Understanding the Singapore Variable Capital Company
Background:

The Ministry of Finance announced in the 2018 Singapore Budget Statement that a VCC would be treated as a company and a single entity for tax purposes. On 10 September 2018, a draft bill for the VCC was presented for the first reading in the parliament, and the bill was subsequently passed in the parliament on 1 October 2018. The VCC Act will come into effect in end of 2019.

Originally it was named as Open-End Investment Company (OEIC), it came to be known as Singapore Variable Capital Company (“S-VACC”). Now, it has been renamed again, as the Variable Capital Company.

The VCC framework incorporates several key features of open-ended/flexible capital vehicles that are already available in jurisdictions such as Luxembourg, Ireland, the UK, and the USA and allows for investment funds to issue shares and debt instruments.

What is the Variable Capital Company?

A Variable Capital Company is an alternative form of corporate vehicle that will soon become available for Collective Investment Schemes (CIS). Presently, the organisational structures available to CIS are the company, limited partnerships, and the unit trust structures. The VCC can be used for both open-ended and closed-ended alternative and traditional fund strategies. As a corporate vehicle with flexible capital, shares are created when investments are made, and the shares are readily redeemable by the shareholders. This kind of flexibility was lacking in the existing vehicle of corporations available under The Companies Act that has several restrictions when it comes to capital reduction and dividend distribution. This new vehicle, exclusively designed for the fund management industry, will strengthen Singapore’s position as a fund management hub in the region.

What are the Benefits of Variable Capital Company?
  • Solvency Test and Resolutions – There is no need for solvency tests and corporate resolutions for issue and redemption of shares. Relief from such conditions ensures seamless movement of capital.
  • Easy entry and exit for Shareholders – Shareholders have greater freedom and flexibility to enter and exit a fund through easy subscription and redemption of shares. Such fluidity and flexibility are very critical for the efficiency of investment funds.
  • Distribution of Dividends – the Company under the Companies Act that requires dividends to be distributed from the profits only, VCCs can distribute dividends from the capital itself.
  • Register of Members – Although VCCs are required to maintain a register of shareholders, they need not disclose the register publicly.
  • Umbrella Fund – The VCCs can be constituted as umbrella funds with several sub-funds that have different investment objectives, investors, and asset classes. The sub-funds could share a board of directors and have the same fund manager, custodian, auditor and administrative agent.
  • Financial Statements – The Financial statements are not required to be made public.
  • Variety of Investment – The VCC can be used for different types of investment strategies namely – traditional, hedge funds, private equity, and real estate funds
Basic Requirements of Variable Capital Company
  • Capital of VCC – The capital of a VCC will always be equal to its net assets, thereby providing flexibility in the distribution and reduction of capital.
  • Licenses Fund Managers – It will require a Singapore based licensed or regulated fund manager (unless exempted under the regulations)
  • Securities and Futures Act – The VCCs are required to follow Securities and Futures Act (SFA) requirements for investment funds.
  • Directorship – It must have at least one Singapore resident director for non-authorised schemes and at least three directors for authorised schemes.
  • Secretary and Registered Office Address – It must have its registered office in Singapore and must appoint a Singapore based company secretary.
  • Auditors – It must be subject to audit by a Singapore-based auditor and must present its financial statements as per IFRS, Singapore FRS, or US GAAP.

 

Entities

Variable Capital CompanyCompany
Legal Form
  • Body corporate incorporated under the VCC Act for investment funds and having a separate legal personality.
  • It can be set up as a stand-alone entity or an umbrella entity with multiple sub-funds. VCC will be a single legal entity, with its sub-funds operating as separate cells (each without legal personality)
A business form which is a legal entity separate and distinct from its shareholders and directors
Legislative Framework
  • Variable Capital Companies Act 2018 for the incorporation, operation and regulation of the structure (with certain provisions ‘borrowed’ from the Companies Act i.e. registration of charges etc)
  • The Securities and Futures Act will govern the offering of shares in a VCC and all other aspects concerning the VCC as a fund.
Companies Act, Chapter 50
Administering authority
  • Accounting and Corporate Regulatory Authority (ACRA) will administer the VCC Act.
  • The Monetary Authority of Singapore (MAS) will oversee its anti-money laundering and countering the financing of terrorism obligations.
Accounting and Corporate Regulatory Authority (ACRA)
Owned ByThe subscribers to the constitution of the VCC and every other person who agrees to become a member of the VCC and whose name is entered in the register of members.
  • Exempt Private Company – 20 members or less and no corporation holds beneficial interest in the company’s shares
  • Private Company – 50 members or less
  • Public Company – more than 50 members
Legal StatusFor VCC, a sub-fund of an umbrella VCC is not a legal person separate from the VCC, but the VCC may sue or be sued in respect of a sub-fund. The property of a sub-fund is subject to orders of a court as it would have been if the sub-fund were a separate legal person.It is a separate legal entity from its members and directors, entity can sue or be sued in own name and also own property in own name.
Liability
  • The liability of a member of the VCC is limited to the amount, (if any) unpaid on the shares held by the member.
  • Members are not personally liable for debts and losses of Company
Members of the Companies have limited liability.
Yearly statutory obligationsAnnual returns must be filed after its AGM and within 7 months after the end of its financial yearAnnual returns must be filed after its AGM (a) in the case of a listed company, within 5 months after the end of its financial year; and (b) in any other case, within 7 months after the end of its financial year
Accounting and governanceThe wider scope of accounting standards to be used in preparing a VCC’s financial statements thus allowing more flexibility in financial reporting:

