- Article
- February 18, 2015
The U.A.E’s Ministry of Finance has recently organized a meeting with its Governmental strategic partners, to discuss plans to sign Double Tax Avoidance Agreements with various countries throughout 2014.
The meeting was headed by Younis Haji Al Khouri, who is the undersecretary of the Finance Ministry. Along with the participants of the meeting Haji Al Khouri outlined the operational plan developed by the ministry to negotiate agreements for the avoidance of double taxation on income for the year 2014, as well as to continue to avoid taxation levied on air transportation and implement memoranda of understanding on tax exemption. Before signing double tax avoidance agreements on income, participants were briefed about the process of tax treatment of the U.A.E’s private or public investments.
Undersecretary of MOF highlighted the ministry’s commitment to conduct a series of consultations between its strategic partners in order to achieve the desired goal of expanding the investment base which links the U.A.E to the rest of the world. Haji Al Khouri is delighted by the role these investments have played on strengthening the U.A.E’s position on the global trade map.
The Double Tax Avoidance Agreements have a positive effect on protecting and guaranteeing U.A.E investments abroad, enhancing trade and economic cooperation between the countries. The DTAA agreements provide significant benefits to all U.A.E investors, institutions, federal and local governments, companies, sovereign funds, institutions with private sector operations, individuals residing in the U.A.E, as well as state-owned national airlines that become exempt from all types of taxes.
The meeting also featured a discussion about the progress being made by the ministry through cooperative efforts with the Ministry of Foreign Affairs to resolve the pending issues before the start of any double taxation avoidance negotiations with Latin American countries.
Moreover, the meeting allowed participants to provide their feedback and recommendations on this topic, while the ministry stressed the need to know the size of any proposed U.A.E investments in these countries, prior to commencing any negotiations.
The U.A.E has been signed 75 DTA agreements with the country’s key trade partners and 46 agreements to protect and encourage investments abroad.
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- Article
- February 18, 2015
Dubai International Financial Center (DIFC), a financial free zone, announced that it had 1,039 active registered companies as of December 31, 2014, a 14 % increase from a year earlier.
According to the announcement, in year there were 55 active financial services and 103 non-financial services firms was registered, bringing the total to 327 and 565 respectively by the year-end.
Over 2012, the combined workforce of DIFC-registered companies is 15,600, representing 11% growth over 2012.
Also, DIFC noted that there is greater diversification in its retail portfolio, with 40 new outlets offering a range of services registered within the last year, taking the total to 145 active retailers.
2013 was a year of significant growth and development for Dubai as a whole, with the U.A.E being awarded the Expo 2020 bid win, the initiative to move towards an Islamic Economy, and the MSCI upgrade of the U.A.E to ’emerging market’ status. These trends were also reflected within DIFC and in its sustained efforts towards becoming a global financial hub for the region.
In 2014 we will concentrate on the development of new markets such as Islamic Finance, Capital Markets, family businesses and growth markets such as Africa, providing additional business opportunities to firms based both within DIFC and the wider region DIFC has a highly attractive tax and regulatory regime, offering firms 0 % income tax guaranteed for 50 years, 100 % foreign ownership, no exchange controls and a legal system based on English common law
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- Article
- February 18, 2015
The Ministry of Finance has signed a Tax transparency Memorandum of Understanding with the Dubai Multi Commodities Center. The U.A.E’s largest and fastest-growing free trade zone, at the Ministry’s Headquarters in Dubai, which will assist in ensuring international standards of transparency in the exchange of information for tax purposes.
The MOU was signed by HE Younis Haji Al Khouri, Undersecretary of MOF and Ahmed bin Sulayem, who is the Executive Chairman of DMCC. The MOU agreement will implement transparency and a clear exchange of information between the MOF and the DMCC, ensuring that a principled process is applied to tax legislation that affects both companies and individuals.
The agreement’s aims is to strengthen the cooperation between the competent authorities responsible for the exchange of information for tax purposes, elevating the U.A.E’s tax practices in line with a global benchmark.
Commenting on the MOU, to support the national economy, the Ministry is committed to work with like-minded partners. This commitment is reflected through the signing of the MOU with DMCC. Also the MOF continuously seeks to strengthen its cooperative relationships with various federal and local government entities in the U.A.E in order to attract more investments and guarantee prosperity in the U.A.E, which in turn will contribute to the U.A.E’s GDP.
