- Newsletter, U.A.E
- January 22, 2020
Foreign Civil Decrees Passed by U.A.E. Courts Are Now Enforceable in India The Indian Government has advised in a recent notification that foreign civil decrees which are passed by the courts in the UAE are allowed to now be executed in India.
For this purpose, the Central Government has given a notification that it accepts UAE as a reciprocating territory for enforcing any foreign civil decrees in India, in tandem with Section 44A of the Code of Civil Procedure (CPC).
“In exercise of the powers conferred by Explanation 1 to section 44A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares, United Arab Emirates to be a reciprocating territory for the purposes of the said section.”
Government Notification released on January 17, 2020
This implies that decrees which are passed by any courts in the UAE will now allowed to be executed in India, similarly in case if they were passed by any Indian civil courts.
The manner for bestowing such a status to any foreign civil decrees has been described in the Section 44A of the CPC, and it states,
“Execution of decrees passed by Courts in reciprocating territory. (1) Where a certified copy of decree of any of the superior Courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court….”
The specification further stipulates the mode in which the foreign decree must be filed. In any cases where such a special recognition of foreign decrees is conferred only on the decrees which are passed by courts located in reciprocating territories, which had to be so announced by the Government Notification. Regarding this, the initial explanation to Section 44A, CPC, mentions,
“Reciprocating territory’ means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and “superior Courts”, with reference to any such territory, means such Courts as may be specified in the said notification.”
Therefore, the Central Government has advised that the civil decrees passed by any of the following UAE courts may be now executed in India, that is,
Federal Court
Federal Supreme Court;
Abu Dhabi Judicial Department;
All Dubai Courts;
Ras Al Khaimah Judicial Department;
Courts of Abu Dhabi Global Markets;
Courts of Dubai International Financial Center.
Federal, First Instance and Appeals Courts located in the Ajman, Emirates of Abu Dhabi, Sharjah, Umm Al Quwain and Fujairah;
- Article, India
- January 20, 2020
Though having a big family has its own benefits, managing parents and your children can make your expenses go out of hands. However, by following some simple tips and rules, you can make sure that your finances are in control while making everyone happy.
Create a budget
The first step if you think you have crunched finances is to create a budget. This depends on your income, expenses, and your lifestyle; however, the steps to do so remain the same. So here we go…
- The mode of your budget– First decide how you are going to make your budget. You could create one with a paper and pen but the disadvantage here is that you have to calculate everything manually here. The other better method is doing it on a spreadsheet. Here, you could segregate your income and expenses and also make charts for all categories of your expenses. There are also sophisticated online software, and some free ones too for this. In these software, you can use various charts for keeping a track of your expenses and seeing where most of money is going. There are also some money apps that could be used for this but online software are better as they show you a visual depiction of your charts on the screen.
- Making an actual budget – Before starting to chalk a budget, you must finalise your financial goals. Without defining your specific goals like your child’s studies, how you can save for it. Consider segregating your financial goals into two categories – short and long-term as per your priority. For example, your main goal could be to change your car before spending on an exotic vacation. Then, you should list all your income sources and expenses and make various categories. Like for expenses, make categories like grocery, utilities, investments, loans, and luxuries. Now, assign a budget for all these categories. This way, you can avoid any impulsive buys and stay inside the boundaries that you have set.
- Being inside the budget – Though this isn’t easy, after you have created your budget, you must stick to it in all circumstances. Don’t redirect your income to other categories without a need. For instance, don’t skip any investment just because your entertainment expense went overboard for a month. This should be a complete no. Keep cross-checking your bank statement along with your budget to see if all you have noted down all your expenses and not missed anything. Also, minimise the cash transactions and use your debit card more often. This way, you can track what you have spent. It’s wise to have the ‘Savings First’ approach and not spend without thinking twice.
Use various tax breaks
Are you aware that you could claim your child’s school or tuition fee as a tax deduction? This is also true for any education loan. There is also an option for getting a tax break if you invest for your parents. For example, a tax deduction can be claimed for any health insurance that you buy for your parents under Section 80D of the IT Act. Besides the tax deduction, you can also save yourself from spending for any unforeseen medical expenses as you get a health cover for them. In case you stay in your ancestral or parent’s house, you can pay them the rent and then claim a House Rent Allowance or HRA. In addition, if you spend on any medical treatment of your parents, then you could claim a deduction under Section 80DDB especially for ailments like dementia.