 

  • Apart from Singapore accounting standards and recommended accounting principles, the use of International Financial Reporting Standards and US Generally Accepted Accounting Principles would also be permitted.
  • Audit by a Singapore based auditor
  • Accounting standards should be consistently applied across all the sub-funds
  • Umbrella VCC must also keep separate accounting and other records for each sub-fund that sufficiently explains the transactions and financial position of each sub-fund.
Singapore accounting standards and recommended accounting principles for companies which are consistent with Singapore Financial Reporting Standards
Re-domiciliation
  • Foreign corporate fund structures can re-domicile as VCCs in Singapore.
  • This will encourage fund managers with funds domiciled in offshore jurisdictions such as Cayman Islands, to shift fund domiciliation with their fund management activities to Singapore.
Foreign corporate entity can re-domicile to Singapore and become a Singapore entity (provided the host country recognises or authorises re-domiciliation)
Appointment of company secretary and auditorsCompany Secretary: Must appoint at least 1 company secretary within 6 months of incorporation.
Auditor: Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements
Requirement for fund manager
  • VCC must appoint a fund manager that is regulated by MAS to manage its investments.
  • This will enable supervisory oversight on the use of the VCC, including to prevent a VCC from being abused for unlawful purposes and to help ensure that it is not used as an offshore vehicle without actual investment management activities in Singapore
No such requirement for fund manager.
Number of ShareholdersAt least one shareholder. (Note: s16 and s17 VCC Act states that any person may incorporate a VCC and the subscribers to the constitution of a VCC are considered to have agreed to become members of the VCC)At least one shareholder
Number of Directors
  • At least one director of the VCC must be a Director of the Fund Manager or must be at least a Qualified Representative.
  • Directors of a VCC must also be “fit and proper persons”.
  • At least one Singapore resident director for non-authorised schemes and at least 3 directors for authorised schemes.
Must have at least one director who is ordinarily resident in Singapore
Registration requirementsThe registering party must submit to ACRA:

 

  • the constitution of the proposed VCC and other prescribed documents;
  • the name of the manager of the proposed VCC;
  • the names of the director(s) of the proposed VCC;
  • provide ACRA the last day of the first financial year of the proposed VCC and such other information as may be prescribed; and
  • pay ACRA the prescribed fee.
  • Declaration by either a registered qualified individual or a director or secretary of the proposed that all requirements for formation of company have been complied with and identities of subscribers and officers of the VCC have been verified.
The registering party shall submit to ACRA:

 

  • the constitution of the proposed company (unless the company use model constitution) and such other documents as may be prescribed;
  • furnish ACRA with the last day of the proposed company’s first financial year and such other information as may be prescribed; and
  • pay ACRA the prescribed fee.
  • Declaration by either a registered qualified individual engaged in the formation of the proposed company or a director or secretary of the proposed that all requirements for formation of company have been complied with and identities of subscribers and officers of the proposed company have been verified.
Taxes
  •  VCC will be treated as company and a single tax entity under ITA, subject to such modification and rules made under the ITA.
  • Tax exemption schemes under s13R and s13x (i.e the Resident Fund Scheme and Enhanced Fund Scheme respectively, which are two main tax exemption schemes for fund management available for Singapore based funds.
  • The tax residency will be determined at umbrella level for an umbrella VCC
  • Profit taxed at Corporate Tax Rates
  • New company can avail Start-up tax exemption subject to fulfilment of exemption conditions
  • Other companies are applicable for partial tax exemption
Continuity in lawA VCC has perpetual succession until it is wound upA company has perpetual succession until it is wound up or struck off
Closing the business
  • Winding up- voluntarily by members or creditors, or compulsorily by the High Court. When winding up a sub-fund, all shareholders of a sub-fund should redeem their shares (where appropriate) and the VCC shall be required to apply to the MAS to be de-authorised.
  • No striking off for VCC unlike for companies under the CA
  • Winding up-voluntarily by members or creditors or compulsorily by High Court.
  • Striking off

