in the ”relevant market”. On the other hand, no special jurisdictional thresholds will apply to particular sectors and this applies across all sectors and regions in the UAE. It is important to reiterate that the jurisdictional thresholds do not apply to exempted activities or enterprises. None of the UAE Competition Legislation has identified how jurisdictional thresholds are cal - culated (including how sales or assets booked in a foreign currency are converted or if the thresh - old is based on the book or fair market value). There is also no sufficient data to understand how the Competition Department will carry out these calculations, due to the absence of case law. 2.6 Calculations of Jurisdictional Thresholds The absence of case law could be justified by: • the high jurisdictional thresholds not usually met by the undertakings based or doing busi - ness in the UAE and do not therefore require any filings or notifications requesting exemp - tions; • the huge volume of “economic concentration” transactions and activities taking place in financial free zones, such as the ADGM or the DIFC, exempted from the UAE Competition Legislation; • many of the undertakings are carrying out activities that are categorised as exempted activities and enterprises; and • the multiple incentives provided by the UAE government to promote the UAE as a regional hub leading to some of the regulatory restric - tions usually found in developed markets being relaxed, which, at the same time, will
not apply to the UAE, which is considered one of the most competitive emerging mar - kets in the Gulf and Middle East region. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds It is important to clarify that an “undertaking” is defined under the Competition Law as ”any natural or legal person conducting an eco - nomic activity or any person in connection with such persons or any grouping of these persons regardless of their legal form”. No other defi - nitions are contained in the UAE Competition Legislation with regards to corporate entities or individuals or group wide. This means that an “undertaking” meeting the threshold could be the ”undertaking” directly involved in the “economic concentration” trans - action or activity or it could be a parent or hold - ing company based outside the UAE. Strictly speaking, the “undertaking” that is directly carrying out an ”economic concentra - tion” transaction or activity in a “relevant mar - ket”, whether based inside or outside the UAE, which meets the jurisdictional threshold as an entity and not as a group will have to notify the Competition Department that is requesting an exemption. However, if we apply the same principles used in the EU, the calculation of the jurisdictional thresholds should be carried out after consoli - dating the turnover of the transactions of the group as a whole and not just the “undertaking” that is a party to the transaction. Unfortunately, due to the absence of case law and regulatory guidance on the calculation methodology, it is unclear if the Competition
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