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Tax Domicile Certificate
  • Article, U.A.E

Tax Domicile Certificate

Tax domicile certificate or the tax residency certificate is typically a certificate or official document that is issued by the respective authority for the government entities, companies and individuals who are eligible to enjoy the benefit of agreements of double taxation avoidance on the income and is signed by the UAE.

In case of UAE, this tax residency or the tax domicile certificate is issued by the UAE’s Ministry of Finance of UAE. The certificate can be obtained by a company or business that is registered in the UAE and also by individuals who have acquired the residency visa or they already permanently live in the UAE. This tax residency certificate is typically valid for one year from the date it is issued.

Please note that only onshore UAE companies are eligible to receive a tax residency certificate. Offshore companies that are also called as International Business Companies are not permitted to get such a tax residency or a domicile certificate. But that is different from a tax residency certificate and doesn’t offer the usual advantages of double tax treaties. In case of UAE onshore companies, the tax domicile or residency certificate is a necessary document which allows them to fully take benefit of the wide-ranging network of double tax treaties that the UAE has signed along with so many countries located in various parts of the world.

The main condition for being considered a resident in the UAE is that one has to obtain a residence permit. A foreign individual should have a sponsor as a rule, so as to apply for a residence permit in the UAE. In many cases, the company that employs the expatriates usually acts as their sponsor and gets them their residence visa. The best way for the people, who do not come in the jurisdiction on an employment contract, is to incorporate or set up a company in the UAE.

Establish a corporate structure to act as sponsor

The usual and preferred method of getting residency is by a corporate structure. However, for foreigners, incorporating an FTZ company is the best way of getting sponsorship. This company should necessarily have physical presence in the kingdom and for that the most cost-effective options are suggested by the free zones that are located in the northern emirates with likelihood to have “flexi offices” or “flexi desks”.

Benefits of getting a Tax Domicile Certificate

Tax domicile certificate provides the advantage to fully utilize the benefits of the widespread double tax treaties network that the UAE has signed with various countries in so many parts of the world.

DTAA or double tax treaty (DTT) is actually a bilateral agreement signed between UAE and other nations that uphold the welfare of global investors and businesses from other jurisdictions in an attempt to invest in the UAE. Due to this treaty, any global firm that is already paying taxes overseas for the profits they have earned from the business can also mitigate the possible tax burden in the country.

This not only applies to companies, but also to individuals who are fiscal citizens in the UAE for over 180 days and are able to provide the documents needed by the Ministry of Finance, will be eligible to use the benefits.

Necessary Documents for getting a Tax Domicile Certificate

In case of individuals

  • A valid passport copy
  • A valid residence copy
  • Certified bank statement for a minimum of 6 months during the required year
  • Source of income or a salary certificate in case of a job
  • Certified tenancy contract or a title deed
  • Immigration report of the residency, that is, Exit and Entry report

In case of corporate

  • A valid trade license
  • A copy of identity card for all the company owners/partners/directors
  • Certified articles of establishment; founding; incorporation; institutionalizing or Memorandum of association
  • Copy of the residence visa for the company owners/partners/directors
  • Copy of valid passport for the company owners/partners/directors
  • Certified audited report
  • Certified tenancy contract or title deed
  • Certified bank statement for a minimum of 6 months during the required year

Need a TRC in the UAE?

We at IMC offer an array of business services to our clients and are especially known for our quick turnaround and reliable services. If you are looking for a Tax Residency Certificate in Dubai or PRO services in Dubai, get in touch with our team of professionals who will assist you according to your specific needs.

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How do Dubai Government Agencies Support Start-ups?
  • Article, U.A.E

How do Dubai Government Agencies Support Start-ups?

Dubai and the UAE are a big hit for setting up new businesses and investing. Do you know that almost 1,700 new trade licenses were issued by the Department of Economic Development (DED) in just the month of May this year; and overall 26,000 transactions were recorded relating to new business registrations and licensing, out of which, almost 12,600 cases were for renewal of existing trade licenses. This data surely proves that this region is enhancing its image as a global business hub.

So why is UAE is becoming increasingly a popular destination for new businesses? It’s because both the government agencies and other companies encourage and support startups. Various initiatives are taken to promote business talent for investing in this region and then supporting them in their initial years of operation.

Let us see some examples of what support has been provided to startups and how can you benefit from it.

Business Initiatives by Dubai’s Department of Economic Development (DED)

Dubai’s DED has a primary objective to give a “supportive environment for creativity and excellence”, while assisting in developing a region that is suitable for investing and bringing in local and foreign businesses. They are aiming to be supportive towards various startups in helping them set up and then succeed in their operations.