 

Variable Capital Company can be used Standalone Fund or Umbrella Fund

Umbrella Fund
  • Standalone Fund comprises of single investment portfolio.
  • The tax treatment of a stand-alone VCC will remain the same as that of a Singapore company.
  • The Enhanced Tier Fund (“ETF”) Scheme and Singapore Resident Fund (“SRF”) Scheme under the Income Tax Act will apply to a stand-alone VCC similar to how it would apply to a Singapore company

Stand Alone Fund
  • An umbrella fund consist of multiple sub-funds;
  • All sub-funds can share the same directors and service providers;
  • Each sub-funds acts as a separate legal entity;
  • If need be, each sub-fund should be wounded up seperatly to ensure ring-fencing of each fund’s assests and liabilities
Signs to Shut Your Business and Start a New One

Running a business is not a cakewalk. There would be many challenges at every step. As an individual, it becomes very important to have clear thoughts and make the right business decisions at the right time. One of the toughest decisions that an entrepreneur has to take is whether or not he should shut his business. When the circumstances of the business are not favourable, it the right time to shut the business and venture into a new one. In this article, you will learn about the signs to shut your current business and start another one.

Signs to Shut Your Business

No Business Growth

Even after trying hard and giving a steady push, there is no significant growth in the business then this is not a good sign. There is something wrong with the business and it’s time to pause and look at the processes again. Even after that if things are not working well then it is the right time to close your business.

No Profits

The aim of starting any business is to make good profits. When your business is working at full capacity and still you are not making enough profits then it is the time to implement new systems. If the new systems and processes are not giving an improvement in operations and profitability then it’s the right time to stop your business and venture into something which is more fruitful.

How a Private Limited Company Can Qualify for Audit Exemptions in Singapore

Singapore is one of the most attractive destinations in the world to set up a business. A private limited company is the most suitable option for incorporating a business in Singapore. Private limited companies in Singapore receive various benefits in the form of tax savings, limited liability and minimum compliance obligations. However, the Companies Act in Singapore has introduced the “small company” concept. The private companies in Singapore get audit exemption if they fulfil “small company” criteria. This is done so as to reduce the overall compliance cost and regulatory burden on private companies.

Small Company

First understand the meaning of a small company to the Companies Act in Singapore, a company is considered a small company if it fulfils two out of the following three conditions:

  • The annual revenue of the company is up to S$10 million.
  • The total value of the company’s asset is up to S$10 million, or
  • The number of full-time employees in the company at the end of the financial year do not exceed 50.


A company that qualifies to be a small company is not required to have its accounts audited and appoint an auditor. Besides the private companies or small companies, group companies i.e. holding or subsidiary of private companies also get audit exemption if they qualify as a small group company.

Group Company Audit Rule

A group company is a holding company and its subsidiaries that together are a part of a group and has a common source of control. A group company can avail the exemption of annual audit if the holding and subsidiary companies individually;

  • Belong to a small group and
  • Fulfil at least two of the small company qualifying conditions.

To qualify as a “small company”, all the companies comprising the group must fulfil at least two out of the following three conditions in the immediate two preceding financial years;

  • The group’s consolidated revenue must not exceed S$ 10 million
  • The value of the group’s consolidated assets must not exceed S$ 10 million
  • The total number of employees of the group must not exceed 50

Therefore, if the company wants to avail the audit exemption, the subsidiarity and holding company as a group must fulfil the above mentioned criteria.

Change in Company Status

When a company acquires the status of a “small company”, it will continue to enjoy the audit exemptions until it is disqualified. Disqualification of a small company occurs when;

  • The company is no more operating as a private company in the financial year, or
  • The company does not qualify the criteria of “small company” for the two immediately preceding financial years.

If you are looking to avail audit exemptions for private companies in Singapore, you may get in touch with IMC Group.

How are Old and New GST Return Systems Different

The new GST return filing system is now revamped in many ways. In this article, we will discuss about the amendments which might not attract our attention immediately such as HSN summary, advances received, non-GST supply details, details relating to e-commerce supplies, TDS, TCS, and more.

