- Article, Saudi Arabia
- June 20, 2019
Saudi Arabia has emerged as one of the ideal destinations for business and entrepreneurship from across the globe. Thanks to the active government measures and many associated benefits such as the lowest average tariff rate in the Middle East, simplified procedures for company formation in Saudi Arabia, liberal political environment, 100% foreign ownership, lower tax rate and numerous other incentives.
Saudi Arabia has taken steps to simplify business setup for foreign companies through SAGIA, which supports approvals, licensing, and visa processing. Ongoing reforms and investor-friendly policies have positioned it as a top business destination in the MENA region. Key sectors drawing interest include real estate, hospitality, and construction. Here’s a look at the basic requirements and registration process for starting a business in the country. To know more about how to open a branch office in Saudi Arabia, you may get in touch with IMC Group.
Basic Requirements for Registering a Company in Saudi Arabia
- Investment Share Capital – A minimum of Saudi Arabian Riyal (SAR) 5,00,000 is required to register a new company
- Number of Shareholders – As per the law of the country, a company can have at least 2 to a maximum of 50 shareholders.
- Auditor – Every private limited company in Saudi Arabia shall appoint an auditor.
- Application for Company Incorporation – The company incorporation application has to be submitted with the SAGIA along with all the supporting documents.
- Hiring Labour – If a foreign company is willing to hire local employees, it has to first get permission from the Ministry of Labour by submitting the required supporting papers.
- Zakat and Income Tax – Every private limited company in Saudi Arabia has to obtain Zakat and income tax certificate or license from the Ministry of Finance.
Taxation for companies in Saudi Arabia
- Tax Incentives – If a foreign company is registered in certain economic cities located in the under-developed provinces of KSA, it enjoys various tax incentives.
- Tax Free – There is no tax levy on the sales and hiring foreign employees, provided certain conditions are fulfilled.
- Corporate Income Tax – Corporate income tax is levied at the rate of 20% to 45%. However, the rate varies from service to service and product to product.
Documents Required for Company Formation in Saudi Arabia
| Document | Description |
| Investment License Application Form | Submitted to the Ministry of Investment (MISA) to request the license for foreign business activities. |
| Notarized Board Resolution | Lists partners’ names and capital shares, validated through notarization for legal standing. |
| Audited Financial Statements (Last 3 Years) | Company’s financial records reviewed by a certified accountant, showing past financial performance. |
| Articles of Association (AOA) | Defines the company’s internal structure, management responsibilities, and operational procedures. |
| Passport Copies of Shareholders | Clear and valid passport copies for every shareholder involved in the setup. |
| Proof of Identity and Address for Directors and Shareholders | Verification documents, such as IDs or utility bills, confirming identities and residential addresses. |
| Approval from Relevant Saudi Ministry | Written consent from the concerned authority based on the company’s sector and business nature. |
| Attested Power of Attorney | Legal authority assigned to a representative to act for the company, verified through proper attestation. |
Business Structures in Saudi Arabia
Structure | Key Features |
Limited Liability Company (LLC) | 2–50 shareholders; liability limited to share capital; minimum capital SAR 500,000 |
Foreign Branch Office | Requires approval from MCI; subject to Foreign Investment Law |
Commercial Agency | Foreign entities appoint a local Saudi agent; regulated by MCI |
Joint Stock Company | Minimum 5 shareholders; liability limited to share capital; capital requirements: SAR 2 million (private), SAR 10 million (public) |
Technical & Scientific Office | Provides support services; cannot engage in commercial activities; requires MCI license |
Process of Company Incorporation in Saudi Arabia for Foreign Investors
- Reserve the Company Name
Submit a name reservation request through the Ministry of Commerce and Industry’s online portal. - Submit the Articles of Association
Prepare and submit the Articles of Association to the Ministry of Commerce and Industry for approval and official stamping. - Notarize the Articles of Association
Visit the Notary Public to notarize the stamped Articles of Association. - Open a Local Bank Account
Set up a corporate bank account with a local Saudi bank to deposit the required initial capital. - Obtain an Investment License from SAGIA
Apply for and secure the investment license through the Saudi Arabian General Investment Authority (SAGIA). - Receive the Certificate of Registration
Upon securing the necessary approvals, obtain the company’s Certificate of Registration. - Register with Required Government Authorities
Complete registrations with other relevant authorities such as:- General Authority of Zakat and Tax (GAZT)
- General Organization for Social Insurance (GOSI)
- Municipality (for commercial license)
- Chamber of Commerce and Industry
FAQs
1. What types of companies can be registered in Saudi Arabia?
2. Is it necessary for foreign companies to have a Saudi partner?
3. What is the minimum capital required to set up a company in Saudi Arabia?
4. How long does it take to register a company?
5. What documents are needed for company registration in Saudi Arabia?
6. What tax obligations do companies have in Saudi Arabia?
7. Are there restrictions on foreign investors in certain sectors?
8. Is a physical office address mandatory for registration?
- Newsletter, Oman, Qatar, Saudi Arabia, U.A.E
- June 17, 2019
Here are some recent updates about employment and immigration law in various GCC countries.
