- Newsletter, Singapore
- March 2, 2022
On Friday, 18 February 2022, Minister for Finance, Mr. Lawrence Wong announced the Budget Statement for the Financial Year 2022. In his speech, he stressed upon the importance of a fair and progressive tax rate in the country. The major tax changes and increased social spending in Budget 2022 also highlight that the Government is investing in strengthening Singapore’s social compact.
IMC Group has deeply analysed the budget 2022 and brings to you key changes that can impact the tax structure in Singapore.
One of the biggest announcements from the budget is the increase in GST rate which will happen in two stages.
Year | GST Rate |
1 January 2023 | 7% to 8%. |
| 1 January 2024 | 8% to 9% |
Furthermore, a committee will be set up to ensure that businesses in Singapore do not try to profit from this increase by raising the prices of their products and services in the name of GST increase. The Ministry of Finance has also announced an additional top-up of $640 million to Singaporeans to cushion the impact of the GST increase making the Assurance Package to $6.6 billion.
The increase is complemented by the permanent enhancement of GST Voucher scheme in the following 3 ways:
- Every adult Singaporean aged 21 and above will get cash payouts ranging from $700 to $1,600 over the next 5 years;
Eligible Singaporean households will get additional GST Voucher U-Save rebates ranging from $330 to $570 over the next 4 years to offset the cost of utilities;
Eligible lower-income seniors will get GST Voucher cash payout ranging from $600 to $900 over the next 3 years. - All Singaporean children aged 20 and below and seniors aged 55 and above will get a total of $450 in MediSave top-ups over the next 3 years
- All Singaporean households will get another two rounds of Community Development Council (CDC) vouchers worth $400 over 2023 and 2024. These vouchers can be used at heartland stores as well as major supermarkets.
The above move will support retiree households to combat the impact of the total increase in GST that they have to pay. For lower-income households, without seniors in their family, these vouchers will offset about half their total GST expenses every year.
Over and above this, for vulnerable households who may need additional support, the Citizens’ Consultative Committees ComCare Fund will get a $5 million top-up over the period of five years, while the four self-help groups will get a total of $12 million over the period of four years. The personal income tax rate for individuals in the top marginal tax bracket in Singapore will increase from the year of assessment 2024. Those earning between $500,000 and $1 million will see an increase in personal income tax rate from 22% to 23%. While those earning in excess of $1 million will see an increase in personal income tax rate from 22% to 24%.
Note: Those earning between $320,000 and $500,000 will not see any change in their income tax rate in this budget. They will still be taxed at 22% without any change. For small and medium sized enterprises various support packages are announced to provide temporary relief for businesses and workers.
- H4 Skills Future Enterprise Credit
This grant aims to support businesses to upskill their employees by waiving Skills Development Levy contribution requirements on them. As a part of the initiative, up to $10,000 credit can be used to offset up to 90% of expenses for transformation initiatives. - Productivity Solutions Grant
Around $40 million will also be set aside for businesses to apply for subsidised accounting and point of sale solutions to combat the impact of GST increase and raise productivity. - Small Business Recovery Grant
Small and medium sized enterprises in the eligible sectors will receive $1,000 per local employee they hire, up to $10,000 per firm.
Sole-proprietor, partnerships and stallholders including SFA-licensed hawkers, market and coffeeshop stallholders in eligible sectors that do not hire local employees will be given a $1,000 one-off grant. - Jobs Growth Incentive
The said grant will be extended to September 2022 to support the hiring of mature and vulnerable workers. - Advanced Digital Solutions
Starting from 1 April 2022, SMEs offering advanced digital solutions will receive up to 70% funding support for qualifying costs on digital solutions. - Grow Digital
Starting from 1 April 2022, SMEs will receive 70% co-funding to onboard cross-border digital platforms.
Another important tax rate hike was seen for those who own a non-owner-occupied residential property in Singapore which includes investment properties. At present they are taxed at 10% to 20% but following the budget, the property tax rate for such properties will be raised to
Year | Tax Rate |
2023 | 11% to 27% |
| 2024 | 12% to 36% |
The excess amount to pay will depend on the annual value of the home. The said tax rate increase will apply to all non-owner-occupied property in all annual value tiers.
The property tax rate for owner-occupied homes with an annual value above $30,000 will also be raised. At present they are taxed at 4% to 16% but following the budget, the property tax rate for such properties will be raised to 6% to 32%. The tax rate change will only affect families who stay in a private property with an annual value above $30,000.
The hike in tax rate signals that the government is taking initiatives to resolve rising wealth inequality in a country. The move is set to increase the government’s property tax revenue by approximately S$380 million annually i.e. around 12% of the existing property tax collection of $3.1 billion. The government has announced an increase in carbon tax rate from the present
Year | Tax Rate |
2024 and 2025 | $5 per tonne to $25 per tonne |
2026 and 2027 | $45 per tonne |
2030 | $50 to $80 (Goal of reaching) |
The current tax of $5 per tonne remains unchanged until 2023.
