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Covid 19 Impacts on the Future Trends and Roadmaps of MSMEs and Startups
  • Newsletter

Covid 19 Impacts on the Future Trends and Roadmaps of MSMEs and Startups

Covid 19 pandemic has descended upon the world as a double-edged sword taking a heavy toll on lives and livelihoods. The global economy was tossed upside down as the pandemic rapidly evolved from a human health emergency to a global economic crisis bringing a huge negative impact on all businesses especially the MSMEs and Startups with limited access to resources.

The immediate issues faced by the MSMEs are fluctuating supplies and demands due to pandemic restrictions as well as disruptions in imports & exports, the disintegration of global and local value chains, declining business activity and revenue stream, increased insecurities, and disruptions in financial systems and instability in financial sectors.

The Future Trends Shaping the MSMEs and Startups

The MSMEs and Startups are the main pillar of the economy for most of the countries around the World and are witnessing drastic shifts in business trends due to complex challenges posed by the pandemic. The seven emerging trends sweeping these two business communities are

1) Digitization

Accelerated digitization and increased acceptance and adoption of digital services and products by the consumers are becoming the most predominant trends which would help in promoting huge employment generation in the foreseeable future.

2) Rise of online learning and employee recruitment

With schools, colleges and other educational institutions closed down, the traditional teaching, learning and training systems have completely broken down witnessing a rapid rise of homeschooling and online classes & training sessions. Social distancing and lockdowns are preventing employers from conducting physical interviews and opting for online recruitment.

3) Remote working

Social distancing and pandemic related restrictions e.g. lockdowns to curb the spread of the virus have forced most of the businesses to opt for the remote working of their employees. Despite the start of variation, most of the working classes are nervous to go to their place of work.

4)  Cross-Sectoral Collaboration

As we have learnt that the virus can not be handled by the administration alone, the Governments, start-ups, universities and healthcare & civil societies have started collaborating more and more to address the pandemic related challenges. The distribution of vaccines is one such area where technology has enabled greater collaboration across public and private sectors for cold chain logistics and last-mile deliveries. Cross-sectoral collaboration is offering multiple advantages in our fight against covid.

5) HR Policy Revision for Human Centric Culture

With the need for remote working and flexible working options of part-time and contract-based working, a new set of HR policies and rules are being introduced by the organisations.

The global economies and businesses are disrupted and HR has been at the core of this discussion. As organisations have started recovering, the role of HR has become even more crucial for effectively implementing measures for employee health and safety, remote working and employee engagement & communication.

6) Employee Wellbeing and Mental Health Support

As growing insecurities, fear of virus infection and reduced social interactions continue to make havoc on the mental health of employees adversely affecting manpower productivity, employee wellbeing and mental health support are becoming an important trend for MSMEs and Startups.

7) Indigenization

As indigenization helps in ensuring more reliable supply chains including increased job creation and reduced carbon footprint due to less transportation, many governments are announcing support initiatives to promote local MSMEs and Startups. In India, the government has initiated a ‘Self Reliant India’ scheme to facilitate the localization of certain industries and businesses.

The Future Roadmap for Survival and Success of MSMEs

The pandemic is continuing disruptions for many MSMEs and Startups is changing the ways they conduct businesses. There are also continuous changes in regulatory requirements forcing businesses to change business models. However, newly created and improved business models can address these issues for improved performance of organizations.

  • Deployment of policies and programs for promoting inclusive growth for addressing the ways of MSME development in coordination with various stakeholders in the MSME ecosystem, including government, industry, business and trade associations.
  • Knowledge and skill development in digital and smart technologies enabling business entities to innovate, upscale, and expand their businesses.
  • Implementing strategies for advancing the marginalized businesses of women, youth, local peoples including rural business entities
  • Understanding customers’ needs and expectations from a changing consumer perspective
  • Implementing cost management and control measures across all areas of businesses
  • Managing working capital and ensuring cash flows to prepare for the future
  • Reorganizing supply chain to evaluate supply landscape and forecasting future needs
  • Revisiting organizational structure and employee welfare needs after assessing the impact of the pandemic on the capacity, capability, and affordability of workforce
  • Enabling businesses digitally making use of digital tools and assets to increase business growth
  • Redefining and managing physical and virtual workplaces for effectively addressing the future risks

Every Cloud has a Silver Lining

New monetary policy measures implemented across many countries can help speed up the recovery of MSMEs through mitigating short-term challenges, providing short-term liquidity support, availability of funding, providing the right conditions and incentives and boosting capabilities of MSMEs and Startups.

The new measures will provide better guidance to help start-ups adapt to the COVID crisis through centralized information and support programs and reduce barriers to new businesses. As regulations and procedures are being simplified, the administrative cost of startups and MSMEs will also come down. Increased collaborations and network developments shall also aid businesses to flourish in the medium to long term.

The newly evolving trends will lead to flexible working hours and increased job satisfaction increasing employee productivity and reducing employee turnover.

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SMEs are the Main Pillar of Saudi Arabia’s Non-Oil Economy
  • Newsletter, Saudi Arabia

SMEs are the Main Pillar of Saudi Arabia’s Non-Oil Economy

SMEs in both developed and emerging economies play the most crucial role in promoting economic growth and development through effective utilization of resources and promoting entrepreneurial talents and job opportunities. Saudi Arabia is no exception and since the Saudi Vision 2030 was launched in 2016, the contribution of the small and medium-sized enterprises (SMEs) to Saudi Arabia’s gross domestic product (GDP) has grown by 45% against the original plan for increasing SME contribution to GDP from 20% to 35%.