United Arab Emirates (UAE)
The DIFC Authority has recently suggested a new mandatory DIFC Employer Workplace Savings scheme (“Savings Scheme”) that is designed to substitute the current end-of-service gratuity (“Gratuity”) regime. Coming in effect from 1 January 2020, as per the proposal all DIFC entities would now not accrue Gratuity but would have to contribute to the Savings Scheme that the employer would have to fund on a monthly basis. This Scheme would be based in the DIFC and operated and run by the trustees appointed by the DIFC. Now, all the DIFC employers and employees need to participate in the Savings Scheme only except if an employer works out a qualifying system of their own.
Kingdom of Saudi Arabia (KSA)
KSA’s Consultative Assembly has just approved a new draft law controlling the means, circumstances and terms under which residency visa or permits would be issued for highly-skilled professionals and wealthy foreigners without, the requirement for a sponsor or employer. The specific terms and circumstances under which this residence permit would operate has yet to be announced. Some reports say that all the eligible global nationals would be able to get a residence permit for up to one-year (which would be renewable) or applicable for an unlimited time duration, along with other qualifying conditions such as proof of sufficient financial resources, possessing a clear criminal record and having medical fitness. The qualifying residence permit holders can also sponsor visitor visas for their family and relatives, employment visas for their domestic workers, and they can also own property and travel around without restrictions to and from the KSA, among other advantages.
Oman
The Ministry of Manpower has extended the current six month ban (again for the same period) on expat workers working in the construction and cleaning sectors.
Additionally, the Ministry has further established that the following professions would only be taken by Omanis in the private sector: Administration Director, Assistant General Manager, Human Resources Director, Training Director, Personnel Director, Public Relations Director, Follow-up Director, Assistant Manager, and all administrative and clerical jobs. Those expats who are currently working in any of the aforementioned roles will be allowed to continue in these roles until the end of their existing residency visas; however, they will not be able to renew them.
This change shows that the Ministry is curtailing the historic expatriate dependency by various employers in the private sector and enhance the flow of Omani citizens into the private sector workforce.
Qatar
As per the Qatar work and residency permit procedure, citizens from Pakistan, Sri Lanka, Bangladesh, India, Nepal, Indonesia, Tunisia, and the Philippines (the “Designated Nationals”) were supposed to complete the post-arrival immigration formalities (such as biometrics, medical examination, signing the employment contract and then residence permit issuance) in Qatar. But, as per the recent amendments introduced in Qatar, the Designated Nationals will have to get their medical examination and biometrics done at the Qatar Visa Centers located in their respective nations before the Ministry of Labour in Qatar would issue them a work visa that allows them to enter the country and file for residency permit. As of now, this process is valid for all the Designated Nationals except for those from Nepal, Tunisia, Indonesia and the Philippines who would soon be covered under this new rule.
Qatar is the first GCC country to propose permanent residency status to its foreign nationals, but that is subject to some qualifying conditions. The Ministry is now accepting applications for permanent residency – almost up to 100 every year – as the new regime is now fully in force.
The Qatar government has introduced a new law that relaxes the exit permit requirement that was imposed on foreign employees (under the Qatari federal labour law) as a compulsory pre-condition to leaving the country, be it on a temporary or permanent basis. This new law then came into force on 28 October 2018. As per the head of the ILO’s Project Office in Doha, this law would be abolished for all the categories of foreign citizens by 2019 end. During this interim period, the individuals was have been currently exempted from the remit of the Qatar Labour Law still need to get an exit permit to go out of Qatar (requiring the sponsor’s permission) till the exit permit rule is abolished wholesale. This modification to cover all employee categories is a welcome move and would facilitate a more flexible and fluid workforce.
Conclusion
The speed of amendments in immigration and employment law throughout the GCC has been intensifying and seems to remain as a major growth facilitator as the GCC economies drive forward their agendas for diversification and foresights for the short and longer-term. We are committed to continue monitoring these amendments and updates and keep you posted on any developments
- Newsletter, Singapore
- June 17, 2019
For those who haven’t already done it, Singapore companies should consider registering alternate addresses particularly for their chief executive officers (CEOs), directors, and company secretaries.
The Accounting and Corporate Regulatory Authority of Singapore (ACRA) announced new regulations three years ago, permitting CEOs, directors, and company secretaries of all the Singaporean businesses and entities to go in for registering an alternate address. Though some have taken benefit of this opportunity, there are many companies who are still not aware of this change, and thus, they still reveal their residential address to the public.
The amendment was introduced to safeguard the privacy of these people by allowing that their residential address should remain confidential.
The context to this change
During the registration of a company in Singapore, the company’s top officials have to provide their residential address – which may be in Singapore or in some other country – so that if need be, they can be easily contacted by ACRA. Now, this information becomes a part of the company profile, which could be bought by anyone without any difficulty for just SGD5.50.
Some firms buy company profiles for the purpose of compiling mailing lists, which results in in the officers of that company possibly swamped with unwanted post or mail at their home address. However, the bigger problem was the likelihood of a disgruntled customer getting an easy access to the addresses of top officers. This regulatory amendment was made to eradicate such risks.
