- NEWSLETTER,U.A.E
- June 13, 2023
As Dubai continues to establish itself as a wealth and asset management hotspot in the international finance landscape, it is essential for expatriates and non-Muslims with assets in the region to consider their estate planning options. This article aims to provide a comprehensive guide to the growing importance of the United Arab Emirates (UAE), particularly Dubai and the Dubai International Finance Centre (DIFC), and the various estate planning options available to different communities.
Dubai and the DIFC: A Global Finance Hub
The UAE’s D33 strategy has successfully transformed Dubai into a leading finance centre in the MENA region. The DIFC, a special economic zone within Dubai, has played a crucial role in this transformation, attracting high and ultra-high-net-worth families to establish a presence in the Emirate. With an increasing asset base in Dubai, it is vital for these individuals to incorporate their assets into their global tax and estate plan strategies.
Navigating Succession Laws in the UAE
The UAE makes a distinction between Islamic and Non-Islamic individuals when it comes to succession laws. For Muslims, Sharia Law is applied in the absence of a will, while non-Muslims can choose the laws of their nationality to govern the succession of their Emirati assets. In particular, UK expats are afforded the opportunity to apply English law, which offers testamentary freedom and allows for tailored estate planning.
Estate Planning Options for Islamic Clients
For those looking to prepare Sharia-compliant wills, trust structures are commonly used to ensure the estate passes in accordance with Sharia principles. In some cases, individuals may opt for corporate structures or foundations to provide beneficiaries with certainty over their inheritance.
Estate Planning Options for UK Expats (Non-Muslims)
UK expats in the UAE can benefit from applying English law to their Emirati assets, enabling bespoke estate plans that take into account the needs of beneficiaries and potential global taxes. This is particularly important for UK-domiciled and deemed-domiciled individuals who may be subject to UK inheritance tax. Many expats have chosen to structure their global estate through jurisdictions such as the Channel Islands, streamlining their estate planning across multiple jurisdictions while residing in Dubai.
Estate Planning Options for Non-UK Expats (Non-Muslims)
Non-UK, non-Muslim expats in the UAE can also explore alternative estate planning options, such as obtaining UK nationality and electing English law to govern their Emirati assets. This can help circumvent forced heirship laws in their country of origin while allowing for tax-efficient structuring.
Navigating estate planning in the UAE can be complex, but with the right guidance and support from experienced professionals, expats can successfully protect their assets and ensure their wishes are carried out upon their passing. Take help from consultancies such IMC Group to ensure the process is smooth and you get the best guidance navigating the laws.
- NEWSLETTER,U.A.E
- June 13, 2023
On June 1st, 2023, the UAE will introduce a federal corporate tax at a rate of 9% for businesses. This new tax aims to strengthen the UAE’s business environment and meet international standards for tax transparency.
The corporate tax will apply to businesses and corporate entities that make over 375,000 AED in annual profits. For small businesses, profits up to 375,000 AED will remain tax-exempt. Some types of businesses and income are also fully exempt, such as:
- Individual income unrelated to a business
- Foreign investors without a UAE business
- Qualifying free zone entities
- Capital gains and dividend income from shareholdings
- Intragroup transactions and restructurings
For businesses subject to the tax, it will be calculated as 9% of their annual taxable profits. For example, if a business makes 4,750,000 AED in profit, it will pay 9,000 AED in corporate tax (4,750,000- 3,750,000 x 9%).
With corporate tax coming soon, now is the time for businesses to prepare. Below are some steps you can take that will help you prepare.
Avoid a AED 10,000 fine by Meeting UAE's Corporate Tax Deadlines. Contact us for Expert Tax Compliance Guidance and Protect your Business.
Register for corporate tax
Keep accurate financial records
Prepare financial statements
Get the right advisory
Don't attempt to avoid the tax
Any restructuring solely aimed at reducing your tax bill could be considered tax avoidance under the new law and result in penalties.
The new corporate tax law is already in place, and it’s time to take action to ensure a smooth transition for your business. Make sure your financial records are in order, understand how the tax will impact your business, and invest in the tools that will help you comply efficiently. Don’t wait – contact IMC Group today to check your eligibility and receive expert guidance on navigating the new tax landscape.