No additional carbon tax will be imposed on petrol and diesel.
Going forward from 2024, large emitters in Singapore will be able to buy international carbon credits to reduce the carbon tax they pay. The minimum qualifying salary for Employment Pass will be increased from $4,500 to $5,000. For the financial services sector, the minimum qualifying salary for Employment Pass will be increased from $5,000 to $5,500. The above-mentioned changes will be applicable from September 1, 2022, for new Employment Pass applications and September 1, 2023, for renewal applications.
Besides Employment Pass salaries, the salary thresholds for S Pass holders will also be raised. The minimum qualifying salary for foreign workers on S Pass will be increased from the current $2,500 to $3,000 for new applicants from September 1, 2022. For the financial services sector, a higher salary threshold of $3,500 will be in effect.
From January 1, 2024, the Dependency Ratio Ceiling (i.e., the proportion of foreign workers a firm can employ) will be reduced from 1.7 to 1.5.
The above write-up summarises the key changes in Budget 2022.
- Newsletter, Saudi Arabia
- March 1, 2022
- Saudi Arabia Clarifies GCC Origin of Goods
- Allows Customs Duty Refunds for Goods Imported from GCC Nations
- Launches eService Platform
Saudi Arabia issued Ministerial Decision No. 3852 dated 2nd July 2021 on local rules of origin stipulating national rules of origin for the eligibility of preferential duty treatment of imported goods when imported from the Gulf Cooperation Council (GCC) into Saudi Arabia based on the GCC Unified Economic Agreement.
Goods produced in any of the GCC countries are considered as national products and should receive duty exemptions on import, the Saudi Cabinet decided.
Following the Cabinet Decision, new guidance has been issued by the Zakat, Tax and Customs Authority (ZATCA) specifying conditions that must be fulfilled before submitting any request for customs duty refund enabling verification of the Rules of Origin (RoO) for goods imported from GCC countries.
The requirements and conditions for the request of customs duty refund on goods of GCC origin are as under:
- The importer needs to make a provision for a bank or cash guarantee amounting to customs duties and other taxes subject to the preferential treatment
- The bank guarantee must be from a bank subject to the supervision and control of the Saudi Central Bank (SAMA)
Request for refund of customs duties must be filed by the importer within 90 days from the date of clearance of the goods of GCC origin on the condition that the request includes the following requirements:
- Certificate of Origin (CoO)
- Copy of the customs declaration eg. from Bayan, under Saudi Central Bank supervision
- National certificate issued by the competent authority in the country of GCC origin
- Valuation certificate for goods from the country of origin
- Proof of payment for the value of the goods
- Bill of lading
- International Bank Account Number (IBAN)
- Copy of invoices
- Copy of Bank Guarantee
Besides the above-mentioned requirements, the value-added percentage following national laws of the country of origin must be certified by a Public Accountant from the country of origin, with a licensed and certified branch operating in Saudi Arabia.
Furthermore, all documents must be verified by ZATCA and other appropriate Saudi authorities by conducting visits to the GCC manufacturing facilities. The process of verification may also be delegated to a competent third party.
In the event of any objections on customs duty refund, the same needs to be done per Common Custom Law of the GCC nations.
Before applying for a customs duty refund, the importers must ensure that they comply with all the rules of the soil including ZATCA rules and regulations. Penalties may be levied if goods declared to originate from the GCC do not meet the requirements specified.
ZATCA has launched an eService platform for Customs Duty Refund on their website permitting an importer in Saudi Arabia to file a request for Customs duties or insurance fee refund. To make a valid claim for the refund, all importers need to provide a completed customs declaration along with all relevant documents for becoming beneficiaries of this service.
The Process of filing an online claim for a refund involves the following steps.
- Logging on to the ZATCA website
- Filling in the refund request information
- Approving the acknowledgement, undertaking and application submission
- Receiving notification by text message
- Approval or Rejection of application
The customs declaration must be on or after the 3rd of July, 2021 and goods of GCC origin must be contained in the declaration. The refund shall be made in Saudi Riyal, SAR.
- Newsletter, U.A.E
- March 1, 2022
- New Cabinet Decision Issued On 30.12.2021
- One Year Extension of Grace Period Granted
- Taxpayers to Benefit from 70% Discount on Penalties
Following a new Cabinet Decision No 108/2021, article 3 dated 30.12.2001, on Administrative Penalties for Violation of Tax Laws; the UAE Federal Tax Authority (FTA) has clarified to the taxpayers to benefit from the extended one year grace period for re-determination of administrative penalties on violation of tax laws until 31.12.2022. The earlier deadline as per Cabinet Decision No 49/2021 was 28.06.2021 and this new decision would make the amount of the total unpaid penalties outstanding until 28th June 2021 equal to 30% of such unsettled penalties, subject to fulfilling the conditions set by the Cabinet Decision.