DED provides all required information comprehensively on their website; for example, the eight steps to set up your business in the UAE and also various initiatives to assist and promote business investment and startups.

Some examples of these initiatives are:

  • A recent verdict which cleared companies in Dubai from any past accrued fines (prior to 14 April 2018) and encouraged to renew their licenses within the grace period that ends in 2018.
  • Another package was announced helping with fines and licenses in times to come, by permitting companies to pay the fines and renewal fee in easy monthly instalments, and allowing them to shelve their trade licenses, if required, for up to a year.
  • A Commercial Compliance Package, designed with an aim to inform business owners and steer them to operating excellence.

Dubai Chamber of Commerce and Industry’s Startup Hub and Google Partnership

Dubai Chamber of Commerce and Industry’s website has a startup hub, providing helpful guidance for new enterprises. The ‘Frequently Asked Questions’ are very useful for people wanting to find how to get started and they also have regular programmes for various startups on subjects like entrepreneur education and gaining market access.

In addition, Tejar Dubai, which is an entrepreneurs’ development programme has been designed to find and cultivate promising entrepreneurs between 18 to 35 in the UAE. This programme caters to young Emiratis having new business ideas, but might not have either the needed skills or experience to work on it. They offer training (between 3 to 6 months) to prepare these young businessmen to launch and then operate their new business successfully.

Dubai Chamber has also recently got into a partnership with Google to offer a competitive edge to its members in terms of being found online. Dubai Chamber confirmed that the initial members who register on Google My Business (which is a free option allowing businesses to create listings so that they stand-out better online), could get a chance to take part in exclusive digital marketing training in the near future.

Hello Business Hub by Etisalat

This telecommunications company is committed to returning to society and it supports various initiatives in social welfare, education, culture, and international relations. Etisalat also offers critical support for various enterprises, especially startups. If you search ‘Hello Business Hub’, you will get a list of ways you can be helped with your new businesses, like how to get it started, how to increase profitability or productivity etc.

This company also provides an ongoing support center for important new business requirements such as company registration, banking, and insurance, licensing, getting office furniture, etc. They also have a unique and one-of-its-kind ‘onboarding’ programme, aiming to assist new enterprises to get their communication requirements as fast and simply as possible and assistance in terms of zero upfront costs, a personalized visit to your office to discuss your needs within a day and flexible packages. You could pick from a Business Quick Start office bundle which includes broadband internet, latest tablets, laptops, voice, and other devices, or you could choose the more inclusive Business in a Box, which includes high-speed internet, world-class IP telephony, and integrated IT support. Lastly, Etisalat can also give you a tailor-made solution after which you can run your services on an online portal.

Instant License Initiatives by DED

There are many instant license initiatives that have been taken by DED with the exemption of Tenancy for one year. Setting up a business in Dubai has become very quick and simple than ever before; this is in line with DED’s vision to assist business owners in starting and expanding their business operations without getting stuck in lengthy and tedious processes and administrative formalities. Dubai has recently launched an “instant license” initiative to permit entrepreneurs and investors to get commercial licenses instantly; yes, literally within five minutes. An instant License means getting a commercial license issued in just one step without the requirement for the Company’s memorandum of association and even the site’s lease contract for the initial one year only. The license would be granted for a period of a year without even presenting a formal official lease, but all the required documents would have to be presented on renewal. This initiative will surely reduce the human interaction by almost 90 percent by automating the earlier manual licensing procedure.

So, if you are thinking about setting up your business in Dubai or UAE, rest assured that there is enough support from these agencies for you. We, at IMC, are committed to assisting you in case you want Dubai company incorporation or PRO services in Dubai or UAE. Please feel free to call us at +971 43709963 or visit us at https://intuitconsultancy.com/ae/or just write an email to [email protected].

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The Booming Sectors in Which You can Set up Your New Startup in UAE
  • Article, U.A.E

The Booming Sectors in Which You can Set up Your New Startup in UAE

With its thriving economy, advancements in technology, and an array of exciting opportunities for entrepreneurs, UAE is the place to establish your startup. But do you wonder which sectors a sure-shot bull’s-eye to start your business in UAE? In this article, we will talk about the main sectors, which have seen tremendous growth in the UAE and even globally.

Beauty and grooming

Data shows that beauty is a huge sector in the UAE, with customers shelling out over USD 9bn on their beauty and personal care products in the year 2016. And these numbers are only expected to grow more in the next few years. The five top-most categories in beauty segment are fragrances, skin care, hair care, colour cosmetics, and men’s grooming. This growth trend along with newer technologies and international trends offer immense opportunities for establishing your startup businesses in this sector in the UAE if you dream to dig big returns.

How can you take advantage?