A new Government agency was also established in 2016 as SME Authority (SMEA or Monshhat) for supporting, nurturing and developing small businesses and startups that have launched a set of initiatives for the ease of doing business in Saudi Arabia and include reimbursing government taxes paid during the first three years of operation, covering business risks of SMEs for financial institutions, providing money to the investing companies for low-cost SME funding and venture capital funding.

Over the last five years, the number of SMEs under the Vision rose from 447,000 to 614,000 in 2020. The SMEs’ share of bank loans also got closer to the target of 11% by 2025 effectively rising from 2% to 8% and acting as evidence of much new company formation in Saudi Arabia.

In a recent survey of the SME confidence index in the MENA region, Mastercard revealed Saudi Arabia to have the highest percentage (57%) of optimistic SMEs with a 50% SME population projecting business and revenue growth over the next twelve months after experiencing unprecedented economic upheaval caused by the covid pandemic. 83% of Saudi SMEs were found to be projecting that the revenue would either grow or hold steady shortly. Access to data, digitalization and skills have been cited as the key drivers for growth by the leading global payments and technology companies.

With the loosening of a tight set of restrictions imposed by circuit breakers to reverse the tide of the covid pandemic, economic normalcy has started being restored in many parts of world geographies including Saudi Arabia and helped raise hopes for a brighter economic future amongst the SMEs.

“Small and medium-sized businesses are vital to the Saudi economy as it diversifies and grows. Through the most difficult days of the pandemic, SMEs continued to press ahead, and it is encouraging to see the renewed optimism and confidence in this sector today.

While 62% of the respondents reported Private sector partnerships as the main reason for future business growth, 55% of SMEs cited government-led initiatives as the major growth driver.

In Saudi Arabia, 99% of Private sector companies fall under the ‘SME’ category employing less than 249 employees and earning less than SAR 200 million as revenue. Though the economic output of SMEs doesn’t match that of big corporations like Saudi Aramco, they employ the largest Saudi population and keep the economy running. Most of the SMEs in the KSA maintained steady growth over the years and promoted employment opportunities in the country. Institute of National Entrepreneurship Initiative (NEI) described SMEs as the backbone of Saudi’s economy.

King Salman bin Abdulaziz and Crown Prince Mohammad Bin Salman, with their visionary leadership, led the country’s economic growth and prosperity through Saudi Vision 2030 with continuous government support and initiatives to the SME sector through a variety of reform programmes. Economic diversification and reduced dependence on oil are at the core of the country’s 2030 vision with a primary focus on enhancing local SMEs’ capability.

Significant resources have been allocated by the Saudi government for enhancing the role of SMEs in the economy in recent years. In 2020 itself, an economic package worth 13 billion USD was announced for SMEs 2020 to mitigate the covid virus-induced financial crisis caused by reduced cash flows. The Kingdom has set a target of a 25% increase in GDP contribution for the private sectors.  

The government has also made a considerable investment to promote SME funding through Sovereign Wealth Fund PIF with several initiatives like Jada investment for providing funds to SMEs through investment in private equity and venture capital funds and contribute 2.29 billion USD to the country’s GDP by 2027.

The SME sector in Saudi Arabia is considered as the pulse of the Kingdom’s economy and enhancing overall economic prosperity through employment generation, local capabilities boost up, ensuring business competitiveness and economic diversification.

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Sohar Port & Economic Free Zone offers Multiple Benefits and Abundant Opportunities to Indian Investors
  • Newsletter, Oman

Sohar Port & Economic Free Zone offers Multiple Benefits and Abundant Opportunities to Indian Investors

SOHAR Port and Freezone in Oman is a deep-sea Port and Freezone administered by SOHAR Industrial Port Company, the SIPC. The port is located in the middle of Dubai and Muscat and was inaugurated in 2004 with the first vessel. The Freezone was added later, during 2010 and 2018. The port is capable of handling more than one million metric tons of sea cargo every week. It is one of the fastest-growing ports and free zones in the world today and lies at the centre of global trade routes between Asia and Europe.

Initially built as three industrial clusters for metals, petrochemicals, and logistics, it has recently added a new food zone cluster for manufacturing, packaging, and logistics of food products. Foreign investments above USD 27 billion poured in this port and free zone that witnessed an increase of exports by 3.8% despite the economic crisis caused by the covid pandemic. Many foreign investors made a choice for company formation in Oman and selected Sohar as their preferred business destination. The port also achieved an almost 1% increase in the number of containers as well as a doubling of Ship-to-Ship cargos due to the port’s unmatched turnaround time and quick service.

In a recently released 2021 first-quarter result, the port and free zone reported cargo handling growth in all categories compared to the same quarter the previous year. Both the throughput and dry bulk volume witnessed sizable growth over last year registering a 21% & 23.6% increase respectively. Breakbulk and liquid bulk handling also grew significantly. 

“Since the start of the pandemic in the first quarter of 2020, one of the key challenges faced by businesses around the globe has been securing supply chains and ensuring their business continuity. At SOHAR Port, we put in place precautionary measures and identified solutions to best serve our clients and the various markets.  A testament to our proactive approach, we were able to continue contributing to the Sultanate’s GDP, supporting the objectives of the Government of Oman in its diversification plans,” told the CEO of Sohar Port Mark Geilenkirchen.