In effect, the new Cabinet Decision should be seen as a replacement of the third Article of Cabinet Decision No. 49/2021 to provide an extended grace period for registrants to settle the outstanding payable taxes along with the 30% of administrative penalties up until 31 December 2022 and a 70% discount on tax penalties.
The Cabinet Decision effective from January 1st 2022, should be seen as an opportunity for businesses to benefit from the reduction of the administrative penalties, highlighted the FTA. The Cabinet Decision would reduce the burdens on business sectors and help improve their contribution to the growth of the economy of the country besides enhancing tax compliance.
Unsettled administrative penalties, not imposed before the effective date, will be reduced to 30% of the total unpaid penalties subject to meeting the below-mentioned conditions.
- The unsettled penalty was imposed based on the old Cabinet Decision No. 40 of 2017
- The unsettled penalty was imposed, in full, before the effective date of 28th June 2021, and
- The tax registrant has met all of the following conditions
- Paid the total amounts of the payable tax by 31 December 2021 with no payable tax due to the FTA. The tax authority must have received the amounts by 31 December 2021 irrespective of the tax amount being payable before or after 28 June 2021, and
- Paid 30% of the unsettled administrative penalties before 28th June 2021 and no later than 31st December 2021
As per the new Cabinet Decision, FTA is responsible for determining the procedures for implementing the provisions for the re-determination of administrative penalties. FTA confirmed that administrative penalties imposed on the tax registrant will be redetermined within a maximum of 30 business days from the dates specified in the Cabinet Decision.
The review of records of some tax registrants is still underway to identify if there are eligible beneficiaries from the re-determination of administrative penalties scheme, FTA noted. The tax registrants who received notifications from FTA to provide supporting data must submit the required information urgently.
Tax Procedure Public Clarification, TAXP004 has been issued on 26 January 2022 by the FTA on redetermination of administrative penalties levied before the effective date of the Cabinet Decision No. 49 of 2021. With this new clarification, the earlier Public Clarification, TAXP002 stands replaced.
According to the new Public Clarification, FTA will again determine at the end of 2022, if the unsettled part of the administrative penalties which is 70% of the total amount of penalties originally levied, shall no longer need to be paid. The e-Services accounts of the tax registrants will be linked to this redetermination process by the FTA for accessing information.
- Article
- February 25, 2022
Overview
We all make big plans while starting our new business and meticulously carry out research on various aspects of business, often forgetting one of the critical aspects of branding our business and protecting intellectual property (IP) from competitors by establishing a trademark.Why is it crucial to register a trademark?
Trademark identifies your business through unique symbols, names, phrases, logos and designs created to make your products and services original and distinct, helping consumers distinguish your offerings from those of your competitors. Being visible, a trademark allows customers to recognize your brand promptly in a crowded marketplace. McDonald’s Golden Arches logo is a living testimony to why it is important to register your trademark.
How to Register for a Trademark?
Presently trademark protection can be obtained through International trademark registration and by filing an application for registration with the trademark office and paying the required fees. Almost all countries have a trademark register today offering full trademark protection on successful registration and once trademarks rights are filed, they are protected for 7 to 20 years and can be renewed indefinitely.
Registering a trademark is a simple process, however, there are some common mistakes that many startups commit during application filing, documents submission and trademark usage. Following are the seven ‘must avoid’ trademark mistakes.
Wrong Assumptions of TM Symbol as Protection
We frequently see the ™ symbol on packages and also on the internet and assume that the products have a brand. However, this symbol is used when an application for a trademark has been filed with the trademark registry just indicating that a trademark application exists. It carries no legal meaning and offers no protection for your startup. You must complete the entire registration process and once the application is approved by the authorized registry, use the R symbol, ® for enjoying protection from infringement under the Trademark laws.
Not Carrying Out Trademark Search
This is perhaps the most deadly mistake a startup can commit as it becomes a double-edged sword. First, it can result in legal proceeds and costly infringement lawsuits if that trademark is already registered for something similar with another business entity. Second, it would mean a lot of wastage of money that you spend on the registration process including filing and attorney fees as the approval is never granted. Nowadays, Trademark Electronic Search System (TESS) is available where you can run a search of the current database to see if what you like to trademark is already in use.
Applying For the Wrong Trademark Class
There are many classes of trademarks that can be chosen based on the usage of the trademark for your products and services. Incorrect and wrongly chosen trademark class can be a frustrating mistake as it warrants application rejection. IP service providers handle thousands of trademarks and can help you overcome this issue.
Not Using Trademark in Commerce
Trademark registries want you to use your trademark for commercial activities such as selling your products and services and using it on your website before you file for registering the same. Simply stating that you are willing to register your trademark without any use in commerce may render your application rejected.
Non-Renewal of Trademark on Time
Losing track of the trademark renewal deadline is also a big mistake as a new application on expiry costs much more. Outsourced IP service providers can intimate you on time and every time ensuring timely renewal and money-saving.
