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Newsletter, Saudi Arabia

Why is Saudi Arabia the Most Appealing MENA Market for Retail Investments?

January 13, 2020

Why is Saudi Arabia the Most Appealing MENA Market for Retail Investments?, Saudi Arabia is the top-most and very appealing developing market for retail investment in the Middle East and North Africa (MENA) and also ranks among the top ten in the world, as per the 2019 Global Retail Development Index (GRDI).

The Kingdom has consumers spending about $125.5 billion annually on their shopping,out of which a large proportion of the residents spend on luxury labels. This is the reason that Saudi has risen up on the index and got the seventh rank globally, just after China, India, Ghana, Malaysia, Indonesia and Senegal.However, Saudi Arabia was ahead of Jordan, which got the 8th position, the UAE being on 9^th, and Colombia on 10th.

The latest ranking has been a huge leap from the 11th rank of Saudi Arabia in 2017,largely because of the continuing efforts by the government to launch new economic and social reforms, as part of the plan to give the country a makeover and attract more foreign investments.

From the time of launch of its Vision 2030 agenda in 2016, Saudi Arabia has executed various social reforms like easing travel restrictions for women, permitting women to drive, and making abayas optional. Many such reforms have also assisted the retail industry.

In 2017 end, a proposal to open hundreds of cinema theatres by 2030 was announced, which ended a 35-year-long ban on movies and cinemas. The GRDI is a bi-annual research or study of the retail industry in about 30 developing markets. It provides ranking to countries depending on “country risk”, their population and per capita gross domestic product (GDP), enabling retailers, consumer goods producers and global service providers comprehend which destinations are growing, and which are stagnant or declining, and the reasons for the same.

Among the numerous reasons that make this Kingdom an alluring destination for international investors is their huge population, and also their young demography that offers itself to the volume game.

In addition, Saudi Arabia has high per capita income which also makes it very lucrative. The concentration of high-net-worth (HNI) individuals adds up to make it an appealing destination for the retail luxury segment and Saudi company incorporation.

Saudi Arabia has a population of 32.9 million and is therefore considered the largest market in the Gulf Cooperation Council (GCC) region for consumer brands and over 58.7 percent of the people here are quite brand-conscious. Its female consumer base and ultra-high net worth individuals are expanding, while the religious tourism is also on the rise. Between the years 2012 and 2016, the retail sales recorded in Saudi Arabia grew from $85.3 billion to $114 billion.

With a focus on the large Saudi retail market, the consumer tech giant Apple has recently collaborated with Fawaz Al Hokair Co to establish their business in the kingdom. SPAR International, a Dutch food retailer that entered into the market in the year 2018 by affiliating with Saudi conglomerate Al Sadhan Group is working towards having their 40 stores operational by the end of 2020.

It’s not just global brands who are setting up their outlets in Saudi Arabia, but many are thinking of capturing a share of the huge online spending. As per some reports, online retail is expected to reach almost $10.2 billion by the year 2023, which is up from $6.3 billion in 2019. Big brands such as Ikea and Landmark Arabia have launched their click-and-collect service to reinforce their omnichannel presence, whereas the e-commerce retailers such as noon.com are working hard to expand their online presence.

So if you are looking for business setup consultants in Saudi Arabia, please get in touch with us and we would be glad to assist you.

Newsletter, U.A.E

Key Points of FAQ Regarding Economic Substance Regulations in the U.A.E.

January 13, 2020

In April 2019, the U.A.E. Ministry of Finance announced Cabinet Resolution No 31 of 2019 (Resolution) on Economic Substance Regulations (ESR). The regulation is an element of Kingdom’s commitment to the OECD inclusive framework.

As per the regulations, the U.A.E. onshore and free zone companies along with other U.A.E. businesses (collectively known as Licensee) that conduct any of the listed ‘Relevant Activities’ to maintain an acceptable economic presence in the country related to the activities.

