- Newsletter, Singapore
- May 17, 2021
The poorest in our society are the most affected class by covid 19 pandemic with minimum and no access to modern digital technologies including telephone, internet, television, and computers.
The digital divide refers and reflects this existing gap and inequalities emphasizing the importance of bridging the digital divide by providing digital infrastructures, services, and applications with an all-inclusive approach and empowering unprivileged individuals and societies to effectively utilize the information and communication technologies. It is feared that expanding digital technology can heighten digital inequalities with disinformation, harassment, and abuse, especially to women and children.
For combating the covid pandemic with sustainable growth, the UN President of the General Assembly recently convened a virtual one-day High-level Thematic Debate on Digital Cooperation and Connectivity on Tuesday, 27 April 2021, in the UN’s General Assembly Hall headquartered in the USA. The meeting was headed by the UN general assembly president Volkan Bozkir and aired online with some international speakers delivering speeches.
Singapore Minister of communications and Information, Mr. Iswaran participated in this high-level thematic debate and noted that though covid 19 has speeded up the digital transformation drive through the world, it has also increased the danger of inequalities between “the digital haves and have-nots”.
As per Roland Berger’s Digital Inclusion index 2020, Singapore ranked first among 82 countries across the world and Mr. Iswaran highlighted the need for an “inclusive, innovative, and interoperable,” digital future and expressed Singapore’s willingness to work in unison with other member states of the UN.
The one-day thematic debate stressed the immediate need for political commitment at the highest levels to address the digital divide in the current Covid-19 situation. The debate was held in response to requests made by the member states and was represented by private and civil society sectors including participants from more than 60 countries.
“To ensure that digital transformation efforts are inclusive, countries around the world must recognize the diverse circumstances faced by nations”, Mr. Iswaran deliberated in his speech.
He also emphasized that the measures taken by different countries and the experiences gained can be shared on UN platforms such as Internet Governance Forum for a strong and focused approach on digital inclusion.
“The platform brings together various stakeholders from the private and public sectors to discuss public policy issues relating to the Internet. The UN Roadmap for Digital Cooperation, which was released in June last year, is also a good start,” said Mr. Iswaran.
The UN has come up with a road map for bridging the digital divide that includes achieving universal connectivity by 2030, creating a more equitable world by promoting digital public goods, digital inclusion for all including the most vulnerable sections, strong digital capacity building, protection of human rights, global cooperation on AI, improving digital security, and lastly, a strong and effective architecture for digital cooperation.
“Singapore has a Digital Readiness Blueprint that could serve as a useful reference for other countries in fostering digital inclusion”, Mr. Iswaran pointed out.
The Singapore digital readiness blueprint acts as a guide to equip all segments of society including children in lower-income households, senior citizens, micro, small and medium-sized enterprises with digital skills and access.
“Countries must also be innovative in their efforts to end the digital divide”, emphasized Mr. Iswaran.
“The accelerated pace of digital transformation has created opportunities but is also profoundly disruptive to some, and requires complex trade-offs,” Mr. Iswaran narrated.
“In Singapore, the Digital for Life movement that was launched in February will encourage ground-up projects that bridge the digital divide”, he emphasized. As per him, the move shall provide resources to enhance basic computer skills.
Singapore treats the ‘Bridge the Digital Divide’ initiative as corporate social responsibility and advocates a new company set up in Singapore upon the policy of partnerships and collaboration with non-profit organizations and individuals working together for this cause.
The Minister also highlighted the importance of an interoperable digital framework for a brighter global digital environment that would help individuals and businesses gain access to global opportunities.
“In Asian, initiatives like the ASEAN Data Management Framework will help to facilitate the flow of data across borders to unlock new business opportunities, especially for SMEs”, Mr. Iswaran remarked.
He also added that the data management framework shall promote data governance including management and protection of data.
The first ASEAN Digital Ministers’ Meeting held in January approved this initiative led by Singapore.
In an effort towards bridging the digital divide, the Singapore government solicits and encourages mobile, laptop, tablet, and other digital gadgets donations from investors looking for company registration in Singapore.
- Newsletter, U.A.E
- May 17, 2021
UAE Minister of State for Financial Affairs, Obaid Humaid Al Tayer participated in the recently held spring meeting of the International Monetary and Financial Committee (IMFC) convened in a virtual format together with the annual meetings of the International Monetary Fund (IMF) and the World Bank Group during April 5 to 11 2021.
Ministers of Finance and development, Central Bankers, representatives of civil society organisations and private sector executives attended this meeting to discuss global economic concerns, the latest global economic developments and the financial and economic outlook due to the Covid-19 pandemic. The agenda of the meeting also included poverty eradication, the effectiveness of financial aids, global economic and financial systems including issues of high debt risks and international economic and development policies.
The Minister of State for Financial Affairs emphasized UAE’s resolve to work hand in hand with the international communities to overcome the risks and challenges posed by the pandemic and ensure sustainable economic recovery and growth.
Abdulhamid Saeed, Governor of the UAE Central Bank, Kristalina Georgieva, Managing Director of the International Monetary Fund, and many finance ministers from different countries also took part in this meeting.
Al Tayer appreciated IMF’s initiatives and timely interventions for world economic recovery with a revised growth prospect of six per cent for 2021 globally from a negative growth experienced during the previous year that also supported more foreign company formation in Dubai.
