7 January 2015, the Abu Dhabi Global Market (ADGM) published draft legislation covering its operations for consultation. The new financial free zone will have its own administration, court system and tax incentives to attract banks and companies from around the world.

Under the proposals, the ADGM will follow the Dubai International Financial Centre (DIFC) in basing its legal framework on English common law. “English common law, as it stands from time to time, will therefore govern matters such as contracts, tort, trusts, equitable remedies, unjust enrichment, damages, conflicts of laws, security, and personal property,” ADGM said in one of six consultation papers.

It will also seek to adopt the most effective legislation from around the world. “ADGM has the opportunity to take the best of the UK approach, while avoiding some of its historic peculiarities that have been removed or abandoned by the best practice of other jurisdictions,” it said. For example, shares in ADGM companies will not have a par value, in line with the approach taken in jurisdictions such as Hong Kong, Singapore and Australia.

It will also introduce a new type of “restricted scope company” with lighter disclosure and compliance requirements which, it said, would be “holding vehicles for professional investors and limited instances of institutions for whom less regulation and a greater degree of confidentiality will be appropriate.” The ADGM is further considering extending this regime to include entities owned entirely by an individual or close family members.

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The Organisation for Economic Cooperation and Development (OECD) has recommended that Australia reduce its company tax rate and broaden the tax base.

The suggestion is made in the OECD’s new report, Economic Policy Reforms 2015: Going for Growth. The report argues that improving the efficiency of the tax system should be a key priority for the Australian Government. It says: “Consumption taxes are relatively low while income taxes are heavy. This partially reflects a high headline company tax rate, especially for a capital-importing country like Australia.”

The report notes that the 2014 Budget included plans for a 1.5 percent cut in the company tax rate from July 2015. However, Prime Minister Tony Abbott has in recent weeks said that the Government will introduce what he describes as a “small business tax cut,” which will be “at least as big as the 1.5 percent already flagged.” Business organizations have criticized Abbott’s statements as foreshadowing a move toward a “two-tier” company tax system, and they have urged the Government to implement a rate cut for all businesses.

Abbott has also made clear that while all options for tax reform are “on the table” as part of the simultaneous Tax and Federation White Paper processes, no changes can be made to the goods and services tax (GST) system without the consent of the states and territories.

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UAE’s ‘material wellbeing index’ ranking is joint fourth

The UAE ranked 25th in the Natixis Global Retirement Index with its retirees outperforming several western nations including USA and Britan in key indicators.

The global findings, which analyse a total of 150 countries, suggest that retirement security is uncertain for most retirees given unsustainable demand for government resources and macroeconomic factors that affect the value of retiree savings, placing more responsibility on individual investors for their own welfare in retirement.

The UAE’s high level of employment, quality of life and stable economy all contribute to the country’s ranking. The UAE’s ‘material wellbeing index’, which measures income equality, income per capita and unemployment, ranking is joint fourth, sharing its high score of 84 per cent with Austria and Luxembourg.

Terry MellishTerry Mellish, Head of Global Institutional Services and Middle East North Africa Business at Natixis Global Asset Management, commented on some of the reasons why the UAE is doing so well.

“The UAE’s high ranking in material wellbeing is partly thanks to its high level of income per capita and high level of employment. It is worth noting that these are attributes shared by all of the report’s top five – Switzerland, Norway, Australia, Iceland and the Netherlands.”

“While these figures are generally positive, there is a much greater emphasis on individuals across the globe, including the Middle East, to do more to provide for themselves in order to maintain their standard of living in retirement.  By focusing on factors within their control, such as financial planning, setting goals and being more engaged with their finances, investors will be much better positioned to ensure their own retirement security.”

The UAE’s income per capita in 2014 was $58,000 (World Bank, GNIPC) – coming in tenth out of 213 countries. The 2015 Global Retirement Index rankings shows the UAE’s stable performance among the top ranked countries as compared to 2014’s report, highlighting the role played by a stable, growing economy, high earnings and progressive public policies in the security of retirees around the world.

The lack of financial planning in today’s working age population has also been laid bare in a recent global survey of individual investors, which showed that only 13 per cent of investors worldwide said they understood their retirement savings goals very well. Even fewer still said that they understood their retirement goals as well.

The 2015 Global Retirement Index focuses on twenty factors that determine the welfare of retirees in different countries, which are grouped in to four sub-indices and corresponding with four key aspects of those in retirement: health, material wellbeing, quality of life and finances in retirement.

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