Registration of an alternate address
Officials of an organisation are allowed to register an alternative address with ACRA for a fee of SGD40. However, they should meet the following criteria:
- only one alternate address is permitted to be registered for each officer
- it should not be same as their residential address
- it should be an address where they can be contacted
- it should not be a post office box number
- it must be situated in the same jurisdiction as the official’s residential address, which is not necessarily in Singapore.
Please note that the alternate address would be the address, which is made available to the public; however, the residential address (should also be registered with ACRA) would be listed on the internal records only.
It’s very vital for the officials to remain contactable at the alternate address they have given. If they’re not available there, then they can be fined for up to SGD10,000 or may get imprisonment for a period less than two years, or both. Their alternate address could also be deleted from the registry and the residential address could be made public instead.
An official who is found to be in default would not be allowed to register another alternate address for a period of three years, and he/she should pay another registration fee whenever they do.
With these kind of serious possible penalties, it’s imperative that the CEOs, directors, and company secretaries strive to get proper professional advice.
- Newsletter, U.A.E
- June 17, 2019
The long-term UAE residency visas for expats are now offered in five select categories, which will allow them to reside in the UAE for up to 10 years.
The General Identity Directorate in Khalifa City of Abu Dhabi, Major-General Saeed Rakan Al Rashedi, who is the Director-General for Foreigners Affairs and Ports, said, “Today we announce the launch of new services in the field of residency, implementing the UAE Cabinet Decision No. 56 for the year 2018. It grants long-term stay in the country to investors, real estate investors, entrepreneurs, talented people like doctors, researchers, innovators and outstanding students.”
He also mentioned that the UAE leadership has made huge effort for the expansion and growth of the country, offer peaceful living for its residents and help people from various walks of life and professional backgrounds to get residency visas easily. The applicants in these five categories that includes outstanding students would be given a renewable residency visa and would be allowed to sponsor and get their spouses and children.
The advantages of the visa for the spouse and children is to make sure that the expats get a cohesive family environment and social structure and they get an invigorating environment for their growth.
These classifications include real estate investors who will be granted a five-year visa, other investors who can get a 10-year visa, and entrepreneurs and other talented professionals like doctors, scientists, researchers and innovators would be given a visa for 10 years.
The fifth category, which is that of outstanding students, would be given residency visas for five years. All these categories of visas are allowed to be renewed on expiry.
After they become eligible during their stay, expatriates are supposed to apply under the investors’ category.
These new measures are expected to attract highly skilled professionals, expats and investors coming from around the globe, and this in turn, would make the UAE as a hub for knowledge and international investment. This move targets to help the UAE in maintaining its optimal business environment by encouraging more and more company formation in Dubai.
Categories in new long-term visa
Investors – 10-year visa
Pre-conditions:
- Public investment has to be made through a deposit or a company (more than Dh10 million)
Non-real estate investments should be over 60 percent of total investments
- Investor should be holding the full ownership and not be on loan. Otherwise he has to prove that he reserves the investment rights for a minimum of three years.
- Assets should not be burdened by claims that damage the correctness of the financial value of Dh10 million
Advantages:
- This 10-year visa is renewable
- There is a possibility of having partners; however, there is a pre-condition that all the partners should be investing Dh10 million
- A 10-year visa also for the spouse and children
10-year visa for is given also to one executive director and one advisor
- A six-month entry visa along with permits for multiple travels
Real Estate Investors – Five-year Visa
Pre-conditions:
- The total investment in the sector of real estate should be over Dh5 million
- The investor should be holding the full ownership and not be on any Otherwise he needs to prove that he is reserving the rights of investments for at least three years.
- Financial assets should not be burdened by claims that weaken the correctness of the financial value.
Advantages:
- This five-year visa is renewable
- A five-year visa also for the spouse and children
- Five-year visa for is given also to one executive director and one advisor
- A six-month entry visa along with permits for multiple travels
Entrepreneurs – Five-year Visa
Pre-conditions:
- Possessing a project with a net value of over Dh500,000 along with accreditation certificates taken from the government
Advantages:
- A five-year visa that could be upgraded to investors visa
- A five-year visa for spouse and children
- A six-month entry visa along with permits that allow multiple travels. This could be extended for additional six months.
- A five-year visa is given to three executive directors.
Researchers, Scientists, Innovators and Doctors – 10-year Visa
Pre-conditions:
- Should have a valid work contract and possess a specialisation in the fields that are given priority in the country
Advantages:
- A 10-year visa, which can be renewed
- 10-year visa also given to spouse and children
Outstanding Students – Five-year Visa
Pre-conditions:
- The student should have scored at least 95 percent in his or her secondary school along with a distinction of 3.75 GPA when graduating from any university
Advantages:
- A five year visa, which can be renewed
- A five year visa for the family, which also can be renewed
So if you think you fit in any of these five categories and need professional advice on how to go forward or need PRO services in Dubai, do get in touch with us and we would be happy to assist you.