The minister also echoed similar concerns as reflected by IMF over the possibility of an imbalanced economic recovery in the Mena region widening the inequality gap arising out of disproportionate economic and social effects and stressed upon fiscal priorities aimed for achieving inclusive sustainable economic development.
“We welcome the Global Policy Agenda devised by Kristalina Georgieva, managing director of the International Monetary Fund, as a comprehensive framework for recovery. The UAE will continue supporting the IMF’s endeavours to mitigate the financial and economic repercussions of the pandemic to achieve global recovery and attain strong, sustainable, balanced and comprehensive economic growth,” he remarked.
Al Tayer added that healthcare continued to be the topmost priority including production and distribution of vaccines for speedy economic recovery. He also informed that USE joined the global efforts to develop and produce covid 19 vaccines with a targeted figure of 200 million doses of Hayat-Vax vaccine annually.
The minister welcomed the initiative of IMF to reallocate Special Drawing Rights (SDRs) for middle and low-income countries as it would help them to fund healthcare systems and take preventive measures against the virus. He also appealed for increased lending and technological support to these countries.
He also noted, “Beyond just recovery, we must pursue socially inclusive and environmentally sustainable models of growth as the only path forward in the post-COVID-19 era, where the IMF can support by facilitating the exchange of expertise, supporting capacity building, and enabling funding efforts.”
Al Tayer added: “As a general principle, we urge the IMF to advance its climate agenda in accordance to the Paris Agreement, which enjoys multilateral consensus, by supporting countries to achieve their Nationally Determined Contributions, while considering their national circumstances and development priorities.”
UAE has taken several social, economic and political measures to mitigate the adverse effects of the pandemic and has demonstrated its commitment by promoting new business set up in Dubai, he highlighted. He also made some additional recommendations including maintenance of a strong, adequately resourced and quota-based fund and highlighted the need for transparent communication to win and maintain public trust.
The IMF Board of Governors responsible for monitoring and management of the world financial and monetary system and timely actions on disruptive issues e.g. covid 19 pandemics are provided with appropriate reports and suggestions during the IMFC meetings.
- Article, Singapore
- May 13, 2021
Growth in businesses prompts companies to enter new global markets. However, this expansion comes with increased regulatory challenges and involves additional statutory compliances such as money laundering, data privacy breaches, corruption, etc. Failure to comply with these regulations can impact businesses adversely and may even have legal complications.
Your prospective business partner with whom you intend to partner for Singapore company incorporation may provide you with incorrect information and something different from what has been lodged with government authorities.
WHY VERIFY
A business organization needs to verify a company before entering into any formal agreement and clearly understand the potential liabilities under anti-corruption laws and other legislations. The verification process allows you to make informed decisions about which partners you can do business with and in what capacities.
Initial verification and due diligence provide you with opportunities to know your prospective business partners better and gain insights on many aspects including
- If the business entity exists and functional
- If it is free of any fraudulent activities
- If the entity makes timely disclosures and complies with all statutory requirements
- If the entity has the good financial health
- If the business enjoys a favorable opinion of the company auditors and directors for an effective administrative function and good business governance.
- Business risks associated with the entity
- Business opportunities and optimization potential
- Mitigation planning that can lower the risks of working with the entity
- Corporate registry data can provide you information on the owner’s percentage of shares, company structure including subsidiary and beneficiary companies.
- If the entity has any legal or civil actions pending against it.
HOW ACRA HELPS?
ACRA, the regulatory body for all Singapore registered companies establishes, administers, keeps, and maintains repositories of documents and information relating to business entities that are registered with it and to provide access to the public, suppliers, customers, and others stakeholders to such documents and information.
The information lodged with ACRA allows both the public and stakeholders to carry out checks on the background of the business entities including the persons involved as its policy to maintain and promote transparency and trust in the business environment and all business dealings.
Basic information on business entities registered in Singapore is available at ACRA’s online Business Directory Search service at BizFile+.
Information collected by ACRA is organized and maintained as several information resources as the business profile report. All reports are available at iShop@ACRA on making required payments and are sent to the requestor’s email.
The iShop@ACRA portal enables both businesses and the public to access information for decision-making purposes and business facilitation.
There are four authorized Information Service Providers (ISP) with ACRA for sharing value-added information to the public and are
DC-Frontiers-Pte-Ltd ( Handshakes)
Dun-and-Bradstreet-Pte-Ltd ( Singapore)
Experian-Credit-Services-Singapore-Pte.-Ltd.
HOW TO VERIFY
Every business or company has its credit rating and legal status which are often verified by the stakeholders to assess its worthiness before establishing any business relationship.
You can run a background check of your prospective business partner either by yourself or by seeking the assistance of a third-party investigator or a company secretarial services or a law firm.
Any verification process must start with ACRA that provides both free online directory search and paid reports to the public for verifying a business entity with the name typed in the search file.
The steps involved are
- Going to ACRA’s free online directory search platform https://www.bizfile.gov.sg/
- Typing the “company name” that you need to verify
- Verifying the CAPTCHA verification code once prompted to ensure that you are naturally human and not a spam-sending computer or robot
- Displaying information related to the company.
The information displayed comprises of
1) The company’s name, address, UEN, and industry as well as the validity of the registered business address of the company and any other address than that displayed on the website should be a matter of concern raising suspicion about the company.
2) The status of the business entity will also be displayed and a “live” status will tell that the company presently exists and operating.
