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Top 5 Reasons: Why Startups in Singapore Should Outsource Corporate Secretarial Services

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The Garne Changer in GRC: Exploring the Might of Knowledge Graphs
  • Article, Global

The Game-Changer in GRC: Exploring the Might of Knowledge Graphs

In the current dynamic business landscape, effectively managing Governance, Risk, and Compliance (GRC) is more essential than ever. The intricacies of GRC have intensified due to economic, geopolitical, social, healthcare, cybersecurity, and various internal and external risks. In this article, we will delve into GRC for the healthcare industry.

Background:

The topmost healthcare company recently faced unique challenges regarding Governance, Risk, and Compliance (GRC). These challenges arise due to the highly sensitive nature of patient data, complex regulations and the constantly evolving technology landscape.

The key challenges include ensuring data security and privacy, complying with healthcare regulations, managing risks related to clinical trials and medical research, and maintaining compliance while adopting new technologies.

Solution:

IMC offers solutions to address the challenges encountered by the healthcare company. We specialize in tailoring comprehensive solutions to address the intricate GRC challenges the healthcare company faces. Our focus lies in fortifying data security measures, devising advanced compliance frameworks aligned with healthcare regulations, and leveraging innovative methodologies to manage and mitigate risks embedded within clinical trials and medical research. Regular compliance audits, staff training on compliance protocols, and fostering a culture of compliance and risk awareness among healthcare professionals are also crucial. Leveraging technology for streamlined GRC processes and fostering collaborations between healthcare and regulatory bodies can also address these challenges.

Key Elements:

We prioritize routine compliance assessments and empower healthcare professionals with specialized training on adherence to stringent protocols. Fostering a culture of compliance and heightened risk awareness is central to fortifying GRC frameworks within healthcare organizations.

Leveraging Technology and Expertise:

Recognizing the pivotal role of technology, we collaborate closely with healthcare entities to adopt cutting-edge solutions that streamline GRC processes—these strategic collaborations aid in navigating the intricate maze of regulations while embracing technological advancements seamlessly.

Result:

IMC initiatives drive precision and advancement in healthcare GRC. Our tailored solutions enable healthcare entities to safeguard patient data, adhere to stringent regulations, and effectively manage risks inherent in clinical trials and research endeavors. Here, a healthcare entity uses a knowledge graph to oversee risks related to clinical trials. The knowledge graph compiles extensive data, including trial details, patient involvement, trial progress, and medical research outcomes. By connecting information within this vast dataset, organizations can enhance patient safety, comply with regulations, and expedite drug development processes.

Precision is crucial in healthcare. This concerted approach fosters a secure and compliant environment conducive to adopting innovative technologies to improve patient care. IMC continues to be a driving force in enhancing GRC standards within the ever-evolving healthcare landscape.

Conclusion:

The company boosted its GRC capabilities by harnessing knowledge graphs, establishing itself as a pioneer in adopting advanced technologies for comprehensive governance, risk management, and compliance. The dynamic nature of the knowledge graph allowed them to stay ahead in a swiftly changing regulatory environment.

Explore the future of GRC with us, uncovering its potential to enhance efficiency and effectiveness in your organization’s GRC strategies. Our commitment to revolutionize GRC in government institutions showcases our dedication. IMC continues to elevate GRC standards within the demanding governmental sector through strategic partnerships, expertise, and tailored solutions.

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Effortless Corporate Tax Registration: Your Ultimate Guide to a Smooth Process!
  • NEWSLETTER,U.A.E

Effortless Corporate Tax Registration: Your Ultimate Guide to a Smooth Process!

Please consider us your allies, ensuring a smooth and compliant corporate tax journey. At IMC, we are committed to delivering indispensable insights, ensuring your readiness for the approaching fiscal year with confidence and compliance.

Essentials for Corporate Tax Registration:

Comprehending the Corporate Tax Law holds great importance, and we’re dedicated to assisting you in smoothly navigating this process. Here, we outline essential vital points to consider:
  1. Enrollment and Withdrawal: It’s highly recommended that all eligible taxable person register for Corporate Tax through the Federal Tax Authority (FTA) without delay. Non-residents earning income from the state have specific factors to note. Timely submission of a Tax Deregistration application is crucial to evade penalties.
  2. Financial Reports and Accounting Approaches: The significance of financial statements in assessing taxable income is paramount. Your choice between a Cash Basis or an Accrual Basis of Accounting depends on your revenue. Adherence to International Financial Reporting Standards (IFRS) and meticulous record-keeping are vital.
  3. Submitting Applications and Making Choices: Businesses aiming to capitalize on Corporate Tax Law provisions might need to apply or make specific elections. Determining when FTA approval is necessary for exemptions, joining tax groups, and specific relief applications is essential.
  4. Filing Taxes and Settling Payments: Corporate Tax functions through a self-assessment system. To prevent penalties, it’s crucial to submit tax returns and payments promptly, within nine months after the relevant tax period’s end. In the case of tax groups, the parent company takes charge of filing.

Key Dates to Mark in Your Calendar: (Registration Process Already started)

End of Financial Year Initial Reporting Period Date of Registration Deadline for Submitting Initial CT Return and Payment Deadline Initial Submission of Transfer Pricing Disclosure Form
Dec-23 Jan 2024 to Dec 2024 Registration Process Already started 30th Sep 2025 30th Sep 2025
Jun-23 Jul 2023 to Jun 2024 Registration Process Already started 31st Mar 2025 31st Mar 2025

Get Started on the Path to Smooth Tax Registration

Book Your Call Now

Required Documents for UAE Tax Registration

In the UAE, corporate tax applies to businesses with taxable income. The corporate tax rate stands at 0% for earnings up to AED 375,000 and 9% for earnings surpassing AED 375,000.