Sohar Port and Freezone in an attempt to explore the Indian market has entered into a collaboration with the Federation of Indian Chambers of Commerce & Industry (FICCI) and launched a five-part online webinar series titled ” Accessing Industrial and Logistics Solution to Maximize your Market Reach”. The webinars will also highlight opportunities on how Indian businesses can capitalise on the strategic location and world-class infrastructure of this port and free zone to gain enhanced access to the GCC, the US and African markets.

The first webinar held on July 13 mainly highlighted the opportunities available at SOHAR Port and Freezone with presentations and success stories from Omar Al Mahrizi, CEO-SOHAR Freezone; Emmee Haun, FTA Advisor; Sameer Gupta, Head of Production Planning, Shipping & Logistics, Jindal Shadeed Iron & Steel LLC; Malvika Pankaj Khimji, Director- Khimji Ramdas. The first webinar session was attended by 70 Indian business houses.

The first session provided knowledge and insights on multiple benefits offered by the port and free zone including value addition through cost-competitive utility prices, unhindered supply of raw materials and lucrative incentives. The Free Trade Agreement reached with the US also allowed duty-free access to qualifying products.

The next four webinars will be conducted over the coming months which will focus on key industries such as food, automotive, plastics and metals and the agenda will be released before each session.

Omar Al Mahrizi emphasized saying, “Oman and India have enjoyed decades of bilateral trading, linked by history, culture and warm and cordial relations. As a well-connected integrated hub with established clusters, our close geographical location, coupled with prime waterfront access, leasable land options and excellent infrastructure are all key ingredients to provide Indian investors with unique business opportunities. This webinar series provides the ideal platform for us to highlight these prospects to FICCI’s vast network, paving the way for future business development and closer relations.”

The webinar series also focuses on the huge opportunity for promoting mutually beneficial business partnerships between India and Oman in the Sohar Port and Freezone which has already attracted investments from Indian top business entities including Jindal, Larsen and Toubro (L&T), and Moon Iron and Steel Company (MISCO). Many new infrastructure projects and investments are also underway providing considerable growth prospects.

The Sohar Port and Free Zone have also made huge investments in innovative sustainability projects such as renewable energy, a rapidly growing sector in India. Indian companies aspiring for doing business in Oman can also benefit from several incentives announced by Sohar port and free zone. The company incorporation process is also easy and simple and can offer global market access to Africa, Asia and the Middle East.

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How Does a Foreigner File for a Trademark Registration in UAE
  • Newsletter, U.A.E

How Does a Foreigner File for a Trademark Registration in UAE?

The UAE is known as the leading financial hub in the Middle East and North Africa Region and many foreign companies look for setting up businesses in the country. It is, however, necessary that they prioritise the need to protect the company’s trademark with full consideration whether the trademark infringes the rights of others before registering the new corporation.

The Government of the UAE has put bold steps forward for implementing sound trademark legislation in line with international trademark registration classifying goods and services for the Registration of Marks under the Nice Agreement. The federal law for trademarks focuses on protecting trademarks and the procedures for the protection of intellectual property rights. Trademarks are effectively protected by Federal Trademark Law No. 37 of 1992 subsequently amended by Federal Law No. 8 of 2002 called the ‘Trademark Law’ with the requirements for trademark registration in Dubai UAE and the penalties for violating the same.

Rights of trademarks are permitted to both the UAE nationals and foreigners performing commercial, industrial, services and other business-related activities.

What is Trademark and its Benefits?

UAE Federal Law No.37 of 1992 defines a trademark as “a trademark is any distinguished form of names, words, signatures, letters, figures, graphics, logos, titles, hallmarks, seals, pictures, patterns, announcements, packs or any other marks or group of marks, if they were used or intended to be used either to distinguish goods, products or services from whatever sources, or to indicate that certain services, goods or products belong to the owner of the trademark, because of their provision, manufacturing, selection of trading. The voice accompanying a trademark is considered a part of it.” In a nutshell, it is the ‘Brand Name ‘ in legal terms.

Though Trademark registration is not mandatory in UAE, it can benefit foreign businesses by providing exclusive rights to beneficially operate under the registered trademark. It also protects the company name and brand from any infringement and allows legal actions whenever such a case arises. Besides, a trademark also helps in promoting business through

  • Unique Image creation
  • Easy Manpower deployment with minimum attrition
  • Creating an intangible asset
  • Product quality recognition
  • Enhancement of goodwill and trust

What is the Trademark Authority in the UAE?

The Ministry of Economy is the controlling authority for Trademark in UAE with a Trademark office located in the Ministry.

How does a Foreign Company register for a Trademark?

Trademark registration can be done by submitting an online application with registration documents including Trademark logo, Commercial licence, Power of Attorney, Priority document, Passport and others, as relevant.

What Is the Scope of Trademark Registration in the UAE?

As per Article 2 of UAE Trademark Law, any character with a distinctive form that helps to distinguish a brand from others can be trademarked such as titles, characters, seals, posters, engravings, paintings, names, signatures, titles, paintings, and any kind of label.

Article 3 of Federal Law No. 37 of 1992, prohibits certain marks from trademark registration on absolute or relative grounds and a few of them are listed below.

