- Article, Singapore
- July 9, 2021
Singapore- The New Silicon Valley of Asia
Recent global politics and trade wars between the US and China, made many tech experts believe that a new technological epicentre is readily emerging and Singapore in all likelihood will take that sweet spot due to its independent political status and unprecedented financial growth led by robust innovative technologies.
Singapore, soon after being independent in 1959 had become the manufacturing and financial centre due to its open and business-friendly policies and slowly became the most sought business destination to the global MNCs, SMEs, startups, and companies driven by technology over the years. More than 80% of the world’s top technology companies have their presence in this small island nation and many more are still rushing to doing business in Singapore.
Key Factors helping Singapore emerge as the New Silicon Valley of Asia
Government Policy Reforms
Government policy reforms which are insignificant play over the last two decades have started bearing fruits now promoting business and investment in the country due to lower taxes, fewer capital restrictions, and liberal immigration policies. In its commitment to sustainable economic development, the country is mobilizing all possible resources and rolling out policy reforms to build robust technical infrastructure and investment opportunities.
The Smart Nation initiative, launched in 2014, is focusing on increased technology penetration into every aspect of the country’s urban and rural population.
Many government establishments have also been incorporated to help new businesses e.g. Economic Development Board (EDB) and the Standards, Productivity and Innovation Board.
The Government has also prioritized studying and learning technology courses to fill the talent gap including the introduction of several tech-focused graduate programs to produce local tech talent. Many companies encouraged by the government are already having satellite engineering teams in Vietnam and India for practising engineers.
Singapore Visa Programme, TechPass Singapore has been launched recently to allow established tech entrepreneurs, leaders, or technical experts from around the world to enter Singapore and contribute to the various tech innovations.
In a visionary move, the National University of Singapore launched a startup-incubation space called Block 71 in a renovated industrial building way back in 2011 embracing an identical strategy introduced in Silicon Valley.
Singapore Blockchain Innovation Programme (SBIP) has also been initiated recently to help companies commercialize blockchain technology.
Intellectual Property Rights
Strategic Location
Investor friendly business climate
Technology Initiatives
The Singapore government is also promoting an AI hub and developing a dedicated data science consortium besides the SBIP and continuously striving to required technological amenities to technology startups.
Singapore also has a National Trade Platform that serves connecting businesses by establishing links between importers, exporters, banks, logistics firms, customs, shipping agents, and other stakeholders.
Technology Ecosystems-Presence of International Tech Firms
Singapore enjoys good diplomatic relations with both the USA and China and many big American technology companies are already there in Singapore for quite some time now including IBM, Google, Facebook Inc, Twitter, Microsoft and Salesforce.
Early this year, some other fast-growing technology companies have migrated into Singapore to expand their existing businesses in the USA and China and include Zoom, Twitter, PayPal, Tencent, Alibaba, and ByteDance, the artificial intelligence company.
The presence of high profile tech companies as well as other foreign companies wanting to relocate to Singapore equates to big investments flowing into the Republic amid the ongoing COVID-19 pandemic.
English speaking country
Access to Capital
As the angel investing ecosystem was behind the rapid progress of technology companies, especially the startups in Silicon Valley through the early years providing requisite capital and financial support, likewise the venture capitalists with more than 150 VC funds are becoming the money source for the Singapore tech companies for the last six years. As per a report published by Enterprise Singapore, venture funding has grown up more than 10 times in Singapore since 2018.
Singapore has a large network of technology startups that have attracted significant government subsidies lately. The government has assured 85% or a maximum of $0.5 million investment in approved start-ups in Singapore under Singapore’s Technology Incubation Scheme.
Conclusion
Everything is in favour of Singapore in its race for becoming the new Silicon Valley in Asia except the availability of tech talents that is in high demand. While large enterprises are capable of sourcing talents, smaller start-ups are finding it difficult to get talented employees. However, Government is strategizing and implementing measures to address this issue.
The pandemic may have slowed investor and business expansion momentum around the world, but global technology corporations have been booming in a time when digital interactions have replaced physical ones out of necessity.
Foreign company registration in Singapore is straightforward and particularly so if a well-reputed local PRO services company is hired.
- Article, Qatar
- July 2, 2021
Qatar National Vision 2030, a development plan launched in 2008 spearheaded the country’s economic diversification in non-oil sectors and brought in many changes in foreign investment policies and procedures over the years. Company formation in Qatar is mainly attractive to foreign investors due to the country’s rich economy, world-class infrastructure and one of the lowest corporate tax rates.
The Al Ula agreement reached on January 5 at the Gulf Cooperation Council (GCC)’s 41st summit removing economic and diplomatic blockade on Qatar by other GCC nations including Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt is also positive news for foreign investors.
Who can start a business in Qatar?
As a foreign investor, you can only start doing business in Qatar if you have a minimum authorized share capital of USD 55,000 and at least one local Qatari partner. Private LLC companies are the most common business setups with the foreign investor owning a maximum of 49 per cent shareholding while the rest 51 per cent is held by the Qatari partner, usually a professional passive Qatari shareholder. Though restricted, the Ministry of Business and Trade may approve 100 per cent foreign ownership on a case to case basis and in certain specific sectors e.g. agriculture, health, education, tourism, IT, entertainment etc.
What are the company structures available in Qatar?
The business structures available in Qatar are as under
- Sole Proprietorship Company
- General Partnership Company
- Shareholding Company
- International Engineering Consultancy Office(IECO)
- Simple Partnership Company
- Limited Liability Company
- Branch Office
- Representative Office
If you don’t want a Qatari shareholder or don’t want to make any big investment either, you can enter into an agency agreement with a professional agent or distributor.