- NEWSLETTER, GLOBAL
- June 13, 2023
As business operations become, more complex and wage costs increase, outsourcing non-core back office functions can provide many advantages. Here are the top 5 benefits of outsourcing back-office operations in 2023:
Cost savings
Outsourcing back office functions like accounting, HR, IT support and facilities management can significantly reduce operating expenses. An outsourcing partner can provide the same services at a lower cost due to economies of scale, experience and specialized resources. You pay a fixed fee for a defined set of services rather than having higher overhead costs related to in-house staff.
Access to expertise
Outsourcing providers have deep expertise in providing specific back-office functions that your in-house staff may lack. They stay up to date on the latest technology, processes and best practices that allow them to provide a higher level of service. You gain access to this specialized expertise without having to invest in building it internally.
Flexibility and scalability
Outsourcing back-office operations gives you the flexibility to scale services up or down according to your needs. If your business starts to grow rapidly, you can easily increase the volume and types of outsourced services. Conversely, if business slows, you only pay for the services you require at that time, allowing you to reduce costs.
Focus on core business
When back-office tasks are handled externally, your in-house staff can focus all their energy on your core operational and revenue-generating activities. Outsourcing non-essential functions allows you to optimize resources and boost productivity related to your key objectives.
Risk mitigation
Outsourcing distributes responsibility for providing services and reduces risk exposure for your company. Outsourcing providers assume liability for errors, compliance issues and security breaches related to their scope of work. They also implement best practices, quality control measures and disaster recovery plans that would be costly for you to implement on your own.
Conclusion
- Article, U.A.E
- June 5, 2023
In a bid to streamline the industrial bidding process and boost the country’s economy, the government of UAE has introduced the ICV (In-Country Value) certification programme. Obtaining your ICV certificate can provide your business with a competitive advantage during tender assessments. This explains why forward-thinking businesses are applying for the ICV certificate to gain an edge over other bidders. As a business entity operating in the Emirates, you would be keen to obtain your ICV.
Most business entities can easily obtain the ICV certificate by adhering to the guidelines. Only an ICV-approved audit firm or advisory company reserves the authority to give this certificate.
Guidelines to obtain your ICV Certificate in the UAE
1. Furnish the documents
The process of applying for your ICV certificate begins with obtaining relevant financial statements. Established audit firms can assist in preparing these documents. This would ensure your compliance with the International Financial Reporting Standards (IFRS). If your company is newly established, management accounts can be used for the application.
2. Use the latest statements
Established audit firms would recommend using ICV certification templates during the application. The auditors would use the latest financial statements (preferably the last 2 years’ statements) that have been audited and are IFRS compliant. For companies established within the last 10 months without audited statements, the figures from management accounts (not older than 9 months) can be used.
3. Get the application evaluated and approved
The Ministry of Industry and Advanced Technology (MOIAT) has established guidelines and procedures for evaluating ICV applications. Businesses need to get the ICV template verified along with the supporting documents. After evaluating your application, the ICV committee will approve it. You need to review the unsigned ICV certificate and approve it before sending it to the certifying body.
4. Issuance of the ICV Certificate
Upon receiving the approved document from you, the certifying body would finally get your ICV certificate issued. With the ICV certificate in hand, your business can participate in bidding processes with relevant entities.
Eligibility for the In-Country Value (ICV) Program
Understanding the ICV Certification Process
The ICV certification process ensures:
- The accuracy and currency of the contractor’s reported ICV contributions.
- Proper calculation of the contractor’s ICV scores using established methodologies.
Benefits of Obtaining an ICV Certificate
1. Cost Savings and Financial Incentives
2. Enhanced Reputation and Community Trust
Required Documents for ICV Certification
To obtain an ICV certificate, you must provide:
- An audited financial statement from the supplier or contractor.
- A comprehensive list of purchased products and services.
- Reports from the Wage Protection System (WPS).
FAQ
How many certificates do I have to apply for?
Being a supplier in the industrial sector, you need separate certificates for all the business licenses in your possession. The authorities consider each business license as a separate legal entity. If your business operates at multiple branches under a single license, you need a single, comprehensive certificate.
