- Article, U.A.E
- April 5, 2019
Dubai has secured its position among top business hubs in the world. This is because of the government’s constant efforts and various policies adopted for the growth of different types of businesses in Dubai, whether big or small.
Owing to this, many people wish to open a small business in Dubai. In fact, lately, many small businesses are continuously opening and flourishing in the city.
One of the promising ventures for many entrepreneurs is opening a coffee shop in Dubai. It is a good idea which is not too risky and at the same time gives you an excellent opportunity to capitalise on the flourishing food and beverage industry. Moreover, the food and beverage industry in Dubai is continuously rising.
Given the competitive environment in the coffee business, it is very easy to set up a coffee shop in Dubai. Moreover, it is also the most profitable and cost-effective business venture. So, if you have the right knowledge and skills then you are sure to gain favourable results. Below mentioned are some tips on how to open a small business in UAE and make it beneficial for you.
Benefits of setting up a coffee shop in Dubai
One of the biggest advantages of opening a coffee shop in Dubai is the cost factor. It is the most cost-effective business idea among all the food and beverage businesses in Dubai. Unlike opening a restaurant in Dubai, The cost of setting up a coffee shop is very less and you need a very small space for setting it up. You also do not require much investment for the functioning of the same. For opening a coffee shop, you are not required to invest much which makes it easier for you to start your business. Moreover, the time taken for setting up the infrastructure is also very short.
Steps to follow for opening a coffee shop in Dubai
Develop and Document Your Business Plan
- Start-up business plan describing how you are going to set up your coffee shop
- Operational business plan with details on how you are going to operate your coffee shop
- Contingency business plan detailing how your business will respond effectively under different exigencies and adverse unforeseen circumstances
Select the right space
Decide on the Right Layout
Outline a marketing plan
UAE Economic Substance Regulations: Compliance & Filing Guidance
Get the necessary license
Normally, you need to apply for general business permissions as well as specific Food & Beverages (F&B) service regulations to set up a coffee shop in Dubai and require the following licenses
- Business Trade Licenses specific to Food and Trade License issued by the Department of Economic Development including a license from the Department of Tourism and Commercial Marketing. License cost depends on the size and type of business and normally costs SAR 8000 and more.
- Food licenses for safety reasons and authorization from the Food Control Department of Dubai Municipality. There may be other Business Trade Licenses for a mobile type like a coffee van and in such case, you would also need driving licenses for you and your employees.
Select Your Equipment
Also, you will need equipment to set up a coffee shop in Dubai such as Coffee and espresso makers, coffee grinders, coffee, and tea brewers, ice makers, hot water dispenser, high-speed oven, decanters, and various coffee shop accessories e.g. cups, spoons, pitchers, syrup pumps, timers, creamers, water treatment equipment, blenders, juicers, refrigerators, sandwich preparation tables, display racks, cleaning and washing equipment like dishwashers and many others.
Fulfill all compliances and requirements
Mentioned above are a few things to keep in mind for a successful set up of a coffee shop in Dubai. Apart from this, you should also monitor your cash flows, hire trained employees and do good market research before starting out. If you need professional help for setting up a coffee shop in Dubai UAE, you may get in touch with IMC Group.
Conclusion
- Newsletter, U.A.E
- April 3, 2019
Home-renting company Airbnb dives deeper into the hotel-booking business by investing in Indian hotel reservation start-up OYO’s series E funding round. Though Airbnb did not disclose the amount of the investment made, sources in the know said that the investment ranges between $100 to $200 million. As part of this deal, OYO is likely to list its properties on Airbnb platform thereby expanding its international reach and simultaneously strengthening Airbnb’s presence in Asia.
This investment underscores a growing trend of companies in the hospitality and travel segment to leverage each other’s strengths.
On 8th March, Airbnb bought HotelTonight, an app for finding hotel rooms at a discount, ahead of its hotly anticipated initial public offering (IPO).
“Emerging markets like India and China are some of Airbnb’s fastest-growing, with our growth increasingly powered by tourism to and from these markets,” said Greg Greeley, president of homes, Airbnb.
On the other hand, OYO has also been aggressively expanding its global footprint by entering markets such as UAE, Philippines, the US, and China over the past one year.
“Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes,” said Maninder Gulati, global chief strategy officer at OYO Hotels & Homes.
Airbnb has about 47,000 properties listed in India. Globally it has almost 6 million listings across 81,000 cities in 191 countries. Whereas, OYO has its presence in more than 259 cities in India with over 8,700 buildings and over 1,73,000 rooms.