In readiness for corporate tax registration, individuals liable for taxation require the following documents:

  • Photocopy of a valid Trade License
  • The license-owning owner/partners must provide copies of their valid Passport and Emirates IDs
  • Power of Attorney (POA) / Memorandum of Association (MOA)
  • Contact information of the relevant individual and the company
  • Report on the annual financial audit

Reasons to Consider Why IMC?

Navigating the complexities of corporate tax can be daunting, which is where the IMC team excels. Armed with in-depth knowledge of the latest UAE Corporate Tax regulations, we will simplify the process for you.

Leverage our team’s extensive experience to ensure precise and punctual compliance with Corporate Tax Law. Entrust us with the finer intricacies while you focus on your core business operations.

Navigating the complex landscape of corporate tax registration in the UAE can be challenging. However, with our IMC expertise in taxation and regulatory compliance, we empower businesses to navigate these complexities confidently. Our commitment to you is to provide the necessary knowledge to ensure seamless integration into the UAE’s tax framework.

For any queries or further clarification, reach out without hesitation. Please consider us your allies, ensuring a smooth and compliant corporate tax journey.

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Navigating the Complexities of Global Payroll: Strategies and Solutions
  • NEWSLETTER, GLOBAL

Navigating the Complexities of Global Payroll: Strategies and Solutions

The efficiency and compliance of global payroll services go a long way in shaping the evolving environment for international businesses. Forward-thinking organizations are striving to retain talent and carve a positive image for themselves in the market. With global payroll solutions from established teams of experts, successful companies are streamlining their operations.

According to the ADP Global Payroll Survey of 2022, payroll data has a critical role to play in organizational decision-making.

  • As much as 98% of organizations are reliant on this data for cost management strategies
  • 97% of the organizations shape their growth strategies based on payroll data
  • 81% of businesses use payroll data for facilitating DEI (diversity, equity, and inclusion) strategies

While the value of payroll management services is undeniable, organizations continue to encounter challenges in this pursuit. Around 72% of businesses believe that they need to upskill their payroll staff while adapting their current operations to fulfil the changing working conditions across the globe.

Also, around 50% of businesses are grappling to find external talent for their key payroll management positions.

The IMC Group is committed to addressing these challenges and helping organizations leverage accurate and streamlined information. Besides offering global mobility services, we deliver sophisticated global payroll services to different players in the industry.

Now, we will take you through the common challenges in global payroll management.

Common Challenges in Global Payroll Management

For enterprises, the key challenges in global payroll management that demand strategic solutions include compliance, complexity, and consistency. Let’s take a look at these challenges in detail.

Complexity

In the first place, the task of operating payroll processes in different countries is a complex task, given that your team needs to address specific regions within each territory. For instance, your team should adhere to multi-governmental norms, banking systems, regulations, and protocols for data security. Besides, they need to address the individual needs of their clients. The challenges arise when it comes to coordinating a single system to record information and carry out the necessary administration. Outsourcing global payroll services is a viable solution to address this constraint.

Compliance

Remember, regulatory norms across different countries are constantly evolving. How well are you poised to stay abreast with all these compliance norms? When you deal with payroll management in multiple countries which aren’t centralized, the compliance challenge intensifies. Experts habitually count on advanced payroll management systems to automate these tasks. Ensuring fair labor and equal pay, your organization can adhere to tax norms and other regulatory requirements.

Consistency

HR teams managing global payroll often struggle to maintain consistency. While you remain obsessed with one area, the other domains demand attention. For instance, teams focussing on the experience of employees by streamlining payroll often find it challenging to collect large-scale data. On the other hand, payroll management teams prioritizing data often end up faltering with their operations. Ultimately, this results in potential frustration for the staff.

Expert Recommendations to Streamline Payroll Processes

The process of payroll management keeps evolving, considering global regulations, local laws, and business priorities. These aspects often trigger significant shifts in operations related to global payroll management. No wonder, why businesses need streamlined solutions to scale up and meet the future requirements in their respective industries.

Here are some of the common components of global payroll solutions.

  • Standardizing Processes: A standardized payroll management solution should seamlessly operate across multiple markets across the globe under different government regulations. Besides, it should help your organization with a single system to maintain records capable of comparing and combining data.
  • Automated Systems: Outsource payroll management tasks to eliminate manual work like compliance checks, data entry, or running reports. This goes a long way in eliminating errors and freeing up your workforce to tackle other projects on priority.
  • Unifying the System: Embrace a system capable of accessing multiple sources of data to integrate valuable information into one solution. This will reduce the complexity of the organization across departments.
  • Data Security: Get a payroll solution that verifies employee data and keeps it secure. For instance, regulatory norms in the EU require data consent to be provided freely, and no business can ever assume the same. Thus, organizations need to take adequate measures to protect data and delete it if necessary.
In reality, every business is unique. Even businesses operating in the same market may have specific payroll management requirements based on size, location, and other aspects. This calls for highly tailored global payroll management solutions from experts. It makes sense to work closely with one of these service providers.

Best Practices to Enhance Payroll Performance

The IMC Group suggests some of the best practices to enhance payroll performance to streamline global payroll solutions. Focus on these best practices, as recommended by our experts.