How long does the ICV certificate remain valid?
The ICV certificate remains valid for 14 months after the audited financial statements get issued. Businesses may use the same financial statements to reapply for the certification before this period elapses. If you receive an updated ICV certificate, the previous one would remain valid.
Can I switch to a different certifying body?
When your business entrusts an Empaneled Certifying Body for validating the certification, you are not entitled to switch to a new body throughout the ICV certification process unless you have a valid reason.
IMC Group continues to be one of the trusted auditing and advisory firms in Dubai. Industrial suppliers can fast-track their process of obtaining ICV certificates with professional support.
- NEWSLETTER,U.A.E
- May 30, 2023
Middle Eastern private client industry is rapidly evolving, showing an increased interest in domestic structuring, ESG/impact investing and family offices. These trends reflect a generational shift in the region as younger individuals recognize the significance of financial security and family governance.
One striking trend in the Middle East is the explosion in domestic structuring. International structuring at offshore finance centres was long the norm; local structuring only recently caught on. A prime example is the recent rapid expansion of DIFC, ADGM and RAK ICC Foundations Regimes which have registered over 550 foundations as of September 2022. These UAE foundations provide unique asset protection features including holding UAE real estate as private wealth vehicles while also functioning as orphan structures allowing asset transfers out of own names, which enables protection and intergenerational planning of assets between generations.
Another notable trend in the Middle East is an increasing interest in impact investing and ESG, particularly among younger family members. This shift is forcing families to reevaluate traditional investment strategies in light of an ever-evolving landscape and adapt accordingly; similarly, their focus on ESG and sustainability influences not only what types of investments they pursue but also their wealth management structures.
Family offices in the Middle East are continually growing more diverse, serving a range of purposes beyond investments. Where once family offices were used primarily as investment vehicles, today they’re being utilized for wealth protection, succession planning, intergenerational planning and governance – reflecting both professionalisation needs within family offices as well as increased demand for services that support such complex structures.
Middle Eastern private client industry presents numerous opportunities, as evidenced by domestic structuring’s increased popularity, impact investing and ESG investing’s increased prominence, and family offices emerging throughout the region. However, as this market develops, it’s essential that families and high-net-worth individuals work alongside experienced advisors to navigate all of the complexities of wealth management.
Families and high-net-worth individuals should enlist the services of an established private client family advisory in Dubai like IMC Group for tailored, expert advice and support. With an understanding of both the region and wealth management complexities, they can help clients take full advantage of all that the Middle East private client market has to offer.
As the Middle Eastern private client industry is continuously developing, it is crucial for families and high-net-worth individuals to remain up-to-date with its trends, working alongside knowledgeable advisors who can navigate its complexities effectively. Domestic structuring, impact investing and ESG strategies as well as family offices present plenty of investment opportunities in this region.
- NEWSLETTER,U.A.E
- May 30, 2023
New generations of wealthy families and individuals in the Middle East are embracing impact investing and ESG principles, leading to significant changes in investment outlooks and strategies. However, this rise in sustainable and ethical investing has exposed a ‘generation gap’ between family members – with younger generations much keener to put their assets behind responsible causes. Next-gen family members are eager to transform both their investments and family businesses to align with ESG and sustainability goals. These individuals are demanding more diverse portfolios that include impact investments, crypto currencies and other alternative assets.
Domestic Structuring Attracts New Interest
Traditionally, Middle Eastern high-net-worth families have structured their offshore assets through jurisdictions like Singapore and the Caribbean. However, domestic structuring through UAE foundations is now on the rise. The number of foundations registered in the DIFC, ADGM and RAK ICC has grown dramatically in recent years. UAE foundations offer certain advantages like the ability to hold domestic real estate – making them attractive to next-gen family members focused on asset protection and inheritance planning.
Family Offices Becoming More Professional
Alongside overseeing investments, family offices in the Middle East are increasingly being used for planning succession, governance and philanthropy. Next-gen family members seek to professionalise the family office to manage these complex needs. Advisers are seeing greater demand for family office services from multi-family offices and outsourced family office solutions. These provide expertise in managing family wealth, businesses and estates alongside philanthropic goals.