  • Marks with no distinctive character
  • Descriptive marks, ordinary drawings and pictures of products
  • Marks breaching public morals or interest
  • Public emblems, flags and other logos
  • Trademarks that are identical or similar to symbols having a purely religious character
  • Geographical names that may create confusion regarding the origin of products or services
  • Particulars of honorary degrees
  • Trademarks owned by prohibited natural persons or legal entities
  • Trademarks composed of national and foreign medals, coins and banknotes
  • Red Cross and Red Crescent symbols
  • Third-party names and titles
  • Other well-known trademarks translated directly
Additional restrictions in trademark if any needs to be consulted with the local trademark registration attorney.

What is the process of Trademark Registration in the UAE?

Trademark Registration Process in the UAE is simple with the below-mentioned steps

  • Filing Application
  • Examining on formal, absolute and relative grounds
  • Publishing for opposition purposes in national newspapers
  • Approval for Trademark Registration
  • Payment of fees, rolling penalty fees for late payment
  • Final Registration of Trademark
  • Issuance of electronic registration certificate, no hard copy certificate is issued

What is the validity of a Trademark in the UAE?

The trademark’s validity lasts ten years from the filing date and can be extended for another ten years.

What is the Trademark Registration Fee in the UAE?

The trademark registration fee in the UAE as of 2021 is USD 1366.
How is Trademark Renewed in the UAE?
Trademark renewals are done by submitting an application through the Service platform of the Ministry of Economy along with a copy of the registration certificate for the mark and a power of attorney if done through a professional farm or agent. The renewal fee is USD 1366 and includes publication fees. Late fees apply for late renewals.
What are Trademark Infringements and what are the penalties?

Trademark infringement can be a major problem in the UAE as in other countries with serious business implications. A business must have a good title to its trademark to ward off any possible risk of infringement.

Various legal actions can be initiated against the infringers and may even lead to criminal proceedings. The trademark holder may even commence civil proceedings for infringing the use of the trademark. The best way to prevent a third party from infringing business rights is trademark registration with the UAE government enabling the enforcement authority to assess trademark rights for most effective countermeasures.

Besides criminal proceedings and imprisonment for infringement of trademarks, hefty fines are also imposed by the authorities. Dubai Customs can also facilitate avoiding infringement with its authority to stop infringing products before entering the UAE soil and can make trademark protection more robust and secure.

Takeaway

There may be an additional cost to hire local PRO services as an attorney for trademark registration, however, partnering with an experienced attorney allows new business owners to focus on other value-added tasks including business development, marketing strategies, advertising etc. instead of getting involved in intricacies of trademark law and submitting applications. A reputed firm ensures that the registration process is successful without getting rejected with complete search and intricate legal analysis.

It is highly recommended that businesses invest in a trademark lawyer and draw up and implement a plan for operating in the UAE, particularly about how trademark rights are handled for a sustainable business with trust and goodwill. A reputed firm also keeps a constant watch and strenuously protects against any infringement of registered trademarks in the UAE.

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UAE SMEs are Optimistic about Post-Covid Economic Recovery
  • Newsletter, U.A.E

UAE SMEs are Optimistic about Post-Covid Economic Recovery

MasterCard, a leading global payments and technology company in its recent research reported that the confidence and optimism amongst the UAE Small and Medium Enterprises (SMEs) are now coming back after the severe economic upheaval caused by covid 19 induced pandemic.

While 88% of SMEs were seen upbeat on the next 12 months; two-thirds of them forecasted the revenue flow to be better or remain stable over that period, the inaugural Mastercard Middle East and Africa (MEA) SME confidence index revealed. Increased and easy access to funding, skill enhancement and digitalization have been identified as key growth drivers in the future.

With a remission in the number of active covid cases and gradual easing of lockdowns and social restrictions, many emirates are coming back to normal economic activities enabling the UAE SMEs easier access to funding for a business, suggested by 40% of the SME population. Digital payments and online transactions have been cited as one of the other reasons by 34% of the respondents. Skill enhancement and training of staff have also been identified as major growth drivers by 34% of SMEs surveyed.

The reasons for future growth opportunities thus factored both external influencers e.g. industry policies, regulations, industry trends etc. and internal transformation and capability enhancement of SMEs through experience, training and upskilling.

Increased focus on core business activities, streamlining operations and cost reductions have also been recognized by Dubai SMEs for internal strengthening and outsourcing PRO services in Dubai should be an ideal proposition in that direction. Engaging external accounting services in Dubai will also come as a great help in reducing overheads and fixed costs of SMEs and enhancing business competitiveness.

More than 400,000 SMEs run their operations within the UAE employing over 86% of the UAE workforce in the non-oil sector and to support this sector, the UAE government has already announced 8.2 billion USD financial support for these SMEs and startups in April. Vision 2021 of the UAE government also stressing on SME participation in the non-oil economy touching 70% this year.

“Starting a business is one of the most ambitious and rewarding things one can do, and it’s great to see that confidence is returning to the UAE’s SME sector after a challenging period. The study highlights the potential of several key drivers of growth that small and medium businesses in the UAE rely on as they look towards an optimistic future. At Mastercard, we connect SMEs to the technologies, the network and the expertise they need to sustainably grow their businesses, collaborating to build prosperous and more inclusive economies,” added Girish Nanda, Country Manager, UAE and Pakistan, Mastercard.