In continuance to the above, the Finance Ministry of U.A.E. recently published a list of 41 Frequently Asked Questions (FAQs) for addressing the apprehensions of impacted companies in relation to ESR. Along with listing down the FAQs, the Ministry has also offered valuable guidance on what steps a Licensee should take before the end of a specific financial year to be able to meet the compliance requirements related to the regulations. As per the stated guidance, a Licensee should –

Evaluate what Relevant Activities were being or are likely to be conducted during the financial period while applying a ’substance over form’ approach;
Evaluate the amount and type of income that is earned from the Relevant Activity in that financial period;
Organise board meetings with a particular required number of directors’ present in the U.A.E. document the important minutes of these meetings;
Investigate all the expenses incurred;
Study and document main U.A.E.-based assets like premises, which is related to the Relevant Activity;
Maintain relevant documents like agreements or financial records which support the assets and expenses;
Examine roles and responsibilities of the staff towards the Relevant Activity;
Analyse applicable outsourcing agreements;
Any other facets that may help Licensee to prove adequate Economic Substance in the U.A.E. for a relevant financial period.

Questions	Answers
Which is the first reportable financial year?	Regulations apply to financial year that starts on or after 1 January 2019. For a U.A.E. company that follows January to December as their financial year, the first assessable period would become 1 January 2019 to 31 December 2019. But for a U.A.E. company that follows April-March financial year, the first assessable period would become 1 April 2019 to 31 March 2020.
Will these regulations only apply to entities in U.A.E. that are part of a global multinational group?	No. The regulations enforce Economic Substance obligations on any U.A.E. business which conducts a Relevant Activity, irrespective of whether the U.A.E. business belongs to a global multinational group. But in case of a U.A.E.-based Distribution Business, Headquarter Business, Service Centre Business, or High-Risk IP Business would remain within the scope of the regulations only if the U.A.E. company or firm is doing transactions with any foreign group companies.
Will a company that is registered under an ‘offshore’ free zone company regime be subjected to these regulations?	Yes. Regulation would apply to ‘offshore’ company in case it conducts a Relevant Activity.
Do the listed activities on the commercial license regulate whether a Licensee undertakes a Relevant Activity or not?	No. Though the commercial license might define the Relevant Activity, a ‘substance over form’ method should be used to decide whether a Licensee conducts a Relevant Activity and is within the scope of these regulations.
What happens if a Licensee does not conduct any Relevant Activity during a specific financial period?	The Licensee would not need to inform its Regulatory Authority nor is it required to submit an Economic Substance return for the applicable financial period.
What if a Licensee conducts a Relevant Activity, but is not able to earn any income from the same during a financial period?	Then the Licensee would only be required to submit a notification with the Regulatory Authority. Nevertheless, they would not be needed to file an Economic Substance return for the applicable financial period.
If the entire income from the Relevant Activity has been earned from outside U.A.E., then does the Licensee get an exemption from the Regulations?	No, this Licensee will not be exempted from the regulations. Any income from a Relevant Activity for which the Licensee needs to show Economic Substance return in the U.A.E. includes all income, inclusive of income generated by the Licensee outside of the U.A.E.
How is ‘adequate’ or ’appropriate’ economic substance defined?	The regulations and directive do not give a minimum standard for what is defined as adequate or appropriate. The Regulatory Authorities are supposed to take a realistic approach while assessing if a Licensee complies with the Economic Substance test, understanding that the type and level of activity of any Licensee might vary during the financial period and also from year to year.
Is the Economic Substance evaluated on a Licensee by Licensee basis, or can Licensees who are part of the same group chose to be evaluated on a ‘consolidated’ basis?	No. The regulations do not permit the Licensees who are a part of the same group to be combined for Economic Substance purposes. All the Licensees would have to comply with the regulations, and validate Economic Substance on an individual basis.
Are conditions for directed and managed applicable to Holding company business?	A Holding Company Business is not needed to be directed and managed in the U.A.E.; only exception is when this is a condition for the relevant licensing authority.
Is it necessary for the employees who conduct Core Income Generating Activities (CIGAs) to be the residents in the U.A.E.?	Yes, the employees who conduct the CIGAs of a Licensee would, be needed to be residents in the U.A.E. Any non-resident employees or other individuals would be counted towards the Economic Substance of a Licensee in the U.A.E. only if: the Relevant Activities are conducted while the individual is present in the U.A.E. physically, and under the supervision of the Licensee; and the Licensee is bearing the related costs of the non-resident individual.
Is it necessary the directors of the Licensee need to be resident in the U.A.E.?	No. Directors only need to be physically present in the U.A.E. to attend pertinent board meetings of the Licensee.
Can CIGAs or any other related activities be outsourced by the Licensee?	A Licensee is allowed to outsource any or all of its CIGAs as long as the outsourced activities are conducted in the U.A.E. However, a Licensee is not permitted to outsource activity of being supervised and managed, as the Licensee itself is needed to show oversight and control of the Relevant Activity in the U.A.E.. Activities that are not defined as CIGAs (like back office functions) could be outsourced to people located outside U.A.E. without negatively affecting the Economic Substance of the Licensee in the U.A.E..
Are investment funds dependant on the Regulations as a Holding Company Business?	No. An investment fund is not deemed as a Holding Company Business.
Is lending to any other group entity deemed a Lease-Finance Business?	Yes, a U.A.E. company that offers a loan or provides some other form of credit to a U.A.E. or any other international group company for deliberation, for example, interest would be deemed as engaged in a Lease-Finance Business.
Is doing investment and trading in debt securities deemed as undertaking a Lease-Finance Business?	No, all the U.A.E. company that invest and hold bonds or other debt securities which are traded on a regulated exchange are not deemed as engaged in a Lease-Finance Business.
What happens if there is no consideration payable for the credit given?	The Regulations are not applicable to credit and other financing and leasing provisions where there is no anticipation of consideration in the form of fees, interest, rental payments, capital gains or any other such form of payment. The grant of security which is in favour of the lender does not constitute consideration.

