Newsletter Archives - Page 26 of 57

Newsletter, U.A.E

DIFC Foundations now being accepted as Direct Shareholders by JAFZA

April 29, 2020

JAFZA (the Jebel Ali Free Zone) has become the most recent Dubai jurisdiction to allow Dubai International Financial Centre (DIFC) Foundations as direct shareholders and/or incorporators in registered entities. This is a big step forward when it comes to business consolidation and growth.

Why is this so important?

The acceptance of these foundations is literally a game-changer when it comes to the structuring of UAE real estate assets. As one of the largest, most reputable free zones in this region of the world, JAFZA and JAFZA IBC’s (its offshore counterparts) have long been recognized as the go-to option for the registration of real estate holdings in the Dubai region. This marks a new beginning in the real estate sector and shows immense opportunity for growth.

The relationship between DIFC Foundations and JAFZA addresses key concerns of many entrepreneurs and investors such as asset protection and legacy planning. In the past, these concerns could’ve only been addressed by fully restructuring the legal process involved in the transference of property ownership. By making it seamless and easier to access than before, the interest that has been generated is newsworthy.

JAFZA IBC’s Before

Using a sub-vehicle to consolidate; individual share holding

No legacy planning strategy
- assets subject to probate in case of death
- dilution equates to destruction of value

Poor asset protection against creditor attacks, divorce, etc.

Poor value – requires double legalization

JAFZA IBC’s After

Consolidated under a single planned structure; asset segregation by class
Smoother intergenerational succession
NO authorities involved
NO dilution equates to better income protection
NO family disputes
Protection against attacks
Privacy

Increased cost-effectiveness

Additional Considerations

As self-owned entities, DIFC Foundations have a personality that is distinct from that of their founders. They are compatible with a range of asset classes in the UAE including investment portfolios, real estate, and shares. Furthermore, they enable business owners and entrepreneurs (as well as their families) to consolidate and maintain control over their investments and other income-generating assets. This shall help bring better financial stability in the market.

At the same time, these individuals are protected against potential risks such as creditor attacks and probate. Most importantly, Muslims and non-Muslims alike will benefit from their efficacy as a financial tool. JAFZA’s action coincides with the introduction of a number of economic improvement measures put forth by the DIFC as a response to the COVID-19 pandemic. This includes waiver of all registration fees for the specific scope industries and for the foundations. Thus, business can look forward to optimizing their high value assets with ease.

Newsletter, U.A.E

VAT Refund for Foreign Businesses in the UAE

April 23, 2020

The Federal Tax Authority (FTA) has introduced a VAT refund scheme in the United Arab Emirates for foreign businesses. With this scheme, all eligible non-United Arab Emirates established businesses will be able to submit the VAT refund requests for the calendar year 2019. However, the refund application needs to be made by 31^st August 2020.

Which businesses can claim VAT refund?

Only specific foreign businesses will be eligible for the VAT refund paid on expenses incurred in the UAE. The eligibility criteria are as follows:

The business must not have a place of establishment or fixed establishment in the UAE or other GCC implementing state.
They are not a taxable person in the UAE (meaning they are neither registered nor required to be registered for VAT purposes).
They are not carrying on a regular business or ongoing activities of a business in the UAE; and
They must be carrying on a business and are registered as an establishment for VAT overseas.

Other conditions

FTA has further mentioned the minimum claim amount for each VAT refund application which is AED 2,000. This may include a single purchase or multiple purchases. Businesses aiming to claim refund must hold the original tax invoices / receipts of the purchases they would like to reclaim VAT. The same has to be submitted along with the refund application to the FTA

Further, businesses operating out of selected countries are only entitled to a VAT refund scheme. Below is the list of eligible counties:

Austria
Bahrain
Belgium
Denmark
Finland
France
Kuwait
Iceland
Isle of Man
Lebanon (in certain situations)
Luxembourg
Namibia (in certain situations)
Netherlands
New Zealand
Norway
Oman
Qatar
Saudi Arabia
South Africa (in certain situations)
Sweden
UK
Zimbabwe
Switzerland

If you have incurred VAT in the UAE but your business is not established in the above mentioned countries, you might not be able to recover the VAT under this scheme. However, you can seek help from professional consultants to explore other options to reduce your VAT cost in the future.

IMC Group is a renowned VAT consultant in the UAE. Our VAT experts can assist you through the entire process of applying for a VAT refund and also help you minimise your VAT cost in the future by reviewing your supply chain structure. For more information, you can get in touch with us.