- Newsletter, Saudi Arabia
- June 17, 2019
Are you thinking of doing business in Saudi Arabia? Do you know that the Saudi Arabia General Investment Authority (SAGIA) has forecasted a 70 percent rise in new foreign investor licences in first quarter of 2019 as compared to Q1 of 2018? In fact Saudi Arabia, which is the biggest economy in the Gulf region, has worked towards becoming a regional hub for global investments and invite more businesses and companies to the private sector, as per its Vision 2030 objective of making its economy more diversified.
A Saudi business solutions provider recently issued a report on international investments in Saudi Arabia and listed all the legal entities that foreign investors could operate as in the Kingdom. So if you are planning company registration in Saudi Arabia or foreign company registration in Saudi Arabia, do consider one of the following.
- A limited liability company (LLC), which is a private equity established between two or more partners (there can be a maximum of 50 partners) or shareholders who are responsible for the company’s debts according to their contributed capital.
- A single member limited liability company (SMLLC) is typically an LLC formed only by one individual. This individual holds complete authority and can accept the position of the company’s director, general shareholders’ assembly and board of directors. The owner is responsible according to the amount of capital he/she has put into the company.
- Foreign companies are permitted to set up their branch office in Saudi Arabia where the parent company assumes full accountability of the office’s actions.
- A joint stock company (JSC) is a business where the capital is divided into negotiable shares. It would have a name that indicates its goal or purpose and a JSC is usually run by a board of directors. As per its memorandum of association, there could be a minimum of three members and a maximum of eleven.
The Saudi Arabia General Investment Authority (SAGIA) has forecasted a 70 percent rise in new foreign investor licences in quarter 1 of 2019 as compared to Q1 of last year. The highest investments per sector were seen in manufacturing industry, construction, IT, and professional science and technology fields.
The National Transformation Programme, which is an action plan launched by the Saudi government to reduce the Kingdom’s economic reliance on oil. This five-year plan basically has three key objectives: reforms in public sector and fiscal reforms, economic expansion and diversification and improving the business environment, and other social reforms.
The report highlights some of the significant licences that are available for global companies who are thinking of investing here.
- Service licences are obtainable for a variety of services, such as management consulting, tourism, training, information technology, insurance and reinsurance, health, education, logistic services, advertising and media, organizing exhibitions, financial services, catering and food services, aviation and handling services.
Service licences are categorised into two groups: specialized activities requiring an approval by some government agencies for services like health, insurance, transportation, and some non-specialized activities, in which no such approval is needed.
- Industrial licences are obtainable for heavy and light industries and also for transformative industries.
- Licences for a scientific or technical office are intended for global companies who have a collaboration with a Saudi agent for distributing their products in the country and they want to open an office to offer scientific or technical services to various agents, distributors and also to customers of those products.
- A temporary certificate to present a proposal to government projects could be requested by companies that want to bid for government projects by duly filling and submitting an application to SAGIA.
- A real-estate licence is meant for global companies who are dealing in property and specifically where the total project cost is not less than SAR 30 million with regards to land and construction and also the investment done outside the borders of the cities of Mecca and Medina.
- A trading licence is offered to all foreign entities who want to undertake wholesale or retail trade inside Saudi Arabia.
- A licence for public transport is needed by foreign companies who want to offer public land transport services like buses or metros operating within the kingdom.
- A consulting licence specifically for engineering offices is meant for international companies who wish to offer engineering consultation services operating in the country with a 100 percent possession.
- An entrepreneur licence is offered to those who want to set up pilot projects that are accredited by either Saudi universities or some business incubators.
- An immediate licence is meant for international companies who wish to open their headquarters in Saudi Arabia for engaging in investment activities with immediate effect and submit documents meeting the requisite standards for the activity.
- A licence for agents who handle recruitment and hiring of domestic labour services especially is meant for global companies who are dealing in domestic labour placement services and also short-term employment agency activities specifically for home services in the country.
- Licencing of the university colleges and also constant universities is available to international companies who want to conduct some such educational activities in the nation.
So if you are considering VAT registration in Saudi Arabia and need professional help, do get in touch with us at IMC Group
- Article, Bahrain
- June 14, 2019
Bahrain is a small island country located in the Middle East. It shares borders with Qatar, Saudi Arabia, Iran and the Persian Gulf. The Kingdom of Bahrain has the fastest growing economy in the Arab world. The economy of the country is majorly driven by the banking, tourism and oil and gas sector.
In order to further boost its economy, the government of Bahrain is taking measures like allowing foreign investors to have 100% ownership in a wide array of business sectors, liberalization of economic laws, tightening anti-money laundering laws, easing out visa and immigration policies and much more. All of these measures work towards bringing foreign investment into the country and to enhance business development within the nation.
Apart from this, Bahrain provides a rewarding investment environment for investors from all over the world. In fact, as per the 2019 report of the World Bank on ‘doing business in Bahrain’, the country is one of the best places for investment in the region. Moreover, it offers a safe and cosmopolitan business-friendly atmosphere to investors aiming for foreign investments in Bahrain.