- Article, U.A.E
- April 2, 2019
Dubai has established itself as the number one business location in the Middle East and it offers a hotbed for business opportunities. The city offers a strong and growing economy, economic diversity, financial stability, tax-free business environment, world-class infrastructure, proficient workforce and great business opportunities.
Today more and more investors are flocking to Dubai to establish their dream business owing to its great potential and bright future prospects. Moreover, it gives access to over 2 billion population in three different regions of the world. Its easy geographical location gives access to over 140 ports in 6 different continents. In addition to this, Dubai is one city in the whole of UAE that houses a maximum number of free zones. Due to the tax-free nature of its business zones, the cost of setting up a company in Dubai is low which attracts a huge number of entrepreneurs to Dubai.
All of these factors make Dubai a great place to set-up a business. With so much ease and facilities, all you need is the best business setup consultant in Dubai and you are good to go!
What is Business Setup Consultant?
Why Do You Need Business Setup Consultants in Dubai?
Setting-up a business in Dubai is easy and smooth but it involves understanding the difference between company formation and business set up in Dubai free zone and mainland. In addition, you also need to comply with other legal and statutory formalities such as preparing legal documents, opening a corporate bank account in Dubai, obtaining the required licenses based on the activities and services you intend to offer and do other visa processes. All of these activities are time-consuming as well as tedious. However, business setup consultants in Dubai can take off the burden from your shoulders and ease the entire process of company formation in Dubai.
IMC Group -Best Business Setup Consultant in Dubai
IMC Group is a cross-border financial advisory firm offering wide range of services such as Business Setup Solutions, Corporate Advisory Services, Global Mobility, Tax Advisory Services, International Tax Structuring, Special Purpose Vehicles (SPV), and Accounting and Bookkeeping Services to its esteemed clientele in the AMEA (Asia, Middle East and Africa) region.
We help you establish your business faster, smoother and easier. Depending on your budget and requirements, we suggest you business solutions that are tailor-made especially for you keeping your unique needs in mind. We advise you with the best option to start your business. We help you with crucial decisions such as whether to form a free zone company or an onshore company, ideal structure of your company, licenses required to make your company functional, etc.
Our Business Setup Services
PRO Services
Bank Account Opening
VISA Services
Products Registration
Local Sponsors
Trademark Registration
A trademark protects your business and distinguishes your products and services from that of others. Since it is crucial for your business, you need experts to do this for you. Being one of the best business setup consultants in Dubai, we assist you with the effective and smooth trademark registration process and ensure that you receive positive results. We conduct a comprehensive trademark search, help you file the trademark application and complete all the formalities related to trademark registration.
If you are looking for best business setup consultants in Dubai, get in touch with IMC Group and we will help you set up your business in Dubai, UAE in a smoothest manner.
- Article, India
- March 26, 2019
Often businesses choose to register themselves as a Limited Liability Partnership (LLP) but later wish to convert into a Private Limited Company. The reason for converting an LLP into the private limited company is growth opportunities and infusion of capital. But as per the recent laws, now LLPs cannot convert themselves into a private limited company. Therefore, those companies who want to raise funds in the future, go for private company registration in India and IMC Group assists such companies for hassle-free registration.
Ministry of Corporate Affairs on Conversion of LLP into Private Limited Company
The Ministry of Corporate Affairs states that, “conversion of LLP into private limited company would not be allowed under the LLP Act. However, enabling provisions would be required to be made in the Companies Act for such conversion. Necessary action in this regard would be taken when the Companies Act would be revised.”
Companies Act 2013 on Conversion of LLP into Private Limited Company
“Companies Capable of Being Registered (Section 366):
For the purpose of this Part the “company” includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force which applied for registration under this Part.”
Now let us try to understand why entrepreneurs choose LLP Registration and Private Limited Company Registration.
Reasons for Selecting LLP Registration
- LLP businesses are not required to get their audit done if the turnover is less than Rs. 40 lakhs and capital is less than Rs. 25 lakhs.
- LLPs are exempt from dividend distribution tax.
- The compliances for LLPs are fewer as there is no requirement for a board meeting or annual general meeting.
- In comparison to the private limited company, the fee for incorporation of an LLP is much lower.