Newsletter

SaaS accounting solutions to help businesses tide over the Coronavirus crisis

April 9, 2020

The world economy is staggering under the pressure of the CoVID-19 pandemic, which has now affected nearly 193 countries and impacted the livelihood of countless people all over the globe.

As social distancing is the norm now, the businesses of all sizes are finding it hard to maintain a smooth run. The situation has impacted global economies, with billions of dollars already been spent and the markets brimming with uncertainty.

Difficult times for the businesses

The firms are presently walking on tightropes, as they need to make sure of the safety of the workforce, as well as keep themselves from faltering in compliance and accounting. CoVID-19 has led to a never seen before the crisis in the businesses. However, good business leaders are the ones who can successfully navigate through these adverse situations.

The silver lining for the businesses

Though for most of the small businesses, it is difficult now to manage the teams, allot work, and oversee compliance and accounting, the firms that have embraced SaaS-based solutions are faring pretty well.

Going for cloud software, for Accounting and Bookkeeping Services, helps the businesses to fight all the unprecedented challenges that can arise. It helps businesses in the communication, delegation, and monitoring of the work, as well as ensuring the safety of the teams working from homes. Thus, cloud-based solutions are the way to help businesses keep up the details of compliance and accounting, in the times of such crisis.

Advantages associated with business accounting software

SaaS, the cloud accounting software, is a helpful tool where the applications get hosted by service providers, and that curbs the issues of maintaining and installing software. Such an automated cloud accounting software can be really advantageous for the companies:

1. Widespread accessibility:

A cloud accounting software is for you if you want access to your bank accounts, view the data, track sales, and inventory from anywhere and at any time. The technology allows you to view your data in real-time and access what you need without any glitches.

2. Work faster and smarter:

Bookkeeping can turn out to be a rather tiring and monotonous job with all the daily dose of invoicing, billing, and so on. When you Outsource Finance and Accounting Services by using an automated cloud accounting software, you not only get relief from doing all of these, but also get the assurance that everything is being taken care of accurately.

3. Easy data backup and storage:

Automated cloud accounting software frees you from those much-known troubles of backing up and storing data. Small businesses can take advantage of low cost but high-quality cloud software solutions, which will not be affected by the fact that the employees are working from their homes.

4. Secured data & privacy:

You get role-based access controls in all cloud accounting software solutions; there is no need for you to worry about privacy or data breaches. Compliance can be made even simpler when AI-enabled tools are added to the mix.

Summing up

Medical emergencies, natural disasters, and economic crises are all situations where a business can be hit without any prior warning and with an upheaval of a large scale. Thus, the need of the hour is to rely on such technologies that can help businesses tide over such situations. If you are yet to adopt on compliance and accounting solutions that are SaaS-based, it is high time for you to start considering it now.

Newsletter, Singapore

Chan Chun Sing announces support packages to help businesses for the next three to six months

April 9, 2020

Mr Chan Chun Sing, the Trade and Industry Minister of Singapore, recently announced that the Government has multiple relief measures planned to be executed to support the workers and businesses in the coming 3-6 months, as the CoVID-19 outbreak continues to threaten the country.

In a recent interview, he mentioned that delivering the necessary support packages is of the utmost priority for now, and the Government is ready to dole out more aids if needed. The Government announced a support package of a whooping S$48 billion last week for shoring up support for the economy, Along with the amount of S$6.4 billion previously mentioned in the budget this year, the Government is known to be earmarking about S$55 billion, or roughly eleven per cent of the GDP

When asked about the number of businesses the supplementary budget of the Government can support and for what duration of time, Mr Chan clearly stated that the exact number of businesses that may go under is difficult to be specified right now, but the Government will make sure to try and make the maximum number of businesses stay afloat.

He further added that the current priority is to put the available budget and schemes to use for helping the businesses and workers manage the next 3-6 months. The Government is ready to launch a couple of schemes that will help businesses with their immediate financial needs.

Mr Chan cited measures like the Job Support Scheme and property tax rebates to help businesses stay afloat.

The massive support package is expected to save many jobs, and help the ones that might get displaced to get rehired to other available roles. Apart from the short term issues, the support package is also expected to address the long term problems of the country. It includes continued efforts for strengthening the abilities of local workers and businesses, like building digital capacities, such that Singapore can be the first one to rise at a time when the recovery is found. Besides, it’s all about reinstating the confidence in the nation’s economy.

Mr Chan said that the depth of the nation’s reserves and the size of the announced package would make the people confident about the ability of the nation to brave the storm, and in fact, it will also be noted keenly by other observers. So, when it comes to an investment decision in the future, the observers will definitely think of Singapore as one of the nations that they can believe in.