Discuss your finances
It’s always a good idea to do a ‘money talk’ with all the family members at least once in a month. You must share that your financial situation is on the right path with your children and parents and also tell them is something is amiss. Lead by example and teach your children how important it is to save. This way, any unwanted expenses could be avoided.
Create an emergency fund
It could be scary to lose one’s job and income; especially when you have a big family with dependants or if there is just one working person or income. Hence, it’s essential to create an emergency fund, which can take care of 6-12 months of your basic expenses, in case you change your job or God forbid, lose it. Such kind of an emergency fund acts like a safety net or cushion to take care of your family. The amount to be maintained in this fund should be calculated depending on the needs of your family.
If you follow these tips, then your finances would largely remain on track. Always give priority to save and never neglect your investments. How about beginning with opening a Fixed Deposit for your children or all of your family members?
- India, Newsletter
- January 13, 2020
In 2019-20 Union Budget, the Finance Minister has recommended to further consolidate all the gains under FDI so as to make India a more appealing FDI destination. Going steady with its reform policy, the Union Cabinet has recently approved the plan for review of FDI Policy on various sectors on 28 August 2019.
The major highlights of the FDI Policy reform are as follows:
Single Brand Retail Trading (SBRT)
Contract Manufacturing
Digital Media
Coal Mining
- Newsletter
- January 13, 2020
Fund raising is on the wish list of every entrepreneur. With a maturing ecosystem, the capital supply is increasing; which in turn means that there are more opportunities for new entrepreneurs to get funds to set up or expand their start-up. So here the top points to remember while taking the plunge and for staying ahead in the game. If you are setting up a start-up in the region, then it will be at least an average of 5 to 10 years before you would think of exiting or closing your venture. And be it your first time or not, there are some factors that remain the same.
1. Concentrate on sustainable growth and prove the numbers
Which business set up doesn’t want to undergo exponential growth? However, there are hitches and pitfalls too, as we are noticing with Uber, WeWork, and many others – and due to this, the investors these days are vary of this. It is recommended to prepare a growth roadmap for at least 5-10 years, and have clear and well-defined goals and objectives for gauging your enterprise’s success.
Having said that, your business model should reflect accurate and convincing growth prospects, and your pitch should accurately display what steps you are planning to undertake for meeting your business goals. Ensure that they’re SMART goals, so that you can show growth year-on-year in terms of your anticipations and objectives.
2. Have clarity in your expecting from your investors and communicate that clearly
As an entrepreneur, you should first have an idea that you believe in, or have in-depth knowledge about. But there are many entrepreneurs who are open to taking ideas that investors want to give them. It is always better to have a clear idea but at the same time, be open to the advice of investors. If they think that a particular client would not be good, then ask why and handle the situation in a delicate manner, instead of pushing it further.
3. Confine your research to existing partners and their earlier deals
You could have a list of your priority investors as a starting point. As a next step, you should know about the earlier deals or investments made by them, and where their interest lies, where they were before, and if any of them is on their way out. This kind of information would help you in focusing your energies to target the right people at the right time.
Though, all the information is not easily available, you can collect some data from your network in the system.Therefore, it is very important to expand your network and remain in good terms with people around you.
4. The primary focus should be your relationship with the investor and not on his investment in your venture
Always remember that all the investors won’t say yes to you. Gracefully accept refusals, if any, so that while listening to their opinion, you can put your connection with them above the investment they are offering. This will help you earn respect from them and also keep your doors open for future prospects.
5. Respect the timelines and don’t lose your focus
Investors can be intimidating at times. But you should remember to design a strong business plan and have a strong mind. Maintain your confidence and don’t go under just because you want their investments. So first, you should get your business model perfect. This way, you’ll grow even without new investments, may be not that quickly though. While negotiating, stay in a position of power, but not in arrogance. And ensure to stick to your deadlines and communicate openly and professionally.
