Newsletter Archives - Page 19 of 57

Newsletter, Saudi Arabia

Kingdom of Saudi Arabia Reaffirms Its Plan to Invest Over 100 Billion USD in India

January 13, 2021

Saudi Arabia has made it clear on Sunday,13th December 2020 that its investment plans in India have not gone out of track and expressed confidence saying Indian economy has all the potential to bounce back from the adverse effects of the deadly coronavirus pandemic and will attract increased FDI inflow and new company-registration-in-India.

In February 2019, an investment of more than USD 100 billion in various sectors including petrochemicals, refining, infrastructure, mining and manufacturing, agriculture, etc. was announced by the Kingdom’s crown prince, Mohammed bin Salman. Recently, Saudi Ambassador Dr Saud bin Mohammed Al Sati reaffirmed Riyadh’s plan of 100 billion dollar investment in India.

“Our plans to invest in India are on track and we are in discussion to prioritize investment opportunities in several sectors in both countries,” Ambassador Dr Al Sati remarked.

He added that the Indian economic revival will help support other nations. He also praised the Indian government’s proactive measures and economic relief package, saying, “The economic relief package provided by India for its most prominent sectors is commendable. As the fifth-largest global economy and the largest economy in South Asia, the Indian economy has the impetus to recover from the impact of the ongoing pandemic”.

“The Strategic (Partnership) Council set up by two countries in 2019 has opened new avenues on partnership in strategic areas like defence, security and counter-terrorism, and renewable energy”, Dr Al Sati noted.

Saudi Public Investment Fund (PIF) had planned for an investment of $1.3 billion in Reliance Retail and $1.5 billion in Jio. He also added that the Saudi Aramco, the state-owned petroleum and natural gas company, is upbeat about India’s energy sector and also has investment plans. He also noted that the recent Labor Reform Initiative (LRI) will further reinforce economic ties between the two countries and facilitate setting–up –a –company–in –India.

The government fund acquired a 2.04 per cent stake in Reliance Retail venture, an ecommerce business running more than 12,000 stores across different cities in India.

As per Ambassador Saud Al-Sati, Saudi Arabia values India as a strategic partner and close friend. Ambassador Al-Sati remarked both countries are cooperating to create and strengthen partnerships in the defence and security sphere by training, knowledge sharing and fighting against terrorism.

“The Strategic Partnership Council set up by the two countries in 2019 has opened new avenues on partnership in strategic areas like defence, security counter-terrorism, energy security and renewable energy,” he added.

He also said the economic recovery of both countries will help promote the economic growth of other countries in the region.

“This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment,” the fund said.

This latest expansion in India follows an earlier acquisition of a 2.32 per cent stake in Jio Platforms, the digital services unit of Reliance Industries.

The Reliance business group of India has interests in oil, petrochemicals and telecoms, and is controlled by Indian billionaire Mukesh Ambani who is leading the Reliance group in making huge investments now in the booming technology sector.

India’s retail industry tops the global list and accounts for an approximate 10 per cent of the country’s gross domestic product, however, the sector has been badly impacted by the covid pandemic and in turn, adversely affected the wider economy too.

“This investment further demonstrates PIF’s commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia,” highlighted the fund’s Gov. Yasir Al-Rumayyan.

With a belief that investment flows in both directions, the Saudi Investment Ministry announced granting of investor licenses to 306 international companies in the Kingdom during the third quarter of 2020, an increase of 96 per cent license issuance over the previous quarter.

Investment Minister Khalid Al-Falih remarked that the latest figures suggesting a phenomenal increase in investor license issuance show that the Kingdom can retain the long-term trust and confidence of the global investor community, and is steadily moving towards “steady and positive” economic recovery.

Analysis of the investors’ data reveals that India topped the list of foreign companies who were granted licenses in the KSA, followed by Egypt and the UK.

The business sectors with the highest number of new investors have been primarily in services sectors including education, financial services and housing and followed by the manufacturing industry and transport and logistics business.

Newsletter, U.A.E

UAE Aims for One Million Companies over Next Ten Years through Landmark Economic Policy Reforms

January 13, 2021

The recent ground-breaking policy reforms allowing full ownership rights to the foreign companies are primarily designed to enhance the openness of UAE’s business climate and increase the number of businesses operating in the UAE to one million within the next decade jumping three-fold from 300,000 currently, the Minister of Economy added.

In a virtual media briefing, the economy minister Abdulla Bin Touq Al Marri highlighted the amendments to the commercial companies law would increase the business transparency and attract more foreign investment and help diversify the economy and ensure additional non-oil income.

“In light of the recent economic changes and challenges that were witnessed globally as a result of the Covid-19 pandemic, the realisation of this vision and this transformation has become even more necessary and urgent.”

Al Marri also pointed out the key changes will boost investor’s confidence and “provide a greater opportunity for establishing productive partnerships between citizens and foreign investors” and also enable the nation ” to contribute to the creation of new job opportunities, development of market movement, localization of technology, and development of skills and human capabilities.”