  • For Employees: Make payroll easy to use, while enhancing transparency by offering self-service options to empower employees.
  • For Stakeholders: Stakeholders need to understand workforce trends and optimize the use of resources by integrating multiple sources of data.
  • For Practitioners: Practitioners need to be consistent during the onboarding process and get their processes optimized. The secret to success lies in prioritizing value-added activities over manual work.
  • For Organizations: Make data-driven decisions, as you collect, curate, and analyze payroll data. This will significantly help you create insightful, intuitive, and proactive processes.

Outsource Your Payroll Management Services

Successful organizations understand that effective and accurate payroll services ensure better employee satisfaction, streamline internal processes, and mitigate compliance risks. The IMC Group continues to be your reliable partner for handling global payroll management services. For Effective International HR Outsourcing and global payroll management, you can reach out to us.

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Finance and Accounting BPO Market Insights: Growth Trajectory till 2029
  • NEWSLETTER, GLOBAL

Finance and Accounting BPO Market Insights: Growth Trajectory till 2029

The global Finance and Accounting BPO Market looks in good shape, and reports reveal that this sector is likely to witness a healthy growth trajectory at least till 2029. Our in-depth analysis, in collaboration with esteemed industry leaders, portrays a comprehensive image of the current and future market trends. This will help you get actionable insights that will facilitate informed decision-making. Before we delve into the growth trajectory, have a look at the top reasons to outsource finance and accounting services to dedicated professionals.

Market Overview

A recent report exploring the key fundamentals reveals that the Finance and Accounting BPO Service market is poised for substantial growth by 2029. In the study, experts deployed robust analytical tools to obtain a realistic insight into this growth potential. These include PESTEL, SWOT analysis, and the opinion of prominent leaders in the industry that presents a comprehensive examination of the dynamics in the market.

Key Players

The report features major players that have been shaping the Finance and Accounting BPO industry. It carefully outlines the contribution of each member, which elicits a data-driven perspective of their performance.

Market Segmentation

The report also explores essential market segments that offer a holistic understanding of the Finance and Accounting BPO industry.

Based on product type, the market can be segregated into:

  • SME (Small and Medium Enterprises)
  • Large Enterprise
Based on product application, the market segregation includes:
  • Business Support Outsourcing Service
  • Specific Functions Outsourcing Service
  • Universal Terminal Outsourcing Service

Key Highlights of The Finance and Accounting Business Process Outsourcing Service Report

The Finance and Accounting BPO sector has witnessed a notable trend where key players are allocating substantial funds for R&D and cloud computing activities. The focus largely lies on innovation, which pacifies the development of the industry at every stage. This explains the value of remaining at the forefront of technological developments.

  • Detailed study of the extent of competition in the industry
  • Tentative volume and market value of bookkeeping and accounting business process outsourcing service finance
  • Using tools like Porter’s Five Forces Analysis and SWOT for market analysis
  • A comprehensive examination of the growth factors, penetration, and size of the global market
  • Growth forecast of the accounting and finance business process outsourcing market
  • A detailed study of service drivers, opportunities, constraints, gaps, obstacles, strengths, and challenges in the market

The Value of Outsourced Accounting and Bookkeeping Services

As evident from the report, forward-thinking players will be increasingly outsourcing their accounting and bookkeeping services. The IMC Group continues to be your trusted partner to meet specific requirements. We have set benchmarks in the industry, offering customization options to offer a comprehensive assistance to businesses in accounting and bookkeeping. We look forward to empowering your strategic decisions with our professional assistance.

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Strategic Insights for Incorporating Your Business in the UAE
  • NEWSLETTER,U.A.E

Strategic Insights for Incorporating Your Business in the UAE

The UAE continues to stand out as a strategic business hub for global businesses of all sizes. Its supportive business environment and tactical location make it a preferred destination for organizations seeking scalability and growth. When you explore viable ways of a company formation in Dubai, you need to choose between the mainland and the free zone. However, your decision largely depends on several factors, including your target market, the nature of your business, and your goals. These factors often sum up to pose a challenge so overwhelming, that forward-thinking businesses count on professionals to remain on the right track.

As you brace up to incorporate your business in the UAE, check out these key insights that should help you make informed decisions and lead you to success.

Choosing the Right Setup: Free Zone vs. Mainland

In the first place, global businesses striving to expand in the UAE should choose between the mainland and a free zone. This choice should align with your business objectives. For instance, if you are running an export-oriented business and need foreign talent, opting for a free zone might be a strategic decision. This way, you can benefit from waived corporate tax, 100% foreign ownership, easy financing, and a more favorable regulatory environment.

On the other hand, if you are targeting the UAE market directly, particularly sectors like real estate, retail, hospitality, construction, and healthcare, setting up your business on the mainland will be a logical move.

Crafting Effective Strategies for Market Entry

Explore some of the highly effective market entry strategies when you eye a business venture in the UAE.

1. Market Analysis with Research

As a prerequisite of entering the market in the UAE, carry out thorough research to comprehensively understand your target audience, the local business environment, regulatory norms, and overall competition. Once you identify your opportunities along with market gaps, narrow down upon the ones aligned with your goals.

2. Networking and Building Partnerships

Foster strong bonds with local suppliers, distributors, partners, and industry networks. These connections go a long way in offering valuable insights and help in establishing your visible presence in the Middle East. Nurturing fruitful partnerships goes a long way in facilitating your market entry.

3. Regulatory Compliance

While expanding your business overseas, getting entangled in legal hassles is the last thing to expect. Staying informed on legal and regulatory norms is imperative, and you may consult professionals on this matter. Make sure to obtain the necessary permits and licenses and reach out to legal consultants if you aren’t too confident about your approach.