3) The legitimacy and company’s adherence to an annual filing with compliance rating will also be displayed with a green tick appearing that indicates the company complies with the annual filing requirements under the Singapore Companies Act. A red cross signifies non-compliance and raises a red flag about the company.
A green tick also means that the company has held its Annual General Meeting (AGM) on time with the latest accounts and financial statements presented at the AGM.
A green tick also confirms that the Annual Return filing has been submitted within 30 days of convening the AGM.
It is always advisable to hire a professional services team based in Singapore who can draw meaningful conclusions from reliable data with multi-level deep due diligence.
- Article, India
- May 12, 2021
Early 2009, India committed to converging IND AS with IFRS in the G20 meeting however suspended its implementation due to some tax issues. The matter again came up during the 2014-15 Indian union budget and the Ministry of Corporate Affairs (MCA) started working in this direction jointly with the Institute of Chartered Accountants (ICA). As of now, 123 countries across the world have already converged their accounting standard with IFRS and India too, as one of the growing world economies is preparing to do so.
Ind-AS and IFRS
Indian law stipulates that all corporate establishments including their auditors must adhere to a standardised set of rules in preparing, reviewing and reporting financial statements to standardise the accounting process and for the ease of comparing financial information amongst companies and accurately predicting the financial health of individual corporates. Ind AS is the accounting standards issued by the Accounting Standards Board (ASB), a committee governed by the Institute of Chartered Accountants of India (ICAI) and represented by government bodies, academicians, and professional institutions such as CII, FICCI, ASSOCHAM, ICAI. MCA, on the other hand, decides on the scope and applicability of these accounting standards and has notified some 39 Ind AS for mandatory adherence.
For consistency in accounting language, practices and statements to improve transparency, International Financial Reporting Standards (IFRS) has long-established some common rules issued by the International Accounting Standards Board (IASB). The rules specify requirements for maintaining and reporting company books of accounts defining types of transactions and other accounts related activities that affect companies financially. The IFRS Foundation stipulates the standards to “bring transparency, accountability and efficiency to financial markets around the world… fostering trust, growth and long-term financial stability in the global economy.”
The Ind AS are named and numbered in the same way as the IFRS. The National Advisory Committee on Accounting Standards (NACAS) recommends these standards to the MCA.
Applicability of Ind-AS
As per the Companies Act, 1956, Sub-section 3(A) to 211 specifies that corporate financial statements be compiled as per Indian accounting standards including profit-and-loss accounts and balance sheets and makes these standards mandatory for the following entities
- Listed companies with listing in India as well as abroad
- Companies with a net worth of less than Rs 500 crores and preparing for being listed
- Holding companies, subsidiaries and joint ventures of listed companies
- Unlisted companies with more than Rs 250 crores net worth
- Non-Banking Financial Companies (NBFC) exceeding a net worth of Rs 50 crores
- Holding companies, subsidiaries and joint ventures or associates of NBFCs, with more than Rs 50 crores net worth
- Unlisted NBFCs with a net worth between Rs 250 crores and Rs 500 crores
- Holding companies, subsidiaries, joint ventures or associate companies belonging to unlisted NBFCs having a net worth between Rs 250 crores and Rs 500 crores
Other companies not mentioned above may set their own accounting rules in preparing their financial statements under Section 129 of the Companies Act, 2013. However, once a company decides to follow the Ind- AS, it cannot revert to previous accounting methods.
Moreover, once a company goes for Ind-As it becomes automatically applied to all its holding companies, subsidiaries, associated companies and joint ventures, irrespective of its qualifying status.
For Indian companies that have foreign operations, stand-alone financial statements may be made, with the Individual country-specific jurisdictional requirements apply to all Indian companies with overseas operations and these companies must also report their financial numbers as per Ind-AS for their parent company in India.
Benefits and Challenges of Ind-As
Though strongly recommended owing to several benefits, it also comes with its fair share of challenges while converging Ind-AS with IFRS because of many regulatory and other issues involved.
Benefits
- Enhanced accessibility of Indian companies to the world’s financial capital markets for raising foreign funds on cheaper and more favourable terms facilitating business growth and expansion.
- Increased cross Border trade and Investments as the foreign listing will be easier for Indian firms with new market penetration.
- Reduced financial reporting as separate and duplicate financial statements will no longer be needed for Indian Companies saving time and money.
- More access to knowledge and skills from foreign counterparts.
- Higher quality of financial reporting with improved reliability and better acceptability amongst international investors.
- Skill development and better career prospects of Indian accounting professionals in foreign countries.
Challenges
- Difficulty in implementation due to inadequate training and skills and a greater need for additional training and qualification.
- Legal hurdles requiring amendments in Companies Act 1956, SEBI act 1992, IT Act 1962 etc.
- Different results for company performance & earnings due to different systems in determining the value of assets.
- An increase in investment and cost due to a need for IT systems overhaul.
- Difficulty in implementation in the SME sectors, a major contributor to the Indian economy due to lack of skills and resources.
Conclusion
Though IFRS convergence with the Ind-AS and a successful transition is a big and challenging task, once implemented the Indian businesses can reap significant benefits out of it. Additionally, Indian businesses establishments cannot afford to be indifferent at a time when the government’s topmost economic objective is attracting more foreign investments in India.
The newly framed Ind-AS are the converged form of IFRS and ICAI and, most of the provisions of IFRS have been accepted by MCA as it is. Barring a few items, almost all other provisions are the same as IFRS.