It was also noted by him that the workers and businesses would be relieved in knowing the fact that the Government has enough in the national reserves to give out aids.

The Minister also mentioned that supply chains had witnessed serious disruption, And the bigger question is how these businesses can maintain their capabilities and connectivity for the country. He said that the short-term challenge is a loss in the ability of selling, but the bigger concern is the loss in the ability to produce, which indicates the fall of company capabilities.

Newsletter, U.A.E

Free Zones in Dubai Have Extended ESR Submission Deadline to June 30

April 9, 2020

ESR or Economic Substance Regulation submission had the deadline of March 31, but due to the pandemic of COVID-19 in these days, a few free zones have extended the deadline for the companies.

As they postponed the deadline for the companies, Younis Haji Al Khouri, Undersecretary at the Ministry of Finance recently announced the fact that the cut-off date is June 30 and they will make certain that all the regulations are followed as per the deadline, given by the Ministry of Finance. He has also added this move ensure ultimate compliance.

Dubai International Financial Centre had also asked the entities for submitting the ultimate economic substance notification on the DIFC portal. Though the March 31, 2020 deadline is no longer applicable, and this has been mentioned on their official website. UAE is a committed member of the OECD Inclusive Framework.Thus, it had come with a Resolution on the Economic Substance on April 30, 2019. It had done so

As per the evaluation of tax framework of United Arab Emirates as well. The ultimate rules and regulation required companies, which simply carry out the relevant activities, to maintain the sufficient economic presence in a nation regarding some of the activities they undertake. It is applied to financial year commencing on or from January 1, 2019.

Abu Dhabi Global Markets have also stated in a recent note that ESR notification got extended until further notice comes. Keeping the recent situation or this pandemic in mind, this can be considered as one of the big reliefs in the general business. Businesses and companies can utilise this extension for analysing their business details and financial aspects.

Newsletter, U.A.E

Organizers of Expo Discover the Postponement by One Year for COVID-19

April 9, 2020

Recently Expo Dubai has conducted a virtual meeting of the Steering committee with all representatives from different nations.They discussed the ultimate impact of Coronavirus, COVID-19 which has impacted the Global preparations of Expo 2020 Dubai.The nations that took part in it explained the worldwide precautionary measures to the Steering Committee.These measures were mandatory for making the involved people totally safe.

According to their assessment, every nation now has an economic crisis.The members of Dubai Expo 2020 reaffirmed all of their solidarity along with the international community as this will simply navigate through the ramifications, which have already resulted from this unprecedented global disaster.

Expo 2020 Dubai has ample representatives from the whole world and during this situation; they are trying hard to come out of it.So, recently, they reaffirmed the UAE commitment for working hand in hand.They want all of their foreign and international partners to come forward and then deliver the World Expo that holds true to the founding purpose.

Though, everybody already knows about the postponement of Dubai Expo 2020, but, they are still trying to find a way.The entire committee has agreed collectively for discovering with BIE,The Bureau International des Expositions, BIE, will now on work with all of the Member States and Expo 2020 Dubai directors to set up the change in dates.Though they have already announced the date, the general assembly has also stated a fact that the final decision can be postponed.

Eventually, if there are any certain changes on the absolute decision on the deferment, then only the General Assembly and also the BIE’s Executive Committee can do these.According to the rule, if the dates need change, then at least 2/3rd of the Member States of the Organization should vote. And if the votes do not come in favour of general assembly, then the change in the date cannot happen.

Recently, the Minister of State for International Cooperation, Reem Al Hashemy, has given stress on this specific matter.He is also the Director General of Expo 2020 Dubai.He has stated that this entire global situation is moving quite fast, and this is unpredictable.As plenty of countries are going through the situation, so they will follow due to BIE processes on deciding to delay the Expo 2020.

Newsletter, U.A.E

The implications of Expo 2020 for Dubai’s real estate scenario

March 16, 2020

There seems to be an upsurge in the real estate arena of Dubai thanks to the years of reforming the real estate policies to draw in the investors. The reforms seem to be working now that the investors are gaining their confidence back about the UAE real estate market. The initiatives that have brought about this change include increasing the flexibility of debt payments by the financial institutes, favourable plans for payment, and long term visas for the professionals and investors.

It seems that the confidence of the investors started rising ever since the news of Dubai Expo 2020 was announced. This was good news for the real estate investors interested in the country because it was a sign of the potential of the market for attracting buyers. A couple of investors have already delivered projects worth multimillions of AED. And, the good news lies not just in the fact that they have delivered the project, but rather in the fact that most of these projects have sold out completely. After all, the popular belief in the real estate world says that the delivery of the project is as important as it is to get it to sell out.

