Be aware of Sharia law on local life assurance policies

On your side: Keren Bobker answers questions on how to take out a life assurance policy and how to protect investments.

I want to take out a life assurance policy and have been shopping around, but I am confused as to which company to go with. I have similar costs for what look like similar policies - one with a local insurance company and one that is based in the Isle of Man. As I plan to live in the UAE for some time, is it best to pick the local company? Why do people use international companies and what are the benefits? WS, Dubai

As you are a British National and not a Muslim, I presume you do not want the proceeds of the policy to be subject to Sharia law? If you take out a policy with a locally-based insurer, the proceeds on death would be paid to your beneficiaries in the UAE and could be distributed in accordance with Sharia law so not necessarily in according with your wishes. If you take out a plan with an international insurer, based in the Isle of Man - an offshore jurisdiction - although still part of the United Kingdom, your policy would be subject to all the regulatory rules of an Isle of Man-based company for additional protection. If a claim is made, the proceeds can be paid to an offshore bank account or one in your home country and then distributed in accordance with the instructions in your will. With the appropriate paperwork, you can also nominate a beneficiary or put it in trust.

According to my visa I am a sales representative, but I actually work as a cashier/computer technician in a shop. I have a three-year contract but although I started work in this shop on July 12 2010, my contract's start date is October 5 2010. I have worked with hardly any break for more than two years and am getting fed up with the abuse from customers and the fact I never get a day off. Even if staff are unwell we have to go to work. Some of us have thought about making a complaint but we are Filipinos, who just want to work and are worried about what will happen. We have endured enough and I would like to know how I can leave this job without being banned or blacklisted. The store manager told me I will be blacklisted in the UAE if I do not finish my contract and will never be able to work here again. I have to work between eight and nine hours every day, but some of my colleagues are working up to 14 hours a day. ME, Abu Dhabi

If someone on a fixed term (limited) contract wants to leave before the end of the specified date, they have to financially compensate the employer. According to Article 116 of the UAE Labour Law this "may not exceed half a month's pay for a period of three months or for the remaining period of contract whichever is shorter." The start date will be that shown on the version of the contract lodged with the Ministry of Labour, but it is not right to put a date different to when actual employment started. That said, "if the employer does not fulfil his obligations towards the employee as provided for in the contract or in this Law" as stated in Article 121 of the Labour Law, the employee may leave service without notice. Care should be taken here and written confirmation obtained from the Ministry before taking action. The law states that the maximum working hours in this situation is eight hours a day to a maximum of 48 hours per week (Article 65). Up to two additional hours can be worked each day if overtime is paid and all employees must have time off; it's illegal to make an employee work seven days a week. There is no such thing as a UAE blacklist and that is just an unpleasant threat from the store manager. I urge ME to contact the Ministry of Labour for assistance as the employer is breaking the law by operating in this way.

A long-standing friend has invited me to join his import business and give him a loan of Dh125,000 for investment in the business on which we will share the profits. I am keen to be involved, but I would like to know how I can protect my investment by entering into a legal agreement. Is this allowed in the UAE from a legal point of view? TS, Dubai

This should be a relatively straightforward business arrangement and you have the choice of two options. The first: lend your friend the money personally on either a secured or unsecured basis, and hire a lawyer to draft proper legal documentation. Alternatively, as this should be a legal company structure, you could take an equity share so that you have a degree of ownership. I have checked the matter with a legal contact and he stated that he prefers the latter option as it is more enforceable if there are any problems. However, matters might get complicated depending on how the company has been set up and whether there is a local partner or if it is based in a free zone. Whatever option you choose, it is important to take legal advice and draw up proper paperwork so that you are fully protected.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at [e-mail]