How to set up an e-commerce business in Qatar?
Qatar being a rich country with a high level of disposable income of its citizens, e-commerce business having only 20 per cent penetration can provide huge business opportunities to foreign investors. The internet penetration is almost 100 per cent with high-speed internet availability.
Moreover, you don’t necessarily require a permanent residence to be a partner in an online business and can even start an online business while on a business visa. The first thing you need to do is getting your business registered with the Ministry of Commerce and Industry (MOCI), the Qatar Financial Centre (QFC) or Qatar Science and Technology Park (QSTP).
Why Qatar Free Zones (QFZ) and How to Register a Free Zone Company?
Qatar Free Zone Authority (QFZA), Qatar Science & Technology Park (QSTP) and Qatar Financial Center (QFC) are the three regulatory bodies entrusted with the overall administration, management and control of QFZ.
Free zone Company formation in Qatar is fast and straightforward and provides foreign investors with several benefits including 100 per cent foreign company ownership, zero corporate income tax, no personal income tax, 100 per cent import and export duties tax exemption, entire repatriation of capital and profits and no foreign currency restrictions.
What is the procedure to set up a Limited Liability Company (LLC) in Qatar?
The most common form of business structure, LLC set up in Qatar involves the following steps
- Acceptance of Proposal
- Name approval and documents submission e.g. AOA etc.
- Apply for Tax Card and issuance of company stamp
- Application for computer card on receipt of trade license
- Ministry of labour registration and visa quota requirement submission for employees
- Registration with Chamber of Commerce
- Notarization at the Ministry of Justice for commercial registration
- Application for Trade License and Municipality inspection
- Corporate bank account opening, making an initial deposit
- Providing documents for office space
How to set up a Branch Office in Qatar?
A branch office can have 100 per cent ownership and is not regarded as a separate legal entity and a permanent establishment. It is only permitted if you have a legal contract to perform a state project and needs to be authorised by the Ministry of Economy and Commerce and fully taxable. The process for setting up a branch office is almost similar to those required for LLC with an additional requirement of permanent tax card application within a month from the receipt of commercial registration.
How is the Taxation for businesses in Qatar?
Companies with 100 per cent foreign ownership including those with partial shareholding are levied with a flat rate of 10 per cent income tax on the profits generated through business activities. This corporate tax rate is lower than compared to many other countries in the world.
Payments made to non-resident entities without any permanent establishment in Qatar attract withholding tax for the companies at a 5 per cent unified rate and includes interest, royalties, technical fees, commissions, brokerage fees etc.
Companies owned by Qatari and GCC nationals are tax-exempt but need to file tax and audited financial statements if the capital exceeds QAR 2 million.
Private associations and foundations; non-profit organizations; salaries, wages, and allowances; gross income from legacies and inheritances are free of tax too.
How to Employ staff when setting up a business in Qatar?
The hiring of employees can start only after you set up your business and receive your computer card. Approval from the Ministry of Labor and Ministry of Interior is mandatory for foreign employees before signing local employment contracts. All such employees must provide an attested copy of their degree certificate to the Ministry of Labor.
Why engage Support Services when starting up a business in Qatar?
Many business consulting firms can offer you help in your journey as an investor in Qatar by providing legal support and even finding professional Qatari partners for your company.
A business consultant can also organize office spaces for you through real estate brokers and as there is an increasing trend for coworking spaces in Qatar, your consultant with a local base can help you find one for huge cost savings.
Accounting services in Qatar can also be a great source of help in automating and managing your accounts, eliminating the need for internal accountants and accounting infrastructure, preparing financial statements on time, providing cost-saving suggestions and ensuring timely compliance with the regulatory requirements.
Conclusion
Although highly rewarding, a new business set up in Qatar is often complex with lots of regulatory requirements and complications. As financial risks may not be completely overruled, it is advised that you outsource accounting and taxation services in Qatar. Engaging a professional PRO services company with a local presence and knowledge of the society, culture and economy of Qatar can go a long way to help you cross over the initial bumps and achieve a successful business enterprise.
- Article, Kuwait
- June 28, 2021
With 1.4 million citizens, 3.3 million expatriates and 6 per cent of global oil reserves, Kuwait is a rich country with a bounty of natural resources, a global top ten oil exporter. Though the economy is primarily oil-based, the national development plan, New Kuwait Vision 2035 stresses economic diversification and enacted many reforms that help the country improve from 97 to 83 among 190 countries in the World Bank’s 2020 Doing Business Report.
What are the business opportunities in Kuwait?
Company formation in Kuwait can be immensely beneficial to foreign investors promising innovation and growth and mainly due to the below-mentioned reasons
- Water, power, land and labour are cheap and some are highly subsidized up to a whopping 86 percent.
- Rich and business savvy Kuwaiti nationals.
- Significant expansion in the building, project and construction industry.
- $104 billion National Development Plan for the construction of major roadways, a new airport terminal, new hospitals, new residential complexes, a new Kuwait University campus.
- New oil refinery, oil exploration, new power projects, and a new railway and metro system.
- Private construction and project development.
- Several project opportunities e.g. a proposed $10 billion electricity generation projects.
- The automotive, oil and gas, computers/ICT, telecommunications equipment, and construction equipment sectors look promising with recent government initiatives.
- Government’s high priority for healthcare infrastructure.
- Politically strategic country.
- A young local population.
- High average income and high domestic consumption.
- A well-managed financial market and a strong banking sector.