As family priorities shift and investment strategies evolve, tailored family office and family advisory services can help wealthy individuals navigate the complex challenges that impact their wealth, assets and legacy. Experienced advisers can provide custom structures, governance solutions and expertise – ensuring family values and visions are translated into strategies that bolster financial security for generations to come. The rise of impact investing and other trends show that a new era has dawned on private clients in the Middle East.
Private Client and Family Advisory services can provide invaluable support to high-net-worth individuals and families seeking to navigate complex financial and legacy challenges. IMC Group offers customized solutions tailored to your unique needs and goals, with a focus on long-term financial security and impact investing.
- NEWSLETTER,U.A.E
- May 29, 2023
Middle Eastern private and family businesses have experienced rapid expansion over time. Without proper planning, though, fragmentation could occur, and family businesses might split. With that being said, high-net-worth individuals often seek to preserve family businesses for future generations while passing them on to subsequent generations, so in this article, we will look at strategies which may help achieve such goals.
Ownership Structure
Although direct ownership might appear to be the easiest and most flexible option, it may not suit all types of assets. Your goals could range from maintaining control over certain assets to safeguarding them against creditors or family members. So it is crucial that you fully comprehend any legal ramifications that accompany any chosen ownership structure.
As families consider which vehicle to use and where to establish it, several considerations need to be taken into account when making this important decision. Tax implications, legal considerations, public disclosure requirements, asset protection measures and legal ownership restrictions all need to be considered when selecting the most appropriate structure for them. Trusts and foundations provide structured solutions, offering some asset protection as well as succession planning benefits.
Wills can simplify probate proceedings and provide certainty to heirs, yet in parts of the Middle East wills are not recognized and Shariah law takes precedence when allocating assets upon death. Non-Muslims living in Dubai or Ras Al Khaimah can register DIFC Wills that cover immovable and movable property as well as guardianship of any children habitually resident there.
Corporate and Family Governance
Good governance is critical to protecting and managing sustainable growth for any family business and ensuring its future generations. A robust governance model should promote transparency, clarity, accountability and fairness. Shareholder protocols or family councils may help to facilitate continuity, smooth succession or address family concerns as they arise.
Transparency and Privacy for Better Transaction Experience
Global tax transparency measures such as the OECD Common Reporting Standard and Ultimate Beneficial Ownership registers have dramatically increased the amount of information about financial assets owned by individuals that are available to authorities and the public. It is crucially important that you are aware of any information publicly accessible that poses threats to the security of yourself or your family, which could compromise security measures.
Establishing a family office can be an effective solution to effectively managing wealth and assets for any family. A family office may take different forms depending on your family’s specific needs and objectives. More families are now turning to family offices in order to maximise financial interests, decrease complexity, and manage personal affairs efficiently.
Family offices provide essential administrative support as well as more comprehensive services that incorporate strategy, asset management and governance. Since each family has unique needs and requirements for its family office services, there can be as many different kinds of family offices as there are families.
At its core, wealth preservation and succession require careful planning and strategic execution. At IMC Group we can assist in setting up a family office tailored specifically to your specific needs and objectives to ensure the successful continuation of your family legacy into future generations.
- NEWSLETTER, GLOBAL
- May 29, 2023
Mergers & Acquisitions Advisory Services are witnessing significant changes as market turmoil, stalling M&A activity, and a challenging economic landscape make their mark. Despite these factors, recent data indicate that there are exciting M&A opportunities in 2023, especially for organizations looking for M&A transaction advisory services in Dubai and other international markets. In 2022, deal volumes were 9% greater than pre-pandemic levels. The current market conditions are favourable for M&A if organisations possess a well-thought-out strategy, financial resources, and the courage to undertake transformational deals that will shape their businesses and contribute to their long-term success.
The Economic Picture and Challenges in Early 2023
At the beginning of 2023, global recession fears and rising interest rates cast a shadow over the economic outlook. Central bankers are grappling with record inflation, while executives face delays due to concerned investors who are still analyzing the severe global stock market crash in 2022, the war in Ukraine, other geopolitical crises, supply chain disruptions, and stricter regulatory scrutiny.