Now, let’s take a look at some of the data to get a better understanding of the market conditions. The last quarter of last year hit a record of sorts by closing nearly five thousand real estate transactions. This was the highest property sales recorded since the year 2008, and the residential stocks of Dubai are projected to hit 6, 37,000 in the year 2020.

The Expo 2020 has been touted, by the Dubai government, as the largest event ever to take place in the UAE. Dubai is to play host to one hundred and ninety countries, and millions of visitors from all over the globe are slated to join the event. The event will carry on for one hundred and seventy-three days, and have various themes like sustainability and innovation in the Arab region.

There is clear evidence that the Expo has changed the face of the economy for the past hosts of it. There is a noticeable growth in local economies and the price of real estate.

Dubai is ready to spend billions to make Expo the biggest event ever in the world. The organizers are expecting eleven million visitors from the UAE and fourteen million from overseas. Going by the recent reports, the Expo 2020 is slated to prove a boost of AED 122.6 billion to the local economy, along with creating over 49,700 permanent jobs this year. Investors are also confident that it will lead to the overall development of the business scene in Dubai.

The investments made in Expo and the money spent by the government in building its infrastructure are one of the main factors keeping the country’s economy on the right track during recent times. It has been predicted that the Expo can help the economic growth of Dubai to range from 3.8% to 4.5% in the future.

The Expo will create job opportunities in varied sectors like tourism and travels, engineering and infrastructural development, architecture, and service industries.

With the right amount of push from the Expo, the real estate sector of Dubai is on a roll now. The developers expect that after the Expo, investors will want to make the country their base because the infrastructural facilities and regulations can make it as lucrative as the other global cities, such as Paris, London, or New York.

Though the leading investments in real estate come from the Chinese and the local Emiratis, the developers have noted that even Indians are now considering Dubai for investments in real estate. Dubai has the luxury factor coupled with great prices compared to what is available in their home country, which attracts the Indian investments. For instance, residential properties have an average price of AED 1,000 – 12,000 per sq. Ft. in Dubai, which is roughly INR 20,000 – 24,000.

The time to invest in the real estate scene of Dubai is right now because of factors that go beyond the usual buying and selling properties. When you think of the average returns you can earn anywhere in the world, the figures stand at five to six per cent, and maybe seven to eight per cent on a great day. But, Dubai can easily take it to ten to twelve per cent for all day.

Newsletter, Singapore

Tax rebates and incentives announced in the Singapore Budget for aiding business growth

March 16, 2020

With Singapore still tackling COVID-19, the Budget Statement was delivered in the Parliament by Finance Minister and Deputy Prime Minister, Mr. Heng Swee Keat, on February 18, 2020.

The changes in the tax structure seen this year are nothing groundbreaking, but it still reflects the values held by Singapore during these times of global structural shift and economic uncertainties. Because of the headwinds being faced by the country, several tax measures introduced this year aim at stabilizing the economy and supporting the businesses. In the international front, the country is well-poised to benefit from the geopolitical changes. There have been several refinements, enhancements, and extensions of tax schemes to make Singapore one of the prime financial hubs all over the world. However, the basic tax structure remains the same as the government believes it to be competitive enough and well-suited for Doing Business in Singapore.

Some of the notable highlights, regarding taxes, in the current budget are given below.

1. Corporate Tax benefits offered to the companies for stabilizing the economy

Twenty-five percent income tax rebate per company, within the limit of S$15,000, for the year of assessment 2020
Improvements in the carry back relief schemes for the year of assessment 2020
Greater relief for renovation and refurbishments, plants & machinery for the year of assessment 2021

2. GST remains unchanged for now, but there might be some changes in GST for the cross-border activities of a company.

No GST hikes from seven percent to nine percent for the year 2021, but it might be implemented before 2025
GST levied on digital payments and imported services

3. The Mergers & Acquisitions scheme to be extended till 31 December 2025, with conditions applied

No stamp duty reliefs for the tools executed after or on April 1, 2020
No waiver application allowed for the foreign holdings of Singaporean subsidiaries for the acquisition they made after or on April 1, 2020

4. Promoting venture capitalism and maintaining a competitive market by refining, enhancing, and extending tax incentive schemes

Extending the ‘safe harbor’ clause for disposing of ordinary shares till December 31, 2027
Tax benefits for fun management businesses and venture capital businesses enhanced and extended
Refining, enhancing and extending tax incentives for different industries, which include particular financial markets, maritime businesses, and insurance firms.