Newsletter, Qatar

Qatar Announces New Executive Regulations Regarding the Income Tax Law

December 18, 2019

Key highlights and next steps

Qatar has made an announcement about the Ministerial Decision No. 39 of 2019 issuing the Executive Regulations to the Income Tax Law (Law No. 24 of 2018). These Regulations were issued in the Official Gazette on December 11, 2019 and will be applicable with immediate effect and the earlier Executive Regulations are now annulled. The Regulations aim on revolutionizing the local tax administration regime to be in alignment with Qatar’s global taxation commitments to bring greater transparency and also to encourage growth of foreign direct investment (FDI) in tandem with Qatar Vision 2030.

Main highlights and key changes:

Corporate Income Tax

Supplementary guidelines on Permanent Establishments (PEs) comprising clear reference to a six-month (183 days) limit for service PEs and also project PEs.
Taxability of various subsidiaries of companies that are listed on the Qatar stock market to the size of non-Qatari shareholding in the listed parent company. Companies conducting “Petroleum Operations” and working in the Petrochemical industry would stay fully taxable, if the company is fully or partially owned by the State of Qatar, be it directly or indirectly.
Tax losses, if any, could be carried over for up to five years, in contrast to three years in the previous regulations.
New Tax depreciation rates have been announced recommending a Straight Line method in place of the Written Down Value method which was mentioned in the earlier regulations.
Amendments to the timeline for tax registration – 60 days now instead of 30 days. There is also a recommendation to use the new digital Tax Administration System.
The scope of field inspections has been defined and also the approach that the General Tax Authority would adopt while assessing tax returns.

Capital Gains Tax

Precise guidance on how to apply Capital Gains Tax on the sale of shares especially in Qatari resident companies by a non-resident corporate body.