Reasons to Invest in Bahrain
Bahrain is an emerging country in the Middle East and investing or doing business in Bahrain has the following advantages:
- Bahrain lies in the heart of the GCC which provides the advantage of easy access via air, land and sea from the Middle East and North Africa.
- The country boasts of its robust infrastructure and well-equipped amenities
- Bahrain holds a 40-year track record as the Gulf’s leading financial centre
- The scope of business growth is vast
- The legal system in the country is simple and lucid
- The corporate policies in Bahrain are business-friendly and liberal
- The country favours exports due to its lower customs duty
- Bahrain offers advanced banking facilities
- The country features a modern global economy
- The cost of living in Bahrain is quite low as compared to other neighbouring countries
- The local workforce in the county is educated, skilled and efficient
- The tourism and entertainment industry in the county are booming year on year
- It has one of the highest qualities of life in the Middle East.
Major Considerations to Make Before Starting a Business in Bahrain
If you have decided on doing business in Bahrain, here are a few things that you should consider.
- You must have a good knowledge of the region. It is vital to understand the business sectors that you intend to operate in, study the market conditions, competition, etc.
- There is a requirement of a local partner who holds the majority interest (share capital) and can, therefore, control the business. It can be a company or an individual.
- Post your foreign company registration in Bahrain, you need to convey to the Ministry of Commerce that you have at least the minimum required capital to invest.
Types of Legal Entities That Can Be Incorporated in Bahrain
When thinking of business set up in Bahrain, you may choose from among the following five legal entities:
1.Limited Liability Company
A Limited Liability Company can have a maximum of 50 shareholders (having at least 1 local resident shareholder) and they are liable only to the extent of the share capital they have invested in the company.
2.Branch Office
In order to incorporate a Branch Office, a foreign company has to get approval from the Ministry of Commerce and Agriculture. It has to appoint a local sponsor.
3.Partnership
It has 3 types:
- Partnership Limited by Shares
Partnership Limited by Shares comprises of two types of partners namely general partners and limited partners. It is formed by at least 1 general partner and 10 limited partners. The general partners are fully liable for the debts and actions of the company while the liability of limited partners is restricted to the amount of their capital investment.
- Limited Partnership
Limited Partnership is formed by at least 1 general partner who is liable for the partnership obligations and 1 limited partner who bears the limited liability and does not participate in the business management.
- General Partnership
In the case of General Partnership, all the shareholders are jointly and severally liable for the company’s debts and obligations.
4.Sole Proprietorship
A Sole Proprietorship is owned by a single person who bears unlimited liability for the business.
5.Bahrain Shareholding Company
A Bahrain Shareholding Company is required if the shareholders intend to engage in banking or insurance business. It has 2 types:
- Public Shareholding Company
A Public Shareholding Company (also called as a Joint Stock Company) is formed by at least two shareholders who are only liable to the extent of their capital investment. The shares of this company can be subscribed by Bahrain GCC and non-GCC citizens.
- Closed Shareholding Company
A Closed Shareholding Company is formed by at least two shareholders. The shares of this company are not offered to the general public for subscription.
Procedure to Follow for Starting a Small Business in Bahrain
1.Select a Legal Structure
The very first step is to carefully choose the legal structure of your business as it has a direct impact on how your business will be managed, how ownership is held, personal liability of the owners, etc.
2.Choose a Company Name
The next step is to select the company name based on the guidelines issued by the Ministry of Industry and Commerce (MOIC). You can propose up to 4 names at a time.
3.Commercial Registration of the Company
On verification of the application form and payment of the necessary fees, you can go for commercial registration of the company. For companies, commercial registration papers are issued at the Bahrain Investment Centre and for individual establishments at the Ministry of Industry and Commerce Commercial Registration Directorate.
4.Licensing and Approval
In case, if you do not get the commercial registration papers right away, you will have to apply for a license or get approval from more than one Governmental authority.
5.Other Requirements
Once your company is registered, you will have to comply with other requirements such as opening a local bank account, leasing an office space, hiring local employees, etc.
In order to ease the process of Bahrain company formation, you may seek help from a professional business advisor who can guide you through the company registration complexities and help you achieve your business goals. IMC Group can help you in this regard and make the entire process of doing business in Bahrain a hassle-free and convenient task.
- Article, U.A.E
- June 11, 2019
SME companies in Dubai or small and mid-size businesses have played a key role in encouraging the private sector and expanded the economic system. But now the question is if the year 2020 would enhance the financial impact of SME businesses located in Dubai and create new business opportunities for SMEs operating in Dubai?
The UAE economy is nurtured by SME firms in Dubai in a big way. As per current data, small and mid-size enterprises represent almost 96 percent of the total number of registered companies in Arab.
Next year, or 2020, is expected to bring a huge transition in the country. Some studies say that in 2020, there will be huge foreign investments by multinationals and many big corporate giants would enter the region. Due to this, the SME firms are anxious that their commercial characteristics would be sidelined. They also think their business opportunities would be restricted.
But UAE has done its ground work. After 2009’s economic downturn, UAE has prepared itself to deal with any global financial crisis such as fluctuations in economy, reduction of oil prices, etc. This is because of segregated business communities, business modules being based on knowledge, and investments in innovation-focused sectors which are majorly controlled by SME firms in Dubai and UAE.