Other notable personalities who attended the briefing included Dr Ahmad Belhoul Al Falasi, Minister of State for Entrepreneurship and SMEs; Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade; Abdullah bin Ahmed Al Saleh, Undersecretary of the Ministry of Economy; Dr Obaid Saif Hamad Al Zaabi, CEO-Securities and Commodities Authority.

“We are expecting new companies to come in, more FDI (foreign direct investment) flow to the country and we are going to support those companies and direct them to right clusters and projects within the country,” Thani Al Zeyoudi, minister of state for foreign trade noted during the briefing.

The compulsory provision for a UAE national or a UAE-owned company acting as an agent has been abolished as part of the new measures. A stipulation requiring a company chairman to be an Emirati and for boards to have a majority of Emirati directors has also been abandoned.

The reforms have been welcomed by the business community as it would reduce the costs of doing business and improve competitiveness and stock market listings.

“There is no doubt that the new amendments to the commercial companies law will encourage local and foreign investment. It will encourage initial public offerings and listings in the country’s capital markets and will increase the rate of transactions and attract foreign capital, which in turn will increase the depth and size of financial markets capitalisation,” Obaid Al Zaabi, chief executive of the Securities & Commodities Authority said during the event.

Al Marri added the UAE currently has around 300,000 companies of various formats and also highlighted saying, “National companies represent 99.3 per cent of this figure, and the new amendments are designed to increase the number of companies operating in the country to one million within the next ten years.”

“Besides, they will accelerate the rate of transformation of SMEs in general into joint-stock companies listed in the financial markets to secure public financing, risk-based capital financing activities market development is also expected to be an outcome,” emphasized Al Marri.

Al Falasi described the initiatives that are being undertaken in partnership with various concerned government establishments to lay sound foundations for the transformation towards a more flexible economic model including updation of the regulations and legislation governing economic, commercial and investment activities in the country.

Launching and implementing new initiatives and policies that would enhance the national economy’s ability to accommodate the changes in the current global economic scenario, develop future sectors and generate opportunities are also on the UAE government’s agenda to promote new business–set–up –in –Dubai.

The minister for SMEs pointed out that the new reforms would help protect the interests of both the UAE and the foreign investors by reviving the market movements, increasing the number and size of companies and projects in the country, and diversifying the foreign investment base.

Al Zeyoudi emphasized the efforts of the UAE to bring about a qualitative transformation to the existing economic model encouraging Emiratis to directly engage in business and invest in the local market.

“It will also boost the UAE’s ability to attract start-ups, innovative companies, and SMEs focusing on advanced technology,” Al Zeyoudi noted.

Al Saleh said as per the new law, the formation of a foreign company branch can now be possible without a Local Agent.

Recent policy reforms made UAE companies more optimistic than their global peers about profitability returning to pre-Covid levels in the next two years as business slowly recovers with more investments pouring in for doing–business–in –UAE.

Newsletter, Singapore

Inclusive and Sustainable Growth with Continued Investment in Innovation and Collaboration are Crucial for Global Economic Recovery: Noted DPM Heng Singapore

January 13, 2021

Singapore can decisively contribute to global recovery amid the coronavirus pandemic through continued investment and global collaboration, noted Deputy Prime Minister, Coordinating Minister for Economic Policies and Minister for Finance Heng Swee Keat on Monday, 7th December 2020 in his inaugural address during Singapore FinTech Festival x Singapore Week of Innovation & Technology (SFF X SWITCH).

As new frontiers are opening through technology and innovation across the world with a unity of purpose, Singapore is also joining the league to ensure inclusive and sustainable growth for its companies and workforce, he added.

Describing the meet at extraordinary circumstances when Covid 19 has taken more than a million lives and disrupted the global economy, Mr Heng highlighted how the Covid-19 crisis has unearthed inequalities in many societies and the need for the world to take a more inclusive approach in global recovery plans.

The five-day event, which ended on Friday, 11th December 2020 witnessed more than 60,000 participants from 130 countries.

Mr Heng, reiterating on Singapore’s commitment to investing in innovation remarked that the Singapore Government is making an investment of approximate 1 per cent of the country’s gross domestic product in research and development each year and finalizing plans for the next five years.

Singapore continues to deepen its capabilities to keep the tech ecosystem vibrant and develop as a global financial hub, he emphasized. “Our commitment to innovation and work together will be key to driving economic recovery and growth.”

During this festival, Mr Heng announced the launching of The Asian Institute of Digital Finance, hosted by the National University of Singapore and backed by the Monetary Authority of Singapore and the National Research Foundation on Monday, 7th December 2020.

One of the institute’s first projects is to build a data-sharing platform that can train models to improve credit assessments enabling lenders make better decisions and offer better rates, Mr Heng said, which will improve the financing of small businesses and enable a stronger post-pandemic recovery.

The institute will also play a strong role to nurture global fintech talent for Asia and will take in its first batch of post-graduate students in 2021.

To deepen its capabilities in Blockchain technology and enable transactions even in a zero-trust environment, Singapore is also launching “Singapore Blockchain Innovation programme” as the first major Blockchain research and translation programme to ward off limitations associated with the energy efficiency of processing blockchains and the ability to connect different blockchain systems, he said.