- Good quality infrastructure.
- Strategically located close to three major markets including Iraq, Saudi Arabia and Iran.
Who can start a business in Kuwait?
The foreign direct investment law 2013 only allows 100 percent foreign ownership if approved by the Kuwait Direct Investment Promotion Authority (KDIPA). Either Kuwaitis or GCC nationals must own a minimum of 51 per cent of any business share.
Total foreign ownership is only considered if the business set up is perceived as capable of creating employment and diversifying the nation’s economy. Besides, the business establishment must also contribute to export promotion and gainfully utilise Kuwaiti services and natural resources.
As per the latest reports from KDIPA, 37 foreign firms have so far been approved for 100 per cent foreign ownership.
What business structures are available in Kuwait?
If you are looking for investment opportunities in Kuwait as a foreigner, the country offers you many business vehicles to choose from.
A Limited Liability Company (LLC) structure, known as WLL (With Limited Liability) is most common, easy and fast to incorporate with a minimum share capital of 1000 KD. An LLC however, is not permitted to take part in banking or insurance sectors, with a maximum of 49 per cent stakeholding.
A joint-stock company alias Kuwaiti Shareholding Company (KSC) also permits a maximum of 49 per cent foreign equity participation and can be publicly traded on a local stock exchange whereas a closed KSC doesn’t permit publicly trading of shares.
A limited liability partnership is a partnership structure with two categories of partners, one being general partners liable for the business’s debts and the other one limited liability partners and profits distributed proportionally based on shares held.
A branch doesn’t need any sponsor and is only permitted for GCC nationals. Other foreign business establishments can only set up a branch office if approved by KDIPA.
Agency involves an agreement with a local commercial agent/distributor if you as a foreign investor are not willing to set up a local company in Kuwait. A commercial agent is normally paid a fixed fee or a percentage of profits from your Kuwaiti business with all terms and conditions detailed in the agency agreement.
A joint venture company, a JV is formed by a venture of two or more legal and natural persons with no separate legal entity and without any need of getting registered with the Ministry of Commerce and Industry and usually used in construction projects and conducted under the trade license of the Kuwaiti partner.
How to set up a business in Kuwait?
Setting up a business in Kuwait is not cumbersome, costs you KD 323 (approx. 1000 USD) and takes around a month. The steps involved are almost similar irrespective of the company types and include
- Submitting an application with details of your company’s capital, shareholding and other information to the department of companies of the Ministry of Commerce and Industry (MOCI) for registration.
- A background check by the ministry of commerce through the local municipality and the ministry of interior.
- Reserving a unique company name and submitting it to the Company Registry for name approval.
- Retrieving the letter addressed to the bank by the department of companies.
- Depositing your company’s paid-up capital at the bank and collect the receipt.
- Scheduling inspection by the local municipality and obtaining NOC within two weeks.
- Submitting Memorandum of Association (MOA) to the department of companies and receiving approval.
- Notarizing the MOA before a public notary.
- Filing signed and notarized copy of MOA with the department of companies.
- Registering with the commercial registry and receiving a Certificate of Registration (CR).
- Obtaining Commercial License from the department of companies.
- Registering with Kuwait Chamber of Commerce and Industry.
- Registering with the Public Authority for Civil Information.
- Registering with the Department of Labour and Social Affairs.
How are businesses taxed in Kuwait?
Businesses owned by the Kuwaitis or GCC nationals are free from corporate income tax (CIT). GCC companies with foreign ownership are taxed based on the extent of foreign ownership. CIT is levied on the profits and capital gains of foreign corporations carrying out business or trade-in Kuwait either directly or through an agent.
Income earned from activities in Kuwait is only considered for CIT subject to tax in Kuwait and at a flat rate of 15 per cent.
The religious tax Zakat is imposed on all publicly traded and closed Kuwaiti shareholding companies at a rate of 1 per cent of net company profits.
The country’s tax law does not levy withholding tax but all public and private entities are mandated to retain a 5 per cent sum of contract amount till that time a tax clearance certificate is presented.
Even though tax treaties are with several countries for the avoidance of double taxation, the interpretation is not always consistent or in line with the guidelines giving rise to frequent disputes.
What is the labour law in Kuwait?
Every business registered in Kuwait must employ local Kuwaitis based on applicable sector-specific requirements that may vary from 3 to 60 per cent of the total headcount.
Social Security contributions are mandatory for all employees at a rate of 10.50 per cent while the employer has to contribute a sum equal to11.5 per cent of the monthly salary of employees, up to a maximum of 2,750 KD towards the Financial Remuneration Fund.
Conclusion
Careful selection of business partners is the single most important step to a foreign investor while doing business in Kuwait. Outsourcing taxation, accounting and legal services can protect your business from future liabilities.
- Article, Oman
- June 17, 2021
For centuries, Oman has been engaged in overseas trading with its marine business vessels navigating across African, European and Asian shores. It is the third-largest country in the Arabian Peninsula and used to be mainly an agriculture-based economy before the discovery of oil and gas in 1964.
Oman started focusing on industrialization and economic diversification into non-oil sectors during the early 70s of the last century under the able and visionary leadership of Sultan Qaboos Bin Said who had undertaken many economic and social reforms to attract foreign investors for doing business in Oman.
Why set up a Business in Oman?
Many present-day economists and financial analysts say across the globe consider Oman as an ideal country for long-term business and investment opportunities because of its
- Strategic location.
- Diversified Economy.
- 100% foreign ownership in free zones and 70% in most sectors .
- Low corporate tax rates for companies with double taxation avoidance agreements with many countries .