- Africa, Newsletter
- January 13, 2020
The booming economy in Ghana can surely make you want to consider settling there and calling the place home. Ghana’s flourishing oil industry has also proven to be a huge additive to one of Africa’s most vigorous small and medium enterprise (SME) economies. It is also the continent’s most steady democracies, which is an added bonus. These are the reasons why Ghana has gradually become appealing to foreign investors.
Let’s take a look at some of the top opportunities this West African country has to offer for company formation in Ghana:
- Telecommunications: Earlier in 2019, the mobile penetration rate in this country exceeded 100 percent. This does not essentially mean that every citizen has a mobile phone. While accounting for several sim cards or possession of multiple mobile phones, the country’s telecom insiders assess that the mobile phone ownership is reaching the 16 million mark. There is a huge opportunity for expanding the voice market, but tower managers along with telecom investors would notice the highest growth in data services.
- Financial Services: The Banking Act in 2007 began the steps towards change in the financial services industry. Since then, the financial services in Ghana have upgraded tremendously. A flourishing economy and increasing incomes usually emphasize the potential of the financial sector. But this country has proven to have more potential than other nations in the region. Let’s take Cameroon for example. Though it has a parallel level of income, but Ghana still has more than twice the number of ATMs per head of its adult population. Benin, which also has a similar level of income, has only one-third of the banks per head of its adult population when compared to Ghana. Though the services have improved in this country, the new integration of banking ATMs in the nine banks in this country, (example in Zenith Bank, Standard Chartered Bank, and Ecobank) enables customers to utilize their bank cards at ATMs which are serviced by banks other than the card provider.
- Real Estate: The real estate prices are blossoming in this country as the returns are good. However, the office or commercial sectors are inundated by poor management and also lack of capacity. Places like Downtown Accra and surrounding suburbs are realising an increase in construction as various developers perceive a rising influx of cash coming from foreign investors. Improvements in the areas like consumer financing and mortgages in the banking sector would also enhance the opportunity for commercial and residential real estate.
- Industrial: Ghana is an industrial hub of the continent as it is way more advanced as compared to many other African nations. However, it is still far from its full potential. Pipeline manufacturing particularly for the oil and gas sector is not able to meet the demand on time and with required quality. At times, you just need the basic things to be manufactured without any hassle, says one industry insider, “but it is the small things that can slow up many projects.” Nevertheless, such kind of lamenting should not dissuade the foreign investors. Similar type of grievances have been also thrown around about some other industries. Every time such a complaint comes up, some anxious entrepreneurs are ready to resolve it, which is one of the biggest positive points of Ghana’s entrepreneurial makeup. Imports in agro-chemicals sector and related agriculture goods would slow over time as new businesses work to produce agricultural inputs locally. But Ghana has huge potential in car manufacturing, perhaps even electric cars. The development potential of gas liquefaction is also the talk of the town as the gas stations have ever-increasing queues. The potential of the industrial sector as a whole in Ghana is incredible, but it can only be grasped with more availability of capital.
- Services: Ghana is in need of various services across the board, which is why this is also a good area for company formation in Africa. It requires several management-level education facilities such as nursing, finance, etc to be able to meet the rising demand in the nation’s private sector. The country’s medical services do not always provide high-quality care and that is why some foreigners and locals need to travel to other countries if they need specialized medical care. Information and communications technology (ICT) services are also not adequate to meet the intensifying demand and needs of private sector businesses, be it SME or big one like oil and gas. There has also been less investment in the above-mentioned sectors. However, great returns are possible, particularly if the investors can hook up investments to Ghana’s energy and mining boom.
- Newsletter, U.A.E
- January 13, 2020
UAE Plans to Ready Itself for the Next 50 Years in 2020. UAE has announced 2020 as the year of preparing for the next 50 years. The Kingdom’s 50th anniversary also falls in the year 2021, marking 50 years from the historic union of the emirates.
In his tweets, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai announced and said: “Brothers and sisters. The UAE is approaching its fiftieth anniversary in 2021 and we want it to be the year of fresh-starts and new-beginnings. We will celebrate our country’s 50th anniversary and launch into another fifty. We will get ready for that in 2020. Next year will be the year of preparation for great strides”.