Choosing the Right Legal Structure

A pivotal domain of incorporating your business in the UAE involves selecting the appropriate legal structure for your company. The most common options in the UAE include:

  • Free Zone Company
  • Limited Liability Companies (LLCs)
  • Branch or Representative Office
  • Sole Proprietorship and Civil Company
  • Stock Company

Scaling Your Business Effectively

A methodical approach, as defined below, will help your business scale effectively.

1. Strategic Planning

As a part of your tactical planning process, develop a clear growth strategy, aligning it with the goals of your target market and business. It’s imperative to identify viable opportunities for expansion and invest in branding and marketing. Try to adapt your services and products to fulfill the evolving interests of customers.

2. Acquiring and Developing Talent

There’s no denying that human resources continue to be the greatest asset for a booming business. Look out for skilled professionals, and recruit and retain them. Make sure that they are well-acquainted with the local market and invest in programs for training and developing employees. With advanced competencies, they can strengthen your business with a competitive edge.

3. Broaden your market reach

The secret to broadening your reach in the market lies in establishing strategic collaborations with local suppliers, companies, and distributors. With partnerships and joint ventures, you can pacify your growth trajectory, leveraging existing networks and their proficiency.

The process of business setup in Dubai involves several strategic decisions. Forward-thinking business leaders seek professional support from our consultants, who recommend effective market entry strategies. The IMC Group continues to be your reliable partner for establishing your business in the UAE. The experience of our specialists can position your business to embrace success in the long term amidst the dynamic business environment in the UAE.

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Succession and Estate Planning Unveiled: Key Trends and Challenges in the Middle East
  • NEWSLETTER,U.A.E

Succession and Estate Planning Unveiled: Key Trends and Challenges in the Middle East

Succession and estate planning in the Middle East is a crucial domain that has drawn the attention of various professional fronts. It’s imperative to understand the key trends and challenges of the Sharia-compliant estate structures and gain insights into the financial future of the area. From the challenges of multiple jurisdictions to the impact of technology, this edition of our newsletter offers a complete idea of the evolving dynamics in wealth transition. With these valuable insights into evolving strategies that individuals and families are adopting, you can secure your future in the Middle East.

Challenges in Sharia-Compliant Estate Planning

Sharia-compliant estate planning is not a novel concept in the Middle East, but it presents unique challenges. Some of these include:
  • It’s challenging to address the evolving dynamics of local GCC assets within Sharia-compliant estate plans. There has been a visible shift toward increased inclusion and significance in comparison to non-GCC assets
  • Another hurdle is to explore the uncharted territories of domestic estate planning solutions like the UAE federal trust regime and common law private foundations
  • Managing the web of multiple (non-GCC) jurisdictions remains a challenge, which is influenced by the demographic location of family businesses and different nationalities or tax residencies of family members
  • The absence of standardization and harmonization in legal frameworks governing Sharia-compliant estate planning across different GCC countries continues to be a challenge. For affluent families, this lack of uniformity poses significant challenges to encompass all their assets within the GCC

Emerging Trends Shaping the Future of Succession and Estate Planning

In this section, we have discussed the emerging trends that will shape the future of succession and estate planning in the Middle East.

1. Domestic Structuring

Over the years, international structuring has been a viable option. However, the rise of local alternatives like the UAE Foundation, is gaining prominence. New trends reveal that clients largely favor locally-based advisors. These domestic structuring options provide a pragmatic response to rising pressure and costs associated with the adherence to global tax norms.

2. Growing Wealth in the GCC

As the GCC cements its position as one of the wealthiest regions globally, the demand for estate planning services keeps rising. High oil prices and booming economies in the Middle East are the key factors spearheading the affluence of the region. This explains why families are looking for comprehensive solutions for the preservation and succession of their wealth.

3. Increased Awareness of Estate Planning

A significant shift has been noted in the awareness for protecting assets and intergenerational planning among families and high-net-worth individuals in the GCC. This trend reveals that the next generation is likely to take a proactive stance in financial planning. They will recognize the impact of the dispute on their family assets.

4. ESG and Impact Investing

The rise of ESG (Environmental, Social, and Governance) considerations and impact investing is yet another important trend to check out. This trend is particularly visible among younger members of the family. Within family offices, the focus has substantially shifted to long-term sustainability and ESG. This has fuelled a growing interest in digital assets and private banks.

5. Family Offices Becoming Professional

Family offices are undergoing a transformation, and they are becoming increasingly sophisticated while dealing with complexities and managing alternative asset classes. They are bracing up to fulfill more stringent regulatory requirements. The asset management process is becoming increasingly complex, which has fuelled this professionalism. This calls for increased transparency and advanced investment strategies.

6. Technology in Estate Planning

Across the GCC, the role of technology in estate planning is going to be vital in the Middle East. From the virtual execution of DIFC wills to the digitization of registration and operations for UAE foundations and family offices, technology goes a long way in enhancing efficiency. Family offices are readily embracing artificial intelligence, machine learning, and advanced data analytics to streamline their decisions.

7. Affordability of UAE Foundation

Establishing a UAE Foundation involves relatively lower costs. This has gone a long way in democratizing access to asset strutting and protection. The cost of registering a will with the Abu Dhabi Judicial Department at approximately USD 260. This implies that now, a broader segment of the population can secure their assets.

8. Multiple Structures for Estate Planning

Considering the uncertainty in the current business environment, the demand for multiple estate planning structures is on the rise. A recent trend reveals that in the GCC, wealthy families are exploring diversified approaches to reduce the risk associated with owning assets in more than one country.