- Newsletter, Singapore
- May 6, 2021
In an attempt to boost the already developed technological ecosystem of Singapore, the Economic Development Board (EDB) on 12th November 2020 announced the official launching of Tech. Pass specifically targeting the founders, leaders and technical experts with proven experience in globally reputed and established high growth technology companies.
Tech. Pass is a Singapore work permit for foreigners that allows established global tech professionals to come to Singapore for spearheading technical innovations and training the local Singaporeans on the latest technologies. The Tech. Pass is an extension of the Tech@SG programme which was launched in 2019 as part of Singapore’s efforts to attract smart Industry 4 technical talents to promote Singapore’s position as one of the top technological hubs.
Tech. Pass is now included in the Singapore work pass schemes in Singapore, which include the Employment Pass in Singapore and Entrepreneur Pass (EntrePass) however with some differences in administering bodies, validities and fees.
Since the time of launch, the Tech@SG programme has been providing best in class technical talents to many companies in potential growth areas including digital, biotech, cleantech, agritech, fintech, medtech.
This programme has also been providing necessary access to business networks and facilitating employment pass in Singapore (EP) applications for the core technical team members comprising highly accomplished entrepreneurs, business leaders, or technical experts.to Singapore and provides them with flexibility in participating in a variety of activities that can contribute to the tech ecosystem.
However a Tech. Pass holder cannot be automatically eligible for the Tech@SG Programme unless their company meets the separate company eligibility conditions to qualify for the programme.
Tech. Pass offers multiple benefits over other Singapore work passes with greater flexibility in their participation in certain activities in Singapore including
- Start and run one or more tech companies;
- Become an employee in more than one Singapore-based companies
- Become a board of director
- Be a shareholder or investor
- Engage in Singapore companies as advisor or mentor
- Become a Lecturer/ Professor in a Technical Institute
- Work as a corporate trainer
- Bring a spouse, children, and parents on either a Dependant’s Pass (DP) or a Long-Term Visit Pass (LTVP).
Singapore has come up with a set of Criteria for Tech. Pass programme with a validity of two years allowing the holder to
- Start and operate one or more tech companies
- Be an employee in one or more Singapore-based companies at any time
- Transit between employers or to an entrepreneur
- Be a consultant or mentor, lecture in local institutions of higher learning, or be an investor and director in one or more Singapore based companies
- Sponsor stay for spouse, children, and parents in Singapore on either a Dependant’s Pass (DP) or a Long-Term Visit Pass (LTVP) issued by MOM
Eligibility Criteria for Tech. Pass has been defined by EDB and to be eligible for the pass, applicants must satisfy any two of the following conditions:
- Drawn a minimum fixed monthly salary (in the last 1 year) of SGD 20,000 or equivalent foreign currency
- Possess minimum 5 cumulative years of experience and in a leading role in a tech company with a valuation/market cap of at least USD 500 million or at least USD 30million funding raised
- Have at least five cumulative years of experience in a leading role with major contributions in the design development and deployment of a tech product with a minimum of 100,000 monthly active users or at least USD 100 million annual revenue generation
- Business owners and any other candidates with annual income over SGD 240,000 or its equivalent in a foreign currency
Tech. Pass is renewable only one time for two years subject to fulfilling the following conditions
- An assessable income of SGD 240,000
- Assessment is done by the Inland Revenue Authority of Singapore for salaries and/or business income
- Proof of Annual business spending of minimum SGD 100,000
- Employing at least 1 local PME4 or 3 LQS5 and
- Performing a minimum of two roles mentioned in the two below columns and one of which should be from the first column as a minimum
First Column
- Founded a company engaged in tech-based or tech-enabled products or services
- Served a top role in a Singapore based Tech company such as Asia Pacific MD, CEO, CTO
- Worked in at least two Singapore based Tech companies
- Employed in a Singapore Tech company as a technical team leader and a particular tech field
- Employed as a Technical Team leader in two or more Singapore based companies
Second Column
- Served a Board of Director in a Singapore based company and not necessarily a Tech company
- Worked in Singapore-based start-up as a mentor/advisor
- Employed in Singapore Institute of Higher Learning (IHL) as a professor or lecturer or adjunct professor/lecturer
- Engaged as a trainer in some form not covered by 2nd and 3rd points mentioned above such as workshops, corporate training classes etc.
- An Investor in one or more Singapore based Tech companies.
The Tech. Pass Application Process involves
1. Pre-application activity include verification of eligibility and preparation of supporting documents
2. Applying for Tech. Pass by downloading the Tech. Pass application form for yourself and dependents if applicable
3. Filling up the soft copy of the application form and obtaining an auto-generated payment reference number
4. Taking print out of the application form and getting the form signed with relevant supporting documents specified in the application form
5. Making Payments of SGD 105 for each application via PayNow or Telegraphic Transfer
6. Uploading completed and signed application form with the following documents
- Payment receipt
- Travel documents and
- Supporting documents for dependants confirming your relationship with the DP/LTVP applicant, verification of Vaccination Requirements document issued by HPB, as appropriate
It usually takes around 8 weeks to process Tech. Pass applications unless there are requirements for additional documents and information.
Once approved, you will receive an IPA letter by email providing 6 months for coming and getting the pass issued for the start work or business activities in Singapore.