The table below shows a comparison between the newly-launched return system and the old or current return system:

Particulars

Old/Current Return Filing System New Return Filing System
HSN Reporting Till now, HSN-level data was not needed to be disclosed for every invoice. But, Central Tax notification number 12/2017 dated 28-06-2017 needed disclosure of HSN data as follows:
– Annual turnover in previous FY up to Rs 1 crore: No HSN needed
– Annual turnover in previous FY which is between Rs 1 crore and Rs 5 crore: HSN of 2 digits
– Annual turnover in previous FY over Rs 5 crore: HSN of 4 digits.
The Annual Return (Form GSTR 9) also has a section in Table 17, which gives an HSN-wise summary of outward supplies. Likewise, a summary of inward supplies is also to be reported in Table 18, only when turnover under a specific HSN code goes over by 10%.
Suppliers having annual aggregate turnover over Rs. 5 crore relative to exports, imports and SEZ supplies have to upload HSN-level data of 6 digits. All other suppliers can declare HSN optionally. Nevertheless, notification number 12/2017-Central Tax dated 28-06-2017 remains effective till cancelled by CBIC. The reporting as per GSTR-9 would continue till further changes are notified.
Exempt, Nil-rated and Non-GST Supplies The reporting of the Nil-rated supplies, which are exempted and non-GST outward supplies were earlier done in Table 8A, 8B, 8C and 8D of GSTR-1 and also in Table 3.1(b),(c) and (d) of GSTR-3B. Table 3D(1) and (2) of RET-1 enables reporting of particular supplies which are exempted from tax payment or are nil-rated, and supplies are made, but which are not encompassed under GST law (non-GST supplies) respectively. The form ANX-1 would not have any provision for reporting of this.
In addition, Table 3D (2) of RET-1 includes supplies made which come under Schedule III -activities which are neither supply of goods or services.
Advances Received 1. Table 11A(1) & Table 11A(2) of Form GSTR-1 was earlier utilised for reporting of details such as intrastate and interstate transactions which involved tax liability at the time of receipt, respectively. Thus, advances that were received were stated in this table.
2. Table 11B(1) & 11B(2) of Form GSTR-1 was utilised for adding details like advance received in a previous period and then adjusting them against supplies stated in the current period.
1. Table 3C(3) of RET-1 enables for reporting of advances received that were taxable when they are received. The same should be net of the issued refund vouchers. Additionally, the table can be utilised to make the adjustments regarding any wrong reporting of advances in a previous period.
2. Table 3C(4) of RET-1 enables for recording of invoices issued in the current period especially showing the advances received in a previous period on which tax was paid by a declaration in Table 3C(3) of that particular period.
E-commerce supplies/TDS/TCS 1. While specifying details of large invoices (over Rs. 2.5 lakhs) regarding taxable inter-state supplies, Table 5 of Form GSTR-1 is utilised. In case the supplies were made using E-Commerce Operators (ECO) in this table, then the checkbox regarding the same has to be selected and the GSTIN of the E-Commerce Operator (ECO) has to be entered after that. 1. Table 3 (3A to 3L) of ANX-1 needs a declaration of several types of outward and inward supplies which are liable to reverse charge, any imports and any missing documents based on which some credit is claimed. Out of the supplies that have been declared in Table 3, the particulars of those supplies which were made using E-Commerce operators (who are needed to collect tax at source). There are some details that need to be given in Table 4, like GSTIN of ECO, the price of the supplies made, the price of supplies sent back, the net value of supplies and the total tax amount.
Qatar Announces New Executive Regulations Regarding the Income Tax Law
Key highlights and next steps

Qatar has made an announcement about the Ministerial Decision No. 39 of 2019 issuing the Executive Regulations to the Income Tax Law (Law No. 24 of 2018). These Regulations were issued in the Official Gazette on December 11, 2019 and will be applicable with immediate effect and the earlier Executive Regulations are now annulled. The Regulations aim on revolutionizing the local tax administration regime to be in alignment with Qatar’s global taxation commitments to bring greater transparency and also to encourage growth of foreign direct investment (FDI) in tandem with Qatar Vision 2030.

Main highlights and key changes:

Corporate Income Tax
  • Supplementary guidelines on Permanent Establishments (PEs) comprising clear reference to a six-month (183 days) limit for service PEs and also project PEs.
  • Taxability of various subsidiaries of companies that are listed on the Qatar stock market to the size of non-Qatari shareholding in the listed parent company. Companies conducting “Petroleum Operations” and working in the Petrochemical industry would stay fully taxable, if the company is fully or partially owned by the State of Qatar, be it directly or indirectly.
  • Tax losses, if any, could be carried over for up to five years, in contrast to three years in the previous regulations.
  • New Tax depreciation rates have been announced recommending a Straight Line method in place of the Written Down Value method which was mentioned in the earlier regulations.
  • Amendments to the timeline for tax registration – 60 days now instead of 30 days. There is also a recommendation to use the new digital Tax Administration System.
  • The scope of field inspections has been defined and also the approach that the General Tax Authority would adopt while assessing tax returns.