Using modern technology and adding the latest tools and apps to your business offering is the key today. You could back it up with some major beauty influencers on social media, and do remember that Instagram is especially quite popular these days. Some examples are use of artificial intelligence or big data to identify the suitable skin care products for your customers. You could offer personalized recommendations or some other technology which would resonate with the tech-savvy millennial consumers.

Artificial intelligence (AI)

In today’s times, AI has become a global game changer and offers big opportunities for businessmen in the UAE. As per the data and estimates by PwC, this sector would contribute approximately USD 15.7tr to the global economy by the year 2030, with about USD 96bn just in the UAE. The UAE government has AI on its top-most agenda and has also launched a strategy for developing the same in 2017. The sectors they would apply AI in are healthcare, technology, and education.

How can you take advantage?

AI’s impact is forecasted to be significant and it would cover all the sectors and industries. One way to take benefit from this booming sector is to develop new AI technologies along with the government support and then sell them globally. It’s also a good idea to become an expert in AI and offer technology consulting services to various organisations. Other option is to review your own sector and find how AI could help to save costs and improve productivity or further enhance your offering of products or services.

E-commerce

E-commerce is yet another area where there is a huge scope. Globally, this sector shows worldwide sales of about USD 1.86tr in 2016 and it’s only expected to shoot up to more than double by 2021. The online sales only in the UAE are slated to be around USD 10bn in 2018, which was USD 2.5bn in the year 2015. As the consumers throughout the world have become more tech-savvy, they prefer using social media and handy apps to know about various products and to engage with their favorite brands. Everything is just a click away – be it buying a product online or be it finding reviews on various products and services available in the market.

How can you take advantage?

Start an ecommerce business in the UAE and be a part of this new revolution. You could target some specific markets or go full swing into international markets if your budgets allow. Pick any range of products or just focus in one particular area. Some popular product types for ecommerce are software, beauty, electronics, and clothing and fashion accessories.

Just make sure to use the latest tools or apps, and mobile technologies to form a connection with your consumers.

To conclude, the UAE is a great option of start up your enterprise, especially if it’s in some booming sectors like we discussed. So if you make up your mind for company formation in Dubai in one of these sectors or JAFZA offshore company formation, do get in touch with us, and we will be more than happy to help you with all the formalities.

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Foreign Direct Investment (FDI) in India
  • Article, India

Foreign Direct Investment (FDI) in India

Foreign Direct Investment or FDI is not only a key driver of economic growth but is also one of the main sources of non-debt financial resource for economy’s development in India. Various global organizations come to invest in India to take benefit from comparatively lower wages and special investment advantages like tax exemptions, etc. When it comes to the Indian government, it has a very favorable policy regime and competitive business environment that attracts foreign capital to flow into the country. The government has been taking various initiatives lately like relaxing FDI norms in all the sectors such as defense, telecom, PSU oil refineries, stock exchanges, power exchanges, etc. 

Market size 

As per the data given by the Department of Industrial Policy and Promotion (DIPP), the total FDI investments that came in India in 2018 (April-June) were at US$ 12.75 billion, pointing towards the success of government’s effort to make it easier to do business and relax FDI norms. According to this data, the services sector got the highest FDI equity inflow which was around US$ 2.43 billion. Trading attracted US$ 1.63 billion, followed by telecommunications which stood at US$ 1.59 billion and then computer software and hardware which got US$ 1.41 billion. In June 2018, the total FDI equity inflows went up to US$ 2.89 billion. Indian received the maximum FDI equity inflows from Singapore, Mauritius, Japan, Netherlands, and United Kingdom (in the same order). 

Investments and further developments

India ranked as the top recipient of Greenfield FDI Inflows from the Commonwealth, according to a trade review that was released by The Commonwealth in 2018.

Some of the significant announcements about FDI off late are as follows:

  • Bharti Airtel received the approval of the Government of India in August 2018 for selling 20 per cent stake in its DTH arm to Warburg Pincus – an American private equity firm for $350 million.
  • Idea’s request for 100 per cent FDI for an approval in June 2018 by the Department of Telecommunication (DoT) and then it got merged with Vodafone, which made Vodafone Idea the largest telecom operator in the country.
  • In the month of May, Walmart bought a 77 per cent stake in Flipkart for US$ 16 billion.
  • In the month of February 2018, Ikea announced that it is going to invest about Rs 4,000 crore (US$ 612 million) in Maharashtra to establish multi-format stores and their experience centers.
  • 39 MoUs have been signed in November 2017 at an investment of Rs 4,000-5,000 crore (US$ 612-765 million) in India’s North-East region.
  • In the month of December in 2017, the Department of Industrial Policy and Promotion (DIPP) gave approval to FDI proposals of Supr Infotech Solutions in retail sector and Damro Furniture, while Department of Economic Affairs, Ministry of Finance gave its approval to two FDI proposals which valued at Rs. 532 crore (US$ 81.4 million).
  • The Department of Economic Affairs also signed three foreign direct investment (FDI) proposals worth Rs. 24.56 crore (US$ 3.80 million) in October of 2017.
  • Kathmandu based CG Group is planning to invest Rs. 1,000 crore (US$ 155.97 million) in India in its food and beverage business by 2020.
  • International Finance Corporation (IFC) is also planning to invest around US$ 6 billion by 2022 in various sustainable and renewable energy programs in India.