The Fees involved is SGD 225 for each pass and SGD 30 for each Multiple Journey Visa, whenever applicable. No extension to the IPA is granted.
The Tech. The pass has come into effect from January 2021 with a quota available for the first 500 applicants on a first come first serve basis.
- Article
- May 6, 2021
The Coronavirus pandemic has taken a massive toll on most of the global economies and the GCC countries are no exceptions. Mandatory lockdown measures along with social distancing have considerably slowed down economic activities and consumer demands and spending, and in turn, greatly reduced Government revenues.
With differing VAT requirements amongst the GCC countries and the recent hike in the KSA VAT rate due to fiscal imbalance, there will be a definite impact on Inter-GCC VAT transactions. Significant legislative updates and developments are also underway along with changing guidelines and clarifications from Tax authorities and ministries. Complying with the new VAT regulations and requirements may pose serious challenges for companies in the GCC countries and outsourcing expert help and guidance would surely make the perfect sense in the post-pandemic era.
IMC, with its long exposure in handling VAT and GST matters, can be a potential source of support for the GCC companies.
History of VAT in the GCC Countries
Value Added Tax (VAT) was first introduced in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) back in 2018. These are the two Gulf cooperation council (GCC) countries where VAT was levied at a standard rate of 5% and on taxable goods and services supplied within the respective jurisdictions, including the imports of goods and services. Since then many developments have taken place in VAT in GCC countries.
Six GCC countries; the UAE, Bahrain, KSA, Oman, Qatar and Kuwait signed the GCC VAT Framework Agreement in June 2016. The agreement is a set of rules based on which individual GCC countries would introduce their VAT regime domestically.
After the UAE and the KSA in 2018, VAT was introduced in Bahrain in 2019 and a staggered manner. Oman Ministry of Commerce and Industry has announced the VAT implementation date in 2021. However, no official news has been aired by Qatar and Kuwait officials on VAT implementation timeline.
With VAT applicable in the UAE and the KSA for more than two and a half years now, there has been an increase in VAT Audits by the local authorities. There are however many VAT related disputes in these two jurisdictions on VAT assessments and penalties.
IMC Tax Consultants are well conversant with adequate skill sets in VAT and could be the perfect choice in resolving VAT disputes and avoiding penalties.
Introduction of VAT in the GCC Countries
Not so distant past, oil and gas were the most significant commodity to the growth and development of GCC countries. However, with Brent crude prices falling sharply in the global market it has been a wise and sustainable move for the GCC countries to diversify their sources of revenues. VAT, an indirect tax is also such a move to generate income for the Governments.
As VAT ultimately gets transferred to the end customer, the general consumers take the maximum hit. The GCC countries didn’t want to put much burden on general consumers and kept the standard VAT rate lower. The KSA, however in its official release in May 2020 tripled the VAT rate from 5% to 15% in a bid to counter the economic implications of Coronavirus pandemic. This sudden and surprising move of tripling the VAT rate has been primarily intended to address the fiscal deficit caused by lower consumer demands and loss of tax revenues, loss in revenue due to falling oil prices, and increase in Government spending towards healthcare. The UAE Ministry of Finance announced that there would be no change in the VAT rate in the UAE.
Comparison of VAT amongst GCC Countries
There are different VAT requirements amongst the GCC countries and are based on the following
1. Industry-Specific Requirements
- Foods
- Financial Services
- Healthcare
- Oil and Gas
- Transportation
- Education
- Real Estate
2. VAT Documentation Requirements
- Tax Invoices
- Record Retention
3. VAT Returns -Input Tax Recovery
- No Recovery- Blocked Input Tax
- Partial Exemption
4. Supplies
- Internal Supplies
- Free goods/services
- Bad debts
5. Transitional Provisions
- Time of Supply
- Contracts
- Registration
6. Penalties
VAT Hike in the KSA and Implications
It was tough going for the KSA Government post-Covid and compelled it to triple the VAT rate to 15% from the earlier 5%. Though the entire picture and associated implications are still not very clear, an overall assessment has been made in this regard.
Implications for Consumers
VAT is a consumption tax and mostly lowers the spendings in the middle and lower-income people. An instant hike in spending was noticed in the car and other luxury good segments just before the new VAT rate was put into force.
Implications for Business
As VAT is finally passed on to the end-user, many businesses have been considering sharing the tax burden with consumers for remaining competitive. The profitability of financial services and real estate businesses with the majority of their goods and services being tax-free is adversely affected as they are not able to claim input VAT incurred.
Schools and hospitals would also be in a disadvantageous position as they are also prohibited to claim VAT on their expenses.
As the VAT rate has gone up, the risk of making mistakes in accounting has also gone up simultaneously. Error-free reporting of VAT has become vital for avoiding hefty penalties.
Implications for GCC
As per the VAT Framework Agreement amongst GCC countries, the VAT rate needs to be aligned across the six participants. The future of VAT in the GCC region is still unclear and it is also to be watched if the remaining countries enhance VAT rates like the KSA.
Transitional Provisions
All existing contracts need to be reviewed for the transitional provisions in terms of the effective date of the newly increased VAT rate and continuous supplies.
IMC can help you with your VAT Compliance in the GCC
IMC VAT Consultancy Services is managed by professionally qualified Tax consultants who keep themselves constantly updated with the changing rules, regulations and other requirements of VAT in the GCC countries.