- The incorporation of LLP is hassle-free and requires fewer
Reasons for Selecting Private Limited Company Registration
- Equity investors or venture capitalists can invest in a private limited company because private companies have the concept of shareholding. Whereas, there is no such concept of shareholding in case of LLPs.
- NRIs and foreign promoters prefer to invest in the private limited company rather than LLPs because they can invest in private companies through automatic route while Foreign Direct Investment (FDI) in LLPs is through approval route.
From the above points, we can make out that the start-ups which do not intend to raise funds from Angel Investor or Venture Capital firms register themselves as LLP. Whereas, those start-ups which look for funding from investors register themselves as a private limited company. At the moment, the conversion of LLPs into private limited companies is not possible. The only solution that is available for the LLP start-ups is to register a new private limited company which can take over its business. To assist you further in such matters, you can contact IMC Group. We provide services like company formation in India and many business-related services. To know more about our services, all you need to do is drop us an e-mail.
- Article, Singapore
- March 20, 2019
Singapore is becoming a hub for foreign nationals for employment. The country provides immense opportunities to individuals not only to earn money but also to grow as an individual. Owing to this, immigration services in Singapore are in huge demand. IMC Group plays a critical role in providing immigration services in Singapore. In this article, you will learn about the various things that you must know while applying for a Singapore Employment Pass.
Before applying for Singapore Employment Pass one must know a few things for a hassle-free experience.
Things to Know Before Applying for Employment Pass
The Employment of Foreign Manpower Act governs the hiring of foreigners via Employment Pass. Therefore, there are certain rules and regulation which must be fulfilled before employing foreign workers in Singapore.
- The candidates must meet the EP requirements. To know the candidate’s capability, the MOM encourages the usage of Self-Assessment Tool (SAT). If the outcome of the SAT is positive, there are high chances of candidate being selected.
- Firms that wish to hire Employment Pass holders must first give the advertisement for the position in the Singapore Workforce Development Agency’s Jobs Bank as per the Fair Consideration Framework.
Let us now learn about the candidates who are eligible to apply for Singapore Employment Pass.
Eligibility for Singapore Employment Pass
Conditions to apply for Singapore Employment Pass;
- A foreign individual having an employment offer in Singapore can apply for Employment Pass. Here the employer shall make the application on behalf of the foreign individual.
- Companies that are incorporated in Singapore and need to hire employees from overseas can apply for Employment Pass.
- Managing directors or Entrepreneurs who want to relocate their Singapore company can apply for Employment Pass.
To apply for a Singapore Employment Pass;
- The individual must have executive or managerial or any specialized
- The individual must be employed for a fixed monthly salary of at least $ 3,600 or more.
- The individual must have qualification by a recognized university or professional qualification or any specialist skills.
Time Taken to Process Employment Pass Application
- The processing time for manual application is around 5 weeks
- The processing time for online application is around 3 weeks and more
Filing Online Application
Digitalization has eased the process of applying for Singapore EP. The EP online portal assists the employer or the candidate to apply for the EP application. Since Singapore is one of the top countries when it comes to ease of doing business, the online processing time of EP application has reduced drastically. One can apply for the following through the online portal;
- Application for new EP
- Cancellation of EP
- Application for family passes for the EP holders
- Applying for the letter of consent to work for family pass holders
- Renewing any of the EP application
- Monitor the application status
- Appeal against the EP application rejection
Let us now have a look at the documents required for the EP application.
Documents for EP Application
While submitting the EP application, you must submit the photocopies of the following documents;
- Copies of the applicant passport
- Copies of the academic qualification certificates
- Latest information about the company’s profile registered with Singapore’s Accounting and Corporate Regulatory Authority (ACRA)
One must be careful while submitting the documents and ensure that the documents submitted are in English. If not, an English translation copy must be attached.
IMC Group is the leader in providing work visa services in Singapore. Our services cover every aspect of the business right from company formation in Singapore to the services that are essential for running a business. In addition, we have expertise in applying for Singapore Employment Pass and ensure that your application is passed without any hassle. We not only assist in applying for Singapore EP but also help you in appealing on the rejection of an EP application, renewing the EP, canceling an EP and similar services. To avail our services and know our quote, you can drop us an e-mail.
- Article, India
- March 20, 2019
As per the report by NASSCOM, India is the 3rd largest start-up ecosystem in the world. Whenever there is a company registration in India, we term it as business and not start up. To put it in simpler words, any business in India is just a business and not a start-up company. This is because the start-up business is very different from regular business. In this article, we will list out a few points that define start-up companies in India.