“The programme will expand blockchain research to the needs of the industry, and will also look into scalability and interoperability of blockchain solutions,” Mr Heng added.

Mr Heng also emphasized saying, “Our commitment to innovation and to work together will be key to driving economic recovery and growth. As we do so, the question before all of us is this – How do we use innovation and tech in a way that will build better lives for all our peoples? How do we build a future that is inclusive and sustainable?”

“To avoid widening inequality, we must recover from this crisis in a manner that is inclusive. We must speed up the time that it takes for the last company and worker to access and benefit from technology. Small and medium enterprises account for 90% of businesses worldwide and 50% of global employment. Many SMEs are not making use of digital technologies, much less training their workers for the digital world. It is imperative that we bring them on board the digital economy.” he said

He also highlighted how Singapore is levelling up the capabilities of its small and medium-sized enterprises (SMEs) by helping them adopt digital solutions and scale beyond Singapore’s shores and promoting new company–registration–in–Singapore.

He also talked about “Business sans Borders” initiative, or BSB, to digitally connect SMEs around the world for expanding their markets and helping foreign-companies–relocate–to–Singapore. BSB is a ‘meta hub’ helping SMEs access a much larger eco-system of suppliers and buyers and also connecting businesses to logistics and financial services providers. “Using AI, BSB enables SMEs to discover prices and sales opportunities in a much larger global marketplace”, he commented.

He pointed out with an example of a furniture maker who has used Singapore-based platform Source-Sage to connect to other digital marketplaces, discovering more buyers and recently acquiring a new buyer on the India business-to-business platform. This platform also offers a tremendous advantage to other businesses such as electronics, one of the top–10–business-options–for–foreigners–in–Singapore.

Describing Covid 19 as a wake-up call for the world with a reminder to be better prepared for big problems like climate change, Mr Heng reinforced Singapore’s commitment for addressing climate change issues through innovation citing how Singapore is deploying at least 2 gigawatts of solar power by 2030 that would accelerate the deployment of electric vehicles as well as explore smart charging technologies and promised to phase out all IC Engine vehicles by 2040 in Singapore.

“We believe that putting sustainability at the core of what we do can create economic growth opportunities,” he pointed out and reaffirmed Singapore’s ability to contribute to a green recovery in Asia.

In his address, Mr Heng emphasised that the foundation for a more inclusive and sustainable post-Covid-19 future lies in the creation of a more resilient global commons.

“One key element of a resilient global commons is stronger governance on the use of technology. Fair and ethical rules that are generally accepted will allow more people to trust and use technology,” he said.

He pointed out how Singapore’s Model AI Governance Framework released in 2019 is providing guidelines to address ethical and governance issues when deploying AI solutions with best practices captured and adopted by companies including Google, Microsoft and DBS Bank.

On the same day, Mr Heng announced the launching of Singapore Financial Data Exchange, World’s first public digital infrastructure which will allow Singaporeans to view their consolidated financial information through financial institutions’ financial planning services or the Singapore Government’s MyMoneySense app.

“Such an approach to trusted data sharing – involving both innovation and conducive regulations – can potentially be applied in other areas and other jurisdictions,” he remarked.

SFF x Switch was jointly organised by the Monetary Authority of Singapore and Enterprise Singapore and had week-long hybrid physical and digital events taking place round the clock.

1,400 speakers were invited including New Zealand Prime Minister Jacinda Ardern; Mr Sundar Pichai, chief executive of Google’s parent company Alphabet; and Microsoft co-founder Bill Gates.

Newsletter, U.A.E

Extension of Economic Substance Regulations (ESR) Notification and Filing Deadline as Per Recent Announcement of The Ministry of Finance, MOF UAE

January 6, 2021

The Ministry of Finance, MOF UAE has announced on 31st December 2020 EXTENDING DEADLINE for submission of ESR Notification and report through a circular in the Ministry’s official website.

All business entities in the UAE undertaking relevant activities as per law and required to submit the annual ESR Notification and Economic Substance Report must do so to the regulatory authority no later than 31st January 2021 to avoid administrative penalties.

All applicable companies falling under this ESR notification and filing requirements must submit a notification and supporting documents online via MOF portal latest by January 31st as no further extension will be given.

The Ministry extended the deadline to support businesses that might have been adversely impacted due to Covid 19 and partly because the MOF ESR portal only went live during the first week of December 2020 when MOF started getting ESR notifications and reports through this portal.

MOF has recently conducted virtual seminars to update companies on the use of the ESR portal and help them submit their necessary ESR documents electronically. More than 5000 companies participated in these seminars.

MOF has also released a set of templates for ESR Notification and ESR Report useful for preparing and analyzing ESR related information that needs to be submitted as a mandatory compliance requirement.

On 10th August 2020, the cabinet of Ministers issued Resolution No. 57 of 2020 concerning Economic Substance Regulations, “Resolution 57” which amended and repealed Resolution 31.

The MOF, UAE strongly recommends that all business entities assess and reassess whether and which of their business activities fall within the scope of the Economic Substance Regulations and how satisfactorily the businesses can ensure Economic Substance Test in respect of each relevant activity.