Why Downturn Deals Can Be Successful
Downturn deals often yield the best results, as buyers can outperform in challenging times. Many C-suites and boards may consider M&A due to a reset in valuations, reduced competition for acquisitions, and new assets coming to the market, particularly distressed businesses. Some companies have already invested in bold moves to outpace their rivals.
Surprisingly, 60% of CEOs in a recent global survey stated that they would not defer deals in 2023 to avoid economic uncertainty, even though 73% are pessimistic about global growth. M&A can help CEOs accelerate digital and ESG reforms, which are crucial for long-term success.
Technology's Role in Dealmaking
Technology has been a dominant force in dealmaking, with many companies striving to acquire digital assets and capabilities. Due to fierce competition and high-value multiples, some firms have struggled to make acquisitions. Companies want to position themselves against competitors and a rapidly changing market, fill their pipelines, reorient to new markets, and redefine themselves beyond tech skills and the energy transition.
Regional M&A Trends
Asia Pacific: Deal volumes and values in the Asia Pacific region declined by 23% and 33% between 2021 and 2022, with China experiencing the largest drops (46% and 35%). China’s pandemic response and weak export demand have slowed domestic M&A. Companies investing in Asia are increasingly looking beyond China to India, Japan, and Southeast Asia. India is currently trailing China in deal values but has surpassed Japan and South Korea.
EMEA: Despite rising energy costs and wavering investor confidence, M&A in EMEA outperformed Asia Pacific and the Americas. EMEA deal volumes and valuations decreased by 12% and 37% between 2021 and 2022. However, the region had 20,000 deals in 2022—17% higher than pre-pandemic levels in 2019.
Americas: Macroeconomic, regulatory, and geopolitical challenges have reduced deal volumes and values between 17% and 40% from 2021 to 2022 in the Americas. Megadeals—transactions over US$5 billion—fell from 81 to 42 during the same period. The decline was more significant in the second half of 2022, with only 16 megadeals compared to 26.
M&A Outlook for 2023 and the Role of Advisory Services
CEOs will focus on reinvention and M&A in 2023. Dealmakers will closely monitor when the US Federal Reserve stops raising interest rates due to recessionary fears. Stability and assurance will drive M&A activity, especially in the private equity sector. M&A, particularly portfolio optimization, will help business executives reposition, expand, and succeed in this rapidly changing landscape.
While global M&A trends in 2023 are influenced by market turmoil and economic challenges, opportunities still exist for organisations with a clear strategy, financial resources, and the ability to navigate transformational deals. By focusing on reinvention, digital and ESG reforms, and portfolio optimization, companies can successfully leverage M&A to secure their long-term growth and success in the face of adversity. To navigate these complex transactions, organizations may benefit from partnering with M&A transaction advisory services in Singapore and other global hubs like the IMC Group, which can provide valuable expertise and guidance in executing successful deals.
- Article, U.A.E
- May 23, 2023
Dubai continues to be a global commercial hotspot, offering a plethora of privileges to small businesses. With its ease of doing business, robust transit network, and business-friendly policies, it appeals to entrepreneurs across the globe.
The tax-free regime in Dubai before 1st January 2018 further transformed the city into a global investment hotspot.
Being a small business, it pays to adhere to the tax norms in the country. Working with seasoned tax advisory professionals, businesses can comply with legalities. Right from registering for VAT to tax auditing, hiring experts for VAT advisory would streamline your growth trajectory.
What services do VAT consultants in Dubai provide?
Getting entangled in legal hurdles would be the last thing small businesses expect. In the UAE, failure to comply with the existing VAT norms invites hefty penalties. Companies specializing in VAT advisory can guide your business and help you deal with your VAT liabilities accurately. With professional minds backing your business, you can focus on your priorities.
Reputable VAT consultants offer a plethora of services, including:
- VAT Registration and deregistration
- VAT advisory
- Explaining VAT regulations
- VAT return filing
- Assistance in processing payment to FTA
- Purchase invoice reviewing
- Internal VAT audit
- Mitigating VAT liabilities
5 Reasons Small Businesses Should Hire VAT Consultants
Here’s why forward-thinking businesses in Dubai closely collaborate with experts for accurate VAT advice.