Capital Gains Tax
  • Precise guidance on how to apply Capital Gains Tax on the sale of shares especially in Qatari resident companies by a non-resident corporate body.

Withholding Tax
  • Amendments to the “wholly or partly” rule when testing performance to evaluate the applicability of Withholding Tax (WHT). The services that are used in Qatar or conducted for
    the advantage of Qatar are considered as locally-sourced, irrespective of the place of performance and as a rule, will be subject to WHT.
  • Amendments to the rule on when a WHT payment would be due and who would be subject to registration obligation as WHT agent.Theamounts that are subject to WHT would now be considered as paid within a period of 12 months from the payment due date (only exception will be for Ministries and other Government agencies or public foundations).
  • Addition of other detailed guidelines about WHT refund claim depending on application of double tax treaty.

Transfer Pricing
  • The requirements for Transfer Pricing applicable for taxpayers have been announced along with new and updated reporting requirements that will be applicable from the tax year ending on December 31, 2019.
  • The requirements for Transfer Pricing comprise four tiers of compliance: (i) Transfer Pricing Form or Questionnaire which is be submitted with the Tax Return, (ii) Masterfile, (iii) Local file
    and (iv) Country by Country requirements or reporting (this has been already introduced in 2018-2019).
  • The Regulation takes a reference from International Accounting Standards and the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines (for instance, it takes a reference on the definition of an Associated Enterprise).
  • Additional guidance are expected to be issued in due course to explain some key areas and this would include an Advance Pricing Agreement program that would be available to the taxpayers who are involved in some complex or material transactions.

The above-mentioned are among the many amendments that are going to reshape the current tax landscape of the State of Qatar.


Points which are still unclear

Some areas of the Regulations that are still not clear are:

  • Exemptions in some specific scenarios that are applicable to legal entities which are partly owned by Qatari nationals.
  • Some practical challenges that are related to the method of calculation of share of profits which are attributable to non-Qatari shareholders in the specific subsidiaries of the listed entities.

The way forward

The announcement of the four tier documentation approach in Qatar is expected to increase the compliance burden on all the taxpayers who are operating in this region. Global Multinational Entities might feel some comfort because the OECD Transfer Pricing Guidelines are referred to in the Regulations. The initiation of Advanced Pricing Agreements would also aid big Multinational Entities to gain certainty in times to come.

How to set up a Small Business in Bahrain in 2020

Bahrain has become a huge attraction for investment opportunities in the past few years. As per the World Bank’s report in 2019 on doing business in Bahrain, the Kingdom has ranked as one of the best places for doing investment and it continues to make the most of it.

Investors from across the globe are now confident that Bahrain offers a rewarding investment environment, which brings us to the importance of forming or registering a company in the Kingdom.

Bahrain is an island Kingdom made up of a group of islands, located in the stretch of the Qatar peninsula and the north-eastern coast of Saudi Arabia. The government here welcomes foreign investment in Bahrain with open arms so as to boost its economy. As a result, the economic laws of the Kingdom have been significantly liberalized. Bahrain also recently passed some laws liberalizing foreign property ownership and tightened its anti-money laundering laws. In addition, the visa and immigration policies are made simpler to encourage business development and ease the process of setting up a foreign company in Bahrain.

Private organizations and firms, specifically in Information and Communications Technology (ICT), Tourism, Education, Banking, Healthcare and downstream industries and Financial Services & Insurance (BFSI) are flourishing in Bahrain.

Bahrain is a country that focuses on development and offers a business-friendly backdrop that is cosmopolitan, safe and unsurpassed in the Arabian Gulf.

Why should you invest in Bahrain?