Though the UAE SMEs sounded more upbeat compared to other middle eastern counterparts, they voiced their concerns over the high cost of running a business in the country. Public-Private partnerships, however, are cited as a positive growth engine. During the survey, 60% of UAE SMEs said that the maintenance and growth of their business was the biggest challenge they were facing.

61% of SMEs surveyed highlighted the increasing cost of doing business as the major hurdle over the next one year while 38% of them pointed to the immediate requirement of even more easy access to capital and funding.

Private sector partnerships were seen as positive for business growth by 57% of SMEs and 53% spoke in favour of government-led initiatives as one of the most potent factors for favourably impacting SMEs and the greater UAE market and economy.

Girish Nanda emphasized saying, “Access, whether it is to growth, stability and financial support, stands out as the top concern that SMEs in the UAE face today. The fundamental benefit of a digital economy is that it eases access across these barriers. Whether it is the ability to sell online, acquire a larger customer base through eCommerce, or enable instant access to apply for or extend credit lines through digital banking, the digital economy works for everyone. At Mastercard, we work every day with the diverse players in this financial ecosystem to transform this infrastructure and build a smart economy that enables access for businesses of all sizes.”

As new consumer trends are rapidly evolving after the covid pandemic across the globe, businesses must acclimate themselves to these new trends for sustainable growth and development. It is believed that a more than 20% increase in e-commerce retail spending would be a permanent thing in the future. 73% of consumers in the UAE are seen doing more shopping online than they used to during pre-covid time and 97% of UAE businesses would prefer and adapt to digital payment over the coming years.

The Dubai government announced four economic stimulus packages in 2020 to mitigate the impact of economic restrictions during the pandemic. The latest package announced this year amounted to AED 315 million for the revival of Dubai startups and SMEs.

An independent agency of the Government of Abu Dhabi, the Khalifa Fund for Enterprise Development (KFED) has recently launched a new media platform called Abu Dhabi SME Hub fully dedicated to supporting small and medium enterprises (SMEs) in the UAE and will extend support to all SMEs during every stage of business and equip them with the appropriate tools needed to comfortably cope up with the local UAE ecosystem to as well as to grow and innovate in terms of best industry practices and newly evolving technologies.

The UAE government has handled the covid pandemic with utmost determination and unwavering commitment that has been very much appreciated and recognized internationally. UAE as a whole and especially Dubai has retained its status as one of the most coveted places for business, logistics, travel and holiday and increased migration of companies for business set up in Dubai is a glaring testimony of that.

The government has also done a stupendous job and kept international travel restrictions limited during the pandemic and stayed away from unnecessary and unpredictable lockdowns to encourage the international business community and promote FDI.

There has been an all round endeavour in keeping the UAE startup and SME ecosystem vibrant by connecting foreign business entities to different local stakeholders including regulatory bodies and investors.

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UAE and Kuwait Markets are Fastest Growing for the UK Service Sectors
  • Kuwait, Newsletter, U.A.E

UAE and Kuwait Markets are Fastest Growing for the UK Service Sectors

It has been confirmed recently by the Lord Mayor and the leader of the City of London William Russel that the two GCC states, the UAE and Kuwait have been identified as the fastest-growing markets for UK services worldwide. Russell noted that British technology and innovation in the fields of green energy and digital infrastructure could offer huge collaboration opportunities for Kuwaiti investors and can open the doors for much British technology based Kuwait company incorporation.

The Lord Mayor said, “We look forward to continuing to work with them in the years ahead and see a bright future for our ongoing trade relationship.”

As estimated by the Lord Mayor, the existing business and investments from the GCC nations including Kuwait, Bahrain, Saudi Arabia, Qatar, and the UAE exceed 140 billion Sterling (USD 195 billion approx at the current exchange rate). He also noted that the City of London would be appreciating these investments into green and renewable energy infrastructure programs and projecting increased future investments pouring into the finance and fintech sectors.

The UAE remains to be the top trading partner for the UK among other GCC nations and has already attracted significant FDI from the UK. The ongoing trade deal between the UK and GCC is likely to be finalized during this summer and once the bilateral trade pact gets through, many more UK companies would likely be rushing for company formation in Dubai.

There were a series of discussions held recently between Mr Russell and the GCC member states, especially the higher authorities in Kuwait on many different issues, however the main topics of discussions revolved around the forthcoming UN Climate Change Conference (COP26) to be held in Glasgow during November 2021. It didn’t come as a surprise when Mr Russell sounded optimistic on the prospects of the trade agreement between the UK and the GCC countries that could surpass China as a trading partner for the UK in a giant leap forward.

He was upbeat on Kuwait and praised Kuwait Investment Authority (KIA) with recognition and delight for being committed to London and mentioned the world’s oldest KIA sovereign wealth fund back in 1953. Kuwaiti investments in the UK infrastructure sector included 20% stakes in London City Airport, Associated British Ports, Thames Water, and several significant properties in and around the Square Mile and Canary Wharf, Mr Russell clarified.

The Lord Mayor of the City of London didn’t want to attach much importance to the Brexit issue and negated any adverse long term business impact on the market. He also emphasised saying that London would continue to be a leading global centre for business and trade including the heritage and culture as evident from the extent of growth and development work being undertaken in the city exhibiting continued support of investors and businesses communities.

“London’s fundamental strengths such as its vast international reach, pragmatism, and spirit of innovation have not been lost, and I am confident that our unique city will continue to thrive for decades to come. We have been through tough times before and we will come through this period as well,” he remarked.