India, Newsletter

India-Vietnam: Increasing Bilateral Trade and Investment Opportunities

December 15, 2020

The year 2020 celebrates India-Vietnam 42nd bilateral trade anniversary. India Vietnam relations have been steadily growing marked by economic, commercial and strategic engagements over the past four decades. India ranks 7th in the list of top trading partners of Vietnam while Vietnam has emerged as the 18th largest trading partner of India.

The increasing trade and investment ties between the two countries have prompted many Indian companies making investments in Vietnam in various sectors.

By 2020 both countries had aimed for a trade worth USD 15 billion with trade growing considerably from USD 5 billion to USD 13.7 billion between 2016 and 2019. Covid 19 pandemic, however, disrupted global economies and the India Vietnam trade volume shrunk by 9.9 per cent to almost USD 12.3 billion in the last financial year. The steady and rapid growth in trade between the two countries can only be understood by the fact that it was only USD 200 million in the year 2000.

Unprecedented volatility has gripped the global investment and trade environment and forced businesses to diversify supply chains away from China and has made India Vietnam trade routes for international business more significant.

Major areas of focus in India Vietnam trade and investment include energy, food processing, sugar, tea, coffee, mineral exploration, manufacturing, IT, agrochemicals and automotive components.

India is one of the fastest-growing economies in the world today and ranks 5th globally in terms of GDP. The ASEAN-India Free Trade Area ( AIFTA), which Vietnam is also a part of, had come into effect in 2010 as a result of convergence in interests of all parties in enhancing their economic ties across the Asia Pacific. This Free Trade Agreement (FTA) exempts tariffs for more than 80 per cent of goods traded between ASEAN and India.

Vietnam has quickly emerged as a lucrative and highly effective location for the manufacturing industries in electronics and telecom segments who are relocating from China because of higher cost and US-China trade war. The country could successfully revive customer confidence by swift and efficient containment of the pandemic. Vietnam is increasingly recognized as a preferred manufacturing hub for companies to diversify their supply chains.

Vietnam has improved its global ranking in ease of doing business ranking 70 amongst 170 economies and has incentivized its business environment enabling Indian investors to establish their operations in its thriving economy.

India, on the other hand, has world-class expertise in IT services, pharmaceuticals, oil and gas and can greatly benefit Vietnam. There also exists export opportunities for iron and steel, zinc and man-made staple fibres from India to Vietnam.

India also has a large middle class in its 1.3 billion population and offers Vietnam a huge market. India’s customs duty exemption for ASEAN products also makes India an attractive destination for Vietnamese exports. There is a huge prospect in developing services related to wholesale and retail trade, business support, transportation and storage including trade opportunities in cotton and knitted clothing.

Exports from Vietnam to India include mobile phones, machinery, computer technology, electronic components, natural rubber, chemicals and coffee while Vietnamese imports from India essentially consists of meat and fishery products, corn, steel, pharmaceuticals, automobiles, cotton, textile and leather accessories and machinery.

Vietnam is strategically located offering access to other South Asian markets with proximity to manufacturing hubs and has a friendly and conducive investment climate which have helped it gain popularity as preferred manufacturing and sourcing location.

The increasing importance of Vietnam in global manufacturing and supply chain is potentially beneficial to India for its bilateral trade and investment ties with this nation. India’s business conglomerates have already invested close to USD 2 billion in Vietnam with more than 200 investment projects.

Several Indian business entities have already invested and shown interest in establishing operations in Vietnam including Tata, Adani, Mahindra and HCL Technologies to name a few.

Vietnam provides numerous attractive reasons to woo foreign investors such as favourable investment policies, increased access to markets, free trade agreements, political stability, economic growth, low labour cost and young workforce.

Indian Government has long initiated business and trade tie-ups with Vietnam as an impetus to promote textile trade and investment between the two countries and sanctioned USD 300 million Line of Credit to Vietnam in 2014.

Despite disruptions in the global economy, Vietnam remains resilient in its economic growth prospects in coming years and provides investment opportunities to Indian investors in Agriculture, Seafood, Information Technology, Automotive Components, Assembling and manufacturing of Agri Machineries and Infrastructure.

Vietnam has introduced several incentives to attract foreign direct investment to the country including preferential corporate income tax rates, import duty exemptions, exemption of taxes from royalties, reduction in land rental fees, and privileges awarded to build-operate-transfer (BOT), build-transfer-operate (BTO) and build-transfer (BT) projects and projects in Special Economic Zones.

The incentives offered are primarily focused for promoting FDI in high technology sectors, underprivileged regions, labour-intensive industries, and other priority sectors such as education and health where foreign entities receive red carpet welcome for company formation in Vietnam.

In the long term, Vietnam can increase its investments in India by taking advantage of the India Government’s policy reform of loosening up of FDI quota for foods and beverages sector and 100 per cent allowance of FDI in the e-commerce, and foods manufacturing space and explore the company registration in India.

The India-ASEAN FTA however may be reviewed and analyzed for trade loss after India announced its decision to opt-out of the Regional Comprehensive Economic Partnership (RCEP).