Being a developing country in the Middle East, Bahrain is all set to grow and advance in a big way. Let’s take a look at some advantages of investing in Bahrain:

  • The customs duty in the Kingdom is low, hence it favours exports
  • The corporate policies are quite business-friendly
  • The legal system is clear, coherent and simple
  • The banking sector is developing at a fast pace, resulting in advanced banking facilities
  • There is a huge scope of business growth and expansion
  • The people of the Kingdom are pleasant and its culture is very supportive of entrepreneurial and industrial growth
  • It has an advanced infrastructure, which is well-equipped with facilities to make the company incorporation procedure in Bahrain simpler
  • It is the major port hub in the region, which offers convenient access to all the markets in the Middle East
  • The tourism and entertainment industry in Bahrain has been flourishing and expanding year on year
  • The standard and quality of life and variety of food in the country is quite tempting

Bahrain is now one of the major players in the financial and banking services throughout the world. Its strategic location and its sophisticated digital telecommunications systems facilitate communications with all business hubs and financial centres. Another big advantage is that the regulation, licensing, and supervision of advisors offering investment and any other financial advice in or from Bahrain is also quite regulated. This safeguards the investors from the probability of negligence or fraud.

What all should you know to start a business in Bahrain in the year 2020?

  • Firstly, gain considerable knowledge about the region.
  • As per the law, you must have a local partner who should be holding the majority of the shares of your company, and thus controls the business.
  • After Bahrain company formation, the Ministry of Commerce should have ensured that you possess the minimum required capital for investment.

Also Read: Top 10 Business Opportunities in Bahrain

However, it is always recommended to consult a local business advisor right from the beginning. A reputed and experienced consultancy like IMC can help you sail through the formalities of company incorporation procedure in Bahrain, and help in attaining your business objectives, whether you are thinking of setting up a start-up or a larger firm.

What are the available legal structures in Bahrain?

When thinking of Bahrain company formation, you could opt from among the following legal entities:

1. Limited Liability Company

2. Branch Office

3. Partnership

When setting up a business in Bahrain, a partnership could fall in three categories:

  • Partnership Limited by Shares 
  • Limited Partnership 
  • General Partnership 

4. Sole Proprietorship

5. Bahrain Shareholding Company

  • Public Shareholding Company 
  • Closed Shareholding Company 

What are the steps to set up your small business in Bahrain?

Company incorporation procedure in Bahrain involves several requirements, which must be followed to run the business. The key steps are:

  1. Registering a company name: Then, you need to register your company name which would help identify your business forever. The Ministry of Industry and Commerce (MOIC) has outlined some guidelines to keep in mind when selecting a business name. You must ensure that you comply with those laws. An entrepreneur is allowed to propose up to four business names at a time.
  2. Doing the commercial registration of your company: The Commercial Registration papers are released by the Bahrain Investment Centre. They issue the papers after checking and ensuring that there is no fault in the application filled in the initial stage. The papers are given after paying the required fees.
  3. Licensing and approval process: Licensing and approval is required when a company or business does not get their Commercial Registration papers right away. Therefore, they need to follow this additional step for registering their company in Bahrain.
  4. Other Approvals: After registering your company successfully, the next steps is to open a company bank account, then lease an apt office space, and then hire Bahraini employees etc.
  5. Other Approvals: After registering your company successfully, the next steps is to open a company bank account, then lease an apt office space, and then hire Bahraini employees etc.

Company formation in Bahrain guarantees a huge earning potential, benefits of various tax exemptions, convenient facilities, state-of-the-art infrastructure, and liberalized public policies along with free trade barriers. We, at IMC, assist entrepreneurs, companies and corporates to set up their business in Bahrain, while taking advantage of all the benefits this economic and financial hub provides. Our professionals would take charge of all the visa, banking, licensing and legal formalities and help you to glide through the company incorporation procedure in Bahrain without any worry. If you are planning to start your own small business in Bahrain in 2020, please contact us and we would be glad to assist you.

Fund Raising of Start-Ups Through Patents

Start-ups often run out of the fuel due to shortage of funds. Their future prospects go in the dark when they lack finances. Therefore, most start-ups are advised to begin the business only when they are sure that there would not be any financial crunch because the functionality of the business majorly depends upon capital. The s tart-ups can source their financing from friends or family, angel investors, crowdfunding, business network, etc. Another source of finance that is getting very popular these days is raising funds through patents.  In this article, you will learn how patents are an important source of finance.

Let us first learn about the meaning of patents.

Meaning of Patents

A patent is an intellectual property. The owner i.e. the inventor of the patent has the right to restrict the marketing, sale or use of the product or service. Therefore, the inventor of the patent has a monopoly over the operation of the product for a specific period of time. The main advantages of patent are as follows:

  • Patent keeps competition away as others cannot use your invention.
  • Patent acts as a source of finance. The inventor can sell the license of the patent to others or sell the patent in exchange for another asset.