There are over 4 lakh SMEs in Dubai which contribute around 60 percent of the GDP of UAE, and this figure has been rising with each passing year. In only Dubai, there are over 95 percent SME firms which add to the robustness of the economy.
UAE believes that the SME businesses in Dubai and in other parts of the region are its backbone. Thus, with the upcoming commercial plans for 2020, UAE has made it compulsory to integrate the SME firms through several programs. It is planning to adapt an approach where SME firms in Dubai and UAE get more flexibility and get equal opportunities to participate.
According to the latest reports, no advanced payment guarantees, no tender bonds and other similar leverages have been appointed for SME firms who are looking for collaborating on various government platforms. The SME sector is all set to almost 245,000 new jobs in the coming years particularly in tourism, event and hospitality sectors, which are set to grow by Dh143 billion. Besides, even IT start-up firms and consultancies will benefit hugely in 2020.
Do you want to take an approximation of how your company would fare in the year 2020? Or are you thinking if this is the right time for company formation in Dubai? Do get in touch with us and our professionals would guide you for business setup in Dubai free zone.
We at IMC, have the best experts of the industry who can help you with any assistance you require regarding company formation in Dubai or UAE. Just get in touch with us and we would offer you comprehensive solutions for business setup in Dubai free zone.
- Article, India
- June 3, 2019
India is a growing economy which offers unprecedented business opportunities. Indian markets are considered as one of the key markets worldwide and have significant potential offering prospects of high profitability and favourable regulatory regime for investors. In fact, every state in the country has a unique economic profile that offers numerous opportunities to foreign investors looking to set up or expand their business in India.
Every year, the National Council for Applied Economic Research (NCAER) publishes its State Investment Potential Index (N-SIPI) to demonstrate the investment climate of India’s states. The NCAER publishes the report by assessing the competitiveness of Indian states on six key pillars – infrastructure, labour, land, economic climate, political stability and governance, and business perceptions. It is a pioneering effort to provide metrics of economic governance, competitiveness and growth opportunities at the state and regional levels. The aim of this report is to provide the domestic as well as foreign investors an overview of the Indian market.
As per N-SIPI 2018, Delhi is the most attractive state for investors, followed by Tamil Nadu, Gujarat, Haryana and Maharashtra. In this article, we will walk you through the country’s top five investment destinations and their economic features.
Delhi
New Delhi is the national as well as the administrative capital of India. Not only this, but it is also one of the largest cities in the world in terms of population. Delhi has established a new benchmark in attracting FDI (foreign direct investment) equity inflows into the country. The per capita income of Delhi is 2.5 times higher than the national average.
Delhi is the preferred choice of investors owing to reasons like investor-friendly policies of the government, great infrastructure, competent workforce and large consumer market. In fact, Delhi outperforms other states in India in terms of infrastructure and economic environment.
The city is a hub for all types of commercial and business activities. If you are looking for company formation in Delhi, the city offers great investment opportunities in the industrial sectors such as information technology, tourism, manufacturing and real estate.
Tamil Nadu
Tamil Nadu boasts of the second largest economy in terms of GDP among all the states in India. It is also the most urbanized state in India. Being surrounded by sea from three sides (i.e. Bay of Bengal, Indian Ocean and the Arabian Sea), Tamil Nadu is strategically located and serves as an important gateway to Southeast Asia.
Apart from being an educational hub, there are many industries in Tamil Nadu which are majorly engaged in healthcare, IT, automotive, textile and financial services. The favourable industrial climate, competitive manufacturing industries in the region and the largest number of special economic zones serve as a major advantage to the businesses eyeing to set up their base in Tamil Nadu.
Cities like Chennai, Coimbatore, Madurai, Tiruchirappalli, Salem and Tiruppur provide huge advantages of population and larger customer base.
Gujarat
Gujarat is a leading industrial state and boasts of the highest GDP growth among all the states in India. Due to its strategic location, it provides a gateway to the land-locked states in north India. In addition, Gujarat is well situated to provide strategic trade routes to the African continent and the Persian Gulf. Moreover, it is consistently ranked on top in the ‘ease of doing business surveys’.
Gujarat offers great investment opportunities in the industrial sectors such as petrochemicals and allied products, chemical and allied products, port and shipbuilding, conventional and renewable energy, pharmaceuticals, jewellery, gems, diamonds, textiles, food and agribusiness, engineering and automotive manufacturing, etc.
Cities like Ahmedabad, Surat, Vadodara and Rajkot provide huge advantages of population and larger customer base. There are well-renowned industries in Gujarat such as Adani group, Aditya Birla Group, Reliance, Mahindra & Mahindra and Godrej.
Haryana
Haryana is one of India’s largest automobile hubs and a preferred destination for auto majors and auto-component manufacturers. The state has also emerged as a base for the knowledge industry, including Information Technology and biotechnology. It is a top-ranked state in terms of business perceptions and ranks among other top states in the country in ease of doing business.