Newsletter, Singapore

Singapore Oman Business Prospects Driven by Oman Economic Zones

December 15, 2020

Oman has many export-oriented Economic Zones and Industrial Estates to attract foreign investors to the country and help promote economic development. With world-class and highly advanced infrastructure, the Sultanate’s economic zones offer several investment incentives, tax holidays and simplified procedures for licenses and permits supporting the free zones’ competitive business environment.

Oman has set up three Free Trade Zones (FTZ) namely Sahar Salalah and Al Muzanah, and two Special Economic Zones (SEZ) called Duqm and Knowledge Oasis Muscat. Besides the FTZ and SEZ, there are also six major Industrial Estates including Rusayl, Raysut, Sur, Nizwa, Al Buraimi and Sumail which offer highly attractive land rents, tax exemptions and equipment duty waiver.

The FTZs and SEZs are categorized based on commercial activities and incentives offered. Different zones are formed for different sectors and all zones are designed for foreign companies to benefit from Oman’s position as a regional manufacturing and distribution base. The purpose of setting up these economic zones is to attract different types of businesses to the country.

In a press briefing to The Business Times, Mr Anwar Muqaibal, the Consul General of the Sultanate of Oman to Singapore said: “There is no minimum share capital requirement for Oman’s free zones. Importers enjoy tax exemptions as no duties are imposed on goods imported and exported from the free zones. Oman free trade zone companies are allowed to trade within Oman without a local agent.”

The Duqm SEZ has long been considered as the place that will balance regional development by energizing the Al Wusta governorate and diversifying Oman’s revenue sources and employment opportunities of Omanis, added SEZAD, the regulator of the economic zone.

Duqm, established in 2011 is the newest SEZ and also the biggest in the Middle East region. It includes functional zones: Duqm, a deepwater port, a dry dock, a regional airport, a heavy/medium and light industries complex with a refinery and petrochemical complex, a residential and commercial space, tourism and logistics service areas and an industrial fisheries complex with a port and offers unique foreign investment opportunities in Oman.

Oman’s Consul General highlighted: “The port entered into an early operations phase in 2012 and currently remains in this stage with a fully functional commercial quay capable of handling heavy-lift project cargo, general cargo, dry bulk and containers.”

The development, management and regulation of the SEZ are administered by the Special Economic Zone Authority at Duqm, SEZAD which is responsible for the management of entire economic activities in Duqm, including long term strategies of infrastructure development and investment. The urban expansion of Duqm city and environmental protection are also overseen by SEZAD.

“Oman has taken important steps to make it’s economy more competitive and conducive to foreign direct investment. Incentives include a five year renewable tax holiday, subsidized plant facilities and utilities, and customs duties relief on equipment and raw materials for the first 10 years of a firm’s operation in Oman,” Mr Muquaibal added.

Mr Muquaibal also said: “Oman’s strategic location connecting the Persian Gulf and the Indian Ocean with east Africa and the Red Sea could also boost the country’s economy. The Duqm Special Economic Zone, which is among the largest in the world, could become the commercial thread between Oman, South Asia and China’s Belt and Road initiative.”

Trade exhibitions and investment events promotions are also planned at a global level to woo more foreign investors for doing business in Oman.

Skill enhancement of the local Omanis has also been planned by the Oman Government so they can be hired by foreign investors contributing to the nation’s economy.

“As the Sultanate remains a very stable country, Oman has good prospects and is an ideal location with its easy market entry,” emphasized Mr Muquaibal.

Referring to Oman and Singapore bilateral relations, the Consul General remarked that ties between the Sultanate of Oman and Singapore date back centuries as both countries share the same aspiration for economic prosperity and social stability.

Mr Muquaibal added that his priorities in the coming months would be to enhance economic relations between the two countries by promoting investment opportunities in Oman and encouraging Singaporean businesses to explore them.

With the tourism sector gradually opening up, this sector also becomes a priority as Oman remains a very attractive destination being unique in the region not commercialized and largely untouched with its mesmerizing scenic coastlines.

Another item on the list of Consul General’s priorities is promoting the visit of high-level Omani officials and specialists from different sectors to Singapore for exploring and investing in health, logistics and manufacturing sectors.

Hyflux, CrimsonLogic and SembCorp are the main business ties Singapore already has with the Sultanate of Oman. Hyflux’s first destination was in 2009 for setting up one desalination facility in Salalah and then in Qurayyat in 2014 to design, build, own and operate an independent water project.

CrimsonLogic has signed an MOU with local Omani SMEs in the IT sector and is also engaged in developing a customs management platform with an office in Oman. SemdCrop won a 15-year contract to supply power and water to the Oman Power and Water Procurement Company.

“Singapore businesses should be looking into investing in agriculture and fisheries, manufacturing, logistics and transport, energy and mining, and tourism,” remarked Mr Muquaibal.

Oman also has business entities in Singapore. The Bank Muscat runs a Singapore Representative Office since 2011 and OQ Trading Company Oman also has a presence in Singapore.

As per Mr Muquaibal said that the Sultanate of Oman is a hidden jewel in the Middle East region and worth exploring by Singaporean business entrepreneurs.