As many queries about the VAT rate hike by the KSA Government remain unanswered at this point of time, IMC is keeping a close eye on all the latest developments being unfolded. All businesses must evaluate the repercussions for their operations now and plan necessary preventive measures.
With growing complexities in VAT regulations and requirements in the GCC, it is strongly recommended that you hire IMC VAT Consultancy Services for efficient handling and timely compliance of VAT related issues.
- Article, Singapore
- April 30, 2021
Employment Pass, often known as E Pass and the Skilled Pass known as S Pass are two separate work passes meant for professionals with high-level qualifications and technicians with mid-level skills respectively.
Though both are work passes, there are many differences between these two based on the following criteria.
Free Self-Assessment Tool Check Your Eligibility for EP or S Pass
Applicability
Employment Pass in Singapore applies to highly skilled professionals with high qualifications and job offers in Singapore. The Ministry of Manpower (MOM) specifies the standard occupations in this link.
S Pass is applicable for Mid-level skilled staff or technicians.
Eligibility and Minimum Salary Requirements
A foreigner having a university degree, professional qualifications, or specialized skills is eligible for E Pass provided he/she has a job offer in Singapore in a managerial, executive, or specialized capacity with a fixed monthly salary of at least SGD 5,000. Older and more experienced candidates need higher salaries.
S Pass is applicable for overseas workers with relevant experience and a degree, diploma, or other technical certificates in a minimum one-year full-time study course. He/she should earn a fixed monthly salary of a minimum of SGD 3,000 while older and more experienced applicants need higher salaries to qualify.
Find Out Your Foreign Employee Quota
Refer to this blog if you have any questions about Singapore E Pass & S Pass. We have covered all relevant details here.
Application for Passes
Validity
With our experience and expertise, we can process your visa application quickly and reliably.
Levy
Levy, the pricing mechanism is applied to regulate the number of foreign workers in Singapore and its rates are periodically reviewed and revised.
For E Pass holders, Skills Development Levy (SDL) applies to both full-time and part-time foreign employees. Employers pay a levy up to the first SGD 5000 of the monthly salary @ 0.25% of 5000 or SGD 2, whichever is higher.
For S Pass holders, both foreign worker levy and Skills Development Levy apply and an employer must pay the levy for all S Pass holders. The levy is enforced from the day of S Pass issuance and only ends with cancellation and expiration of S Pass. For S Pass holders employed in the services sector, the levy rate is as under
|
% of total workforce |
Monthly |
Daily |
||
|
Services Sector |
Tier 1 |
Upto 10% |
SGD 330 |
SGD 10.85 |
|
Tier 2 |
10%- 13% |
SGD 650 |
SGD 21.37 |
|
|
Manufacturing Sectors |
Tier 1 |
Upto 10% |
SGD 330 |
SGD 10.35 |
|
Tier 2 |
10% – 18% |
SGD 650 |
SGD 21.37 |
|
|
Other Sectors |
Tier 1 |
Upto 10% |
SGD 330 |
SGD 10.85 |
|
Tier 2 |
10%-20% |
SGD 650 |
SGD 21.37 |
|
Quota
No Quota applies for E Pass
For S Pass quota applies and is as under
For manufacturing sectors, the S Pass quota is reduced from 20% to 18% and applicable from January 2022. It is further reduced to 15% from January 2023.
You cannot hire more S Pass holders than 13% of the company’s total workforce in the services sector.
For construction, marine, shipyard, and process, the S Pass quota was reduced to 15% from 18% effective January 2023.
What is the Application Process for Employment Pass or S Pass?
- Posting a job ad on a government-approved website matching the occupation as per Employment Pass / S Pass application.
- Submitting the Employment Pass / S Pass application by the employer and must be the same as per the job advertised. The Ad must be open for at least 28 days after publication and another 28 days if changes are made.
On the expiry of the active Job ad, the Employment Pass / S Pass application can be initiated.
No Employment Pass / S Pass application is allowed if the employer takes more than 3 months to fill in the vacancy.
Requisite Documentation
In pursuing an S Pass or Employment Pass application, a collection of mandatory documents necessitates submission to the Ministry of Manpower (MOM). The prerequisites for each employment visa exhibit subtle variances, yet overall, the subsequent documents are requisite:
- A duly filled-in application form
- Detailed particulars of the applicant’s passport and academic credentials
- An offer of employment encompassing particulars regarding job responsibilities, remuneration, and perks tendered to the applicant, in addition to the period stipulated in the employment accord
- The curriculum vitae of the applicant, coupled with records delineating professional experience
- The corporate profile of the employing company, along with fiscal declarations
It is crucial to bear in mind that MOM may make a requisition for supplementary documentation or data during the application procedure, contingent upon the unique circumstances of the application.
The S Pass and Employment Pass, while both designed for foreign PMETs in Singapore, adhere to distinctive criteria and serve disparate purposes. With a comprehensive comprehension of the regulations and meticulous groundwork, the engagement of foreign talents in Singapore can manifest as a constructive contribution to the expansion of commercial enterprises and the economic landscape.
Feel free to contact IMC Group to discover how we can assist you in establishing your team in Singapore. We eagerly anticipate the opportunity to provide expert guidance throughout the entire process.
Useful Links
Free official Self Assessment Tool is available to check eligibility of E Pass or S Pass
- Article, U.A.E
- April 20, 2021
Overview
More and more investors across the globe are discovering Dubai as their future business destination and many companies located in the UAE are planning to hire people from abroad to meet their human resource recruitments. Skilled professionals in great numbers from other countries are also seeking to work in this business and tax-friendly Middle East state.