- Membership with international agencies e.g. WTO, GCC, GAFTA.
- Foreign Trade Agreements with USA, Singapore, Iceland, Norway, Switzerland.
- Political and economic stability.
- Low Tax with zero personal income tax rate.
- No restriction on capital or profit repatriation, currency exchanges or dividend transfers.
- Tax exemptions on import of plant and machinery as well as raw materials for 5 years from the commencement of operation.
- Modern infrastructure with good roads, airports, seaports and communications.
- Investor-friendly business regulations .
What Corporate structures are available in Oman?
The Omani government does not put any restrictions on foreign investment and company formation in Oman. However, businesses in certain sectors including banking and finance, insurance, tourism, telecommunication, industrial factories, mining, food and beverages, schools, hospitals and employment agencies need specific permits to operate.
The company structures that are available to the foreign investors in Oman include
- Limited Liability Company
- Partnership
- Closed Joint Stock Company
- Joint venture
- Public Joint Stock Company
- Branch of a foreign company
Foreigners are allowed a maximum of 70% ownership in a company registered in Oman. Citizens of countries enjoying free trade agreement (FTA) with Oman can have higher % age of ownership.
The minimum share capital requirement for a foreign-owned LLC is OMR 150,000 whereas an LLC with 100% ownership of Omanis or GCC or FTA nationals, the minimum capital requirement is much lower, OMR 20,000.
The minimum share capital requirements for public and closed joint-stock companies is OMR 500,000 and OMR 2 million respectively.
Minimum capital requirements are substantially higher for banks, insurance companies including lending and financial companies.
How to set up a fully Foreign Owned LLC Company in Oman?
The most common type of locally incorporated company in Oman is an LLC and its formation involves the following chronological process steps
- Reserving a company name.
- Registering with Oman Chamber of Commerce and Industry (OCCI).
- Applying for Municipal License.
- Registering with a local PRO.
- Leasing arrangement for office space and warehouse.
- Registering with the Ministry of Commerce and Industry (MOCI) for Commercial Registration (CR).
- Preparing the documents.
- Registering with the Ministry of Finance (MOF).
- Registering with Customs.
- Registering with the Ministry of Manpower (MOM).
- Designing a company seal.
What documents are needed for setting up a 100% foreign-owned LLC in Oman?
The following documents are needed for an LLC in Oman
- The board of resolution of foreign shareholders.
- Memorandum and Articles of Association of foreign shareholders.
- Duly audited accounts as proof of a minimum of three years of operation.
- Tax registration certificate.
- Copies of Passport / Identity card of shareholders and authorized signatories.
- Receipt of initial deposit.
What is a foreign branch and How to incorporate a branch Office in Oman?
A foreign-owned company once entered into a contract with the Omani government or quasi-government establishment gets entitled to register and operate in Oman as a foreign branch. It doesn’t have a separate legal entity and is not a permanent structure. A branch office in Oman needs a local agent as a sponsor for managing visas and licenses. A minimum of 12% tax is the rate applicable to a foreign branch office. The same process steps need to be followed as in an LLC for setting up a foreign branch except paying a bank guarantee for obtaining an operational license.
Why prefer Free Zones in Oman for setting up a company?
Oman has three free zones and two special economic zones that provide incentives including tax holidays, import duty waiver, exemption on initial share capital requirements and 100% foreign ownership.
How foreign business entities are taxed in Oman?
Oman follows a uniform income tax rate for all types of business establishments irrespective of being either a corporate entity or a registered entity or unregistered.
Apart from Sole proprietorship businesses, the income tax rate is 15% for all taxpayers and LLCs that fulfill the conditions of SMEs.
Omani proprietorships and LLCs that meet some specified requirements are taxed at 3 %.
Income generated from the sale of petroleum products comes under the purview of petroleum tax and at a 55% rate.
There are no regional or local income taxes in Oman.
VAT has recently been introduced in Oman during April 2021 at a flat 5% rate as per Oman VAT Executive Regulation.
Are there any tax incentives announced by Oman to counter the effect of the pandemic?
A five-year tax exemption was proposed as an economic stimulus plan on 9th March 2021 for new businesses in manufacturing, agriculture, fishing, mining, tourism, and logistics and services that can bring economic diversification to the country and the tax exemption would be effective from the date of registration in the commercial registration certificate.
Some other tax measures have also been announced including
- Exempting hotel establishments from tax during assessment years 2020 and 2021.
- Permitting tax payment in installment during 2021 without any penalty.
- Suspending withholding tax on dividends and interest for an additional period of five years, from the tax year 2020.
- Permitting unlimited carry forward of losses for tax losses incurred for the assessment year 2020.
- Reducing tax rate to 12% (from 15%) for small and medium-sized enterprises (SMEs) for the tax years 2020 and 2021.
- Exempting tourism businesses from both tourism and municipal tax levy until the end of 2021.
- A grant of a preliminary license for a certain type of business (subject to certain terms and conditions) sufficient to allow them to conduct commercial and investment activities without waiting for the issuance of the final license.
- Granting permit for ready hiring of three expatriates on the issuance of commercial registration.
Conclusion
Even though the e-commerce market in Oman is in infancy, it was valued at more than USD 2 billion in 2020 and projected to touch USD 6 billion by 2026 growing at a CAGR of more than 20%.
The construction and logistics sectors though severely impacted by the pandemic are expected to witness a K shaped recovery as the Sultanate is undertaking many new initiatives.
Oman also stood committed to the international business fraternity as it signed the OECD tax treaty to prevent Base Erosion and Profit Shifting (BEPS).