Newsletter, Saudi Arabia

The New Saudi Arabia Professional Companies Law

December 15, 2020

Saudi Arabia has enacted a new Professional Companies Law (PCL) that will have a direct effect on professional partnerships existing in the Saudi Arabian market including those providing engineering consultancy, legal and accounting services to name a few as well as the new entrants in the market.

A Royal Decree was issued on 25th September 2019 approving the issuance of the new Professional Companies Law and the Saudi Ministry of Commerce and Investment issued the implementing Regulations of this new law on 26th March 2020 (together “The New Professional Companies Law”) that marks a welcome development in the professional services field.

The New Professional Companies Law has now entered into force and is in effect in the Kingdom of Saudi Arabia.

The New Professional Companies Law (PCL 2020) represents a sea change of its predecessor which was issued 29 years ago in 1991 in how professionals will be able to constitute their businesses. The PCL 2020 markedly addresses some of the fundamental limitations of the old law many of which are resolved in the new PCL.

The PCL defines a Professional Company as

“a civil company that operates independently, which is incorporated by an individual (or more) who are licensed to legally carry out one (or more) profession, or with others, for the purpose of practising professions.”

The concept of Profession in Saudi Law, therefore, lies in business activities which require a professional license granted by a legally recognized regulatory body. This will include legal, audit, engineering, accounting and any other activities of identical nature.

Under the old law, professional companies could only be formed via one single vehicle of incorporation, being a general partnership with unlimited liability for their partners. Under the new PCL 2020, the vehicles of incorporation have been expanded and professional companies in the Kingdom of Saudi Arabia can now be formed as

General Partnerships as in the old law
Limited Partnerships
Joint Stock Companies (including single shareholder Joint Stock Companies)
Limited Liability Companies ( including single shareholder Joint Stock Companies)

The flexibility of choosing a vehicle under PCL 2020 for the intended professional company is a welcome improvement and will help the investors who would prefer to incorporate their businesses in a form other than General Partnerships.

The ability to form a professional company as a single shareholder limited liability company or single shareholder joint-stock company should provide investors who wish to have absolute control that flexibility and autonomy.

Another major development under PCL 2020 is the permissibility of professional companies to undertake more than one distinct profession as one professional company engaged in engineering consulting may also provide accounting services.

This new development under PCL 2020 may make inroads for strategic consortiums across different disciplines which was not a choice under the old law.

The new PCL 2020 also allows for a natural person who is not a licensed professional or a juristic person to be a partner or shareholder in the professional company incorporated as a limited liability company or a joint-stock company. The new law thus essentially permits unlicensed parties to potentially bring strategic benefits such as business knowledge, capital and liquidity to the professional company and possess its ownership.

Under this new law, however, the unlicensed parties can’t own more than 30 per cent of professional company’s capital and this threshold of 30 per cent can only be increased by the Minister of Commerce.

The new as well as the old professional companies law refers to the MOC, Ministry of Commerce as the sole regulator of professional companies.

The new PCL 2020 can be seen as a new dawn for professional companies existing in the Saudi Arabian market and desiring to restructure their holdings as well as the prospective entrants who don’t currently have a presence in the Kingdom and are looking for a professional company formation in Saudi Arabia.

Newsletter, U.A.E

JAFZA and ECI Collaborate to Offer Credit and Export Financing Solutions

December 15, 2020

Jebel Ali Free Zone, Jafza, flagship free zone of DP World, UAE Region’s leading business and logistics hub showcased its customers the trade payments protection solutions it has initiated in partnership with Etihad Credit Insurance, ECI, the UAE Federal export credit company on 19th November 2020.

Jafza has launched ECI’s tailored solutions to support UAE based businesses and increase export trade by offering protection against commercial and non-commercial risks.

During a well-attended webinar titled, “Etihad Credit Insurance Collaboration: Trade with Protection”, Jafza based companies were guided through the ECI’s solutions as part of the free zone’s drive to ensure the growth of businesses, while lowering the cost of export, by reducing the risk of non-payments, and funding, by lowering banking pre and post-shipment funding in the current unprecedented economic climate.

More than 8000 companies in the Jebel Ali free zone are set to directly benefit from the strategic collaboration of Jafza and ECI, giving the export business a major boost and a competitive edge in the regional and global markets.

Jafza’s partnership with ECI will be a game-changer for the export of goods and services as ECI’s support increases cash flow, enables trade and contributes towards sustaining growth even as the markets recover.

Jafza believes that ECI’s range of export credit, financing and investment insurance products will directly benefit Jafza’s customers, particularly the SMEs.

The shared objectives of ECI and Jafza represent the vision of the leadership to establish the UAE as a preferred global hub for exports. Jafza is working closely with ECI to take this partnership forward and reinforce its commitment to business continuity with confidence.

ECI has issued more than 1600 revolving credit guarantees additionally for a total exposure amount of Dhs. 2 billion in the first half of 2020, which is equivalent to Dhs. 4 billion guaranteed non-oil trade coverage. About 55 per cent of the total revolving credit limits were issued to large private exporters and 17 per cent to SMEs, while the remaining 38 per cent were issued in favour of UAE Government companies.