Government Initiatives

The Government of India is considering 100 per cent FDI especially in Insurance intermediaries in India to promote the sector and attract more funds. In early 2018, the Government of India permitted a foreign airline to make investments in Air India up to 49 per cent. However, the percentage of investment cannot go over 49 per cent, directly or indirectly.

Now, no government approval is needed for FDI going up to 100 per cent in the Real Estate Broking Services. In September last year, the government spurred the states to strengthen single window clearance system to enable fast-tracking approval processes, so that we could attract bigger Japanese investments in India.

The Ministry of Commerce and Industry has made the approval mechanism easier for foreign direct investment (FDI) proposals by abolishing the approval of Department of Revenue and making it compulsory to clear all proposals that need approval within 10 weeks after receiving the application.

The Government of India is also discussing with the stakeholders to ease foreign direct investment (FDI) even further in defense sector to 51 per cent from the existing 49 per cent, so as to boost the “Make in India” initiative and also generate employment. Then in January 2018, Government of India permitted 100 per cent FDI in single brand retail via automatic route.

What’s in store?

India is now the most lucrative and emerging market especially for global partners (GP) investment in the coming year, according to a market attractiveness survey done recently by Emerging Market Private Equity Association (EMPEA).

Annual FDI inflows in India are forecasted to go up to US$ 75 billion in the coming five years, as per a UBS report. According to the World Bank, private investments in India would grow by 8.8 per cent in FY 2018-19 which would overtake the private consumption growth of 7.4 per cent, and thus promote India’s gross domestic product (GDP) in 2018-19.

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Top 10 Business Options for Foreigners in Singapore
  • Article, Singapore

Top 10 Business Options for Foreigners in Singapore

Is setting up a business in Singapore in 2019 on your mind? You might be sure about new company formation in Singapore but cannot decide on the best and most viable business ideas. So here it is… We have listed the top ten and most lucrative small enterprise investment opportunities available for foreigners in Singapore.

It’s a well-known fact that Singapore currently tops the charts in the Ease of Doing Business Rank as per the World Bank. This means that accordingly to the World Bank Singapore is the easiest place in the whole world to set up a business or for incorporating a Singapore company. With over 3,000 multinational companies operating here, this data gets proven.

With a highly-evolved economy, Singapore’s market has been ranked as one of the most open, business-friendly and not at all corrupt. The low rates of taxes and high GDP per capita make it a great and most favorable destination for doing business.

So, if you are interested in starting your own business and for new company formation in Singapore, the first step is to do proper research and assess the demand and what customers actually want. You would also need to know about the country’s laws, culture, business trends and the overall economy. Your success will completely depend on where and in which business you invest in.

Top 10 Best Business Opportunities in Singapore

1. Food and Gourmet

Food business is one of the best businesses to set up not only in Singapore but all across the world. There is always a universal need and demand for good food and this The Lion City is also known as a food paradise. With its outdoor food courts, hawker centers, fancy eating joints and buzzing nightlife, this destination appeals to both locals and travelers alike. Though if you are zeroing down on food as your business, you will surely face tough competition. But the key is to be innovative so that you can offer something new. You could opt for untapped markets such as gourmet chocolates or some special cuisine which hasn’t found its way in Singapore.

2. Agriculture

Singapore has very limited area and relies a lot on agro-technology for agricultural production and its consumption. However, there is a huge demand for agricultural products which is larger than the supply considering there are very few players in this sector. So, if you can make it in agriculture, you could reap huge profits in Singapore as long as you’re prepared to spend on the technology needed for enhancing production.

3. Biotechnology

Singapore has been promoting and expanding its biotechnology industry and the government has already spent huge amounts on fund research, infrastructure, further development and to hire the best international scientists. Also, leading drug making companies such as GlaxoSmithKline and Pfizer have also set up their plants in Singapore. Therefore, the opportunities open for investors in this sector are huge. But, do remember that for new company formation in Singapore in this industry, you will need a lot of knowledge and large amounts of capital.