Legal Definition of Start-Up in India
A business entity is a start-up for 7 years from the date of its incorporation. However, the eligibility period is 10 years for the biotechnological sector.
Growth
In India, the biggest difference between traditional business and start-up is growth. The traditional business functions on a lesser scale whereas the start-up companies have the capability to grow at a rapid pace. Start-ups have the ability to capture a larger share of the market in a small span of time.
Business Funding
Any type of business requires funding to operate. Traditional business have finacing options such as bank loan or loan against security to fund their business. Whereas, start-ups in India have many options to fund their business like a bank loan, funding by angel investors or venture capitalists in exchange for security, etc. Start-ups easily acquire loan as the investors expect huge returns from their funding and they continuously mentor the start-ups until it’s a success.
Exit Plan
Traditional business and start-up business both have a different exit plan. In case of a traditional business, the entrepreneur can exit the business when he suffers loss or finds an alternative idea of business. Whereas in the case of a start-up, the business does not close when funding is done by a venture capitalist or angel investors. The exit strategy of a start-up in such cases is via merger, IPO, or acquisition by other company.
Working Culture
The working culture in traditional businesses and start-ups are drastically different. The traditional business functions like any other business in India and have normal offices. While the start-up offices are lavish and attractive. The working culture in a start-up is very professional. Furthermore, the start-up companies provide their shares to the employees of the company at lower prices which acts as a big motivation for the workforce.
Unique Selling Proposition
The traditional businesses in India work on pre-defined guidelines and strategy. On the other hand, start-ups sell their products using innovative tools and methods. The start-ups focus on creating such technological tools that attract the customers to purchase its products. Therefore, by using innovation and technology as USP, start-ups try to capture the market.
We hope the above points help you in understanding about the start-ups in India. IMC Group is a professional firm offering services of company registration in India. If you want to register a company or avail any other company related service, just drop us an e-mail to know our quotations.
- Newsletter, U.A.E
- March 18, 2019
The detailed information about the double tax treaty between the UAE and the KSA (the “DTT”) signed on 23 May 2018, has been finally made available.
The verdict for approving the DTT in KSA was published in the official Saudi Gazette and Umm Al-Qura, recently along with the text of the DTT. This publication of the decision done in the official Gazette brings an end to the ratification process for KSA. Both the countries involved have to inform the other about the completion of the process as per their law so as to bring the DTT into force.
The key features of this treaty are as follows:
- Abuse of the treaty: In accordance with the Multilateral Convention to Implement Tax Treaty related procedures to Prevent Base Erosion and Profit Shifting (“MLI”), which both the UAE and the KSA have signed, the DTT says that the treaty access would be denied in case even one of the chief purposes of the arrangement is to get treaty benefits.
- Effective date: The DTT would be entering into force on day one of the second month after the above notifications. The DTT would be effective for all the payments that are made on or post 1 January after the date on which the DTT came into force particularly for withholding tax reasons and for tax years which begin on or post 1 January of the same annual year for the purposes of income tax.
- Persons covered: The DTT is applicable to the residents of the UAE and the KSA. Please note that the DTT is not restricted only to GCC nationals; thus, non-GCC nationals could also take advantage from the DTT.
- Permanent establishment (PE): The DTT applies the general OECD definition of a Permanent Establishment. A PE is a basically a fixed place of a company from where the business is fully or partially carried on. A PE would include a branch, a place of management, an office or a factory; however, it excludes all the activities that are of a preparatory or auxiliary nature.
- Income derived from immovable property: This kind of income could be subject to tax in the nation where the property is actually located.
- Business profits: Business profits are usually taxable in the nation of residence. However, an exception to this is where the company carries on the business in another country via a PE and in that case, the profits of that PE could be taxed in the other nation.
- Dividends: Dividends would be taxed in the source nation but the tax will be limited to a maximum of 5 percent in case the beneficial owner of those dividends is residing in another country.
- Interest: Interest income is allowed to be taxed only in the residence country in case the recipient is the beneficial owner and is also a resident of that country.
- Royalties: Royalties are to be taxed in the source nation but the tax would be limited to 10 percent in case the recipient is the beneficial owner and is also a resident of the other nation.
Capital gains: Any capital gains would be taxed only in the residence country except if one of the exceptions is applicable to provide the taxing rights to the source country.