The main sectors to benefit from this credit lines are Foods and Beverages, Healthcare and Pharmaceuticals, Automotive, Petrochemicals, Cable, Steel and Building materials, accommodating some of the major sectors present in the free zone. ECI’s solutions were chosen by Jafza for its customers after carefully analyzing the advantages they deliver.

The range of conventional and Shariah-compliant export credit financing and investment insurance solutions offered by ECI cover the exporters and the entire supply chain against commercial and political risks, allowing Jafza customers to manage and mitigate risks effectively.

Jafza, which generated trade worth 99.5 billion USD in 2019, is widely responsible for promoting the non-oil sector of Dubai and the UAE,

ECI plays the role of a catalyst in accelerating the country’s non-oil economy trade, investments, and strategic sectors development, in line with the UAE National Agenda leading to the UAE Vision 2021.

Jafza is one of the world’s leading free trade zones and is home to over 8000 multinational companies. Jafza accounts for 23.9% of total FDI (Foreign Direct Investment) flow into Dubai, sustaining the employment of more than 135,000 people in the United Arab Emirates.

Jafza has a strategic location providing market access to more than 3.5 billion people and creates an integrated multimodal hub offering sea, air and land connectivity, complemented by extensive logistics facilities. The port and free zone contributed 33.4 per cent of Dubai’s GDP in 2017. Jebel Ali Port and Free Zone are considered by the global business community as the most ideal location for a business set up in Dubai.

Jafza is the most sought after business hub between Asia, Europe and Africa, connecting some of the fastest growing and consumer markets globally. With over 30 years’ experience, Jafza focuses on long term customer relationships, building alliances with multinational investors and providing world-class infrastructure and support.

Jafza, a business opportunity provider offers its customers easy and efficient access to substantial business opportunities in the region. The Jafza ECI collaboration will further boost FDI flow and more number of global investors are expected to opt for Jafza company formation.

Newsletter, U.A.E

DIFC ADGM Sign Memorandum of Understanding with Israel’s Largest Bank Hapoalim

December 15, 2020

Dubai International Financial Centre (DIFC), a top ten global financial centre, and the leading financial hub for the Middle East, Africa and South Asia (MEASA) region and home to the largest most developed financial and FinTech ecosystems in the region with a presence of 72 countries, has signed a memorandum of understanding with Hapoalim Bank of Israel, one of the largest bank and financial services company in Israel. The agreement aims at cooperation across financial activities and will benefit both countries in a wide range of mutually beneficial opportunities.

Bank Hapoalim, the leading bank in Israel and headquartered in Tel Aviv is engaged in corporate and private banking services. The bank was founded in 1921 and is a publicly-traded banking corporation organized and operating under Israeli law listed on the Tel Aviv Stock Exchange (TASE).

As per the agreement signed on 21st November 2020, Bank Hapoalim will become a global partner of the DIFC and will also become a part of DIFC worldwide network of banks, financial centres, regulators and companies disrupting financial and technology sectors and embracing the highest legal, regulatory and operating standards.

The MOU signed with the DIFC will enable bank Hapoalim to avail banking and innovation opportunities in the MEASA regions.

The agreement reached will enable DIFC to help Emirates facilitate economic growth from the finance and innovation sectors. Besides, the MOU will support the DIFC vision to drive the future of finance from Dubai. The agreement also demonstrates the contribution of DIFC to the UAE’s willingness to forge business ties with Israel and promote Israeli business setup in Dubai.

The agreement also marks a step towards bank Hapoalim establishing the bank’s first regional presence outside Israel. Both the entities recognize the importance of collaborative efforts through knowledge sharing, delegations hosting and industry events promotional activities.

FinTech and investment experts from Hapoalim bank will also be invited to take part in exclusive events including the forthcoming DIFC Fintech Hive Investor Day and explore opportunities for company formation in Dubai.

Arif Amiri, CEO of DIFC Authority commented: ” Our partnership provides Bank Hapoalim with access to the most developed, broad and deep financial ecosystem in the region, allowing them to capitalize on the most lucrative banking, capital markets, asset management, innovation and fintech opportunities available.”

Arif Amiri also said: “We hope the agreement will provide us with a unique Dubai-Israel opportunity to accelerate our future of finance agenda and stimulate innovation with Bank Hapoalim through the DIFC Innovation Hub.”

Dov Kotler, CEO of Bank Hapoalim remarked: “It will provide Israeli fintech entrepreneurs with a gateway to the dynamic and vibrant Dubai ecosystem, and help foster cross border innovation. It is an honour to be the first Israeli bank to construct this important bridge for innovation.”

The CEO of Bank Hapoalim also added: “The agreement signed with Dubai International Financial Centre is an important milestone. We hope to serve, extend and strengthen the financial relationship between our two countries.”

Emirates NBD, a Dubai based lender signed an MOU with Israel’s Bank Hapoalim in September 2020 allowing Israeli clients to transact directly in the UAE.

Abu Dhabi Global Market (ADGM) and Bank Hapoalim have also signed an agreement to jointly innovate on fintech services, ecosystems and market opportunities, the official news agency WAM reported on 21st November 2020.