Not Outsourcing IP Service Providers
Many startups wish to handle the Trademark registration process on their own and prefer not to outsource IP service providers for trademark registration. It can, however, be costly and time-consuming and may even fail to achieve the end objectives.
Trademarking a business is often complex with legalities involved and requires you to spend considerable time researching and fact-finding. IP service providers, on the other hand, are experts with years of professional experience and can critically review and analyze your trademark for assessing the success of registration before filing.
Not Securing and Protecting Trademark
Once a trademark application is approved by the registry, you need to secure and protect your trademark so that your competitors are prevented from using your name, logo or ideas. An IP service provider can be of great help who would deal with any infringements to your trademark legally. A Google Alert for your trademark name may also be set for security. Not investing in trademark protection can diminish the value of your business in the future. Trademark law is tricky and defies basic business logic and understanding at times. It is thus advocated you work with an IP service provider to bring your startup branding to fruition.
- Newsletter, U.A.E
- February 22, 2022
Overview:
The entire global economy went haywire since the outbreak of the Covid 19 pandemic and Oman is no exception. Besides, a steep drop in revenues due to lower oil prices also posed serious fiscal challenges to the Omani government and adversely impacted the national economy. Natural calamities like tropical cyclone Shaheen causing widespread flooding in the country’s northern coast also added to the country’s economic woes.
Regardless, Oman has been on track to realize the country’s 10th Five-year Development Plan (“10th FDP) for deficit reduction objectives and achieve a surplus budget by 2025 as the government implemented a series of economic reforms in policies and measures during 2021. The introduction of VAT is the most notable that would help supply the state exchequer to address fiscal deficit issues, diversify the non-oil economy and enhance the nation’s competitiveness and sovereign rating.
“The policies and measures implemented by the Sultanate of Oman recently have begun to show results,” highlighted Dr Saeed bin Saqri, the Minister of Economy. The government has made huge changes to the business, legal, and tax frameworks in the country for continued economic development through fiscal sustainability & economic diversification.
As per the report of the Ministry of Economy, the country is optimistic about an accelerating economy during 2022 and expects to register 5.8% overall growth. The steadily recovering investment climate in the country also suggests continued economic growth during the years of the 10th FDP.
The Fitch ratings, a global leading provider of credit ratings, commentary and research, recently revised Oman’s economic outlook from negative to stable on the back of the government’s commendable progress with implementation of its medium-term fiscal plan (MTFP) for balanced and surplus budgets and lower debt to GDP ratios leading towards reduced risks of defaults.
Standards and Poor (S&P) also forecasted the country’s economic growth to accelerate during 2022 on the back of higher global oil prices, increased oil and gas production and a growing non-oil economy. It also revised Oman’s economic outlook from stable to positive.
“We expect Oman’s real GDP to grow by 1.7 per cent this year and then accelerate to 3.1 per cent on average in 2022-2023 as oil and gas production ramps up after OPEC production limits are eased,” S&P highlighted in a research update released during last October. The growth in the non-oil economy would be mainly driven by the logistics, fisheries, agriculture, tourism and manufacturing sectors.
As the country witnessed economic normalization due to the lifting and easing of Covid-19 related restrictive protocols and boosting up of vaccination drive with almost 84% population double vaccinated, the non-oil revenue during January to October 2021 grew almost 40% Year on Year (YOY) primarily led by the introduction of VAT in April.
Budget 2022
Oman’s 2022 State Budget (RD 1/2022) was approved by His Majesty Sultan Haitham bin Tarik on 1st January 2022 through a Royal Decree and was officially published on 2 January in the State Gazette. The nation’s General Budget was documented based on Oman Vision 2040 and the 10th FDP and in close alignment with the objectives of medium and long-term plans and objectives of fiscal policy measures. The budget deficit projected was the minimum in the last 11 years, OMR 1.5 billion and down 32% YOY.
The revenue growth sharply outpaced the growth in state spending and the government mostly maintained spending on basic services like health, education and social welfare. Any additional revenue accrued from higher oil prices than that very conservatively assumed will be used to lower fiscal deficit and loan repayment, as per the budget highlights.
The Ministry of Finance (MOF) emphasized in its budget report saying, “The State’s General Budget for the financial year 2022 is consistent with the objectives of the Tenth Five Year Development Plan.” It also said, “The 2022 budget aims to achieve a set of economic and social development objectives.”
The budget outlined the economic and social guidance for 2022 and was centred on nine measures including sustainable levels of public spending; improving non-oil revenue contributions; prioritising projects involving the productive sectors; distributing government subsidies to low-income households for demand generation; maintaining spending on basic services; enhancing digital transformation; continuing improved sovereign credit ratings to boost up investor confidence; support training programmes and those linked to job schemes, while boosting job creation; and extending all necessary support for small and medium enterprises for doing business in Oman.
Oman 2022 budget projected total revenue OMR 10.6 billion while the projected expenditure was OMR 12.1 billion with a projected deficit of OMR 1.5 billion. The 32% lower fiscal deficit is primarily due to higher oil and gas receipts.