Withholding Tax

Amendments to the “wholly or partly” rule when testing performance to evaluate the applicability of Withholding Tax (WHT). The services that are used in Qatar or conducted for
the advantage of Qatar are considered as locally-sourced, irrespective of the place of performance and as a rule, will be subject to WHT.
Amendments to the rule on when a WHT payment would be due and who would be subject to registration obligation as WHT agent.Theamounts that are subject to WHT would now be considered as paid within a period of 12 months from the payment due date (only exception will be for Ministries and other Government agencies or public foundations).
Addition of other detailed guidelines about WHT refund claim depending on application of double tax treaty.

Transfer Pricing

The requirements for Transfer Pricing applicable for taxpayers have been announced along with new and updated reporting requirements that will be applicable from the tax year ending on December 31, 2019.
The requirements for Transfer Pricing comprise four tiers of compliance: (i) Transfer Pricing Form or Questionnaire which is be submitted with the Tax Return, (ii) Masterfile, (iii) Local file
and (iv) Country by Country requirements or reporting (this has been already introduced in 2018-2019).
The Regulation takes a reference from International Accounting Standards and the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines (for instance, it takes a reference on the definition of an Associated Enterprise).
Additional guidance are expected to be issued in due course to explain some key areas and this would include an Advance Pricing Agreement program that would be available to the taxpayers who are involved in some complex or material transactions.

The above-mentioned are among the many amendments that are going to reshape the current tax landscape of the State of Qatar.

Points which are still unclear

Some areas of the Regulations that are still not clear are:

Exemptions in some specific scenarios that are applicable to legal entities which are partly owned by Qatari nationals.
Some practical challenges that are related to the method of calculation of share of profits which are attributable to non-Qatari shareholders in the specific subsidiaries of the listed entities.

The way forward

The announcement of the four tier documentation approach in Qatar is expected to increase the compliance burden on all the taxpayers who are operating in this region. Global Multinational Entities might feel some comfort because the OECD Transfer Pricing Guidelines are referred to in the Regulations. The initiation of Advanced Pricing Agreements would also aid big Multinational Entities to gain certainty in times to come.

Newsletter, Saudi Arabia

Announcement of Instant Visas for the SMEs who are Planning to set up in KSA

December 9, 2019

One of the biggest obstacles for any entrepreneur or SME setting up their business in a new country is the humungous amount of paperwork needed, particularly in case of getting a licence to operate there. Various governments across the globe understand this challenge and are taking steps to simplify the process of doing business in the country, which in turn, attracts foreign investments and businesses to set up and add to the country’s GDP.

In 2019, Saudi Arabia opened its doors and simplified guidelines to pull in more visitors to the nation. Their visa-on-arrival and online visa application system went live this year on 27 September, and since then, over 50,000 visitors have travelled to the country.

Saudi Arabia, which is the GCC’s largest economy and also houses one of the world’s most profitable companies, has announced its plan to start an instant work visa scheme next month for SMEs and entrepreneurs who are thinking of setting up their base in the country.

“[The work visa service] will enable young Saudis to launch start-up projects, open small businesses, boost economic growth and accelerate business expansion plans, which will have a positive impact on national development.”

Ahmed Al-Rajhi, the minister of labour and social development

The ministry mentioned that this decision was made after undertaking an extensive study into the requirements of SME entrepreneurs. Therefore, this work visa has been designed especially for assisting new small enterprises. Additionally, the service would be available through Saudi’s Qiwa platform that is particularly designed for SMEs. This initiative is likely to also make it easier for Saudis to begin more and more start-ups.

This announcement was made during a meeting held with entrepreneurs from Hail Chamber of Commerce and Industry. It also said that entrepreneurs would now be able to gain from a set of integrated tools made available for SMEs. After an initial grace period, the ministry is planning to introduce a new framework which will nationalise the workforce of these businesses under the Saudi nationalisation scheme named, Nitaqat.

It’s a fact that SMEs are the backbone of any economy. As Saudi Vision 2030 is aiming diversification of its economic dependence away from oil, it is now also working to strengthen the tourism and economic sector by taking new initiatives to attract investors and businesses to the Kingdom. Under the Vision 2030, there are plans to enhance the contribution of SMEs to the country’s GDP from 20% in 2016 (when the vision was announced) to about 35% by the year 2030.