As per the agreement, ADGM and Bank Hapoalim will collaborate on fintech projects in the fields of international trade, business and financial services activities between the UAE and Israel.

ADGM and Bank Hapoalim will also support fintech companies and entrepreneurs seeking to scale their presence across the UAE and Israeli markets.

Dhaher bin Dhaher Al AlMheiri, CEO of the ADGM Registration Authority said: ” ADGM is continuously working with strategic partners, locally and internationally, to further the Abu Dhabi and UAE’s economic plans and technology agenda, and we are excited to partner with Bank Hapoalim to advance the banking and financial services in both jurisdictions. “

Dov Kotler, CEO of Bank Hapoalim nominated speaker at the upcoming FinTech Abu Dhabi festival commented: ” The agreement with Abu Dhabi Global Market is a breakthrough pact that we hope will serve to extend and strengthen the financial cooperation between the UAE and Israel. It will enable fintech companies, customers of Bank Hapoalim, access to a new world of opportunities. It is a great honour to be the first bank to sign such an agreement that will contribute to the establishment of the relationship between our two countries and economies.”

Newsletter, U.A.E

Dubai Chamber Hosts Israeli Business Delegation to Pave the Way for Investments and Trade Ties

December 15, 2020

A high-level Israeli delegation led by the Federation of Israeli Chamber of Commerce (FICC) and consisting of representatives of the FICC, Israeli Manufacturers Association and the Israel Export Institute visited Dubai Chamber of Commerce and Industry headquarters on Monday, 9th November 2020 to discuss and lay out the groundwork for exploring prospects of trade and cooperation between Dubai and Israel and to facilitate business set up in Dubai.

The invitation for Israeli delegation was sent by the President and Chairman of Dubai Chamber of Commerce and Industry, H.E. Hammad Buamim who also serves as the Chairman of World Chambers Federation.

The visit of the business delegation is a part of the trade mission organized by the Dubai Chamber and aims to familiarize Israeli businessmen with the economy, business environment and competitive advantage of Dubai.

The delegation also aims to set the stage for Emirati and Israeli business ties and promote relations with the institutions in industry, trade and investment of both countries.

The visit was in line with the efforts of Dubai Chamber to maximize opportunities for Dubai’s dynamic private sector, create fertile ground for investments from local, regional and global stakeholders, and provide training for education and skills to boost the capacity of its members to carry out business activities.

Importantly, the visit was organized only after two months of signing a strategic partnership between Dubai Chamber and Tel Aviv Chamber of Commerce, represented by the FICC to oversee bilateral economic cooperation benefitting both countries’ business ecosystems.

As per press release, with the partnership agreement, both the nations will produce a joint study identifying synergistic sectors of mutual interest, plan a roadmap of virtual events and commit to organizing a business delegation and mutual hosts. It would also include hosting a joint business forum and support for new businesses, startups and scale-ups with available resources and programs.

Through the entire week, the delegation met with officials from Dubai Exports, Dubai Airport Free Zone, Dubai South, Expo 2020 Dubai, Jebel Ali Free Zone, DP World, Dubai Future Foundation, Dubai World Trade Centre and Dubai Multi Commodities Centre. The Israeli delegation also visited the Sheikh Mohammed Centre for Cultural Understanding.

The delegation was headed by Uriel Lynn, President of the FICC and also accompanied David Castel, CEO, Haifa Chamber of Commerce, FICC; Amir Shani, Vice President, FICC; Adiv Baruch, Chairman, Israel Export & International Cooperation Institute; Zeev Lavie, VP, International Relations Division & Business Development, FICC; Gadi Ariely, DG, Israel Export & International Cooperation Institute; Sabine Segal, Deputy Director-General for International Business Affairs Israel Export and International Cooperation Institute; and Avshalom Vilan, Secretary-General, Israel Farmers’ Federation.

H.E. Hammad Buamim and Dubai Chamber officials and directors received the delegation and HE. Buamim expressed his optimism about the prospects for developing and promoting Dubai- Israel trade. He also emphasized saying that there exists a huge potential for companies of both countries to explore and forge mutually beneficial partnerships and capitalize on new market opportunities.

H.E.Buamim also highlighted the competitive advantage that Dubai can provide Israeli companies as a strategic trade hub offering access to the emerging markets across the GCC and Africa and South Asia.

Dubai Chamber’s President and CEO also stressed upon the fact of Dubai’s strengthening position as a worldwide preferred market for startups and noted that the Emirate continues to launch new business incentives to attract innovative entrepreneurs and top talents, including long term residency visas and recently a virtual work visa for Dubai company incorporation.

There is a growing demand for high tech, pharmaceutical and electronic products in the UAE generating numerous investment opportunities that Israeli companies can benefit from, given their strong expertise and advanced solutions in these fields, H.E. Buamim commented.

Sustainable Agriculture, food security banking, fintech, cybersecurity and space economy have also been identified as high potential areas where the UAE and Israel can build new partnerships, Dubai Chamber’s head noted.

Uriel Lynn, President FICC described the visit as an important step towards developing UAE-Israel trade relations, promoting mutual understanding and facilitating cross-border cooperation across several economic sectors of mutual interest.

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