4. Fast foods and snacks

With a fast life, people prefer snacking on the finger and fast foods and snacks. If you are thinking of this segment, you can make lots of money if you try setting up a business to sell snacks like pizza, barbecue, other snack items, etc. This business doesn’t need a lot of capital and no formal educational certifications. So, what are you thinking of? Try it out!

5. Transport

Transportation is one of the biggest necessities that and hence good transport services will always remain in high demand everywhere. You can set up a transport business, but it completely depends on the capital you have. You could consider starting a cab or taxi service for local transportation. If you have bigger capital, you could start transport services that ply inter-city or inter-state.

6. Electronics

The electronics sector is one of the largest in Singapore’s manufacturing industry and accounts for almost 48% of the total industrial output. So, there is huge opportunity to set up the business that sells electronic products; the range you keep again depends on the capital you can invest.

7. Online Marketing

With the boom of e-commerce and businesses wanting to lure more and more customers and sell their products and services through the internet, there is also an ever-expanding demand for professionals and companies offering online marketing services. The services could range from marketing, copywriting to search engine optimization. If you have any skills like copywriting, website designing or developing search engine optimization, or social media marketing, then there are huge opportunities for you and you can think of new company formation in Singapore.

8. Freelance Writing

Blogging is a new way of not only making money online but also expressing your views. Businesses are using blogging to advertise about their products and services and that has escalated the need for creative and also ghostwriters. Quality content is required by all organization and if you are good with words, then, you can make a lot of money while taking up writing assignments.

9. Laundry

If you are looking to establish a small-scale enterprise in Singapore, you could consider laundry as an option. You just need a washing machine and some other equipment such as irons, dryers, etc to start this business.

10. Automobiles, Repair and Spare Parts

A business in automobiles and its spare parts is a very good option in Singapore. However, this business requires a good amount of capital to set up. However, with little capital, you can start selling auto spare parts as that is quite a lucrative market too.

11. Financial services

Because there are many businesses in Singapore, there is high demand for professional financial services like accounting, bookkeeping and auditing. In case you have solid knowledge in any of these services, you could reap huge profits in Singapore by assisting other businesses with your skills.

Here are some more small business or investment opportunities for foreigners in Singapore:

  • Thrift or vintage store
  • Eco-friendly products or organic products or gift packs
  • Home tutoring
  • E-books
  • Hand-crafted jewelry
  • Fitness training
  • Elderly care services
  • Repair services
  • Deep-cleaning services

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Why do Foreign Companies want to Relocate to Singapore?
  • Article, Singapore

Why do Foreign Companies want to Relocate to Singapore?

A gateway to ASEAN, Singapore has one of the lowest corporate tax rates and also boasts of various business-friendly regulations that make it easy for organizations to set up their business and offices in this South-east Asia country.

Data shows that companies are looking for regions that have higher growth potential so that they can meet the demands of their stakeholders. Especially fast-growing Asian economies like China and the South-east Asian countries are a choice of many entrepreneurs because of their large and lucrative markets.

Singapore – A Gateway to ASEAN

So where does Singapore figure in all this? Gaining the fifth rank amongst the top 20 host economies in FDI inflows, Singapore has made its mark as the gateway to ASEAN and is a preferred destination for enterprises of all sectors and sizes to base their office or operations in Asia. Here in this article, we will talk about some of the major driving factor contributing to Singapore’s success in bringing in foreign companies to its shores.

Network of double tax treaties

Singapore is known for its extensive network of double tax treaties or tax agreements (DTAs) with over 80 nations across the globe. The main advantages of a DTA are that double taxes are avoided, there are lower withholding taxes, and there is a preferential tax regime. This enables in minimizing the burden of taxation for a company. Other than this, there is no capital gains and dividends tax, which further makes Singapore a lucrative choice for business investments by company formation in Singapore.

Appealing tax regime

The simple and investor-friendly tax regime is another big advantage. In Singapore, the maximum corporate tax rate on any taxable income is just 17%. There is no tax on capital gains and on dividend income and no withholding tax on post-tax dividends that are paid from Singapore. What’s more? All foreign-sourced income is completely tax exempt if that income has been taxed in a country having a headline tax rate of at least 15%. Then there are no restrictions on foreign ownership and no controls whatsoever on foreign exchange.

Strategic location with superb connectivity

Singapore has is very strategically located at the intersection of the main trade and all the shipping routes of the world, for example, the major sea route connecting India and China. Known as a transportation hub, Singapore is proud to have the award-winning Changi Airport and also boasts of a world-class port infrastructure, which has been awarded the ‘Best Seaport in Asia’ many times. With its telecommunications infrastructure also at a world-class level, this nation has been ranked as one of the top in leveraging information and also communications technologies to improve its country competitiveness by the World Economic Forum. Today, Singapore stands as one of the two Asian countries ranking in the top 10 amongst 139 countries worldwide.