1. They are experts
Being informed professionals, tax advisory companies in Dubai educate their clients about their liabilities. So, you don’t bear the risk of miscalculating payments or levying the wrong rate from customers. Established VAT consultants bring their comprehensive knowledge to the table, helping your business navigate through the complex regime.
2. Accuracy matters
While filing VAT, accuracy happens to be the magic word. Reputed VAT consults never hesitate to walk the extra mile to cross-check details. Working with experienced tax advisors, you remain secure from committing generic mistakes during return filing or the initial tax registration.
3. Risk analysis and mitigation
One of the best perks of seeking VAT advisory from consultants is their ability to manage risk. Experienced tax professionals are capable of identifying compliance risks. Accordingly, they advise their clients to stay on the right track, keeping them out of the woods. This way, you wouldn’t be at the risk of being pulled up for unintentional non-compliance with VAT norms.
4. Flawless VAT audit preparation
Remember, FTA would allow your business just 5 days to respond to a VAT audit query. Top VAT consultants prepare their clients for stringent tax audits. Just after filing your VAT, they help businesses understand the supporting documents. Besides, the consultants capture relevant field data and keep their clients well-poised for VAT audits.
5. Capitalize on opportunities
In case your business turnover lies in the Dh187, 500 to Dh375, 000 bracket, registering for VAT isn’t mandatory. However, getting your firm registered brings several benefits that are easy to overlook. Reputed VAT consultants help their clients make the most of these opportunities.
Conclusion
Fulfilling complex tax obligations in Dubai and remaining compliant involves the experienced handling of your accounts. Why not hire the best VAT consultants in your city to spearhead your business? IMC Group, one of the most esteemed companies specializing in VAT advisory in Dubai, can handle your tax matters with expertise.
- NEWSLETTER,U.A.E
- May 15, 2023
Recent years have seen significant strides taken by the United Arab Emirates (UAE) to strengthen its legal and regulatory framework in combatting money laundering (ML), terrorism financing (TF), proliferation financing (PF) and other forms of financial crime. Recent changes to relevant laws have increased coverage of regulated entities while prompting businesses to become more familiar with their obligations.
Historically, regulated companies consisted of financial institutions, insurance companies and banks; however, due to recent amendments to anti-money laundering (AML) laws, more obligations have been extended to designated nonfinancial businesses and professions (DNFBPs), such as lawyers, accountants, real estate brokers, dealers in precious metals and corporate service providers.
To ensure compliance, new authorities have been charged with monitoring DNFBPs’ reporting and registration requirements, including lawyers and notaries registering with the Ministry of Justice as well as businesses registered with the Ministry of Economy for most other businesses. Furthermore, over the last three years, both Executive Office for Control & Non Proliferation (EOCN) and the National Anti-Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) were established resulting in more frequent inspection visits as well as training sessions for businesses.
Companies operating in the UAE must now take steps to comply with AML, CTF, PF and sanctions policies. These steps include:
- Regular risk evaluations should be undertaken, at least every year or when introducing new products and services, to create policies specific to their business and client base
- Implement effective Know Your Customer (KYC) procedures that include an organized framework for rating client risk and collecting any necessary documentation
- Establishing an Anti Money Laundering Reporting Officer (MLRO) or Compliance Officer can assist organizations with ensuring adherence to laws and regulations as well as communicating with relevant authorities
- Training team members on the importance of tracking and reporting any suspicious transactions are paramount to their safety and the success of your business
As compliance operations become more sophisticated and costly, businesses should dedicate a specific budget for compliance activities. Acknowledging and fulfilling AML/CTF/PF and sanctions obligations promptly is crucial; any delays could cause increased costs and difficulties in the long run.
Businesses must embrace emerging technologies for KYC and screening purposes, particularly artificial intelligence compliance solutions that help companies reduce human errors while streamlining operations and accessing cutting-edge technologies.
Businesses operating in the UAE must take compliance obligations seriously and be cognizant of any associated risks, particularly penalties and fines that may ensue from breaches. Penalties or fines aside, breaches can have devastating repercussions for partnerships, banking relationships and the ability to access funding as well as retain clients.
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