In his concluding remarks, the Mayor added that the City of London and the UK government would now concentrate more on future strategies and visions for promoting future growth markets such as green finance, fintech, and other rapidly developing business areas and maintain its position globally.

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Family Office Regulations in the UAE
  • Newsletter, U.A.E

Family Office Regulations in the UAE

A family business is defined as a private business entity with skilled professionals capable of assisting a family with overall business and financial administration including investment management, taxation, real estate planning etc. and enable the family members to protect and grow family wealth and achieve long term financial objectives. Two or more members hailing from the same family are the major business owners with the controls lying within the family itself.

The family offices are the oldest form of business in human history and were born out of necessity since the beginning of modern civilization. During the 19th century, the modern family offices of today were conceptualized and gradually developed. While J. P. Morgan, the New York based banker, founded the House of Morgan to manage his family wealth somewhere during the middle of 1800; John. D. Rockefeller the business magnate of America established his family office in 1882.

Essentially, Family offices are privately managed entities involved in the wealth management of Ultra High Networth Individuals by providing unique financial solutions. While investment management is the primary function, family offices also carry out other activities such as managing accounts and payrolls, complying with regulatory requirements, tax filing, managing charities, lifestyle management, risk management and succession planning.

The UAE plays a critical role as the top investment hub in the GCC region and many UAE businesses and investments are family-owned. The family businesses in middle eastern countries are relatively younger compared to Europe and the U.S and until recently the majority of them didn’t have any succession plan. However, there has been a sudden shift in focus amongst family businesses now and the family offices have become the most rapidly growing business vehicle in the country’s leading free zones.

Establishing family offices in the UAE must comply with the legal and other regulatory frameworks stipulated by the government and the free zones including ADGM, DIFC and DMCC have their own sets of rules and regulations in terms of minimum paid-up capital requirements, compliance and reporting requirements and criteria for family members.

Neither of these three zones imposes any tax on corporate income or capital gains of the family offices. Providing asset and wealth management services are also allowed in these free zones.

For streamlining the affairs of family offices, DMCC now accepts wealth, assets and legal affairs management of a single family and also provides administrative services. DMCC company formation allows family offices to be owned by a single family with descendants from a single ancestor. It doesn’t allow family offices to provide services to third parties as investment advisors.

Dubai family ownership law was amended in August 2020 allowing families in the Emirate to enter a family ownership contract to appropriately structure the family’s assets in both immovable and movable forms. All company shares except those in listed companies can be included in such contract and with the maximum duration of the contract to be 15 years. This contract is an important step towards the protection of family wealth and continuity of family-owned businesses making DIFC company formation an ideal solution for family offices.

Irrespective of its size and the nature of resources it employs, a family office must prioritise safeguarding the interests of the family by managing and protecting the family’s wealth with smooth, successful and dispute free transfer of family wealth to the next generations.

The UAE has recently witnessed tremendous legal and regulatory changes in the private wealth space. There is huge private wealth concentrated in the Middle East and family-owned businesses play a very crucial role in the economic activity and future growth prospects in the region. The successful transition of wealth to the next generations thus becomes extremely critical.

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Policy Reforms have made India a Great Place for Investment Finance Minister Asserts to US Investors
  • India, Newsletter

Policy Reforms have made India a Great Place for Investment Finance Minister Asserts to US Investors

Union Finance and Corporate Affairs Minister of India, Nirmala Sitharaman addressed U.S. investors in a meeting on June 24, 2021, noting that India’s present fiscal situation is well under control and in all expectations would only improve further confirming the country’s strong post covid economic resilience.

The U.S.-India Strategic Partnership Forum (USISPF) convened a global investors’ meet where Ms Sitharaman emphasized that the government has demonstrated sound and adequate records of ‘reform implementation in the last six years and successfully exhibited the ‘strong relief and reforms undertaken during the pandemic times’.

“Macro-economic stability, infrastructure-led economic growth opportunities, financial sector reforms and positioning as a strong player in global supply chains are just some of the ways India continues to rise as a global economic powerhouse,” she added, highlighting that there was a considerable drop in new virus infections and also a significant decline in the spread of the second wave.

Representatives of reputed multinational companies including Mastercard, Metlife, Prudential, Dell, Softbank and Warburg Pincus participated in the meeting. The Finance Minister broadly explained India’s vision to make the nation ‘self-reliant and modern’ through the ‘Atma Nirbhar Bharat Programme’ and based on the fundamental building blocks for self-reliance of 5 ‘I’s including Intent, Inclusion, Investment, Infrastructure and Innovation.

The Finance Minister expressed India’s commitment to forging a long term business relationship with U.S. investors and proposed to meet them two times in a year.  “The continuous reforms make India a great place to do business and the highest ever GST collections shows the bright spot — more formalisation of economy and tax compliance,” Ms Sitharaman told the U.S. investors as reported in an official statement.

Emphasising India’s ‘continued macro-economic stability and resilience in economic recovery in the recent months’, the Finance Minister said India’s wide-ranging reforms continue to position the country as an attractive destination for foreign investors. There are ‘new opportunities emerging for foreign investors with recent FDI reforms, privatisation policy and PLI (production-linked incentive) scheme’, she pointed out. It is noteworthy that the foreign investment process has been made much simpler now and company registration in India by foreign investors can be done online without any red tape.