The MOF said that a cautious approach was taken and the budget was estimated based on an oil price of USD 50 per barrel. The government has considered the ongoing uncertainty of the global oil prices because of the new Covid-19 variants such as Omicron.
International institutions including the International Energy Agency (IEA), the International Monetary Fund (IMF) and credit rating agencies (Fitch, Moody’s, Standard & Poor’s, and other global agencies) however forecasted the average oil price to be hovering between USD 53 and USD 84. The budget estimated an increase in revenue by 23% to OMR 10.6 billion against OMR 8.6 billion in 2021.
The Takeaway
In all likelihood, Oman is set to witness higher economic growth this year in the light of a better and stronger performance of its hydrocarbon sector with improved natural gas production and higher crude oil output. Besides, the continued structural reforms by the government are expected to bolster foreign direct investment through new company formation in Oman.
The second half of FY 2021 witnessed higher growth momentum as increased revenue contributions came in from the non-oil sector due to the easing of Covid-19-related restrictions and VAT and excise tax implementation. The economic stimulus package announced during late November also supported the economic turnaround on the back of improved domestic demand. As revenue generation increased sequentially supporting government coffers, the estimated fiscal deficit narrowed sharply by more than 70% by the end of 2021 as against 2020.
Last but not least, the Omani government’s recent announcements of several projects towards fueling the digital transformation drive, improving fiscal performance management and enhancing SMEs and startups in the private sector will aid in achieving all-around economic prosperity.
- Article, Singapore
- February 14, 2022
Why Singapore?
Singapore is well known for its business-friendly policies. It is the leading startup hub not only in Southeast Asia but in the world. The city-state is the gateway to Asia with great global connectivity and easy access to top-quality talent and business advisory services. The country provides infrastructure and funding support and is an ideal destination expand your business in a growing consumer market in Asia, China and India. Additionally corporates can also enjoy the benefits of a low tax rate, various business incentives, and a supportive startup ecosystem which make Singapore an attractive hub for company incorporation.
Though the covid 19 pandemic hit hard all world economies including Singapore and many businesses pulled down their shutters, Singapore witnessed many startups and SMEs growing and prospering during this time. The country still offers profitable, scalable and sustainable business opportunities and remained encouragingly resilient during this economic upheaval
Why are Companies Registered in Singapore?
The ease of doing business, business opportunities, the fact that it’s a great place to work and live, and
- The rate of corporation taxation is 17%
- Dividends are not taxed
- Foreign Investment Facilitation
- No capital gains tax
- A low 7%* value-added tax and revised to 8% from 1 Jan 2023
There are all reasons why companies register in Singapore.
High In-demand and Profitable Startup Ideas in 2022
Following are some low-cost startups that benefited hugely during the pandemic due to a demand surge in Singapore.
Affiliate Marketing
Affiliate marketing is an online business model that helps you to make money from other businesses when someone takes an action on your affiliate link and/or makes a purchase. This business is straightforward as merchants or advertisers will pay whenever something happens. However, the way you are paid can be tricky sometimes and needs an understanding.
Following are the ways to get paid.
Cost Per Action (CPA) is a performance-based scheme where you are paid as and when an action happens, or a lead is generated without a monetary transaction. If a web user fills up a form without making an actual purchase, you will earn a certain amount of commission as it leads to identifying a potential customer.
Cost Per Sale (CPS) payment scheme applies as and when there is a transaction, and a customer buys a product through your affiliate link. You get a commission from the sale. This scheme is considered more cost-effective and less vulnerable to fraud or manipulation.
Pay Per Click (PPC) is an advertising scheme where advertisers pay commission to you whenever one of their ads is clicked and a phone lead is generated. This works with a call tracking system that uses a tracking code and converts to a generic number.
Drop shipping
The future of drop shipping businesses looks bright in Singapore as the country’s e-commerce market is expected to grow at a high CAGR for years to come.
It is an online business model which is gaining popularity in Singapore and doesn’t require you to be tech savy or financially savvy.
This business involves you selling goods and services online either on your website or creating accounts in reputed shopping platforms and without holding any inventory. Once a sale transaction is done, the supplier will pack, prepare and ship the goods for the customer, and you earn the margin difference.
You, however, need to address a few aspects for a profitable business including identifying the reliability of suppliers, quality of products, speed of delivery, customer feedback and any restrictions imposed by the shopping platforms.
Telemedicine
Singapore based telemedicine startups are making significant positive impacts on the way remote or virtual healthcare is accessed by patients. A full stack of technology solutions is utilized to provide an enriching customer experience by creating more convenient and easier reach to physicians and healthcare professionals. You can also start a telemedicine business for pets.
The Ministry of Health (MOH) Singapore will start licensing telemedicine in the middle of 2022 and once you comply with the MOH telemedicine e-training and register, you can start providing consultations under the Community Health Assist Scheme. As the hospitals and outpatient clinics are very crowded in Singapore, the Telemedicine business holds promise in the future.