Though further details about the new visa service scheme are yet to be announced, it is a good sign for new businesses, particularly SMEs and start-ups based in the Middle East, who are planning to do foreign company registration in Saudi Arabia and gain from the large economy.

Newsletter, U.A.E

The Path for Family Office Investments and Private Equity in the U.A.E

December 9, 2019

The topic of a discussion at the recently held Super Return conference in Dubai was – What is the future ahead for the asset management and safeguard of family offices and high-net-worth individuals located in the Gulf Cooperation Council? In the event, the discussion hovered around how the world of family offices was changing. Titled ‘In it together: family offices, private equity and venture capital’, the main point from the event was that the market seemed promising especially for the high-net-worth clients who are thinking of asset diversification, particularly in private equity. They also emphasised how the sector is gaining from the professional attitude of the service providers in the area as the demands on them are increasing.

One of the experts at the event also said that the family offices such as the fund managers in the area, are anticipating more from their providers because the market is growing and there is ever-increasing demand for state-of-the-art technological infrastructure. People managing investments have a preference for service providers who are ready to work as an extension of their back office team and also provide a professional operational oversight function.

Although the investors are giving positive response towards private markets in general, they have been also conveying their caution. This shows in higher expectations of service providers to assist in providing peace of mind. Their requirements on administrators are rising in terms of access to data and information being available on clear and transparent fees. Various managers and investors want them to exhibit the value they are adding to structures. Another expert mentioned that “For private equity investment, Limited Partner (LP) sentiment is reflective of the growing demand within the industry of a greater need for transparency and enhanced reporting. Fundamentally, increased disclosure regarding fees and greater visibility and understanding of the value remains a focus for LPs.”

The need for more transparency comes as no surprise in the area and “The regulator is keen to reinforce the notion that there is no place for weak corporate governance. Investors want the assurance of a robust risk management framework to mitigate operational risks, a feature of which is inherent in the DFSA’s regulation. We have seen it become increasingly likely that fund managers and family offices will seek to secure the services of sophisticated, independent fund administrators. Their ability to provide the additional comfort investors seek from having an independent, comprehensive and robust corporate governance and control framework is a fundamental requirement when managing funds and investor commitments.” We, at IMC, can guide and support you by playing the role of an outsourced family office or may be a multi-family office. You can also get in touch with us if you need professional assistance on Dubai company incorporation or family office investment in the UAE.

Africa, Newsletter

Vast Export and Trade Opportunities for Africa

December 9, 2019

African countries are set to benefit from the ongoing US-China trade war as it is bringing new opportunities for the continent where they could step up their product and services export capabilities.

Francois Fouche, who is the advisor at Trade Research Advisory, was addressing dignitaries where there were several ambassadors and trade mission officials present at the launch of the 2020 edition of Africa Trade Week in Johannesburg recently.

“South Africa and the SADC region need to export,” Fouche said. “In South Africa alone, while in Q219 there was reasonable quarter on quarter growth, South Africa has not had a very impressive growth run prior to that. We’re a very small and open economy, and we must participate more in the global market.”

Highlighting that the world’s biggest importers and exporters were also the world’s leading economies, he mentioned that global trade reinforced economic growth. At present, there are massive opportunities available for African exporters to go into various international markets such as China and the US. There are huge opportunities for company formation in Africa and also business or company formation in South Africa.

In order to seek and convert these opportunities, all the nations had to understand the transforming nature of globalisation, he said. “In future, globalisation will be more about what we do than things we make. So, services trade is likely to pick up faster than products trade. Global services trade, at around US$5 Trillion, is still three times smaller than products trade, which is very mature at around US$15.7 Trillion,” he said.