In yet another tweet, Sheikh Mohammed said, “Today, we announce 2020 to be the Year of Getting Ready for UAE’s 50th Anniversary. We will develop our plans, projects and thinking. 50 years ago, our founding fathers designed our lives today. So, we want next year to design the future of generations to come in the next fifty years”.
He mentioned that 2020 will be the year of getting ready and gaining momentum in the economic sector, infrastructure, education, health, and in the media sector. “In 2020, we will work together, Emiratis and residents, in all sectors… We are united and we can change the equations. We can raise expectations… We want 2020’s atmosphere to be similar to that of in 1970 when our founding fathers and their teams were preparing to embark on a new stage and new life” the Vice President said.
He further said, “I was there in 1970, the year of creating the union and will also be there in 2020, overseeing the team shaping the next fifty. There will be two committees. The first one will be chaired by Sheikh Mansour Bin Zayed and will be tasked with mapping out the development plan of the next 50 years. The other committee will include Sheikh Abdullah Bin Zayed and Sheikha Mariam Bint Mohamed Bin Zayed to oversee the celebratory activities of the country’s Golden Jubilee”.
“We are one team working in one spirit. We are fully optimistic that we have a promising future ahead,” he concluded.
In the meantime, His Highness Sheikh Mohamed Bin Zayed Al Nahyan, the Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, also announced that 2020 will be the year of preparing and making great strides towards the country’s 50th anniversary and also prepare for the next 50 years.
Sheikh Mohamed tweeted: “Today, I launched with my brother Sheikh Mohammed Bin Rashid the biggest national strategy for next year 2020. It will be the year of getting ready for the UAE’s 50th anniversary. It will be a red-letter year, during which we will make great strides economically, socially and developmentally aiming to be the best in the world in fifty years”.
He further added: “In the next fifty years, we will prepare all sectors for the post-oil phase, build a real knowledge economy based on innovation, creativity and modern science, and leave our imprint on the human civilization march. We will lay solid foundations to sustain development for future generations”.
The 50-year development plan committee
Sheikh Mohammed also announced the formation of a committee for creating a development plan for the coming 50 years. The committee, which would be chaired by Sheikh Mansour Bin Zayed Al Nahyan and Mohammed Abdullah Al Gergawi as his deputy, would have main agenda of preparing a complete development plan across the UAE and advancing the government administrative system with an objective to make the UAE the quickest and most adaptable and flexible government to future amendments.
The committee is also responsible for involving various segments of the society in shaping their life in the UAE for the coming 50 years. It would create a new economic map for the UAE and designing exceptional projects, guidelines and policies to make massive leaps in the country’s economy. It would also work to cement the soft power of the Kingdom and establish latest media systems for sharing the country’s new story with the world, thus bringing economic and social yields that safeguard its profits and increase opportunities in the new economy.
The committee is also responsible for developing key sectors such as health, housing, education, transport, and food security in the country to enhance future readiness. The committee would also create a broad vision of the UAE society in the coming 50 years that adapts family life, cultural identity and demographics to a rapidly-changing world.
It is also responsible to foster the ethics of productivity and passion for growth to prepare the new generation for any challenges and goals of the country in the coming 50 years.
Golden Jubilee celebrations committee
Sheikh Mohammed bin Rashid also announced directives to form a committee which would oversee the Golden Jubilee preparations.
The committee, which would be chaired by Sheikh Abdullah bin Zayed Al Nahyan and deputy Sheikha Mariam bint Mohamed bin Zayed Al Nahyan, would organize and manage remarkable celebrations to mark the momentous milestone in UAE’s history.
The committee would have a goal to govern the Emirates’ Golden Jubilee celebrations, develop a broad preparation plan and also form teams to organize various events and activities to celebrate the country’s 50th anniversary next year in 2021. It is also supposed to involve all the segments of the society for preparing for the Golden Jubilee celebrations.
The committee would also involve the private sector in preparing and executing the exceptional celebrations towards the Golden Jubilee and develop new plans to reinforce the global outreach and effect of the Golden Jubilee celebrations.
The committee would also compile a report of the Kingdom’s achievements since the federation and preserve the same for future generations. It is also going to involve embassies across UAE in the preparations and implementation of the Golden Jubilee celebrations for promoting the UAE’s global image.