9. Professional Estate Planning Advisors

A notable trend in succession and estate planning in the Middle East reveals that an increasing number of families are seeking professional advice from established companies for estate planning. These families in the GCC have realized the importance of engaging estate planning advisors for tailoring plans, which align with individual needs to secure the interests of their beneficiaries.
At the IMC Group, we understand the challenges and new trends in succession and estate planning in the Middle East. Our dedicated team of professionals operating both in the Abu Dhabi Global Market and DIFC offers a comprehensive range of services to private and corporate clients. We remain committed to our clients with highly customized succession and estate planning advice.

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A Guide to Understanding Corporate Taxation in UAE Free Zones
  • NEWSLETTER,U.A.E

A Guide to Understanding Corporate Taxation in UAE Free Zones

The UAE continues to be a preferred hub for entrepreneurs and investors seeking global opportunities to expand. While the country might be synonymous with a tax-free environment, entrepreneurs should be aware of recent changes in its corporate tax regime. With the recent implementation of the Federal Decree-Law No. 47/2022 on the Taxation of Corporations and Businesses, the tax-free environment has witnessed a change in paradigm. Effective from 1st June 2023, this new corporate tax regime in the UAE has been drawing the attention of investors. Forward-thinking organizations can reach out to established professionals for corporate tax advisory in Dubai to ensure compliance and manage their tax obligations.

Considering the gravity of the new corporate tax regime on your organization, it pays to understand the impact of taxation in the Free Zone areas in the UAE. In this comprehensive guide, you will get a clear understanding of the classifications, regulations, and benefits associated with Corporate Tax in the UAE Free Zones.

What Do Free Zones Mean For Your Business In The UAE?

Free zone areas have emerged as strategic business hubs in the UAE. These zones offer a wide array of incentives to businesses such as exemption from import and export duties, 100% foreign ownership, and several tax advantages. Businesses need to understand the clauses of Corporate Tax regulations to ensure compliance and capitalize on the advantages.

Free Zone Persons

For understanding tax obligations in the Free Zones in the UAE, it’s imperative to distinguish between Juridical Persons and Natural Persons. Natural Persons, operating independently, include sole establishments, freelancers, and civil companies. Although these individuals may carry out their business from a Free Zone, the UAE Corporate tax laws don’t recognize them as Free Zone Persons. Juridical Persons, on the other hand, include corporate entities like LLCs. They can attain the status of Free Zone Persons only when they are incorporated into these Free Zones.

What Are The Corporate Tax Rates For Free Zone Companies?

Based on their classification, corporate tax rates may vary for Free Zone companies.

  • QFZP (Qualifying Free Zone Person): Eligible for a 0% tax rate on qualifying income.
  • NQFZP (Non-Qualifying Free Zone Person): Not meeting specific conditions, leading to different tax implications.
Avoid a AED 10,000 fine by Meeting UAE's Corporate Tax Deadlines. Contact us for Expert Tax Compliance Guidance and Protect your Business.
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Criteria for Qualifying Free Zone Person (QFZP)

  • Fulfill Adequate Substance in the UAE such as having sufficient assets, being involved in activities to generate income, having mandatory operating expenses and qualified employees
  • As explained in Cabinet Decision No. 55 of 2023, the entity must get “Qualifying Income”
  • Avoiding the applicability of the 9% tax rate
  • Adherence with Arm’s Length & Transfer Pricing Rules
  • Fulfilling other conditions outlined in the Cabinet Decision No. 139 of 2023
  • Meeting the ownership criteria established by the free zone is crucial, typically permitting full foreign ownership

Taxation for Three Types of Business Activities in Free Zones

Business activities in Free Zones fall into three categories: qualifying activities, excluded activities, and other activities.

  • Qualifying activities: Approved activities are defined as per the parameters of Cabinet Decision No. 139 of 2023. Companies actively involved in these operations may be eligible for tax incentives or exemptions.
  • Excluded activities: Restricted activities include a list of operations that do not align with the criteria for tax benefits or exemptions mentioned under Approved activities. For businesses, it’s crucial to identify whether or not their activities come under this category.
  • Other activities: These include activities that aren’t mentioned explicitly under the Qualifying or Excluded Activities lists. For these activities, the tax implications are decided after considering their nature and respective tax regulations.

Qualifying Income Categories

The structure of Qualifying Income is decided on the basis of the transactional nature and parties involved. These include:
  • Transactions with Other Free Zone Persons, including qualifying income that covers all the transactions excluding the ones originating from Excluded Activities
  • Transactions with Non-Free Zone Persons, where qualifying income includes revenue generated exclusively from Qualifying Activities, where Excluded Activities is considered ineligible
  • All Other Transactions, where Qualifying Income may include extra revenue, and has to meet de minimis requirements

Tax on Accountable Income

  • Tax on Accountable Establishment Income: Income attributed to Domestic or Foreign Permanent Establishments of Free Zone Persons is calculated at a 9% tax rate.
  • Tax on Accountable Income to Establishments and Immovable Property: Tax rates on accountable income may vary on the basis of the nature of transactions and parties involved. It is crucial for businesses to understand these aspects to comply with tax regulations in Free Zones.

Eligibility for Corporate Tax in UAE Free Zones

To be recognized as a Free Zone Person under UAE corporate tax laws, entities need to satisfy the Minimis Requirement, which mandates that non-qualifying Revenue within a Tax Period remains below AED 5,000,000 or 5% of total Revenue, whichever is lesser.

Mandatory Corporate Tax Registration and Filing

Regardless of their qualifying status, all Free Zone entities are required to register for corporate tax and file their returns via the Federal Tax Authority (FTA) online platform.