Healthy food supply
Singapore Food Authority doesn’t impose licensing requirements for home-based food supply businesses considering very few food safety risks. This business is trending and is an easy, hassle-free and convenient startup for you. However the scale of business in a residential setup can be limited.
You need to identify competition in this segment and be attentive to how other food supply businesses are designing their posts on social media. You need to consider healthy sustainable foods and may also think of utilizing smart technologies in your kitchen such as smart cookers, smart fridges etc. in future. Promotional packaging can also be a good idea to grow your customer base.
Digital content marketing
Singapore has one of the highest online penetration in the world and if you can provide quality and engaging content to promote companies and brands, you can venture into an online startup business in Singapore. This is trending and holds great promise for growth and profitability as more than 60% of leads today come through content.
You need to provide great content with valuable and useful information as blogs or copyrights to promote a business to a range of prospective customers. Digital content marketing is the future of conventional marketing as it can access a wider and more diverse audience. Companies using content marketing usually register higher business growth.
For great content, you need to connect with bloggers and copywriters and frequently use social media to influence the audience on your products and services.
Software as a Service (SaaS)
SaaS is in great demand all over the world including Singapore as many small and medium-sized companies are trying to automate their businesses for higher productivity, better control and reduced cost. If you can provide business or operation management software based on proven technologies and can streamline single or multiple business functions, you can start your SaaS business.
You can develop SaaS for inventory management, automatic payments, product recognition, electronic signature etc. and can use cloud services to provide a SaaS platform. There are more than 1600 SaaS startups in Singapore today and many of them are very profitable and successful.
Digital learning
Digital learning is commonly known as Education Technology or EdTech and is associated with the development and application of tools for enhancing online education. EdTech has been in use for more than two decades however, it has gained renewed importance after the breakout of the covid pandemic.
It leverages technologies such as VR, AR, Enhanced Video & Rich Media, ML, IoT etc. to promote the reach and impact of education and enables everyone to thrive as learners in a digital world. It is also used for research, innovation and professional development.
You can venture into a digital learning startup in Singapore as it is a profitable and high in demand business opportunity high growth potential.
The Takeaway
The world, no doubt, is becoming more competitive, however, many present-day entrepreneurs are still keen about doing business in Singapore.
Trying times call for sound, robust and innovative strategic themes to invest your time and resources. The above-mentioned startup ideas can help you navigate through, provided you remember that money or capital is not the last word in entrepreneurship, your love, compassion and willingness to devote time will have the lasting impact..
Author Bio:
Mr. Pankaj Kumar is a member of ICAI (Indian Institute of Chartered Accountants of India) since 2002. He has over 17 years of experience in cross border advisory, international taxation, structured finance, trade finance and management consulting. He advises MNCs and SMEs on formation of cross border corporations and business structures and structuring commercial transactions. Previously he has worked with Amicorp Group, DM Ventures, Amba Research (Singapore) and ICICI Bank. He primarily manages Client Advisory, Relationship Management & Business Development amongst group strategies and identification of new business opportunities.
- Newsletter, U.A.E
- February 8, 2022
In an attempt to uphold its position as one of the most business-friendly and innovative UAE free zones, Ras Al Khaimah free zone (RAKEZ) has rolled out Dual Licensing in January 2022 after introducing a women entrepreneurship package and gaming license programme. The newly announced licensing structure is strategically designed to attract more foreign investment in the country through new company formation in Dubai UAE.
The Group CEO of RAKEZ, Ramy Jallad noted, “We are always keen to provide our clients with the best solutions. We launched the Dual Licence structure for this very reason – to offer them the best of both free zone and mainland benefits, all without the need to incorporate a separate company. This package opens up a new market for their business, and substantially expands their accessibility and reach; all whilst reducing the red-tape requirements of the past.”
Dr Abdulrahman Alshayeb Alnaqbi, Director General of RAK DED, remarked, “We are pleased to collaborate with RAKEZ on yet another great initiative for the benefit of global investors who chose Ras Al Khaimah to base their operations. We will continue to work together to further elevate Ras Al Khaimah’s investment landscape and make it even more welcoming and dynamic than it is today.”
Dual License, launched in collaboration with Ras Al Khaimah Department of Economic Development (RAK DED) will allow investors to operate in both mainland and free zones from one office without requiring an additional mainland facility. This is a cost-effective business solution and will grant investors 100% foreign ownership including bidding rights for government contracts.
RAK DED is the authorized entity responsible for issuing licenses for Ras Al Khaimah mainland companies. It will issue a trade license to the free zone companies that wish to extend their activities in the mainland and make products and services offerings. A company holding a Dual license will be recognized as a ‘Branch of a free zone company’ with a legal identity as its parent company. The scope of business activities of the mainland branch should be similar to that of its parent entity in the free zone.