The committee’s key duties also involve setting broad mechanisms for coordinating events and activities during the Golden Jubilee celebrations on both the federal and local level, creating local and international-level media plans for sharing the country’s journey of 50 years and also invite regional and international media to participate in the Golden Jubilee celebrations.
With all these dynamic changes, if you plan Dubai company incorporation or new business setup in UAE, this is the right time. We, at IMC, can assist you in your entrepreneurial journey and help you register your business.
- Newsletter, Saudi Arabia
- January 13, 2020
Why is Saudi Arabia the Most Appealing MENA Market for Retail Investments?, Saudi Arabia is the top-most and very appealing developing market for retail investment in the Middle East and North Africa (MENA) and also ranks among the top ten in the world, as per the 2019 Global Retail Development Index (GRDI).
The Kingdom has consumers spending about $125.5 billion annually on their shopping,out of which a large proportion of the residents spend on luxury labels. This is the reason that Saudi has risen up on the index and got the seventh rank globally, just after China, India, Ghana, Malaysia, Indonesia and Senegal.However, Saudi Arabia was ahead of Jordan, which got the 8th position, the UAE being on 9th, and Colombia on 10th.
The latest ranking has been a huge leap from the 11th rank of Saudi Arabia in 2017,largely because of the continuing efforts by the government to launch new economic and social reforms, as part of the plan to give the country a makeover and attract more foreign investments.
From the time of launch of its Vision 2030 agenda in 2016, Saudi Arabia has executed various social reforms like easing travel restrictions for women, permitting women to drive, and making abayas optional. Many such reforms have also assisted the retail industry.
In 2017 end, a proposal to open hundreds of cinema theatres by 2030 was announced, which ended a 35-year-long ban on movies and cinemas. The GRDI is a bi-annual research or study of the retail industry in about 30 developing markets. It provides ranking to countries depending on “country risk”, their population and per capita gross domestic product (GDP), enabling retailers, consumer goods producers and global service providers comprehend which destinations are growing, and which are stagnant or declining, and the reasons for the same.
Among the numerous reasons that make this Kingdom an alluring destination for international investors is their huge population, and also their young demography that offers itself to the volume game.
In addition, Saudi Arabia has high per capita income which also makes it very lucrative. The concentration of high-net-worth (HNI) individuals adds up to make it an appealing destination for the retail luxury segment and Saudi company incorporation.
Saudi Arabia has a population of 32.9 million and is therefore considered the largest market in the Gulf Cooperation Council (GCC) region for consumer brands and over 58.7 percent of the people here are quite brand-conscious. Its female consumer base and ultra-high net worth individuals are expanding, while the religious tourism is also on the rise. Between the years 2012 and 2016, the retail sales recorded in Saudi Arabia grew from $85.3 billion to $114 billion.
With a focus on the large Saudi retail market, the consumer tech giant Apple has recently collaborated with Fawaz Al Hokair Co to establish their business in the kingdom. SPAR International, a Dutch food retailer that entered into the market in the year 2018 by affiliating with Saudi conglomerate Al Sadhan Group is working towards having their 40 stores operational by the end of 2020.
It’s not just global brands who are setting up their outlets in Saudi Arabia, but many are thinking of capturing a share of the huge online spending. As per some reports, online retail is expected to reach almost $10.2 billion by the year 2023, which is up from $6.3 billion in 2019. Big brands such as Ikea and Landmark Arabia have launched their click-and-collect service to reinforce their omnichannel presence, whereas the e-commerce retailers such as noon.com are working hard to expand their online presence.
So if you are looking for business setup consultants in Saudi Arabia, please get in touch with us and we would be glad to assist you.
- Newsletter, U.A.E
- January 13, 2020
In April 2019, the U.A.E. Ministry of Finance announced Cabinet Resolution No 31 of 2019 (Resolution) on Economic Substance Regulations (ESR). The regulation is an element of Kingdom’s commitment to the OECD inclusive framework.
As per the regulations, the U.A.E. onshore and free zone companies along with other U.A.E. businesses (collectively known as Licensee) that conduct any of the listed ‘Relevant Activities’ to maintain an acceptable economic presence in the country related to the activities.