Taxation for Free Zone Entities with Mainland Operations

For Free Zone entities with operations on the mainland, a 9% corporate tax rate is applicable to taxable income generated from mainland activities. However, income from Free Zone operations can still enjoy a 0% tax rate, provided that separate accounting records are maintained for Free Zone and mainland income.

Impact of Disqualification from the 0% Tax Rate

If an entity no longer meets the criteria for a Qualifying Free Zone Person, it will be disqualified from the 0% tax rate and will instead be subjected to the standard 9% corporate tax rate on income exceeding that generated on the mainland.

Requirement for Audited Financial Statements

To access the benefits of the 0% UAE corporate tax rate on Qualifying Income, entities must submit audited financial statements, ensuring accuracy and compliance in financial reporting.

Steps for Corporate Tax Exemption in Free Zones

Businesses seeking corporate tax exemption in Free Zones must follow a systematic process, including business formation, obtaining a business license, registering for tax, submitting required documentation, and undergoing review, resulting in the issuance of a tax exemption certificate.
Ongoing Compliance and Reporting for Free Zone Entities
Even with corporate tax exemptions, Free Zone entities must fulfil compliance and reporting obligations, including annual audits, timely renewal of tax exemption certificates, and adherence to Free Zone regulations, ensuring continued eligibility and regulatory compliance.
For corporates, it’s natural to wonder how to calculate the payable corporate tax in the UAE? For businesses, understanding Corporate Taxation in UAE Free Zones is crucial for seamless financial planning and adherence to norms. The IMC Group is your trusted partner for corporate tax advisory. With professional support from our expert team, you can embrace the new corporate tax regime with confidence.

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A Comprehensive Guide to Investing in Singapore Real Estate
  • NEWSLETTER,SINGAPORE

A Comprehensive Guide to Investing in Singapore Real Estate

In a recent survey carried out by CBRE, Singapore emerged as the third most preferred destination for cross-border real estate investment in the Asia-Pacific region in 2022. With the real estate industry in Singapore looking promising, it presents lucrative opportunities amidst stability and resilience. Being a forward-thinking investor, you might be thinking about how to start real estate business in Singapore. Whether you are considering your first real estate venture or happen to be a seasoned investor, this newsletter will help you gain the essential knowledge to make strategic decisions.

Singapore has emerged as a prime hub for global investors to put their money into real estate. The government of Singapore came up with a strategic approach while combating the challenges posed by the Covid-19 pandemic. As a result, the country’s real estate industry has witnessed a steady increment in property prices. Along with its strong global commercial infrastructure, the booming real estate market positions the country as a promising and secure investment destination, where you can capitalize on mid- to long-term benefits.

What Makes Singapore A Prime Investment Hub for Real Estate Investors?

A plethora of factors fuelled the real estate boom in Singapore, positioning it as a prime hub for global investors.
  • Sophisticated digital infrastructure: Singapore boasts edge-cutting digital infrastructure, a crucial aspect defining efficiency and connectivity for modern investors.
  • Competitive workforce: The country has a workforce known for its competitiveness and diversity. For businesses seeking a skilled pool of talent, Singapore has emerged as a top investment destination.
  • Expanding Central Business District: Singapore’s Central Business District has been consistently expanding, further strengthening the country’s position as a regional centre of business and wealth. For savvy investors, it holds immense potential for returns.
  • Work-life balance: The typical Singaporean lifestyle is defined by the much-needed work-life balance. This makes it a preferred destination for both expatriates and residents.
  • Low crime rate: Given that safety is paramount, the country boasts a negligible crime rate. Thus, a secure environment helps businesses and investors thrive.
  • Political and economic stability: With political and economic stability ensuring a peaceful environment for residents and businesses, investors are drawn towards the country for secure deals.
  • Strong dollar value: The Singaporean dollar has been performing pretty well compared to other currencies. This makes it a preferred hub for investment in the long run, particularly in the real estate segment.
  • Regulation of financial institutions: In Singapore, financial institutions remain under the scrutiny of the authorities. This serves as a source of confidence for investors, who trust the financial ecosystem in the country while investing in real estate.

Your Guide to Residential Real Estate Investment in Singapore

This guide through the crucial steps will help you make an informed decision before channelling your funds into the sector.

1. Preliminary Considerations

In the first place, investors should have a clear understanding of their preferences and investment goals. While it’s imperative to evaluate the market and the economic conditions in the market, the process turns out to be a painstaking one.

2. Hiring a Professional Team

Consulting one of the trusted agent works wonders, provided the professional addresses your interests, not the sellers’. Identifying investment hot spot for wealthy foreigners in Singapore is crucial, and having a professional agent to guide you largely helps. Besides, it’s advisable to consult an experienced real estate lawyer, who can help you identify the potential pitfalls of the property and understand necessary legal aspects. In case financing is a part of your plan, make sure to loop in a financial adviser.

3. Structure your Real Estate Purchase

At this stage, it’s imperative to consult your lawyer regarding the ownership structure. These experts can also help you optimize your tax planning and make significant savings. The stamp duty implications and costs largely depend on your residency and citizenship. Get these aspects clarified by the professionals.

4. Get Financial Advice

Do you want to get your new property in Singapore finances through a bank loan? It’s imperative to explore all your funding options. Reach out to financial advisors to get potential valuations and evaluate your loan options. Accordingly, you can communicate with your lawyer, real estate agent, and financial adviser.