Skilled and multilingual resources

The business environment in this country is very attractive to skilled and multilingual workers who come from across the globe. The fast-moving innovative work environment, along with a pool of local Singapore talent, reinforces Singapore’s reputation as the most productive, flexible and motivated workforce in the region, which has also been proven by the data and rankings in the IMD World Competitiveness Yearbook.

Smart immigration policies

Singapore offers many types of Visa schemes for talented and qualified professionals and entrepreneurs. The government is constantly making efforts to pull in foreign investments and enhance the level of its local workforce by adding top talent from across the globe.

State-of-art infrastructure

One of the most stable and prosperous countries in Asia, Singapore’s stability in terms of politicals, an array of available facilities, public services conveniences, and the cosmopolitan environment makes it an attractive destination for people globally. With its multitude of dining, entertainment, tourist options, best-in-class infrastructure, and many internationally-recognized educational institutions and universities, Singapore offers a high standard of living yet having its friendliness and warmth.

Excellent IP protection regime

A hearty intellectual property (IP) rights regime and most trusted legal system further adds to the Singapore’s list of advantages. The IP policy of the government, which aims at encouraging innovation and growth of business and commerce in Singapore has been recognized by the World Economic Forum’s Global Information Technology Report 2017-2018 as the top Asian regime for the protection of IP. Despite the high international rankings, additional initiatives by the government are underway to improve the country’s IP landscape further and build it as Asia’s IP hub.

Efficient and effective legal system

Singapore’s legal system is well-developed and has successfully maintained its relevance in the existing cultural, commercial and social environment, by taking in the common law and other best practices from evolved legal systems. The country’s legal system has won accolades globally because of its efficiency, integrity, and for being the least bureaucratic in Asia. Companies are not stuck in red tapism or slow operations because of bribery or other issues. Singapore’s commercial legal structure is also known for its fair and impartial ways.

To conclude, Singapore remains an attractive destination for offering various opportunities for business and investment in the Southeast Asian region. So if you require any assistance or professional advice on company formation in Singapore, Visa services in Singapore or Accounting services in Singapore, do get in touch with us and we would be happy to help.

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The World as 100 People
  • Article

The World as 100 People

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Key Insights on Singapore Variable Capital Companies Bill
  • Article

Key Insights on Singapore’s Variable Capital Companies Bill

Ms. Indranee Rajah, the Second Minister for Finance, moved the Variable Capital Companies Bill (“the Bill”) for first reading in the Parliament on 10th September 2018.

Background of the Variable Capital Companies Bill

Variable Capital Companies Bill will serve the needs of investment fund and establish a culture for incorporation and operation of a new corporate structure in Singapore. With VCC, the fund managers in Singapore will be encouraged to set up the domicile of their investment funds within the country. This will further help the country in strengthening its position as a full-service international fund management centre.

The VCC structure shall be in line with the current suite structure that is available to the Singapore’s fund managers. Unit trusts and investment companies are the most commonly used investment fund structures. Due to the restrictions under the Companies Act (Cap. 50) (“CA”) in Singapore, the investment funds constituted as investment companies are very rare. The restrictions affect the regular functioning of the investment companies in a way that they have the lesser flexibility to pay a dividend, redeem shares, etc. In order to resolve such issues, there are specialised corporate structures for investment funds established by the international fund jurisdictions.

The VCC Bill is prepared by the Monetary Authority of Singapore (“MAS”) after conducting a public consultation about the proposed regulatory framework. The respondents were positive on the VCC structure and the proposed regulatory framework by MAS. The bill is prepared by the MAS after incorporating all the possible public feedback.

Provisions of the VCC Bill

Since the investment fund companies faced a lot of restrictions, the VCC Bill shall include the following features that will ease the operations of a VCC as an investment fund.

Variable Capital Structure

To give relief to the investment fund companies, the bill shall give permission to such companies to redeem its shares without shareholders’ approval, pay dividends using their capital and enable the investors to exit their investments whenever they wish to. On the other hand, the companies under the Companies Act can distribute dividend only out of its profits and face numerous restrictions on capital reduction.

Sub-funds with Segregated Assets and Liabilities

VCC Bill allows the companies to establish themselves as a standalone or umbrella structure with multiple sub-funds having different objectives of investment. The umbrella structure helps the companies in reducing their cost in the form of having common service providers like a custodian, fund managers, auditor, etc. Under the umbrella structure, they can also have sub-fund having the same board of directors. In addition, these companies can also consolidate its administrative functions like preparing a prospectus, holding a general meeting, etc.