In continuance to the above, the Finance Ministry of U.A.E. recently published a list of 41 Frequently Asked Questions (FAQs) for addressing the apprehensions of impacted companies in relation to ESR. Along with listing down the FAQs, the Ministry has also offered valuable guidance on what steps a Licensee should take before the end of a specific financial year to be able to meet the compliance requirements related to the regulations. As per the stated guidance, a Licensee should –
- Evaluate what Relevant Activities were being or are likely to be conducted during the financial period while applying a ’substance over form’ approach;
- Evaluate the amount and type of income that is earned from the Relevant Activity in that financial period;
- Organise board meetings with a particular required number of directors’ present in the U.A.E. document the important minutes of these meetings;
- Investigate all the expenses incurred;
- Study and document main U.A.E.-based assets like premises, which is related to the Relevant Activity;
- Maintain relevant documents like agreements or financial records which support the assets and expenses;
- Examine roles and responsibilities of the staff towards the Relevant Activity;
- Analyse applicable outsourcing agreements;
- Any other facets that may help Licensee to prove adequate Economic Substance in the U.A.E. for a relevant financial period.
Questions | Answers |
| Which is the first reportable financial year? | Regulations apply to financial year that starts on or after 1 January 2019. For a U.A.E. company that follows January to December as their financial year, the first assessable period would become 1 January 2019 to 31 December 2019. But for a U.A.E. company that follows April-March financial year, the first assessable period would become 1 April 2019 to 31 March 2020. |
| Will these regulations only apply to entities in U.A.E. that are part of a global multinational group? | No. The regulations enforce Economic Substance obligations on any U.A.E. business which conducts a Relevant Activity, irrespective of whether the U.A.E. business belongs to a global multinational group. But in case of a U.A.E.-based Distribution Business, Headquarter Business, Service Centre Business, or High-Risk IP Business would remain within the scope of the regulations only if the U.A.E. company or firm is doing transactions with any foreign group companies. |
| Will a company that is registered under an ‘offshore’ free zone company regime be subjected to these regulations? | Yes. Regulation would apply to ‘offshore’ company in case it conducts a Relevant Activity. |
| Do the listed activities on the commercial license regulate whether a Licensee undertakes a Relevant Activity or not? | No. Though the commercial license might define the Relevant Activity, a ‘substance over form’ method should be used to decide whether a Licensee conducts a Relevant Activity and is within the scope of these regulations. |
| What happens if a Licensee does not conduct any Relevant Activity during a specific financial period? | The Licensee would not need to inform its Regulatory Authority nor is it required to submit an Economic Substance return for the applicable financial period. |
| What if a Licensee conducts a Relevant Activity, but is not able to earn any income from the same during a financial period? | Then the Licensee would only be required to submit a notification with the Regulatory Authority. Nevertheless, they would not be needed to file an Economic Substance return for the applicable financial period. |
| If the entire income from the Relevant Activity has been earned from outside U.A.E., then does the Licensee get an exemption from the Regulations? | No, this Licensee will not be exempted from the regulations. Any income from a Relevant Activity for which the Licensee needs to show Economic Substance return in the U.A.E. includes all income, inclusive of income generated by the Licensee outside of the U.A.E. |
| How is ‘adequate’ or ’appropriate’ economic substance defined? | The regulations and directive do not give a minimum standard for what is defined as adequate or appropriate. The Regulatory Authorities are supposed to take a realistic approach while assessing if a Licensee complies with the Economic Substance test, understanding that the type and level of activity of any Licensee might vary during the financial period and also from year to year. |
| Is the Economic Substance evaluated on a Licensee by Licensee basis, or can Licensees who are part of the same group chose to be evaluated on a ‘consolidated’ basis? | No. The regulations do not permit the Licensees who are a part of the same group to be combined for Economic Substance purposes. All the Licensees would have to comply with the regulations, and validate Economic Substance on an individual basis. |
| Are conditions for directed and managed applicable to Holding company business? | A Holding Company Business is not needed to be directed and managed in the U.A.E.; only exception is when this is a condition for the relevant licensing authority. |
| Is it necessary for the employees who conduct Core Income Generating Activities (CIGAs) to be the residents in the U.A.E.? | Yes, the employees who conduct the CIGAs of a Licensee would, be needed to be residents in the U.A.E. Any non-resident employees or other individuals would be counted towards the Economic Substance of a Licensee in the U.A.E. only if:
|
| Is it necessary the directors of the Licensee need to be resident in the U.A.E.? | No. Directors only need to be physically present in the U.A.E. to attend pertinent board meetings of the Licensee. |
| Can CIGAs or any other related activities be outsourced by the Licensee? | A Licensee is allowed to outsource any or all of its CIGAs as long as the outsourced activities are conducted in the U.A.E. However, a Licensee is not permitted to outsource activity of being supervised and managed, as the Licensee itself is needed to show oversight and control of the Relevant Activity in the U.A.E..