- Newsletter, U.A.E
- June 15, 2021
Shifting a company’s operations into foreign soil for business expansion is usually a complicated, time-taking and costly affair and due to these very reasons, only a few companies venture upon corporate migration without solid economic reasons such as favourable labour and market conditions spurring business growth.
Both large and small enterprises can benefit from relocating overseas and only when there is a real-time strategically assessed move considering all possible benefits and hurdles. Though in general, the main reasons driving a business to migrate to another country are taxes, regulations, market access and labour cost, the situation this time is entirely different compared to the past as the recent covid pandemic is constantly demanding the companies to be more agile and resilient for survival and growth.
Brexit has been a source of uncertainty for UK based business entities ever since the country’s electorate voted for this decision. As the consequences were unknown and unpredictable, many global establishments including Panasonic, Barclay’s, Honda, Sony, HSBC shifted their European headquarters out of the UK to mitigate risks and challenges.
The European Union (EU) has long been the UK’s biggest trading partner and accounted for more than 40% of all UK exports and almost half of all UK imports in 2019. In all probabilities, the effect of Brexit on the UK’s business and trade over the next couple of years could result in
- Higher inflation
- Increased import/export costs
- Higher taxes
- Supply chain disruptions and logistics issues
- Skilled labour shortages
- Subdued market due to lower demand from the EU
Persistent business challenges of every kind are apprehended besides the prevailing higher inheritance tax even after the last-minute trade deal with the EU and the resumption of vaccination programs.
Many UK businesses are mulling over relocating their businesses to the UAE fully or partially and this was also confirmed in a survey conducted in the recent past when more than 30% of SMEs expressed their desire for complete relocation or additional facilities setups in the business-friendly and no-tax desert nation.
With UAE’s foreign ownership laws outlined in the country’s 2015 commercial companies law being amended, onshore companies will no longer require 51% of local majority shareholding effectively lowering overhead costs and easier business set up for foreign investors in both mainland and free zones in the country including the most sought after DIFC company formation.
The UAE has always been considered an attractive business destination for UK companies with more than 5,000 British business setups and 120,000 British citizens and expats residing in the country. The UAE also provides powerful business solutions exclusively meant for UK citizens.
Apart from mainland and DIFC, other UAE free zones are also becoming vastly tempting to the UK companies due to diversified platforms and easy and low-cost business setups and include DMCC company formation and JAFZA company formation. UAE free zones, besides 100% foreign ownership offer a plethora of other opportunities to the business communities than the onshore ones.
The UK has also proven and very successful track records in the field of finance, technology, FMCG, renewable energy, healthcare and IT which are in great demand in the UAE and other gulf countries further validating business relocations. It is also worth noting that the UAE is the largest export market for the UK in the Middle East region. Additionally, the UK is also the biggest foreign direct investor in the UAE with a great reputation for ethical business conduct.
Migration to the UAE by a UK company is simple and straightforward involving only shifting to a new jurisdiction while maintaining the same legal identity without affecting the customer base and brand identity.
Relocating your business isn’t an easy decision though, no matter how much more cost-efficient it may appear. If you are considering moving your company to another country several other things need to be considered that can ensure you make the most of the opportunities presented including business rules and regulations, cost of removing the existing setup, language barrier, culture and future market challenges.
Even when the Brexit challenges are kept aside, setting up a business establishment in the UAE has always been a compelling proposition due to the world-class infrastructure built over the years with unmatched communication, transportation, education and healthcare facilities besides zero corporate tax environment, 100% repatriation benefits on profits, multiple corporate structures availability and double tax avoidance treaties with 115 countries.
- Newsletter, Singapore
- June 15, 2021
Cross border innovative collaboration has now become possible and easy for local business establishments with company registration in Singapore as the country joins 45 member countries across the globe as a member of the Eureka network. Local Singapore companies will benefit from multiple opportunities by collaborating with foreign partners on innovative value-added projects and grow.
Eureka was launched in 1985 as an Intergovernmental network to facilitate and support real-world market-based R&D projects propelled by innovative technologies from academic institutions, industries and research centres. There are more than 45 member states in Eureka presently including the European Union represented by European Commission, South Korea as a partner country and four associated states namely Singapore, Canada, Chile and South Africa. The other members are from different countries from Europe, North America, Asia and Africa representing almost all the major continents.
Singapore embraced the Eureka network concept, extending its support and officially joining this network of international cooperation in research and development as an associate country on Tuesday, May 18 2021.
Partner countries working as a consortium on an R&D project must focus either on a new product or a service or a new process with a maximum of 3 years duration. No individual country or organisation is allowed to claim more than 70% of the total cost of a project. For a Singapore local company, it must meet the eligibility criteria of Enterprise Development Grant (EDG) before applying.
The agreement was signed by Trade and Industry Minister Gan Kim Yong and Austrian minister for digital and economic affairs Dr Margarete Schrambock at the Global Innovation Summit 2021 convened virtually.
As per this agreement, Enterprise Singapore (ESG) will support the facilitation and funding of joint innovation projects between entities from Singapore and other Eureka member countries and explore further partnerships within the network.
Singapore’s association with the Eureka network will enable local firms greater access to other markets by participating in joint innovation projects and by exploring various initiatives including
- Eurostars calls given twice a year for joint innovation projects between entities from 36 member countries
- Eureka Clusters, Thematic calls announced by European industries under Eureka which are normally long term and strategically significant
- Eureka Network Projects Programme, a flexible vehicle that allows Eureka member countries to build a country specific product, process or service theme as short term projects
Before joining the network officially, ESG worked with Eureka on three co-innovation calls, through which more than 40 Singapore firms worked on joint innovation projects with overseas enterprises from more than 20 countries.