5. Choosing your Property

Prioritizing your investment goals, choose between apartments and land in Singapore. It’s crucial to understand the concepts of leasehold and freehold properties along with their respective tenures and implications. Investors should prioritize the benefits of purchasing the property during the construction process or after it is ready for possession.

6. Focus on the Buying Process

When you start looking for a viable property in Singapore to purchase, establish a strong support team. Hire a proactive real estate lawyer to carry out the necessary due diligence on the property. The last thing you would want is to land in legal trouble with the necessary papers not in place.

7. Get Tax Advice

While you may remain obsessed with the property-buying process, it’s easy to overlook taxation norms. It’s advisable to consult reputed tax professionals for valuable advice on tax structuring and optimizing your investment. It’s crucial to understand the implications of stamp duty on the type and value of your property.

8. Securing your Investment

Once you are done with the property purchase formalities, make sure to get it insured to secure your asset. If you are investing in the property for rental income, negotiate terms with tenants to make the most of your investment. As a landlord, it’s wise to stay abreast of your responsibilities and liabilities.

Professional Support Matters during Property Investments in Singapore

The real estate market in Singapore presents a wealth of opportunities for those looking to invest wisely. The IMC Group continues to be your trusted partner for Singapore company incorporation, besides providing professional advice regarding taxation and finance. Supporting you at every step, we provide valuable insights and personalized solutions for your real estate ventures in Singapore.

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Common Questions About Foreign Portfolio Investment
  • Article, India

Your Guide to Foreign Portfolio Investment (FPI): Frequently Asked Questions

India’s currency has weakened due to a significant outflow of funds. However, its strong underlying strengths and projected growth continue to make it an appealing prospect for foreign investors.

Indian investors can invest from anywhere via several routes: Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), Foreign Venture Capital Investment, and Alternative Investment Fund.

Today’s topic of discussion is one of the most popular investment paths – Foreign Portfolio Investment (FPI).

What is Foreign Portfolio Investment (FPI)?

Foreign Portfolio Investment (FPI) refers to the investment made by non-residents in Indian securities. These securities may include shares, government bonds, corporate bonds, convertible securities, and units of business trusts, among others. Investors who fall under this category are known as Foreign Portfolio Investors (FPIs).

Can you provide information about India's main laws and regulations for a Foreign Portfolio Investor (FPI)?

The Securities and Exchange Board of India (SEBI) primarily regulates foreign portfolio investments in India. Recently, SEBI has introduced new regulations, called SEBI (Foreign Portfolio Investors) Regulations, 2019, which replace the old 2014 Regulations. In addition to these regulations, Foreign Portfolio Investors (FPIs) must comply with the Foreign Exchange Management Act of 1999 and the Income-tax Act of 1961.

What are the different Types/Categories of Foreign Portfolio Investors in India?

An applicant can obtain an FPI license under SEBI regulations in one of two categories below:

(a) “Category I FPI”, mainly includes:

  • Investors associated with the government or government entities
  • Pension funds and university funds are two separate types of financial entities
  • Entities like asset managers, banks, and investment advisors should be appropriately regulated
  • Entities that meet the eligibility criteria set by the Financial Action Task Force (FATF) member countries

(b) “Category II FPI” includes all investors who are not eligible under Category I:

  • Funds that are appropriately regulated cannot be considered as Category-I foreign portfolio investors
  • Endowments and foundations are charitable organizations supporting a specific cause or mission
  • “Corporate bodies” refers to organizations or groups legally recognized as distinct entities from their members or owners
  • Family offices
  • Individuals
  • Unregulated funds can take the form of limited partnerships and trusts.

What are the advantages of registering as a Category I FPI compared to Category II?

The main advantages of category I are listed below:

(a) Determining the eligibility to issue Offshore Derivative Instruments (ODIs);

(b) Compared to Category II FPIs, Category I FPIs enjoy easier compliance with certain KYC norms.

(c) Regarding stock and currency derivatives, the position limits have been increased.

Category I FPIs are exempt from the Indian Income-tax Act’s “Indirect Transfer” provisions. These provisions apply to overseas investors who transfer shares/interest in an overseas entity with assets in India.

What are the key operational aspects to consider when making a foreign portfolio investment?

The following are the significant operational features:

1. Appoint a legal representative:

To obtain an FPI license under SEBI regulations in India, it is necessary to appoint a legal representative to assist in the process. The application needs to be submitted in the prescribed format, along with all the required documentation. Financial institutions authorized by the Reserve Bank of India can act as legal representatives and reputable law firms.

2. Appoint a Tax advisor:

If you are an FPI working in India, complying with all tax obligations is essential. A tax advisor can help you with this by maintaining records, issuing certificates for repatriating funds out of India, handling annual tax compliances, and representing you before tax authorities. By hiring a tax advisor, you can ensure that you meet all the requirements and avoid any legal issues related to taxes in India.

3. Appoint a Domestic Custodian

Before investing in India, appointing a domestic custodian to provide custodial services such as banking and Demat operations for your securities is essential. A domestic custodian refers to any entity registered with SEBI to carry out the activity of providing custodial services for securities.

What tax compliances must an FPI follow under the Income Tax Act of 1961?

Foreign Portfolio Investors invest in securities such as shares, bonds, debentures, and units of business trust, earning income in the form of dividends, interest, and capital gains. They must remit this income and capital investment out of India regularly.

To remit funds, deposit the applicable income tax with the government treasury. Taxes depend on the nature of the income and can be paid through withholding or self-assessment. Also, the banker must have a tax advisor’s certificate to remit the funds.

FPIs must file an annual tax return electronically at the end of each Indian financial year. If requested, tax authorities may scrutinize the return.