Activities that are not defined as CIGAs (like back office functions) could be outsourced to people located outside U.A.E. without negatively affecting the Economic Substance of the Licensee in the U.A.E.. |
| Are investment funds dependant on the Regulations as a Holding Company Business? | No. An investment fund is not deemed as a Holding Company Business. |
| Is lending to any other group entity deemed a Lease-Finance Business? | Yes, a U.A.E. company that offers a loan or provides some other form of credit to a U.A.E. or any other international group company for deliberation, for example, interest would be deemed as engaged in a Lease-Finance Business. |
| Is doing investment and trading in debt securities deemed as undertaking a Lease-Finance Business? | No, all the U.A.E. company that invest and hold bonds or other debt securities which are traded on a regulated exchange are not deemed as engaged in a Lease-Finance Business. |
| What happens if there is no consideration payable for the credit given? | The Regulations are not applicable to credit and other financing and leasing provisions where there is no anticipation of consideration in the form of fees, interest, rental payments, capital gains or any other such form of payment. The grant of security which is in favour of the lender does not constitute consideration. |
- Article, U.A.E
- January 10, 2020
A freelance permit offers you an opportunity to work on your own as a sole practitioner or an independent contractor. Working like this is entirely legal in the U.A.E. if you have the required permit. However, it’s important to note that in the U.A.E., you can get the permit as an Independent Contractor only if you are pursuing some selected professional activities (most of which are media-related) that are approved by the government.
Information you would need
Freelancer contractors can apply for this work permit and residence from some selected free zones located in the U.A.E., which also let you to set up and run your business in your birth name that is equivalent to the brand name. Essentially, your profession should be related to the listed free zones activities which are principally media-related like artists, directors, editors, writers, photographers, producers, make-up artists, and other technicians in the field of TV, Radio and films.
There’s also a recent trend where many professionals and businessmen want to gauge the market before they plan to invest and establish a company in U.A.E. Taking a freelance permit provides entrepreneurs with an option to test the market without investing or risking a big amount.
A freelance permit slightly varies from setting up a start-up company. Many professionals or entrepreneurs start out with freelancing in the beginning and the gradually upgrade to a suitable and full-fledged setup as they get successful.
For many people, being your own boss or starting a side-business is like a dream come true. Therefore, freelancing seems to be the best option to begin with. Having said that, it does need a strong and structured business plan and a great insight and determination to get new clients on-board. It is obvious that you would require the right set of skills and passion to succeed.
As a freelance permit is offered by some specific free zones and as per the package, the freelancers can base themselves in one of these free zones either by using a flexi-desk option which is surrounded by other businesses who may need a freelancer’s services or by renting their own office space.
Please note that freelance permit registration and the relevant visa applications have an attached cost, therefore, you will require funds that separates saving account supported with at least 6 months expenses or may be even more.