Let us now learn how a patent can help in fundraising.|

Fundraising Through Patent

The inventor has to patent his invention so that it becomes a source of revenue and help him in developing new inventions for the market without worrying about infringement. Patents are important source of finance for the start-ups because of the following reasons:

  • Patent ensures that the competitors cannot infringe your product.
  • Patent ensures higher profits and a regular flow of revenue.
  • If the patented invention has a promising future then it will attract a large number of investors who can acquire your patent.
  • If the invention gets a good public response abroad, patent opens a potential market in foreign countries.
  • Patent secures the position of your invention in the global markets.
  • To increase investors to file for patents, the government provides many tax rebates and enables faster processing of documents.

There is a provision even to get the incomplete invention patented through a provisional application. The provisional application defines the field of the invention and its scope. This gives protection to the inventor against unlawful use of his idea.

The validity of the provisional application is for 12 months. After the period of 12 months is over, the inventor has to file a complete specification, otherwise the provisional patent application will then be considered as abandoned. After the filling for a full patent, the provisional specification given in the provisional application shall not be removed. The inventor must take care while writing a provisional application. It should be to the point and in context of the business objectives.

The provisional patent application can play a big role in the success of the business. The start-ups must file for provisional application before they proceed with a full patent. There are many advantages of filing a provisional patent application, they are as follows:

  • Provisional application can be filed at a very low cost.
  • It prevents competitors from filing patents related to that particular field.
  • Before applying for the full patent, the inventor can conduct trials of the product.
  • It gives protection of 12 months to the inventor of the patent.

One thing that is clear from the above is that a start-up can raise funds through patent only after securing it. A patent has the potential to generate huge profits in the long run.

If you are a start-ups looking for company registration in India or need help with patent registration, you can contact IMC Group. We understand the importance of patent registration for start-ups and therefore, we provide the service of patent, copyright and trademark registration in India. To know our quotation or if you have any query that you want us to answer, just drop us an email.

Singapore is one of the world’s most attractive destinations for start-ups looking to spread their wings. In fact, Singapore now has overtaken Silicon Valley to become the number one place across the globe for start-up talent. In the year 2016, the World Bank Group ranked

Singapore as the best place for “Doing Business” in the world. This article will help you in learning some of the key factors that make Singapore an attractive place for start-ups and expansion of business.

Business Friendly Policies

The business-friendly policies are the top factor for start-ups to grow in the country. The Singapore government ensures maximum support for the companies. The attractive tax-friendly rates, efficient transport system, well-functioning court system, public safety and minimal bureaucratic red-tape make it easy for the start-ups to access the assistance provided by the government. The easy to follow rules and kind of environment created by government makes it simple for start-ups to survive, grow and innovate.

Access to Resources

To become a successful start-up, assistance from various stakeholders is required. The market participants like investors, service providers, government organizations, research institutes, accelerators and co-working spaces give the start-ups an ecosystem to grow. Singapore government is very supportive towards start-ups. It provides them with necessary resources required for setting up the business. The type of help depends on the type of start-up you are incorporating in Singapore.

Access to Skilled Workforce

A company needs skilled workforce in order to expand its business or grow a start-up. Without skilled, knowledgeable and efficient workforce, the start-ups cannot survive. Therefore, entrepreneurs are always looking for countries where they can get skilled workforce at affordable rates. Singapore perfectly fulfils the need for skilled workforce for businesses. Therefore, for companies looking to expand their business, Singapore is an ideal destination.

Laws of the Land

A start-up while setting up its business would want an assurance that their intellectual capital and contracts with different countries would not be taken away arbitrarily. Singapore gives them this assurance with well-defined and robust laws. The corruption-free governance, accountability, stability and equal justice to all give the start-ups in Singapore the confidence to flourish their business.

Taxes

The taxation policy is one of the main criteria for start-ups before establishing their business in a country. Singapore is one of the best places for start-ups when it comes to taxation policies. The start-ups in the country attract tax exemptions for the first three years of the operations subject to conditions for start-up tax exemptions. Besides, the corporate tax rate is capped at 17%. Moreover, the businesses can carry forward their losses in order to reduce their future tax liability. Also, the corporate dividend is exempt from tax in the hands of the shareholders. What further makes Singapore more appealing for start-ups is that it has signed Avoidance of Double Taxation Agreements (DTAs) with more than 50 countries.

Protection of Intellectual Property

Intellectual property is a critical asset for any start-up. Investors invest in companies with a strong intellectual property portfolio as they have good future potential. The government of Singapore supports and encourages the protection of intellectual property. The government’s Intellectual Property Hub Master Plan protects the intellectual property rights of the companies in Singapore with modern legal framework. It covers trademark laws, copyright, patent, industrial design protection and trade secrets protections.