However, this process of global hiring poses serious issues when the companies recruiting manpower do not have the right resources to successfully address all the regulatory requirements of the local administration and other government authorities.
Though there are many guidelines available, practically it is very difficult for someone new, to properly understand all the processes involved in appointing and retaining new hires till the time it is done by oneself. Multiple visits to government offices are normal and on various pretexts either for a document or payment of fees or some other reasons making it very complicated and embarrassing just to realize the importance of external support from an experienced and professional pro services in Dubai.
Areas for Employers to Outsource PRO Services In Dubai
1. Immigration & Labour Contracts
For a new business set up in Dubai mainland, one must register with the Department of Naturalization and Residency (DNRD) and the Ministry of Labour (MOL) for allowing the business entities to hire and appoint the required labour and professional staff from overseas.
For businesses established in free zones, a registration with free zone authority is a must. On registration, you must interact with the Free Zone Authority to initiate the process of residence visas and work permits. However, a legal document detailing the conditions and procedures of employment between the employer and employee becomes mandatory for ensuring securities of both parties.
The labour contracts are required to be documented both in English and Arabic necessitating careful drafting and translation and needing help from pro services in Dubai. Moreover, even after the introduction of online services by the UAE government for easing this process, it remains to be very complicated and almost always requires assistance from pro services.
2. Employment Visa & Residence Permit
For entry and work in Dubai, both an Employment Visa and Residence Permit are required. These documents are to be provided by the employers and pro services in Dubai can be of great help in obtaining these documents as they are well conversant with the procedures involved and familiar with the working of the immigration department.
3. Emirates ID
Emirates ID is an identity card issued by the Federal Authority for Identity and Citizenship. It is a legal requirement for all UAE citizens and residents alike and they should carry it with them at all times. Employers are not allowed to withhold the Emirates ID cards of their employees. The ID card comes with an electronic chip containing all employee data.
Obtaining an Emirates ID card for your employees can be complicated and time-consuming due to the application process and documentation requirements as it requires filling up of an eForm at one of the authorised typing centres or through the online form available on the website of Federal Authority for Identity and Citizenship (FAIC) and then receive an SMS containing information about the registration centre. Dubai pro services can save the employers lots of time, money and hassle only requiring employee data to be given to the services.
4. Dispute Resolution
Where there is a dispute between an employee and employer, an application must be made to the MOL for resolving the dispute. In case, an employer is faced with such a situation, he/ she can seek guidance from Dubai pro services.
5. Transfer of jobs
The rules relating to workers changing jobs from one company to another are restrictive, complex and changeable. So when employers need to transfer their employees to any other company owned by them, pro services can often facilitate this process of transfer of jobs between two companies jointly owned by an employer.
6. Medical Insurance
Employee health-related issues take utmost priority in Dubai. It is a must for employees to undergo strict medical examination during the Visa approval process. The medical insurance is integrated with the Emirates ID and Dubai has made it compulsory for all employers to have employee medical insurance.
The medical insurance is tricky considering the cost and suitability aspects and local pro services based in Dubai can help employers to choose the best medical insurance scheme out of many different alternatives available to them. Because of the familiarity of Dubai pro services with local insurance agents, they can assist employers to choose the most cost-effective and useful scheme.
Conclusion
Reinforcing the importance about pro services in Dubai, it is equally important to state that information are sometimes very hard to come by in Dubai despite every government bodies owning their websites with regulations, procedures, fees etc. and employers can only seek help and guidance from local expert pro services in Dubai for managing employees and running their businesses.
- India, Newsletter
- April 15, 2021
India and the UK share long historic ties and as one of the leading G20 investors, the UK has made an investment of 29.56 billion USD in India since 2020 and the number of UK businesses has jumped more than two times during this period with many new India company formation.
The sectors that have been witnessing strong investment growth are healthcare, consumer goods, retail, and infrastructure. Both the countries have long been working to strengthen and improve the trade and investment relationship including enhancement of collaboration in technology and pharmaceuticals.
India having the world’s third-largest startup base can join hands with the UK which has the third-largest Unicorn base in the world to create business growth and employment.
There is no bilateral free trade agreement (FTA) between the UK and India however as a part of a roadmap to future FTA and during the 14th Joint Economic and Trade Committee (JETCO) meeting convened in 2020; trade and investment ministry officials from both countries committed to set up Enhanced Trade Partnership (ETP) between the two countries expected to be officially launched during the visit of the UK Prime Minister during 2021.
UK Investment Status in India
In collaboration with the Department of International Trade (DIT) and Confederation of Indian Industry (CII), Grant Thornton Bharat a reputed consultancy firm in its ” Britain Meets India” report emphasized a stronger trade and investment relationship between India and the UK, especially after covid and post-Brexit. The report highlighted some facts about some information on UK investment in India as under
- UK FDI in India increased from USD 898 million in 2015-16 to USD 1,422 million in 2019-20.
- 572 UK companies in India contributed a total turnover of 46.73 billion USD providing direct employment to 416,121 people
- The goods and services sector contributed to 26.7 billion USD during 2020
- India is the preferred country for the UK for economic partnership especially post Brexit
- Top-ranked sectors being watched by the UK companies are industrial and business service sectors with Maharashtra topping the list of preferred investment destinations followed by Haryana, Delhi, Tamil Nadu, Telangana, and Karnataka.