UAE mandates all mainland companies to have a physical office for opening bank accounts. A trade license is only issued on submitting the lease agreement to the respective DEDs of each emirate and after banks verify the physical office address for approving bank account opening. A free zone company in RAKEZ holding a Dual license can however start a mainland branch without any physical office space in the mainland and can carry out business activities on the mainland from its office in the free zone.
The Dual license has come as a ‘new year present’ offering considerable benefits to the investors. Once a RAKEZ Dual License is obtained, free zone companies can have wider access to the mainland customers to distribute products and offer services. As per rule, free zone companies are only allowed to conduct business activities within the free zone premises.
The dual license helps companies to avoid additional cost burdens on mainland office rentals and maintenance and provides complete access to the mainland without paying any such fixed costs and overheads. Daily operational costs are also avoided as there is no need for separate administrative and accounting setups.
RAKEZ Dual License however puts some restrictions on the business activities and only allows activities permitted by RAKEZ and RAK DED. Activities falling outside its domain and requiring ministerial approval are not allowed.
With the introduction of the Dual Licensing, the entire landscape of business setup in Dubai free zone and UAE has been completely transformed offering tremendous cost benefits to foreign investors. However, before opting for this license entrepreneurs and investors must carefully consider the restricted activities and seek the advice of corporate service providers based in Dubai UAE.
- GCC, Newsletter
- February 8, 2022
Economists believe that the GCC economies are all set to achieve higher and stronger economic growth in 2022 on the back of higher oil prices and the expansion of their non-oil sector. These two factors will primarily inject increased growth momentum in their economies through higher public financing and improved demand and employment generation.
Fiscal policy changes are playing a pivotal role in faster economic recovery in some countries through fiscal balancing and increased public financing and investments. VAT has been introduced in Saudi Arabia, Oman and Bahrain.
As per IMF forecast, the GCC as a whole will come back to a fiscal balance in 2023, for the first time since 2014. Oman has already reported the lowest budget deficit this year as a result of significant reforms besides higher oil prices.
Most of the sectors besides tourism, hospitality and transportation registered stronger recovery and were seen largely back to pre-covid level and in most of the countries. Saudi Arabia’s non-oil GDP also succeeded in exceeding its pre-pandemic level during last year. The financial services sector boomed across the region due to higher and easy liquidity and reduced risks of defaults due to government intervention.
Many GCC countries have been at the forefront to take rapid and timely mitigation measures against the covid 19 pandemic and UAE, Bahrain and Qatar are among the highest globally in rolling out of vaccines. Stringent government policies on mobility restrictions also supported the GCC nations in their fight against the virus to protect the economy.
Inflation is often a barrier to stronger economic growth prospects and though a major concern globally, does not appear to be too much of a concern for the GCC nations during 2022.
The UAE, Saudi Arabia and other countries in the GCC have also provided economic support through various initiatives and stimulus packages besides implementing strategic structural reforms and reducing budget deficits.
Emirates NBD, one of the leading banks in Dubai and UAE in its report said, “We expect this approach to continue in 2022. Saudi Arabia, the region’s largest economy, has pencilled in a 6 per cent decline in spending in the 2022 budget even as revenue projections were increased.”
“With Brent oil forecast to average just under $70 per barrel in 2022 and GCC oil production expected to rise, we expect Saudi Arabia, the UAE and Qatar to post budget surpluses this year, while Oman and Bahrain are likely to see their budget deficits narrow further,”
As per the Chief Economist of Emirates NBD, the Gulf economies are projected to grow 5.1% on average this year after recovering to 2.3% in 2021 from a 4.9% contraction during the previous year when the pandemic started.
“The recovery in the GCC economies gained momentum in the second half of 2021 as travel restrictions eased, tourism rebounded and domestic demand strengthened,” the report from Emirates NBD highlighted.
- Newsletter, Saudi Arabia
- February 8, 2022
Saudi Arabia is planning to attract $3 trillion of investment into the country’s economy over the next nine years as part of the National Investment Strategy (NIS) to drive economic growth and sustainable development. The Public Investment Fund including other global and local firms will play the most valuable role. The investment minister recently remarked.
In his address during Riyadh Future Minerals Forum on 13th January 2022, Investment Minister Khalid Al Falih said, “The kingdom is striving to be ‘the most investor-friendly destination and increase the participation of the private sector to ‘our large and growing economy, to 65 per cent.”
To promote investment contribution to the GDP, the Kingdom is planning for a global best in class investment law to attract more domestic and foreign investors for doing business in Saudi Arabia. The new law shall address the needs of both local and foreign investors. “It will be a global best-in-class law, it will be enacted this year, sooner than later,” the Minister highlighted.
Commenting on the crucial role the international investors play to support the country’s economic growth by establishing their business setup in Saudi Arabia, Mr Al Falih emphasized, “not only bring in the capital but bring in that know-how and best practices which benefit Saudi partners and the economy.”
To complement Saudi Vision 2030, the Kingdom of Saudi Arabia, the largest economy in the Arab world is steadily diversifying from an oil-based to the non-oil economy and is developing projects across key priority sectors including real estate, petrochemicals, manufacturing, transport and hospitality to drive investment and enhance demand and employment generation.