The DTT is actually a rare agreement between two GCC countries and is set to improve the economic relations and also the bilateral cooperation between the UAE and the KSA. After it comes to effect, the DTT is surely going to have major tax implications. The conclusion of the DTT might have an impact on the existence of a PE and could reduce the withholding tax rate applicable in the KSA. Companies and persons who do cross-border transactions should ideally evaluate their transactions and also corporate structures immediately so as to ensure their eligibility for treaty advantages. As both the KSA and the UAE have signed the MLI, the provisions of the DTT could be amended by the MLI as per the final MLI positions taken up by the UAE and the KSA. As of now, the KSA is in its provisional MLI positions, and has included the DTT as a covered agreement, though the UAE has still not included it as such.
- Newsletter, U.A.E
- March 18, 2019
This step focuses on easing the process of performing business and reducing the expenses for companies.
The Government of Dubai’s Department of Finance (DoF) has announced the second package with some economic growth initiatives which aim to augment the emirate’s current economic incentive package under the government’s response to the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
The directives regarding leadership which were given to the government aimed at simplifying the steps of performing business and bringing down the costs for enterprises by using all the possible resources, so as to aid the economic accomplishments.
Abdulrahman Saleh Al Saleh who is the DoF director-general said that the new initiatives package comes with five initiatives aimed to encourage small and medium-sized businesses and public-private partnership. The work needs to be carried out while complying with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum and execute various economic and financial incentives for reducing the cost of doing business, aiding the registered enterprises in the emirate and also attracting more and more new investments.
The first incentive proposal is to pay all the dues of SMEs who are supplying goods and services government bodies within 30 days rather than 90 days, as long as the payment period is within the 10 days in case of the members of Dubai SME. As per the initiative, the government would be classifying the SMEs who are permitted to get their dues within 30 days. This initiative will be able to provide SMEs with some extra liquidity of Dh1.6 billion per annum.
The second initiative is regarding cutting down the value of primary insurance for all the SMEs to bring them between 1-3 percent range instead of 2-5 percent range, in order to promote them to carry on with supplying to the government agencies. As per this initiative, the minimum primary insurance has been reduced from the original Dh40 million to Dh20 million (which includes 80 percent of SMEs), while the maximum primary insurance was cut down from Dh100 million to Dh60 million (which involves 20 percent of the establishments).
This initiative also aims to offer better liquidity for SMEs, and also ensure bigger opportunities for them to take part in procurement to the government agencies.
The third economic incentive proposal is regarding the final insurance for the performance of SMEs in government projects. This initiative includes cutting down of the final insurance rate or “performance insurance” and slashing it from 10 percent to half or 5 percent on all the supplies. As per this initiative, the Government of Dubai plans to chart out a classification of SMEs who will be entitled for this performance insurance reduction.
This initiative will help to increase the total value of the retrieved final insurance from all the classified companies or businesses, which add up to almost 70 percent of the SMEs, going up to Dh100 million over a shorter period of time.
The fourth initiative aims to allocate 5 percent of government capital projects to the SMEs. Targeted at members of Dubai SME, this initiative will promote business setup in Dubai and various enterprises to expand their business, participate into key projects contracts particularly with the government agencies and also form alliances to contest for government projects.
This move of allocation of 5 percent of government capital projects to the SMEs enables them to get projects which are worth Dh400 million.
The fifth initiative is allocating projects worth Dh1 billion to the PPP, so as to invite the private sector investments, improve the government service quality and finally decrease the burden on the budget.
This initiative will make sure that there is optimal use of Law No.22 of the year 2015 on Public-Private Partnership, and the execution of the projects planned by government agencies are on time and in compliance with the Dubai 2021 Plan.
- Newsletter, Singapore
- March 18, 2019
Singapore is planning to upgrade its trade pacts to get improved access to global markets for its local firms and businesses, and also to cater to new business models as shared by the Minister for Trade and Industry, Chan Chun Sing.
It is also going to expand its free trade agreement (FTAs) network to aid Singapore enterprises enter into more economies, and assist in diversifying the nation’s markets and supply chains.
Mr. Chan also said that they want to expand their FTA network to provide our enterprises a privileged access to more and newer markets in comparison to our competitors. This will not only diversify their markets and supply chains but we would also not completely depend on any one specific market.
He also mentioned that they are also in a process to broaden their reach by planning FTAs with the Pacific Alliance, Eurasian Economic Union, and the Southern Common Market in South America (Mercosur). Especially for long-term, they should take up more opportunities in specifically in the new, emerging markets by acquainting themselves with the regulations and business networks and also the culture in those regions. Mr. Chan also explained how the authorities are planning to prepare the Republic and get ready for the next stage of development.