Fouche quoted the ITC survey for the Fifth Global Review of Aid for Trade (2015), which found that the biggest component of trade costs in which all the trade support organizations would most value improvements was accessibility of information regarding export opportunities. “People want intelligence to help grow their exports,” he said.

Lynn Chamier, the Event Director of Africa Trade Week said that networking capability and knowledge sharing are imperative for creating mutually-beneficial trade ties in Africa, and Africa Trade Week is planned to facilitate many such opportunities to do so. Africa Trade Week is one of the major engagement platforms meant for more than 10,000 global industry professionals from 67 countries and it aids broker deals and encourages trade overseas and across the continent.

Africa Trade Week combines three leading exhibitions and conferences, namely, The Hotel & Hospitality Show, Africa’s Big 7 and SAITEX, focusing pan-African trade and business opportunities, products, equipment, services, supplies, innovations, and new technology and solutions.

SAITEX, which has been acting as the major annual product sourcing opportunity for whole of the continent’s retail/trade industry for more than 25 years, highlights a key exhibition and also a two-day Trade Development Forum which offers a platform for strategic intra-Africa trade discussions for various diplomats, government officials, entrepreneurs and top business leaders from around the globe.

Africa’s Big 7 is the exclusive food and beverage trade show held in Africa which invites thousands of stakeholders, buyers and suppliers under one roof and also features a two-day FOODNEXT.AFRICA conference. The Hotel & Hospitality Show in Africa is their leading event for the hospitality industry which features the Hospitality Leadership Forum.

Newsletter, Singapore

TPCI Collaborates with Singapore’s Monetary Authority for Supporting SMEs

December 9, 2019

TPCI Chairman Mohit Singla mentioned, “We are ready with its digital infrastructure and are eager… for leveraging the idea of export promotion using the new-age fintech system”. It will also help businesses in uploading their data related to demand and supply of their goods. In addition, the platform would accept a trade whenever the demand and supply match between two businesses.

Trade Promotion Council of India (TPCI) recently joined hands with Singapore’s Monetary Authority for hand-holding local SMEs for encouraging their exports. There is a plan to create a new platform to offer various services to small and medium enterprises (SMEs); for example connecting the buyers and sellers from different countries, assisting exporters in tasks like custom clearances, options of financing, and custom advisory.

“It will complete the transaction for the matched trade and includes an applications store for the recommendation and listing of applications providing generic services,” he added.

Singla also said that the platform in the pilot phase would be launched during the upcoming edition of its flagship mega show named Indusfood 2020. Earlier in 2019, the business chambers from India and Singapore started a joint venture through micro, small and medium enterprises (MSMEs) to go to the bigger Southeast Asian markets by finalising this MoU which was signed last week. The MoU inked by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Singapore Indian Chamber of Commerce and Industry (SICCI) would offer training, assistance and facilitation to MSMEs of both countries, along with other businesses to aid in establishing bases and joint collaborations . This will not only promote Singapore company incorporation but entrepreneurs are expected to leverage business startup schemes and grants in Singapore. On the occasion of the MoU signing ceremony held following the India 101: Internationalisation Conference, Jawed Ashraf, India’s High Commissioner to Singapore, mentioned, “Singapore has always been a gateway for India into Southeast Asia, and just think of the opportunities that Singapore’s SMEs can have by being a bridge for Indian companies into Southeast Asia.”

Ashraf also said that India, along with the Monetary Authority of Singapore (MAS) is in the process of creating a new platform named, ‘Business Sans Borders’ that would connect Indian companies through Singapore to the ASEAN.

Newsletter, U.A.E

Mediation in the Middle East: Prior and Post the Singapore Convention

November 25, 2019

The United Nations (UN) Convention on International Settlement Agreements Consequent of Mediation, known as the Singapore Convention on Mediation (the ‘Singapore Convention’), was inaugurated for signatures on 7 August 2019.