Haryana contributed around 3.32% to India’s GDP. The state offers a wide range of fiscal and policy incentives to businesses. Its key geographical location and progressive business environment attract local as well as global investors.
Haryana offers great investment opportunities in the industrial sectors such as automotive, IT, textiles, oil refining, agro-based industry, biotechnology and petrochemicals.
Maharashtra
Maharashtra is known as the most industrialized and wealthiest states in India. Mumbai, the capital city of Maharashtra is popularly known as the financial capital of India as it is home to some of the major banks and financial institutions such as the Reserve Bank of India, Bombay Stock Exchange, National Stock Exchange, General Insurance Companies and Life Insurance Companies.
If you are looking for company formation in Mumbai, you can grab the many advantages that the city offers such as its strategic location on the western coast of India; a gateway for imports into western India; conducive business environment; competitive banking, financial, and service industries; and largest entertainment industries in the world.
Maharashtra offers great investment opportunities in the industrial sectors such as automobiles and auto components, petroleum and allied products, chemicals, information technology, telecom, engineering, textiles, electrical and non-electrical machinery, etc.
Cities like Mumbai, Pune, Nagpur, Nasik and Aurangabad provide huge advantages of population and larger customer base.
If you are looking for company formation in India, you can choose any of the above-mentioned destinations. For company formation in India, you may seek help from a professional company like IMC Group.
- Article, India
- May 31, 2019
US-China trade war has been a major concern for many companies and economies across the globe. The tussle between the US and China gives nations like India a chance to enter into new foreign markets. Many companies from the US are looking to relocate their companies from China to India. In addition, the export from Indian companies can increase drastically amid the trade war.
Recently in a media interview, US-India Strategic and Partnership Forum (USISPF) – a US-based advocacy group, said that the US has been looking at India as an alternative to set up companies that are moving out of China. This will certainly give a big boost to India’s manufacturing sector.
Many top brands like Samsung, Adidas, Nokia, etc. have already shifted their manufacturing base from China even before the trade war began. This was done to reduce their costs and diversify their supply chain. If this manufacturing base shifting continues to happen, India will prove to be a great alternative to China.
Why India Appeals as a Manufacturing Hub?
The Indian government took several initiatives to bring structural reforms and intellectual property rights, which has attracted companies from across the globe to India and start their manufacturing unit.
In the recent years, many big companies have set up their manufacturing units in India. One of them is Samsung electronics, it has set up the world’s biggest mobile phone manufacturing plant in India. Another example is the iPhone which has started assembling its phones from India.
Since many companies are eyeing at India to set up their manufacturing unit, it is important to learn what makes India so appealing.
What Makes India Appealing?
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- Lower Labour Cost
Many global giants and start-ups are looking for foreign company registration in India because it offers many benefits. The primary benefit is the low labour costs which makes manufacturing affordable. India’s labour cost is lower than China and the majority of the Southeast Asian countries. Also, there is a large pool of engineers that offer world-class expertise with wages less than the Chinese labour force.
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- Huge Customer Base
Furthermore, what makes India highly attractive is the large population which provides the manufacturers with a good domestic market for their products. The 1.3 billion population of India has the market for every product that various companies offer. Therefore in terms of consumption, India’s population is higher than any other Asian country other than China.
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- Easy Access to Natural Resources
Another reason why there is an increase in setting up of manufacturing base and company formation in India is the access to natural resources. When the prices of raw materials or natural resources are compared with any other country, India is the cheapest. India has a vast reserve of iron ore, aluminium, etc. which proves to be a good alternative to China when it comes to setting up of manufacturing units in auto or apparel sector.
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- Favourable Government Policies
Government policies have played a significant role in attracting businesses to set up their manufacturing units in India. India’s manufacturing sector got major strength from the “Make in India” program. This program facilitates investment, protect intellectual property, build manufacturing infrastructure, enhance skill development and foster innovation. Furthermore, many bold moves like the implementation of goods and services tax, the revival of the power sector, IBC code, etc. have addressed the concern areas of the economy.
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- Free Trade Agreements
India has many free trade agreements (FTAs) inside and outside the Asian region. Also being a signatory of ASEAN, India provides the companies an access to the world’s largest FTAs. This gives the companies an opportunity to sell their products not only in India but to the outside regions as well.
Setting Up Your Business in India
Before setting up your business in India, you must understand the wide geographical area of the country. On the basis of need of the business, the manufacturing unit must be set up accordingly. The infrastructure facilities vary from state to state. Also, many states offer various incentive facilities to the business for setting up a manufacturing unit.
Like for example, states like Gujarat, Andhra Pradesh, Tamil Nadu, West Bengal and Maharashtra have their own industrial policy that emphasises on developing the manufacturing sector. Gujarat offers various incentives and facilities for setting up production units in jewellery, chemical, textile and pharmaceutical sector. For setting up business units in automotive and auto-component manufacturing, Maharashtra is the most popular place. For electronics assembly and manufacturing, Uttar Pradesh and Tamil Nadu are the popular states.
Therefore, it would not be wrong to say that the wide geographical land of India offers many opportunities for setting up manufacturing units in the country.