Other parts of Singapore’s strategy comprise transforming various industries to grab fresh opportunities, enhancing the skill-sets of workers, improving the capabilities of businesses, and enabling faster and effective regulations to get a more pro-business environment, thus empowering enterprises and consumers.
Due to several benefits from the pacts, Singapore’s business with its FTA partners currently totals to 92 percent of its total business or trade in goods and service. Enterprises here also recorded tariff savings of almost $730 million in the year 2016, which went up from $450 million a decade ago, which meant that such savings are a major advantage that is derived from signing FTAs.
Mr. Chan also assured that the ministry would continue to work with the Singapore Business Federation and various trade associations and chambers to assist businesses to get advantage from the FTAs.
During its chairmanship of Asean in 2018, Singapore completed various initiatives to develop the region into a more attractive destination for setting up a business, company formation in Singapore or doing investments.
This also meant having the Asean Single Window, under which now there are five Asean countries who are exchanging their business and trade documents electronically, while the remaining countries would be coming on board in 2019. An Asean agreement regarding e-commerce was also signed, among others.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership in 2018, which was Singapore’s first trade pact with Canada and Mexico and also the European Parliament’s approval of the European Union-Singapore FTA earlier this year came into force.
Singapore’s trade agreements map up to the efforts by the Republic and partners with similar objectives to advance the international rules and regulations and support the rules-based multilateral trading system personified in the World Trade Organisation.
Singapore is currently working actively with like-minded members of WTO, which includes recently giving an e-commerce joint statement to assist in decreasing the cross-border obstacles on this front, while welcoming new associations to push the envelope on digital trade.
Mr Chan also mentioned Singapore’s challenges in his speech, such as the uncertainties of the US-China trade relations and collaborations in the near future and transformation in the international trade patterns and also the production chains in the mid-term.
In the long-term, Singapore has to carefully observe the developments in global taxation, which is going to shape the Republic’s attractiveness as the best business destination in future.
He said that if they can get the fundamentals right, they can be unique and attract more global investors to come to Singapore and create better jobs. These fundamentals should include efficient governance which is based on long-term political stability and effective planning; an international mindset; a competitive edge in terms of innovation and high levels of creativity and standards; and a talented workforce with a focus on regular training and learning.
- Newsletter, Saudi Arabia
- March 18, 2019
Kingdom of Saudi Arabia’s (KSA) government authorities are working towards enhancing the investment environment, which was planned under the National Transformation Plan and Vision 2030. In this regard, the Saudi Arabian General Investment Authority (SAGIA), which is the governing authority dealing with foreign direct investments (FDIs) and has been working hard to develop the foreign investment regime targeting to simplify some of the restrictions put on global investments in the KSA.
According to this, all the shipping agents would be able to function independently with the support of the KSA’s privatization plans. Till some time back, the ship agency services were only allowed to be conducted by a 100 percent owned KSA company or any KSA national. However, after the recent reforms, foreign shipping companies or shipping agents are allowed to decide if they would work with a local investor or not and also have the right to function autonomously as ship agents at Saudi Arabian ports. After the recent letter that was issued in August 2018 by the Saudi Minister of Commerce and Investment, the Minister of Commerce confirmed that now the shipping agency operations would not fall under the purview of the Saudi Agency Law and thus it will not be a prohibited activity for any companies that are non-KSA owned. This has enabled giving foreign investors a shipping agency license.
SAGIA has also confirmed that they have started welcoming all global shipping companies and shipping agents, and there are no specific requirements to perform the shipping agency activities besides the usual requirements for establishing a company in the KSA. This is a positive step for the marine sector and also for the KSA economy as a whole.
The foreign investment license would be valid for a period of five years and could be renewed every year. Investors would also need to get a shipping agency license from the Saudi Ports Authority (Mawani) after the setting up of the company and prior to conducting the activities. Mawani and SAGIA are collaborating to execute this change and to apply the necessary process for regulating the investment of various shipping agencies.
Mawani confirmed that shipping agency the activities would mainly include vessel clearance and also related activities such as booking of cargos, as loading and unloading of cargos, paying port dues, representing the shipping line and also supplying various supplies to ships. However, foreign direct investment companies cannot perform the following services, that is, customs clearance and supplying fuel to ships.
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