– The first Eureka Globalstars-Singapore call was introduced in 2019 and there were seven Eureka countries including Belgium, Czech Republic, Denmark, Netherlands, Spain, Turkey and the UK. This call received 36 joint applications along with 17 projects across the medtech and advanced manufacturing sectors chosen for funding.
– In 2020, the second Eureka Globalstars-Singapore call was even bigger and included 14 participating countries e.g. Austria, Belgium (Flanders), Canada, Estonia, Hungary, the Netherlands, Poland, South Africa, South Korea, Spain, Switzerland, Turkey, Ukraine and the UK from the Eureka network besides Singapore. It received the highest joint applications to date among all the Eureka Globalstars calls, 84 numbers in total. More than 20 new projects across the transport and logistics, medtech and space tech sectors were selected for granting funds.
– Singapore was among the 16 countries that participated in the first Eureka Clusters Artificial Intelligence (AI) Call last year. Two projects involving Singapore companies were funded.
EverComm, an energy start-up, was one of the firms that received funding from the second Eureka Globalstars-Singapore call last year with the partnership of British tech firm Ionate to develop a platform for equipment performance optimization and now looking for opportunities in Taiwan and Thailand as well.
Artificial intelligence cluster call in 2020 also witnessed two projects involving local firms getting selected for grants.
Enterprise Singapore’s director of global innovation network Jonathan Lim commented, “Even amid the challenging conditions of a Covid-19 environment, Singapore companies actively participated in these co-innovation calls. This shows their keen interest to engage in research and innovation to develop stronger offerings, as well as their desire to capture new overseas opportunities. We are excited to become an Associate Country of the Eureka network as this provides the opportunity for Singapore companies to participate in all Eureka initiatives and tap into the know-how of entities from over 45 countries. We also welcome Eureka member countries to work with us, and leverage Singapore as a launchpad to access the growth opportunities in Southeast Asia.”
Earlier, Singapore local companies had to partner with a minimum of two other entities represented by two Eureka member countries as an Associate member. However, Singapore companies can participate on a one to one basis.
To benefit from the enormous opportunities presented to the investors by Singapore, it is advised that foreign investors seek support from a professional and credible local firm and find out how to start a business in Singapore as a foreigner and comply with ESG and EDG eligibility requirements.
- Newsletter
- June 15, 2021
Now it is time to reinvent accounting and get rid of some repetitive manual accounting processes. Many accounting and financial operations tasks can be readily automated resulting in smoother time savings, smoother operation and increased profitability.
Several accounting tasks have already transformed by enabling them to be automated from manual.
Different tools are in use to automate different accounting tasks though all are designed to improve efficiency by reducing repetitive manual work. As manual work is lessened, the accountants can free themselves from manual data entry and bookkeeping and devote their time to providing value-added advice on corporate taxation and tax incentives.
Here are six accounting tasks that you can immediately consider automating for time-saving with some basic understanding of automating accounting processes.
1. Bookkeeping
The most time consuming and repetitive task in accounting is undoubtedly data entry and perhaps the scariest amongst accountants during monthly and yearly closing time. Calculating returns and taxes are all about huge amounts of data and take hours and days for accountants to make manual entries and calculations with the associated risk of incorrect data entry inadvertently.
Data analytics software available in the market can save hours wasted on data entry with mostly 100% accuracy. Choose a software that can easily integrate into existing systems and tools including spreadsheets and CSV files enabling you to carry out calculations from multiple sources and secure it at a single location.
2. Invoicing
The process of sending and receiving invoices can also be easily automated with many benefits derived.
If you go for software designed for cloud accounting for small businesses that integrate invoicing software, you can create and edit invoices easily for emailing. Besides, the software will monitor if invoices have been paid or not and send automatic reminders making the process of invoicing faster, easier and more accurate. As data recognition and data upload are automatic, there is no need for manual data entry.
3. Tax Filing
For tax filing, accountants usually send clients a tax form for filling out tax details. Clients then take a printout of the tax form, fill and scan and then mail the filled-in form in a PDF format involving many embarrassing manual steps. Once the information reaches, the info is manually checked by the accountant for storing in a shared file.
We can easily avoid this manual and time-consuming task by replacing it with web forms and collecting information electronically. Templates from web forms can help you customize client information and allow clients to attach digital files that can be securely stored on an online platform. Easy integration with your emailing system is also possible with a web form software that can keep you posted on client’s tax information submission.
4. Expense Reporting
For many companies, much has changed over the last decade and a half about expense reporting for accountants. Previously these reports used to be handwritten or printed-out spreadsheets with receipts attached and submitted manually.
However, it is now possible for employees to automatically fill out and route expense reports without attaching supporting receipts as software is generally integrated with the payment platforms able to capture and store data.
Not only the accounting department but a great deal of administrative work is also taken away from the busy schedule of HRD.
5. Signature Authentication
Many accountants still demand tax paying clients to print the form, put signatures, scan and email it back to the accountants causing a huge discomfort and time wastage for the clients as they don’t have ready access to a printer or scanner most of the time.
Making use of eSignature technology in place of physical signatures with a pen and paper can be a much convenient and easy way to obtain customer signatures only needing the software provider to be compliant with the regulatory authority for eSignature.
6. Payroll services
Payroll can be time-consuming and a real nightmare for accounting professionals. Automated payroll software can take the burden off their shoulders by automatically calculating wages and applicable deductions such as TDS, PF, Gratuity, Bonus etc.