“Innovation and R & D have great potential. New opportunities are emerging for foreign investors with recent FDI reforms, privatisation policy and PLI scheme,” the Finance Ministry said in a press briefing, summarising the Finance Minister’s message at the USISPF meeting. To register your company in India from USA has never been so straightforward before, not needing the U.S investors to be physically present anymore during their company establishment, the ministry informed.

First Solar CEO Mark Widmar appreciated ‘the effort done already towards the investment opportunities in India, especially with the combination of industrial policy and the trade barriers that have enabled this initiative’, a ministry spokesperson reported. Mr Mark was also encouraged to see the vaccination and economic progress, the statement added.

India had 15 new unicorns in 2021 that reinforced India’s growing startup ecosystem ‘to be amongst the best in the world’, commented Ms Sitharaman. Economic Affairs Secretary Ajay Seth explained the bigger themes of the recent Union Budget and the far-reaching positive and beneficial consequences to be realized.

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Bengaluru Figures in the List of Top Five Technology Centres in the Asia Pacific
  • India, Newsletter

Bengaluru Figures in the List of Top Five Technology Centres in the Asia Pacific

Bengaluru has emerged as the top five technology centres in the Asia Pacific region including Beijing, Shanghai, Shenzhen and Singapore in a report published by Colliers, a diversified professional services and investment management firm with a global presence. Hyderabad is another Indian tech city that could find a place in the top 10 list of the report titled ‘Growth Engines of Innovation: How Asia Pacific’s Technology Hubs are Reshaping Regional Real Estate property markets.’

As the Asian technology groups make plans for their future business expansion through company formation in India and other regions, the in-depth study made by Colliers should come in handy for ascertaining the most valuable technology submarkets amongst the Asia-Pacific (APAC) cities. The report also provides opportunities to the property owners who can focus on these cities for future investment and property development opportunities.

While the report mentions Shangdi in Beijing as one of the already established submarkets; some other APAC cities including Yangpu in Shanghai, Hitec City in a Suburban Business District in Hyderabad, Sydney’s CBD South Whitefield and North Bengaluru in Bengaluru are highlighted as the developing real estate submarkets. Tech companies wanting company formation in Bangalore can obtain valuable insights from this detailed report.

“While Bengaluru has been ranked in the top five technology centres in APAC, we also witness Hyderabad in the Top ten list. Offering a compelling balance of infrastructure and talent for occupiers and well-positioned to deliver future growth and investment opportunities for owners, ORR in Bengaluru is the epicentre of commercial leasing,” noted Arpit Mehrotra, the Managing Director, Office Services-South India in his comments.

“In addition, while smaller than Bengaluru, Hyderabad is also attracting talent and multinational companies to the city. Rents are 15% to 20% cheaper than in Bengaluru. Overall, we foresee the South India markets leading the pack in terms of office leasing demand for the technology sector,” Mehrotra emphasized.

The technology sector is presently considered the most important business sector across the world comprising 65% of the top 20 public companies globally by market capitalization.

Almost 20% to 25% of leased office space demand will be contributed by the tech companies in the APAC region over the next five years as many Asian technology companies especially the Chinese have started investing and developing real estate to rapidly expand their businesses. Technology companies have already pumped in almost 10 billion USD for acquiring APAC real estate assets.

Senior Director and Head of Research- India operation, Siddharth Goel noted, “Demand from technology occupiers has been the mainstay of Indian commercial real estate. After reaching highs of 65-70% share in annual leasing volumes in the 1990s and 2000s, though the share declined to around 45-50% share in the last decade, technology occupiers are expected to increase their share in the post-pandemic period.”

“Also, Indian office real estate is expected to maintain its competitive advantage over its APAC peers as over 45% of the submarkets in top established and upcoming categories are from the cities of Bengaluru, Chennai, Delhi NCR, Hyderabad and Pune. This is further supported by our research that shows that about 70% of the tech occupiers are MNCs compared to an average of 30-40% in many other APAC cities,” Mr Goel remarked.

Besides the rent and rental growth, the availability of quality spaces at competitive rentals also decides the future growth prospects of technology occupiers and Delhi NCR has also been named amongst the top ten cities by property factors in outside cities with considerable office spaces.

Bengaluru, Hyderabad, Shenzhen, Delhi NCR and Manila have also been identified as top markets by property factors with large space in new or outlying districts.

“Delhi NCR’s micro-markets of Noida Expressway and Golf Course Extension Road in Gurugram have been featured amongst the top ten emerging submarkets in the APAC region for Tech occupiers, which is expected as technology companies are coming out of an extended work from home scenario and raring to go and perform in an office setup,” remarked Managing Director, Regional Tenant Representation-India, Bhupindra Singh.

He also emphasized saying, “We foresee buoyancy in the Delhi NCR market, and once the restrictions are fully lifted, the market will witness an upswing. Colliers forecasts an increase in uptake from the SME segment, moving towards economical micro-markets in the NCR, like NOIDA and Golf Course Extension.”

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Singapore is Emerging as the Most Preferred Investment Hub in Asia for Indian Entrepreneurs
  • Newsletter, Singapore

Singapore is Emerging as the Most Preferred Investment Hub in Asia for Indian Entrepreneurs

The cultural and business relations of India with Singapore dates back to the 9th century Chola dynasty and most Indian business entrepreneurs feel at home while anchoring their business vehicles on Singaporean soil. More than 10% of Singapore’s citizens have Indian ethnicity with Tamil as an official language. The name Singapore has also been derived from Sanskrit.