His Royal Highness Crown Prince Mohammed bin Salman noted last year that the Public Investment Fund is making huge investments infusing billions of dollars into the country’s economy to drive growth. USD 40 billion fund injection has been planned yearly during 2021 and 2022, HRH Crown Prince highlighted.
The Investment Minister added, “The kingdom will be – in terms of its regulatory system and judicial system – one of the best places to do business. We are already good by the way international investors and domestic investors have been finding investing in the kingdom to be stable, predictable and secure, but we are not happy with being very good and we want to be the best. And we believe that our regulations and reforms are taking us in that direction.”
The Kingdom witnessed higher FDI flow into its economy in recent times as also revealed by the issuance of new foreign investor license data registering the highest number of 478 new licenses during the first quarter of the previous year since 2005.
The NIS includes many initiatives including the expansion of the country’s railway network and plans to increase it with 8000 Kms of the new track thus tripling the sizing of the existing network. The investment minister informed.
“New rail will criss-cross the Kingdom and add to the network we already have,” Khalid Al-Falih told the Future Minerals Forum in Riyadh.
There is approximately 3,650 km of track on the Saudi rail network presently and it also plans to build more internal railway networks to jump-start its investment in the infrastructure sector, highlighted the Minister.
To realize Saudi Vision 2030 several socio-economic structural reforms have been rolled out in the Kingdom and approval of new privatisation and agriculture laws including a new mining law in January 2021 feature amongst them.
- Newsletter, Singapore
- February 8, 2022
Family businesses play the most pivotal role in the Asian economy and almost 85% of the companies in the Asia Pacific region are owned by family groups. Moreover, more than 20% of the top 750 global family businesses ranked by revenue are based in Asia with total revenue of approximately USD 2 trillion.
Trusts, unlike companies and not being a legal entity, have provided an effective structure for holding valuable assets for the beneficiaries and transitioning from the settlor to the trustee like a family business, for a long time. The absence of rigid formal requirements for the creation and operation of trusts, and the high flexibility of trust structures, make them particularly useful for estate and succession planning.
Trusts are being used for holding and passing on family wealth for centuries and providing great advantages of asset protection and disposal of family assets without lengthy probate procedure. Such trusts when combined with a Singapore Private Trust Company (PTC) provide a structure for enabling founders to take continued rapid commercial decisions about their business effectively without sacrificing the validity of the trusts. These private trust companies commonly known as family trust companies form the foundation of the Singapore family office.
If the settlor is willing the board of the PTC can consist of the settlor, members of his family and professional trusted advisors and the settlor and his family members have direct involvement in the decision making processes. A Singapore PTC vehicle thus allows members of succeeding generations of the family to be involved in the management of the PTC providing Management succession planning.
To avoid personal ownership issues, a Purpose Trust is often used to create an entity with no individual owning the structure. Typically, a separate non-charitable purpose trust is used, with the purpose of the trust being to hold the shares of the PTC and especially when control and confidentiality are concerned. The benefit offered is that the Trust can then be used to ensure the board of the PTC is properly controlled. This trust type is formed to hold assets for a purpose and without providing a benefit to any specific individual.
Though Singapore does not have legislation allowing non-charitable purpose trusts, it is possible for the shares in a Singapore PTC to be held by a trust in another jurisdiction with appropriate provisions for the non-charitable purpose trusts formation.
PTC can also hold other assets, such as real estate, private equity and hedge funds appropriate for the family and diversify to optimize assets as and when necessary. As PTCs have no motive for profit-making with no conflicts of interest, the entity can reduce costs of trust administration while ensuring the needed risk management as per the risk appetite of the family. PTC structure with high liquid assets can also invest in and facilitate the best Singapore company incorporation.
There is often slowness or reluctance on the part of the Independent professional trustees in approving certain assets for holding or entering into major transactions or Singapore PTC however provides greater choice to determine investments to be made with the trust fund based on knowledge of family members acting as members of the board.
Continuity of business is assured with a Singapore PTC because even if the administrator changes, PTC remains as a trustee.
In Singapore, the ownership of Singapore companies and PTCs are publicly available on the company register. However, certain confidentiality is maintained and ownership information about trusts is generally not available. A Singapore PTC owned by a purpose trust in a jurisdiction allowing a non-charitable purpose trust structure will maintain confidentiality about the owners of the PTC and the asset holdings of the trust.
As several family businesses in Singapore are focusing on leadership succession, besides wealth succession, a Singapore PTC structure can be beneficial as it familiarizes the family members with the wealth and business interests owned by the trust and provides appropriate instructions to the members in managing such assets.
The island nation with its current trust law and trusted legal system, world-class infrastructure, high level of digitization, openness to foreign talent, attractive tax regime and political stability has come up as a global hub for corporate and financial services activities. The city-state now has become home to many sophisticated wealth management entities including the Single Family Office in Singapore.
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