Even individual employees can securely access their payslips online, submit their attendance online and receive salary through electronic payments.
Automating accounting tasks will provide several advantages to the accounting and finance professionals however it also demands a careful selection with some advanced planning and research. Once the platform and software integrations are perfect, it would pave the way for a smooth accounting journey.
It is advised that you speak to somebody who is a qualified professional and has hands-on experience in accounting practice and automation. The best is to outsource accounting and finance services that can help you with necessary training besides an on-site demonstration.
- Newsletter, Singapore
- June 15, 2021
The Chinese corporates are eyeing the Association of Southeast Asian Nations (ASEAN) with increasing focus on Singapore and Malaysia as these two countries are all set to witness significant growth and opportunities in business and investment over the next year.
Approximately 43 per cent of companies surveyed echoed their confidence in Singapore company incorporation and company registration in Malaysia as leaders of future growth and expansion in the emerging ASEAN economy and a majority of Chinese corporates hopeful on ASEAN economic potential expect to see their businesses grow in near future.
The survey was conducted for the bank’s Borderless Business highlighting the China-Asean Corridor report and exploring prospects and opportunities for the future cross-border growth between both regions.
All the 43 China-based companies surveyed during last April considered Singapore and Malaysia as the most potential markets for growth and expansion opportunities of their businesses in the ASEAN.
While the highest number of China-based companies to the tune of 65% voted in favour of Malaysia, 60% of participants from the surveyed companies emphasized their future business focus on expanding in Singapore for increased market share by promoting sales and production opportunities. Thailand too figured in the list with 53% China-based companies expressing faith in the ability of this emerging ASEAN economy to do well during the post-covid period.
Singapore is being considered by the China-based corporations as a major regional procurement hub and 44% of these companies expressed their willingness to build a regional Research and Development (R&D) centre, an innovation centre basically in the country, as these companies plan to expand across ASEAN.
The survey observed that 56% of the companies have been focusing on the ever-increasing vast consumer market access as the most critical success factor while some 53% of similar companies considered government support and business incentives by the ASEAN as critical for business viability, stability and long term sustainability.
51% of the company participants mentioned that the availability of a reliable supplier base in the ASEAN is also one of the most significant rationales behind their business expansion in the ASEAN region while 47% of the companies were found in agreement with the fact that the presence of the Free Trade Agreements (FTA) network in the ASEAN is crucial for the world market access.
88% of companies noted that the Regional Comprehensive Economic Partnership (RCEP) in this region is one main reason for attracting foreign investments and even the China-based companies are seriously considering increasing their investments in the region by a minimum of 25% in the coming three to five years.
Chinese business houses were also seen to be aware of the risks and challenges within the ASEAN with 70% stressing upon the Covid-19 pandemic or other health issues. A good number of respondents, some 67%, considered ASEAN’s geopolitical instability and trade conflicts as business risks when another 67% of corporates raised concerns over the muted revival of the economies in this region along with a decrease in consumer spending.
One of the most important challenges cited was the way the Chinese business entities would align their business model to the existing ASEAN business environment and trade practices while initiating new business ventures in this region over the next six months and a year.
The survey revealed 56% of corporates strongly evaluating other business risks and challenges such as regional regulatory aspects, monetary transactions and payment methods and infrastructure besides relationship building with prospective suppliers. 56% of respondents have also been found strategizing on getting along with the regional supply chain and logistics.
During this survey, a sizable number of respondents comprising 58% of the China-based companies were found interested in executing digital transformation programmes and another 47% were seen looking for long term growth and sustainability driven by environmental, social and governmental (ESG) initiatives. Another 44% of the surveyed companies have been found eager in exploring new partnerships and joint ventures to enhance market share during business engagement in this ASEAN region.
Chinese companies have been seen seriously considering strategic support for business growth and expansion in the ASEAN. Approximately 60% of these Chinese companies were found desirable for suitable banking partners with a strong repute of finance and cash management potential and 56% of these companies also wanted to foray into trade financing services widely. Fundraising and corporate financing services projects are also being eyed upon by 56% of the corporates.
- Newsletter, U.A.E
- June 15, 2021
To promote bilateral trade and investment between the two countries, the UAE and Israel entered into a Double Taxation Avoidance Agreement (DTAA) on Monday 31st May 2021.
It was first tweeted by the Israeli Finance Minister Israel Katz who described the move as a boost to develop business and investment between the two nations after signing the Abraham peace accord last year.
“The agreement will accelerate the development of economic relations and contribute to prosperity in both countries,” Katz said in his tweet.
Katz noted in a briefing that the treaty is primarily based on the OECD model and it will provide certainty and favourable conditions for business activity and will also strengthen the economic ties with the UAE.
The treaty is subject to the parliament and cabinet approval of Israel and is expected to come into force on 1st January 2022. “Israel is a party to 58 double taxation treaties,” Israel’s Finance Ministry remarked.
DTAA being a bilateral agreement, the two countries involved formulate and establish rules that apply to income and assets of the two countries, the Israeli Finance Ministry highlighted on its website.
The UAE has so far concluded 115 double taxation agreements with its trade partners to help avoid similar tax imposition by two countries on the same taxpayer, and for facilitating the exchange of goods, services and capital. It was in 2020 October that the UAE officially announced that it had reached a deal with Israel on avoiding double taxation.
After the peace accord, several commercial agreements have been reached between the two countries and almost USD 280 million in trade treaties were signed within a couple of months. As per reports, the diplomatic and trade normalization between the two countries could give rise to more than USD 4 billion bilateral trade between the two countries.