Ease of Global Expansion

Start-ups and other companies look to establish themselves in countries where they can easily expand their business globally. Singapore is located in the heart of Southeast Asia. Its location has many geographical advantages. Some of the largest economies of the world are a short flight away from Singapore. This gives businesses an opportunity to easily trade with big countries across the globe. Singapore also provides assistance programmes to help start-ups expand their business world-wide. The assistance is in the form of grants that can be used for hiring marketing staff, conduct market research or carrying out contractual negotiations.

Singapore, despite being a small country has achieved huge economic growth by focusing on its core proficiencies. The excellent infrastructure, highly advanced industrial sector, pro-growth reforms and pro-business policies have made it an excellent place for start-ups and expansion.

If you are keen to know how to start a business in Singapore, you can get in touch with IMC Group. We assist the start-ups in the process of company formation in Singapore. You can avoid the pile of paperwork and take our assistance at affordable rates. Our streamlined process will help you in starting a company quickly. If you require any more information or have a query, you contact us by dropping an email.

Announcement of Instant Visas for the SMEs who are Planning to set up in KSA

One of the biggest obstacles for any entrepreneur or SME setting up their business in a new country is the humungous amount of paperwork needed, particularly in case of getting a licence to operate there. Various governments across the globe understand this challenge and are taking steps to simplify the process of doing business in the country, which in turn, attracts foreign investments and businesses to set up and add to the country’s GDP.

In 2019, Saudi Arabia opened its doors and simplified guidelines to pull in more visitors to the nation. Their visa-on-arrival and online visa application system went live this year on 27 September, and since then, over 50,000 visitors have travelled to the country.

Saudi Arabia, which is the GCC’s largest economy and also houses one of the world’s most profitable companies, has announced its plan to start an instant work visa scheme next month for SMEs and entrepreneurs who are thinking of setting up their base in the country.

“[The work visa service] will enable young Saudis to launch start-up projects, open small businesses, boost economic growth and accelerate business expansion plans, which will have a positive impact on national development.”

Ahmed Al-Rajhi, the minister of labour and social development

The ministry mentioned that this decision was made after undertaking an extensive study into the requirements of SME entrepreneurs. Therefore, this work visa has been designed especially for assisting new small enterprises. Additionally, the service would be available through Saudi’s Qiwa platform that is particularly designed for SMEs. This initiative is likely to also make it easier for Saudis to begin more and more start-ups.

This announcement was made during a meeting held with entrepreneurs from Hail Chamber of Commerce and Industry. It also said that entrepreneurs would now be able to gain from a set of integrated tools made available for SMEs. After an initial grace period, the ministry is planning to introduce a new framework which will nationalise the workforce of these businesses under the Saudi nationalisation scheme named, Nitaqat.

It’s a fact that SMEs are the backbone of any economy. As Saudi Vision 2030 is aiming diversification of its economic dependence away from oil, it is now also working to strengthen the tourism and economic sector by taking new initiatives to attract investors and businesses to the Kingdom. Under the Vision 2030, there are plans to enhance the contribution of SMEs to the country’s GDP from 20% in 2016 (when the vision was announced) to about 35% by the year 2030.

Though further details about the new visa service scheme are yet to be announced, it is a good sign for new businesses, particularly SMEs and start-ups based in the Middle East, who are planning to do foreign company registration in Saudi Arabia and gain from the large economy.

India is Opening up Myriad Business Opportunities for Companies in Central and Eastern Europe

India is Opening up Myriad Business Opportunities for Companies in Central and Eastern Europe. The Commerce and Industry Minister Piyush Goyal announced recently that India is going to open up doors for big business opportunities especially for the companies based in central and eastern Europe. He said this at the India-Europe 29 Business Forum, which was organised by the industry body CII.

“We have lots of opportunities together and I hope we can look for a greater engagement. We have both comparative and competitive advantages. We offer incentives and have slashed tax rates. We have 1.3 billion people who are aspiring for a better quality of life,” he said.

Requesting countries for investments, Goyal highlighted that India is offering various incentives like low tax rates for the investors, which makes it an apt destination for new company formation in India.

The companies in central and eastern Europe are welcome to collaborate with Indian businesses and companies in sectors such as robotics and artificial intelligence (AI), new-age manufacturing and renewable energy.

While addressing the forum, Deputy Prime Minister for Economic and Demography Policy for Bulgaria, Mariyana Nikolova also sought new investments especially from India.

She mentioned that her country can offer a stable and anticipated policy regime and multitude of beneficial incentives for investors.

TS Tirumurti, secretary Ministry of External Affairs also mentioned that central and eastern European countries would gain advantage from the openings that India is proposing in various sectors.

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