The sub-funds can have its own set of investors, but it is not a separate entity in the eyes of law. The risk that assets and liabilities of one sub-fund can be merged with another sub-fund is always there. To overcome this risk, the bill necessitates each sub-fund to segregate their assets and liabilities. This is done to ensure that the assets of one sub-fund are not used to meet the liabilities of another sub-fund. Furthermore, during insolvency, each sub-fund must wound up separately.

Fund Manager under VCC Bill

According to Bill, every VCC must compulsorily appoint a fund manager who is regulated by the MAS to manage the investments. This will enable supervision of the functioning of the fund manager. In addition, it would ensure that the VCC is not using the funds for unlawful purposes or the company is not running as an offshore vehicle without any actual activity relating to managing the investment in Singapore.

Accounting and Governance

With the introduction of the VCC Bill, the scope of the accounting standards which can be used in preparing a VCC’s financial statements has considerably increased.  The bill allows the companies to use the International Financial Reporting Standards and US Generally Accepted Accounting Principles apart from Singapore accounting standards and recommended accounting principles. This will give more flexibility to the investment funds and serve the needs of the global investors efficiently.

The register of VCC shareholders shall not be made public to meet the privacy needs of the investors. This practice is in line with other major jurisdiction such as Hong Kong, UK, etc. The aim of MAS is to prevent the VCC from being used for illegal purposes like money laundering, terror financing, etc. Therefore, the VCC is required to regularly update the register of the shareholders and provide the information to the regulatory authorities whenever asked for it.

Re-domiciliation

The new bill shall encourage the foreign corporate fund structures which are similar to VCCs to re-domicile as VCCs in Singapore. This, in turn, will lead to fund managers in offshore jurisdictions to co-locate fund domiciliation with their fund management activities in Singapore.

Insolvency Provisions

A VCC Amendment Bill shall be placed in 2019 to replace the provision of the insolvency of a VCC and its sub-funds that are adapted from the Companies Act. Furthermore, the provisions under the Insolvency, Restructuring, and Dissolution Bill (“Insolvency Bill”), shall also be amended. Therefore, the VCC insolvency regime shall align with the VCC Amendment Bill with the other corporate structure in Singapore.

Administration of VCCs

The administrator of the new bill and registrar of the VCCs shall be the Accounting and Corporate Regulatory Authority (“ACRA”). However, ACRA shall not look into matters of anti-money laundering and counter-financing of terrorism obligations of VCCs, they shall be overseen by MAS.

For more such updates on new rules and regulations issued in Singapore, keep following out articles. IMC Group is a cross-border advisory firm focusing on providing financial services to various companies. Some of the services that IMC Group provides includes market entry services, corporate services, international tax, corporate finance, investment advisory, global mobility, private client & family advisory, outsourcing solutions, business advisory and mergers, and acquisitions.

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UAE is all Set with the New Plan to Spur FDI and GDP Growth
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UAE is all Set with the New Plan to Spur FDI and GDP Growth

UAE has long been a hub for trade and business. The country has always been in the eye of global investors. The opportunities and profitability that UAE offers to the businesses attracts huge Foreign Direct Investment (FDI). UAE has now introduced a new investment law to attract more foreign investment and boost the economic growth of the country. The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, issued Decree No. (19) of 2018 on Foreign Direct Investment on 30th October 2018. The new law aims at making the country the first pick among global investors and promote country’s investment environment.

With the new law the UAE will be able to consolidate its position as the leader in attracting foreign direct investment not only at the regional level but also at the global level. The new law shall attract and encourage more foreign investment.

The introduction of the new law shall help UAE to expand and diversify its production base, attract latest and innovative technology, and enhance knowledge and training. The policy aims to increase the inflow for foreign direct investment to help in achieving sustainable and balanced development of the nation. It will help in generating job opportunities across different sectors of the economy, achieving the best returns of available resources and over all increased value to the country’s economy.

The law further states that, a “Foreign Direct Investment Unit” shall be established in the Ministry of Economy which will be responsible for framing and proposing the policies relating to FDI. Furthermore, the unit shall also determine the priorities and set up associated plans and programmes and work towards their implementation after they get approval from the cabinet of UAE. The FDI Unit shall also look into developing an attractive environment for FDI. They will ensure and facilitate the procedures for licensing and registering the FDI projects. In addition, the FDI Unit shall also monitor and evaluate their performance in the country.

As per the new law, the foreign companies shall be given a best investment environment. Moreover, the licensed foreign investment companies shall be treated like national companies within the limits that are permitted by the legislation of the state and international conventions to which UAE is a party.