Commenting on the importance of the MOU, as the international hub for trade and enterprise, DMCC, the U.A.E’s largest and fastest growing free zone, has and will continue to increase the flow of trade through Dubai and continue to make a significant contribution to the growth of the economy.
“At DMCC we always look at ways of improving efficiencies. Signing a MOU with the Ministry of Finance will further enhance collaboration across both Government entities to increase foreign direct investment and GDP contribution as we continue to demonstrate our commitment to his Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister of the U.A.E and Ruler of Dubai’s vision to establish Dubai as the main global economic hub.”
The Ministry of Finance has been already set about ensuring key stakeholders in the U.A.E become acquainted with the legal framework on the exchange of information related to tax, as recommended in the “Evaluation of the U.A.E” report. To guide the various stakeholders in the implementation of the legal framework and its recommendations, the Ministry has organized and will host a series of meetings with the various stakeholders.
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- Article
- February 18, 2015
Kenya’s Government has approved the establishment of Free Trade Zone (FTZ) in Mombasa. It will be the first free trade zone in East Africa and the project is expected to be ready by 2015 and it is being implemented by the ministry of Industrialization and Enterprise Development, which has already opened the search for consultants to carry out a feasibility study on the FTZ.
FTZ is expected to promote and strengthen trade within the East, Central and Southern Africa by allowing trading of goods without paying duty within the zone. Also the free trade zone is expected to start operations with motor vehicles, household goods, and construction materials.
The establishment of free trade zone will be a catalyst for attracting global and local investors and multinational corporations to Kenya.
For the wider African continent, the free trade zone is expected to open up a ready market and thus spur numerous economic activities for the country raising the country’s trade volumes as well as create a number of new jobs.
This will assist stimulate local, regional and international trade as well as investment. It is intended to improve Kenya’s global competitiveness.
Free trade zone is expected to support innovation, and investment leading to growth and expansion of the economy and employment in the country.
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- Article
- February 18, 2015
Costa Rica approves seven TIEAs
Morocco House of Representatives approves DTA with Lithuania.
Protocol to DTA between Canada, France Enters into Force.
Kazakhstan, Qatar Sign DTA.
Peru Ratifies DTA with Mexico.
- Article
- February 18, 2015
According to the Chamber, Members of Dubai’s Chamber of Commerce and Industry recorded eight per cent growth in exports and re-export totalling Dh290 billion in 2013. In 2012, Exports and re-exports were Dh268 billion.
Also in 2013, there were added that around 13,000 new companies joined the Chamber, the highest number recorded by the Chamber in the last four years. President and CEO of Dubai Chamber Mr. Hamad Bu Amim said, the economic recovery in the Arab Spring countries has been an added value to boost overall trade performance across the emirate.
He attributed this growth in trade to the strategic relations that Dubai has with world markets, which helped increase two-way trade and investments.
Trade with Iran, however, one of the UAE’s main trade partners, witnessed a drastic drop in the last 3 years. The political argument about relieving the sanction against Iran will definitely improve the trade between the two countries and facilitate ways of payment, which has been the main obstacle in the past 3 years.
Bu Amim said that Dubai economy is expected to maintain the current upward trend driven by sentiment and optimism created by Dubai’s winning the Expo 2020 bid. “Expo is a big opportunity for businesses in Dubai and will continue to drive the economy in the next coming 6 years.”
The real estate sectors will be one of the main sectors to grow ahead of hosting Expo 2020. Real estate market is not a sustainable sector but will be transformed from a driver to an enabler of the economy in the short term.
Bu Amim added that the Chamber is planning to open 20 representative offices in different market over the next 5 years. Dubai Chamber is exploring opportunities for new offices in Angola, Ghana, Abuja Nigeria, Uganda, and Brazil, in the next two years.
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- Article
- February 18, 2015
An Inter-Governmental Agreement has been signed between Mauritius and the United States for the implementation of the Foreign Account Tax Compliance Act (FATCA), as well as a bilateral tax information exchange agreement (TIEA).
The signing ceremony for the two agreements was held on December 27, 2013, in Port Louis and the signatories were the Mauritian Vice-Prime Minister, Minister of Finance and Economic Development. Xavier-Luc Duval and the US Ambassador to Mauritius, Shari Villarosa.