FPIs face several burning issues under the current tax regime

Many Foreign Portfolio Investors (FPIs) structured as non-corporates have to pay a higher surcharge rate on their income from capital gains. As a result, several FPIs are contemplating converting their structure from non-corporate to corporate. However, this conversion may attract General Anti Avoidance Rules (GAAR) under Indian tax laws.

FPIs with fund managers in India with potential business connections must satisfy prescribed conditions.

Areas Where IMC Can Assist FPIs:
IMC Group has a team of experts to help Foreign Portfolio Investors invest in India. We offer the following services:
  • Assisted in guidance and helped with organizing the FPI route
  • Support setting up the structure under the FPI route
  • Obtain transaction information from the custodian and maintain records
  • Computation of tax liability on securities per the Indian Income Tax Act, Double Taxation Avoidance Agreement, and Multilateral Instrument
  • Issuance of certificate for repatriation of funds as per Income-tax Act and RBI guidelines
  • Organising and filing Annual Income Tax Returns
  • Assisting in responding to and managing notices or letters issued by tax authorities and providing related advisory services
  • During tax proceedings, one can review assessment orders
  • Communication with the tax authorities

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What Factors Are Vital for Ensuring ESR Report Compliance upon Submission
  • NEWSLETTER,U.A.E

What Factors Are Vital for Ensuring ESR Report Compliance upon Submission?

This is to inform you that the Economic Substance Regulation (ESR) requires reporting by December 31, 2023, for the Financial Year ending December 31, 2022.

The Economic Substance Regulations (ESR) in the United Arab Emirates (UAE) require certain legal entities in domestic and free zones to conduct one or more of nine relevant activities (RA) (referred to as “licensees”) to comply with annual filing obligations.

Licensees earning income and meeting under the exempted licensee criteria (for instance, if a licensee operates as a branch of a foreign entity and its income is taxed in a foreign jurisdiction) must submit a notification but are exempt from filing a report.

Navigate ESR with Experts

Simplify Compliance Today!

There are other exemptions. The Ministry of Finance has recently released updated instructions in Ministerial Decision No. 100 of 2020, which can help firms determine whether they conduct a relevant activity and are exempted licensees.

Key Factors to Consider

Relevant Activities (RA): As per the UAE Ministry of Finance’s ESR Regulation, the responsibility for submitting an ESR Notification and ESR Report lies with Licensees involved in any pertinent activities and generating specified relevant income outlined in the regulation.

Reminder about the Deadline: The deadline to submit the ESR Report is approaching. We strongly encourage you to act promptly, to guarantee compliance with the regulatory obligations.

An entity must submit a notification within six months from the end of the fiscal year (FY) stating its engagement in RA, regardless of whether the licensee is exempt from the ESR or generates income from RA.

A report outlining specific business details should be filed within 12 months after the conclusion of the Fiscal Year, solely if income was derived during the period from RA and the licensee was not exempt from the ESR.

Consequences of Non-Compliance: Not submitting the ESR report by the specified deadline may lead to an administrative penalty of AED 50,000. It’s essential to adhere to the resolution’s provisions by submitting the report and any pertinent information or documentation to avoid these penalties. Furthermore, failure to comply with the Economic Substance regime for the year ending 31 December 2022 will have severe results, such as suspension or cancellation of your business license.

Suggested Steps for Your Business

ESR Evaluation: We advise all Licensees to undertake a thorough ESR assessment, irrespective of involvement in pertinent activities, and, if applicable, to submit an ESR notification and report via the MoF portal.

Accountability for Pertinent Activities: Licensees involved in relevant activities and generating relevant income are obligated to file the ESR Notification and ESR Report. They will be answerable to their respective regulatory authorities.

Key ESR Factors to Consider before the end of the Financial Year

All legal entities should address the following ESR matters and act, where applicable, before the end of the fiscal year:
  • The entity needs to evaluate if it engaged in and earned income from any of the nine RAs within the period. This assessment is crucial as it determines the entity's specific ESR compliance needs for the fiscal year
  • Entities that have generated income from RA during the fiscal year should assess their adherence to the relevant ESR evaluations, namely the directed and managed test, core revenue generating activities (CIGA) test, and adequate examination
  • After the review, entities should promptly undertake all essential measures before the fiscal year's conclusion to rectify any potential non-compliant areas (i.e., ensuring adherence to all relevant ESR tests)
  • Regarding the CIGA test, entities must showcase control and supervision over any outsourced arrangements during the fiscal year. This can be illustrated, for instance, through contractual agreements or correspondence
  • Given the FTA ESR audits, Licensees should gather pertinent supporting documents regarding their ESR compliance obligations and maintain them on file. Should they be chosen for an audit, Licensees have a brief timeframe of 5 working days to furnish the FTA with all requested documentation (i.e., demonstrating compliance with the ESR tests)
The guidance mentioned above (not exhaustive) is to offer entities a chance to initiate any required actions for ESR compliance before it becomes too late.
How Can IMC Be Your Trusted Ally?

Navigating the complexities of compliance with regulatory bodies such as the Federal Tax Authority (FTA) and the Ministry of Finance (MOF) can be challenging. At IMC, we understand the importance of staying in good standing with these authorities. That’s why we’re here to assist you in conducting a thorough ESR assessment and ensuring clear communication of your status to the regulatory authority.

By partnering with us and addressing these requirements promptly, you can avoid the stress of potential conflicts and significant penalties. Remember, we’re just a call or an email away for any additional guidance or questions you might have. Let’s tackle these challenges together, with ease and confidence.

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