About Us
IMC Group caters to all the requirements regarding company formation in India. We understand the various challenges that your business may face in India. We help you in identifying the right location for your business. Our wide range of services can assist you at every step of the company or manufacturing unit set up in India. Some of our services include:
- Legal Set-up Services
- Physical Set-up Services
- Ongoing Services
The aim of the IMC Group is to act as a one-stop solution for all your business needs in India.
- Article, U.A.E
- May 28, 2019
The UAE has come out with a new approach to construct a sustainable infrastructure to generate power using renewable energy. Traditionally, oil and gas have been the main source of fuels driving the UAE. But the UAE is changing the manner in which they use the energy mix, as per the ‘Energy Strategy 2050’, the key objective is to provide the nation with clean energy, to be specific, 7 percent of Dubai’s total power productivity by the year 2020, which is progressively rising to 75 percent by the year 2050. All the GCC nations have realised that they can’t just rely on the oil sources in the long term. They are now investing heavily in the renewable energy sector to attain the targets they have set by 2030-2040.
The UAE is the first nation that has adopted a new energy approach and is targeting a blend of renewable, nuclear and clean and is now known as one of the world’s foremost countries to come out with an effective and dependable renewable energy approach. The breakdown of this approach is as follows:
- 44 percent clean energy
- 38 percent gas
- 12 percent clean coal
- 6 percent nuclear
The ‘Energy Strategy 2050’ is in agreement with the ‘UAE Vision 2021’ when it comes to certainly constructing a sustainable environment by lessening carbon footprint, enhancing air quality and also adopting clean energy. The overall objective of this approach is to enhance the usage of clean energy from the current 25 percent to 50 percent by the year 2050, so as to lessen the carbon footprint by almost 70 percent and to enhance the energy consumption by entrepreneurs and enterprises by 40 percent. The UAE government is also investing an amount of over AED 600 billion by the year 2050 to make sure that this approach is put into practise and the established goals are met. Presently, the world’s biggest concentrated solar plant is under construction in Dubai amongst an array of other projects in the pipeline. This is going to put the UAE at the third rank in the world when it comes to creation of concentrated solar power.
The process of setting up an energy company in the UAE
There are many opportunities available in the UAE and within the GCC for innovative and ground-breaking companies to expand their business within the region. With progressive and avant-garde energy projects that are already running in the UAE, the Energy and Power industry provides beneficial investment prospects across the board; particularly for those who have interest in company formation in Dubai or setting up a business in the renewable energy space and service companies that support the industries like technology, engineering, and professional services. There is also an ever-increasing demand and ample of new opportunities in the energy production field. Here are some points to consider when you begin setting up a business within the UAE in this industry:
- Decide and set up the legal form of the new business
- Register your company or trading name
- Find out the best office lease options and get a contract done
- Fill the application for a trade licence and get requisite approvals from the concerned departments
- Get a Department of Economic Development (DED) Trade Licence
- Get registration of your new business with the Labour and Immigration Departments
- Open your company’s bank account
- Recruit and apply for your employees’ visas
Note:
People interested in working within the renewable energy industry as a Solar or PhotoVoltaic Consultant or Contractor have to register with Dubai Electric and Water Authority (DEWA). Then, they need to attend a five-day training course, which covers competence building and safety awareness. For more information on this, please visit: www.dewa.gov.ae
Locations to set up your company in the Energy Sector in the UAE
If you are planning for business setup in Dubai free zone, you can consider one of the following free zones:
Masdar City Abu Dhabi:
Masdar City is located very close to Abu Dhabi International Airport and is a thriving clean-technology business hub. If you set up your business in this free zone, you would get an array of advantages such as 100 percent foreign ownership along with exemption from corporate taxes.
Dubai Multi Commodities Centre (DMCC):
This is a government entity, which was founded in the year 2002 to augment commodity trade flows within Dubai. It is a dedicated global hub for over 14,100 enterprises ranging from various industries and sectors. There are many benefits that DMCC extends to companies who are setting up their businesses in the UAE or are thinking of DMCC company formation.
Dubai Silicon Oasis (DSO):
Dubai Silicon Oasis (DSO) was established in 2005 and is a technology park with an integrated community. It’s a 100 percent government-owned free zone facilitating and promoting new technology-based industries. Various incentives and advantages are offered to companies that function within this free zone.
Mainland:
Mainland licenses get varied benefits to companies such as the flexibility to do business and be located anywhere in the UAE, an unlimited number of visas along with an exemption from business and/or personal taxes, besides many more plus points.
A company planning to establish a mainland licence in the UAE would have various options for formation such as: Limited Liability Company (LLC), Branch Office and Commercial Agency. You have to consider some factors affecting the cost of a mainland license such as the nature of the activity and which licence is required – industrial, commercial or service-oriented and what would be the legal form of the company.
The procedure to set up a renewable energy company within the UAE is no doubt quite complex, and hence, it is recommended to seek professional advice for the same. We at IMC, have experienced professionals who can guide you with all the procedure so that you are all set to function legally within a short span of time.
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