The UAE also made a revelation saying that it was planning for a USD 10 billion investment fund for the strategic sectors in Israel besides the USD 3 billion joint investment fund established by the UAE, the US and Israel together after the accord.
Finance and economy experts welcomed the tax treaty in anticipation that it would enhance bilateral trade and investment relations in future and promote new company formation in Dubai by Israeli investors.
“Under the agreement, tax deductions, dividends and royalties are capped. The double taxation treaty would make the two countries more competitive and promote economic activity. It will make the two nations more attractive to international investors,” an expert remarked.
As per the experts, the tax treaties between the countries would help promote foreign investment flow between the two countries as investors only invest money after satisfactory earnings after deductible tax playing the most crucial role in foreign investments.
“Having a treaty in place, UAE entities will be able to repatriate returns on investment with a reduced rate of tax from Israel in form of dividend, interest or royalties whereas Israeli businesses will continue to enjoy tax exemptions on their investment in the UAE. This treaty not only will boost investment into the UAE from Israel but also from the global players having investments in Israel to route investment into UAE,” an Industry expert commented.
“We have a huge surge in investment into real estate from Israel whereas UAE outbound investment goes into Israel’s technology and defence sectors. It is a great initiative towards business harmonisation between both the countries, a high-level industry professional remarked.
“In countries that have worldwide taxation, a non-resident citizen who is working in UAE could be liable to pay tax on their income in their home country as well as in the country in which it is earned. UAE being part of an international tax framework, it provides important protection and benefits for UAE companies and expatriates,” emphasized an expert.
To avoid the same income being taxed twice, the UAE has signed double taxation treaties with many countries, as the Government has understood it as unfair and potentially discouraging for international trade and business that could adversely impact future business setup in Dubai and other emirates.
The DTAA however could be tricky and companies and individuals are advised to seek professional help from a reputed and professional accounting firm.
- Newsletter, U.A.E
- June 15, 2021
What is a Foundation?
Foundations have no beneficial owners and are, therefore ’ownerless’ structures even where the foundation property is held for the benefit of beneficiaries.
How is a Foundation formed in the UAE?
- A Founder, at least one founder as an individual or legal entity.
- A Council constituted by the Founder with a minimum of two members to manage the foundation.
- A Guardian as an individual or legal entity appointed by the Founder for mentoring.
- An appointed Registered Agent Registered Agent only compulsory in RAK ICC with a necessary license from the regulatory authorities.
- Beneficiaries appointed by the Founder as an individual, group or entity authorized to receive and make payments.
- A Registered Office as the address of the Registered Agent.
What are the different types of Foundations?
- Exclusively charitable.
- Not charitable.
- Benefits persons identified in its Charter or By-Laws.
- A combination of the above three.
What are the reasons for the popularity of Foundations in the UAE?
- Asset protection as assets are not readily accessible to creditors, governments or other family members.
- Privacy as the beneficiary details are kept private ensuring the reduced risk of claims and legal actions from third parties against the founders and their families.
- The flexibility of legal and beneficial ownership enabling families intergenerational legacy planning and wealth protection in different international jurisdictions.
- Efficient succession planning based on the wishes of the founder under the terms of the foundation with no scope for probates.
- Better governance of the family in line with a professionally managed corporate governance.
- Facilitates charities depending on the wishes of the founder.
- Maintenance of legacy.
Where in UAE are the Foundations flourishing?
- The Dubai International Financial Center (DIFC), under the governance of the Foundations Law, DIFC Law No. 3 of 2018.
- The Abu Dhabi Global Market ( ADGM) under the Foundations Regulations 2017 and
- The RAK International Corporate Centre (RAK ICC) following the RAK ICC Foundations Regulations 2019.
Initially foundations were formed in the DIFC and then followed by ADGM and RAK ICC.
How the Foundations in DIFC, ADGM and RAKICC differ?
The DIFC is the sole regime that allows DIFC company formation to get transformed into a Foundation.
DIFC Foundations are allowed exclusively for charitable purposes where ADGM may not allow unless a Guardian is appointed mandatorily.
A DIFC Foundation can issue securities representing the value of the contributed assets from the contributor and their entitlement to the same and allows user arbitration for dispute resolution. USD 200 is required for registration and yearly renewal of foundations.
ADGM
While the identity of the Council Members is available in the DIFC, it is kept confidential from the public in the ADGM.
It is the only regime where foundations are not needed to file and audit accounts unless demanded by the Registrar. Records of accounts however must be prepared and maintained as in other regimes.
ADGM Foundations are not allowed only for charity without additional purposes. USD 200 is applicable as the fee towards registration and renewal every year.
RAK ICC
RAK ICC does not maintain a publicly accessible register of information about a Foundation.
Information related to the Foundation benefits from the applicable privacy laws in the UAE and will not be disclosed unless required by the relevant authorities.
Within RAK ICC however, a Registered agent is a mandatory requirement whereas with DIFC and ADGM it is only optional.
Fees: Registration Fee / Annual Renewal (fee as at 2021): AED 750 (approximately USD 200).
What is the essence of a Foundation?
- Private wealth management and preservation.
- Tax planning.
- Asset and creditor protection.
- Succession planning.
- Financial planning.
Foundations are also used for charitable purposes
Foundations often need legal help for effective wealth preservation through appropriate structuring which can ensure safe and undisputed transfer of assets to the beneficiaries and successors. IMC with a team of legal professionals can render requisite support and help you achieve your goals in this regard.
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