The Article 10 of the Decree states that licensing authority and the other respective authority shall hold the power and responsibility to determine the conditions and procedures for licensing and establishing the FDI projects on the basis of listed documents of the Decree law and the law of the land. Furthermore, the FDI projects that were already in existence before the enforcement of the new law shall continue to retain the privileges that were given as per the former legislations, agreements and contracts within the specified period.

The announce of the new law comes as foreign direct investment flows in Dubai rose to $4.84 billion in first half of 2018 which is 26% up as compared to the last year. As per the reports from the Dubai Investment Development Agency (Dubai FDI), an agency of the Department of Economic Development (DED), the number of FDI projects in Dubai surged by 40 percent to 248 in 2018.

Sincere efforts by the government in the form of relaxed regulations, government diversification efforts and lower cost of doing business in Dubai has helped the city bag 10th rank globally for greenfield FDI.

We expect the UAE investment law to be a game-changer which will change country’s business landscape by attracting increased foreign direct investments. With increased FDI, more and more companies will aim to set up their business in UAE to grab this opportunity.

If you too are looking to set up a company in Dubai, it is ideal to seek professional help for the same. A professional and renowned company like IMC Group can help you with the entire process of company formation in Dubai. We take the complete charge of your business set up, right from conducting initial market survey to setting up your business and ensuring that it operates successfully. We come with an experienced team of skilled professionals who can guide you on every step of the way. To know more about our services, get in touch with us and we will be glad to assist you.

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Ease of Doing Business: UAE Rises 10 Positions

UAE has always been among the top destinations for doing business. The country attracts local as well as foreign investors to invest in its numerous business sectors. One of the major reasons for this draw is the ease of setting up a business in UAE. Moreover, stable government, better political and social environment, booming economy, liberal laws and regulations for the business set up and many other factors contribute to attracting more and more investors. As a result, company formation in Dubai is on a rise.

With a package of reforms that were introduced in the past year, UAE has climbed up 10 positions to reach 11th position in the World Bank’s ease of doing business rankings. As per the report of the World Bank, the constant and focused efforts by the UAE government to keep the economy competitive and vigilant has led to the rise in the position.

Even though UAE has always led the Arab World for the past six years, the recent rankings have positioned its economy among world’s top 20 countries for the ease of doing business.

The World Bank’s ranking is determined after considering the scores of 190 countries on 10 factors that include dealing with construction permits, paying taxes, protecting minority interests, obtaining electricity, protecting minority interests, etc.

Factors contributing to UAEs better ranking

The four significant economic reforms that led to a better environment for doing business in UAE are:

  • Ease of starting the business
  • Getting electricity
  • Smooth and easy registration of real estate
  • Gaining access to easy credit


In terms of getting electricity, UAE has made it easier by getting electricity connections for commercial and industrial usage by eliminating the industrial and commercial cost of up to 150 kilo-volt-amperes (kVA). It is one of the few countries that received the top score in terms of electricity subcategory.

UAE has further made it easier for the entrepreneurs to start a business in the country by improving its online procedure for company registration. Moreover, government has made it simpler for new businesses to avail funds by strengthening the credit system by creating a register of moveable assets. This makes it safer for the banks to lend money to new businesses. UAE has further simplified the procedure to register a property by increasing the transparency of the land administration system.

The judiciary system of Dubai has also improved considerably. The measures like the modernization of the judiciary, better training of arbitrators and judges, setting up of commercial courts, implementation of new insolvency code, etc. have shown tremendous results for the economy of UAE. Furthermore, as per the new framework the secured creditors have priority to get their dues and have out of court settlements. This has strengthened the legal rights of the lenders and borrowers in the country.

All of these efforts have shown a positive impact on the judicial system of the country specifically on commercial litigations and insolvency proceedings. The Federal government and other local departments of UAE have made the country an ideal location for the investors to do business. The world class friendly environment of the country makes it an innovation hub. Furthermore, the commitment of the government to resolve the challenges remaining in its services and litigation matter ensures that UAE shall continue to remain committed towards rapid growth of its economy.


Investment Opportunities in UAE

With its attractive investment environment, UAE continues to be an investment friendly destination specially for international companies that are eyeing to set up their business in the Gulf region. The above factors along with world-class infrastructure in the form of top quality airports, public facilities, and economic zones leads to the evolution of UAE as an international business destination. Moreover, the relaxed and robust policies of the government further facilitate the business environment in UAE.

If you are keen on setting up a company in UAE, you can seek professional help to expedite and ease the entire process of company registration and operation. A professional and dedicated company like IMC Group can help you conduct initial market research, conduct feasibility studies, design entry strategies, make business development plan, register a company, obtain required business licenses and permissions and set up a company in a hassle-free manner. We have helped thousands of local and international companies to set up or expand businesses in Dubai and UAE. Feel free to reach out to us on [email protected].

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