FATCA, enacted by Congress in 2010 and taking effect on July 1, 2014, is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients, including account ownership, balances and amounts moving in and out of the accounts, will result in a requirement to withhold 30 % tax on payments of US-sourced income.
To address situations where foreign law would prevent an FFI from complying with the terms of an FFI agreement, Treasury has developed model IGAs.
Under the terms of the Model 1 IGA between Mauritius and the US, Mauritian FFIs will be required to report their information to the Mauritius Revenue Authority, which will then automatically exchange the information with the US, according to the TIEA.
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- Article
- February 18, 2015
The Dubai International Financial Centre (DIFC) has recorded a growth of 7% in the number of actively registered companies as well as its workforce during the first half of the year, much of it driven by new businesses from Asia, Middle East, Europe and North America wanting an exposure to the relatively stable business environment and sustained recovery of the emirate.
During the same period, occupancy of the DIFC-owned leasable space is up to 97% from 94 %.The retail space has grown to 99 %, with the total leasable commercial space increasing by 122,000 square feet, which is a six per cent increase over the end of last year.
The number of active registered companies which is physically doing businesses within the DIFC, grew to 979 with 1,000 new jobs added bringing the total number of employees to 15,000.
At a media roundtable in Dubai, the chief executive of DIFC Authority Mr. Jeff Singer said, “We are becoming the established international financial centre for the Middle East, Africa and South Asia region”.
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- Article
- February 18, 2015
Abu Dhabi and Dubai topped the list of the Middle East and North African cities in terms of disposable income per capita in 2013 with $13,496 and $12,543 respectively. This was revealed by Economic Intelligence Unit (EIU), which covered 26 cities from 16 countries in the Middle East and North Africa (MENA) region.
The EIU considered, based on the disposable income criterion. Abu Dhabi and Dubai the richest cities in the region. They were followed by Riyadh in the third place with $11,700, Kuwait in the 4th place with $11,429 and Doha in the 5th place with $11,045. Istanbul came in the 9th place with $10,061, while Marrakech came last in the 26th place with $2,063, preceded by Algeria in the 25th place with $2,217.
In a report titled “Mena Cities Prepare for Opportunity” issued in January, the EIU said Dubai’s expenditure totaled around $29.7 billion in 2013, placing Dubai in the 5th place in the region, while Abu Dhabi’s expenditure totaled around $17.8 billion. During the same period, Dubai’s population totaled 2,367,493 compared with 1,317,388 in Abu Dhabi.
In contrast, Abu Dhabi came in the 9th place and Dubai in the 10th place in terms of the annual spending per capita with $8,956 and $8,841 respectively. Riyadh topped the list with $11,175, while Algeria and Basra came at the bottom of the list with $2,083 and $1,766 respectively.
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- Article
- February 18, 2015
In order to further strengthen the relations in financial services between Dubai, Hong Kong and Asia, the Chairman of the Dubai Financial Services Authority (DFSA), Mr Saeb Eigner, delivered an address in the seventh Asian Financial Forum, Hong Kong.
The forum was attended by 2,400 delegates from Asia, Europe and America, where finance ministers, central bankers, heads of governments and business leaders gathered to discuss economic developments and business trends in China and the rest of Asia. “The future will belong to vibrant cities like Hong Kong and Dubai which continue to pioneer, innovate and implement strategies quickly and efficiently with visionary leadership and efficient governments,” Mr Eigner said.
Dubai enjoys excellent trade and finance relationships with Hong Kong and the rest of Asia. These will continue to grow in 2014, including in the Islamic finance arena. Since His Highness the Ruler of Dubai announced the initiative for Dubai to be the global hub for the Islamic economy, plans are moving ahead, with the necessary legislation already in place. In 2013, the DFSA witnessed many successful issues of sukuk on NASDAQ Dubai, where USD6bn worth of sukuk were listed, up from USD1bn in 2012.
Due to the highly international nature of Dubai and the DIFC, the DFSA has placed great emphasis in its work on international co-operation and collaboration. This has included building regulatory relationships with the Hong Kong Securities and Futures Commission, the China Banking Regulatory Commission, the China Securities Regulatory Commission and with the Reserve Bank of India.
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