Differences between Freelance Permits of Free Zones in Dubai and Umm Al Quwain (UAQ) Free Zone
Here are the differences between the Dubai Free Zones and the Umm Al Quwain Free Zone that you should be aware of to be able to apply according to your preference and requirements:
|
Particulars |
UAQ Freelance Permit | Dubai Freelance Permit |
| NOC from the Sponsor | Not needed | Needed |
| Shared Desk | Not needed | Needed |
| Visa Validity | 2 years | 3 years |
| Sponsorship of Dependents | Yes | Yes |
| Auditing/Book keeping | Not Needed | Not Needed |
| Bank Account | Personal | Personal |
| Duration | 4 – 5 working days | 25 – 30 working days |
| Cost | AED 22,000* | AED 35,000* |
- Article, India
- January 7, 2020
The newly-launched GST return system has brought about some major amendments in the method of reporting of supplies; however, it has its own advantages and disadvantages. One such challenge is the declaration process of the input tax credit (ITC), which would now be based on the fact that the relevant suppliers report their invoices on the GST portal. Listed below are some of the challenges related to vendor compliance that the new return system entails.
1. The CGST Amendment Act, 2018 introduced Section 43A for easing out the return filing process under GST. Following are its highlights and the subsequent changes in the return filing system:
- The supplier has access to a mechanism where he could declare the details of outward supplies made by him on the common portal and then on the basis of that, a recipient could claim ITC.
- The recipient of supplies also has an option to verify and avail ITC.
- The accessibility of provisional ITC (that is, the credit related to the undeclared supplies by the supplier in his returns) is limited to 20% of the total available ITC (the guidelines governing this provision are still to be notified).
- Additionally, there would be a procedure for the recovery of any tax amount, which is yet to be recommended.
2. Is it justifiable to stop vendor payments if you are not filing GST returns?
While analysing the new return system, it is seen that the ITC claim by a supply’s recipient majorly relies on whether the supplier has declared the same and has filed his return within time limit. If the supplier delays this, then it could end up in an extra output tax liability though it’s
not the recipient’s fault.
The natural reaction of an entrepreneur in such a scenario would be to stop vendor payments till he files his return and he can see the credit reflecting on the common portal. But, this is not the ideal thing, as some suppliers might be going through a genuine working capital problem, and he might want his recipient to pay for the supplies so that he could pay the relevant taxes to the government. Stopping payments could also result in lawsuits as payments have to be made depending on goods or services received, and not as per the tax compliances done.
For small and med-sized supplier businesses, stopping vendor payments would be an expensive alternative as the Micro, Small and Medium Enterprises Development Act (MSMED), 2006 mandates the debtors of these MSMEs to clear payments within 45 days, post which these payments made would invite a very high cost of interest. Then only the large suppliers are left against whom these kind of actions can be taken. Unless the amount involved is quite big, stopping such payments would not put adequate pressure on large suppliers for filing their returns.
Thus, considering the above-mentioned points, stopping vendor payments is not a viable option if a supplier has not filed his returns.
3. Which alternate measures can taxpayers take to make sure that their suppliers are filing returns on time?
Though there is no clear solution for claiming ITC right now, but if a vendor has not filed his returns, here are some measures that can be taken:
- Indemnification clause: As part of the supply agreement, before making a supply, a clause can be added where the supplier has to indemnify the recipient in case the supplier fails to fulfil the required compliance needs, thus causing a loss of credit to the recipient. Though this may secure the company on paper, enforcing such a method practically involves a lot of time and legal costs, which decreases the effectiveness of this particular method. Also, many small businesses such as proprietorships and HUFs still conduct their business through verbal or implied contracts and might not see the advantage in employing professional services for drafting such an agreement.
- Boycotting such defaulting suppliers: The suppliers who do such compliance defaults frequently can be boycotted – either by limiting their trade or by declining to collaborate with them altogether. But, this could spoil business relationships. Mostly, small businesses are very dependent on long-existent business relations and looking for a new supplier for an important product may not be very practical. However, large suppliers mostly have a structured system for settling past dues and making payments for the required taxes on time. But, small businesses might not want to deal with them because of high costs involved.
- Compliance software: An application or software can be put in place, comprising applicable details for each vendor, which assists with compliance as it keeps track of the invoices, shows return-filing status, sends due-date reminders, etc. This makes it substantially easier for a vendor to maintain compliance.
- Incentive system: An incentive system especially meant for vendors can be developed where they are encouraged to file timely returns and pass on the necessary credit. But, this could mean an increased cost for the recipient. Therefore, care should be taken to make sure that the cost of execution this system doesn’t exceed its advantages.
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