This boasts of 46 signatories or countries, out of which five are a part of the Middle East. When paralleled to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the ‘New York Convention’) in total numbers of Middle Eastern signatories, it seems that the Singapore Convention was not received as heartily as the New York Convention (which has about 13 Middle Eastern signatories). But while looking closely and when comparing as per the number of Middle Eastern signatories when being inaugurated (just Jordan from the Middle East had signed the New York Convention on 10 June, 1958), then the projections of the Singapore Convention immediately seem brighter in the region

Some Key Highlights of the Singapore Convention

The Singapore Convention has been greeted as the “missing piece” in the framework of global dispute resolution enforcement. It creates a framework for the cross-border recognition and also enforcement of various settlement agreements (Article 3 of the Singapore Convention) and targets to get certainty and stability to the global framework on mediation. Some notable provisions of this include:

1. Lucidly-defined Application Scope

Article 1(3) of the Singapore Convention impedes settlement agreements which are enforceable like court judgments or arbitral awards from its application. This has established a well-defined arena for exercising this Convention and eradicates probable overlaps with any other conventions which regulate global trade like the Hague Convention on Choice of Court Agreements (2005) and the New York Convention.

Though the New York Convention would continue to administer and oversee settlements attained through mediation which are part of Med-Arb and Arb-Med-Arb processes, the Singapore Convention would now allow an equal level of authority to settlements exclusively ensuing from mediation. Thus in a way, this will assist in establishing mediation as a more effective and an independent way of Alternative Dispute Resolution (‘ADR’), as compared to a secondary step in the arbitration process.

2. Procedural Safeguards

Articles 5(1)(e) and (f) of the Singapore Convention stipulate that the competent authority might decline relief on the grounds of “serious breach of standards applicable to the mediator or the mediation” and failure to disclose “circumstances that raise justifiable doubts as to the mediator’s impartiality or independence”.

Intriguingly, the Singapore Convention doesn’t specify the criteria that is to be used to evaluate the conduct of the mediation, the mediator or his impartiality. Since the Singapore Convention doesn’t offer any examples or instances for either provision, and as there is no soft law or regulation on which States could rely (contrary to arbitration, mediation gets insignificant attention from global associations), the responsibility for elucidating these regulations now resides with the capable authorities in all the ratifying States.

Therefore, wherever needed, the signatory States would have to include regulations or standards in their own national laws before they would be able to endorse the Singapore Convention. In turn, this might encourage the manufacture of soft law instruments to restructure and streamline these standards. Consequently, there would surely be the formation of standards which have been elusive in mediation so far, except from the generating more awareness and debating mediation in the near future. It is important to note that the recently-inaugurated Saudi Centre for Commercial Arbitration (‘SCCA’) offers a code of ethics for various mediators in Saudi Arabia.

Prospects of Mediation in the Middle East

The initial response of the Singapore Convention in the Middle East is should surely not be considered as reflective of its eventual success. As State parties may assent at any stage to the Singapore Convention, it is very likely, that the countries in the Middle East who have still not signed the Singapore Convention would soon do so to keep up with the growing demand for mediation in this region. For instance, in just UAE, the Dubai International Arbitration Centre (‘DIAC’), which resides under the ambit of the Dubai Chamber of Commerce and Industry, registered 127 mediation cases which were valued at Dh18 million (almost US$ 4.9 million) in the first quarter of the year 2018.

With the necessity to align their national laws with their obligations under the Singapore Convention, all the signatories in this region would have to alter or come up with dedicated and standalone national laws regarding mediation. Though there is much that remains to see with regards to how well, and through which strategies, all of these nations would implement the Singapore Convention in their areas, one thing that remains certain is that mediation in the Middle East is surely in for a facelift and carries a view of a very assuring future.

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Key highlights and next steps

Main highlights and key changes:

Corporate Income Tax

Capital Gains Tax

Withholding Tax

Transfer Pricing

Points which are still unclear

The way forward

The criteria for UAE nationals:

Some Key Highlights of the Singapore Convention

1. Lucidly-defined Application Scope

2. Procedural Safeguards

Prospects of Mediation in the Middle East

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