In a growing trend over the last few years, many Indian businesses, especially startups are choosing South East Asia for their business expansion and company registration in Singapore is becoming the most favoured choice. Indian companies looking for capital can have easier access to several fundraising opportunities to set up their business establishments in Singapore.

India and Singapore have long been enjoying very good bilateral trade and investment relationships and the Comprehensive Economic Cooperation Agreement (CECA) reached in 2005 further boosted the partnership.

Several MOUs were also signed between the two countries during the visit of the Indian Prime Minister in 2018 to foster collaboration between Indian and Singapore startups and pave the way for the Indian companies in Singapore to better explore the Asian markets.

Singapore contributed to more than 29% of FDI received by India during 2020 with its export close to 9 billion USD. The country is also home to over 8,000 Indian companies.

 

Why Indian Companies are confident of doing business in Singapore?

Singapore is known as the gateway of Asia and has a robust and resilient economy, skilled and educated workforce, excellent infrastructure facilities and a high standard of living with a per capita GDP close to 60,000 USD in 2020 offering Indian startups an ideal business climate for making investments with greater confidence. A high level of digital infrastructure and the adoption of innovative technologies have also played a crucial role in advancing the business competitiveness of Singapore. Indian FDI to Singapore touched more than USD 60 billion in 2018.

IIT- Kanpur in a joint effort with the Singapore Indian Chamber of Commerce and Industry (SICCI) launched a Start-Up Incubation and Innovation Centre (SIIC) that would act as a springboard for technology-based startup businesses.

 

Why Indian investors are more attracted to Singapore?

Innovative policies of the Singapore government are at the core of the country’s booming startup ecosystem. Besides cultural compatibility, many other reasons drive Indian investors to this foreign country.

 

1. Ease of doing business

Innovative policies of the Singapore government are at the core of the country’s booming startup ecosystem. Besides cultural compatibility, many other reasons drive Indian investors to this foreign country.

2. Strategic location in the heart of Asian flourishing market

Presently the Asian economy is the fastest growing in the world and with a GDP of almost 3 trillion USD backed by a large population of 650 million, this continent is all set to fly in a high growth trajectory.

3. Multiple bilateral treaties and agreements with India

Besides CECA with India in 2005, Singapore has also entered into Double Taxation Avoidance Agreement (DTAA), Bilateral Air Services Agreement, Defence Cooperation Agreement, MOU on Foreign Office Consultations, Mutual Legal Assistance Treaty, Mutual Recognition Agreement on Nursing as well as cooperation in fintech. DTAA substantially reduces the tax burden of Singapore based Indian holding companies.

4. Favourable Tax Climate

Singapore’s tax system is one of the top attractions for Indian investors. The country imposes a moderate corporate tax of 17% and doesn’t levy any capital gain tax. Significant tax incentives are offered by the government and especially during the first three years of incorporation of businesses. Income from businesses up to 74,570 USD are tax exempt. GST is imposed at a flat rate of 7% which is lower compared to many other countries.

5. World Class Infrastructure

Singapore provides world-class land, port and aviation facilities including a robust digital infrastructure.

6. Transparent Governance

The regulatory bodies in Singapore follow a high level of transparency with minimum bureaucracy. As most of the business activities are carried out online and free of any corruption.

7. Easy Access to Funding and Capital

Easy access to affordable financing is another reason that lots of Indian investors are being drawn to Singapore. The country has witnessed a meteoric rise in venture capital funding in recent years and is considered the top startup funding hub in Asia. Financing for new entrepreneurs or startups for business expansion is available through loans, equity funding, government grants and angel investing. The Singapore government has also initiated many grants and business accelerators for specific sectors.

8. Conducive import-export tax regime

Singapore only imposes customs duty on certain categories of imports including tobacco, liquor, automobiles and petroleum products with no export duty.

9. Liberal Immigration policies

Singapore offers EntrePass to overseas investors willing to start and operate a business in Singapore that can be obtained easily and transparently.

10. Strong Intellectual property (IP) Regulatory Framework

The Ministry of Law observes a strong IP policy to safeguard the interest of high technology companies

11. Fast and Effective dispute resolution

Singapore authorities provide quick and cost-effective resolutions of business disputes to Indian investors through the Singapore International Arbitration Centre (SIAC).

12. Partnership opportunity with a Singapore Company

Partnering with a Singapore company can be rewarding for Indian investors willing to set up a business in Singapore as it eliminates customer and business development from scratch reducing business establishment cost greatly. However, the process of checking registered companies in Singapore must be carefully verified through an online information retrieval system of ACRA.

 

Which company types of Indian investors can establish in Singapore?

Indian entrepreneurs desirous to start a business in Singapore can choose the following business structures

  • Private companies limited by shares
  • A Branch office
  • A representative office (RO)
  • A Variable Capital Company (VCC)

 

Conclusion

Singapore has come into prominence as one of the most attractive businesses and investment destinations in the world primarily due to government policies, free and transparent investment landscape, ease of doing business, skilled human capital, conducive start-up environment, smart technology adoption and sound technological infrastructure.

If you are in the lookout for setting up a company in this business friendly country, there are experienced and reputed corporate service providers with a local base who can help you on how to start a business in Singapore as a foreigner.

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