- Enhanced and continued business collaboration during post covid made India-UK trade and investment partnership stronger.
- Supply chains for Indian pharmaceutical products and surgical masks remained uninterrupted for the UK and other countries as humanitarian gestures including future investment for mutual economic prosperity
- Relentless collaboration between the two countries in the research, design, and manufacturing of vaccine has further enhanced the investment relationship between the two countries
- Dyson Technology, Aviva Life Insurance, Diageo Business Services, RMD Kwikform, and FMC Technologies have been termed as the fastest growing UK companies in India, and Vedanta, Vodafone, Hindustan Unilever, United Spirits India have become the top 20 UK companies by revenue. I
- Top UK employers in India include G4S Group, Vedanta Resources, and HSBC Holdings
Sector-Specific Business Opportunities in India for UK Investors
As per Invest India report, the following Indian business sectors are drawing maximum interest amongst the UK investors
Indian Chemicals sector nearly contributes to 3 percent of world production of chemicals with more than 80,000 products and generating more than 2 million people and permitting 100 percent FDI through faceless automatic route. Tata Chemicals, Atul, Reliance, and Asian Paints are major players in this segment.
The electronics and Telecommunications sector with smartphone manufacturing is the second-largest in the world with a projected turnover of approximately 400 billion USD by 2025. FDI up to 100 percent is allowed through an automatic route. Consumer and industrial electronics, computer hardware, and LEDs do also come under this sector and Samsung, Apple, LG, Intex are the major players.
The Food Processing segment is the second-largest in the world and dairy, fruits, vegetables, poultry, fisheries come under this sector with 55 mega food parks spread across the country. Britannia, Nestle, Amul, and Hatsun Agro are some major players, and 100 percent FDI is permitted through the automatic route.
The E-commerce and Retail sector is the third-largest in Asia and online grocery, e-pharmacy, and social commerce are the sub-sectors. 100 percent FDI is allowed and Adidas, Marks & Spencer, Dyson are some major players.
Aerospace and Defense sector with the second largest armed forces and worth 42.7 billion USD allowing 49 percent FDI under automatic route and 100 percent under the government route with BEL and HAL being the major players.
The IT and Business Process Management (BPM) sector contributes to 8 percent of the country’s GDP with more than 500,000 high skilled professionals.
Why Choose India Over Other countries
As per the recent forecast, India would be the third-largest economy in the world with a huge domestic market and has considerably eased the process of How to register a private limited company in India for improving the country’s ranking in the ‘ease of doing business index.
The following are some reasons that are attracting overseas investors to do business on Indian Soil
- India has received 73.45 billion USD FDI inflow in 2019-20 and one of the fastest-growing economies
- Global maritime trade to shift from the Pacific to Indian ocean providing India growing economic influence
- India improves its position in global innovation index 2020
- India has the largest youth population in the world
- National Infrastructure Pipeline initiative has been announced and is being undertaken for providing world-class infrastructure facilities
- Rising global competitiveness and drastic improvement in Global Competitiveness Index
- Newsletter, U.A.E
- April 15, 2021
Dubai International Financial Centre (DIFC) is the fastest growing financial center in the Middle East and Africa (MENA) region and has been dedicated to the economic excellence of the nation by promoting technological innovation and providing a conducive and enabling environment to the technology and financial services industries.
DIFC, acting as the harbinger of economic prosperity in the Middle East, Africa, and South Asia (MEASA) region as the largest financial free zone has recently announced a new license for startups called Innovation License when the DIFC corporate startup license holders under this scheme will join the communities of more than 200 technology companies, 2000 plus firms with more than 25000 professionals.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai originally announced this Innovation license during early 2020 to attract new categories of businesses to the financial center as a key initiative of Dubai Future District with a provision of subsidized commercial licensing option for USD 1500 per annum minimum.
Innovative and creative business entities will be able to grow and expand their business utilizing the legal and regulatory framework of DIFC complemented by world-class intellectual property and data protection rights.
“The new DIFC Innovation License provides an important springboard for future economy pioneers to establish, upscale, and future proof their business within the stable framework of a world-leading global financial center,” added Salmon Jaffery, Chief Business Development Officer, DIFC.
Salmon Jaffery also highlighted, “It is an exciting new offering that we hope will attract technology-led, sector agnostic start-ups that will disrupt the technology and financial sectors. These types of businesses have an important role in shaping the economic future of Dubai, UAE and the region. They will be welcomed by members of DIFC’s ecosystem and become a central part of the new Dubai Future District.”
Officially launched in August 2020, the initiative has already started witnessing new startups and entrepreneurs opt for Innovation license and in the applicable areas of IT infrastructure, Software Development, Internet and cloud migration consultancy, Smart Technology, R&D, and computer consultancy
Besides offering co-working spaces at an affordable rate of USD 500 per month, DIFC provides numerous benefits to Innovation License holders including a registration fee of USD 100, USD 250 data protection fee; securing up to 4 visas when renting flexible desk space, and 50 percent subsidy on additional visas.
IMC is a Dubai-based PRO services company with a team of highly qualified and result-oriented professionals and is well conversant with the local laws and regulations. In addition to rendering our round-the-clock active support in the entire licensing and registration process, we will also help you in identifying the most suitable business activities that can result in a high level of success under this new DIFC Innovation Licensing scheme.
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