Twenty-five percent income tax rebates will be given to the corporate ventures, within the limit of S$15,000, for the year of assessment 2020. The small and medium enterprises will benefit considerably from it, and so will the companies facing minor cash crunches.

Mergers & Acquisitions Schemes Extended, but with certain limitations

The Mergers & Acquisitions scheme, introduced in the year 2010, was meant to foster growth and restructuring of the companies through the scheme. This scheme states that a Singaporean company legally acquiring the shares of another company might be entitled to certain tax rebates.

To qualify for this scheme, the main holding company of the acquiring company needs to be a legal tax resident in the country. This condition was waivered in 2012 for particular companies, including foreign MNCs that have headquarters in the country under the Headquarters Tax Incentive Program.

There will be an extension of the Mergers & Acquisitions scheme for qualifying acquisitions made before or on December 31, 2025. But, there will be certain limitations on the scheme, such as:

The stamp duty reliefs under the scheme will end up lapsing for Singapore company incorporation after or on April 1, 2020
Lapse of waiver for share acquisitions made after April 1, 2020. The MNCs that incorporate Singaporean subsidiaries might not be able to fulfill the conditions of the scheme under this clause.

The present tax benefits under the Mergers & Acquisitions scheme incorporate, an allowance based on purchase considerations that are limited at S$10 million for all the qualifying acquisitions in the year of assessment, and a double-tax reduction on the transaction costs spent for acquiring the qualified shares that are limited at S$100,000. The limits on double-tax reduction and Mergers & Acquisitions rebates are aimed to benefit the growth and development of small and medium enterprises. The other conditions and limitations of the Mergers & Acquisitions scheme continue to remain the same.

Newsletter, Saudi Arabia

Saudi Arabia Exerts Efforts on Providing Scopes of Doing Business

March 16, 2020

“Saudi Arabia is now shifting its interest from studies to creating sustainable environments for attracting investments,” stated Mohammad Al Tuwaijri, the Minister of Economy and Planning in Saudi Arabia.

There are three pillars for catching in incentives, and they are creating clear strategies for measuring performance, offering diversified sources of finance by way of lucid plans through ministries, and the vital role of investment funds. Tuwaijri further stated that the investment funds would be coming in from the National Development Fund, aimed towards supporting all the areas and ministries to use investment opportunities.

In other words, doing business in Saudi Arabia would now be a possibility for every business investor. That’s good news added to the fact that three pillars are offered for attracting investments.

The government in Saudi Arabia is taking up many assignments and even financing the same for offering major benefits to the private sector, said the Minister at a Municipal Investment Forum held on 24-26 February in Riyadh.

The Minister further put down that Saudi Arabia is putting in the best efforts in creating sufficient infrastructure in the long run. The infrastructure will be in perfect line with Vision 2030 in collaboration with the municipalities.

Speaking on investment incentives and as queried by Mubasher, Tuwaijri stressed on the legislative facet of investment incentives in the future. He further added that the Saudi government is working on offering the infrastructure required for different sectors and projects.

The economy in Saudi Arabia is a thriving one, with the nation being the only member of the G-20 major economies from the Gulf region. The oil-based business in Saudi Arabia, along with petroleum, accounts for around 87% of budget revenues, 90% export earning revenues, and 42% GDP. With recent declines in the export of oil, the government here is looking to offer new business opportunities to entrepreneurs seeking Saudi Arabia as a great destination for doing business.

A record number of major business reforms were carried out in this Gulf country in 2019. This earned the nation a position in the Top 10 Universal Business Climate Improvers of 2020. This report came from the Doing Business 2020 publication of the World Bank Group.

There were a total of eight reforms implemented by Saudi Arabia in different business areas. The country ranks 62nd in the list of countries offering the ease of business. It means company registration in Saudi Arabia will not be a matter of great concern for business investors.

Thanks to the reforms meant towards improving the interests of the minority investors, the country now has the third position universally on this indicator. It ranks just after Singapore and New Zealand. The destinations considered easiest for doing business in the world. In addition to this, new reforms being made in the field of getting electricity have made it easy for new businesses to get fast electricity connections in the country.

Coming up with a new business gets easier in Saudi Arabia as the nation has now introduced a one-stop store that merges multiple post-registration and pre-registration procedures. Getting structural permits has also become easier because of the evolution of new online podiums.

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Why is this so important?

JAFZA IBC’s Before

JAFZA IBC’s After

Additional Considerations

Which businesses can claim VAT refund?

Other conditions

Difficult times for the businesses

The silver lining for the businesses

Advantages associated with business accounting software

1. Widespread accessibility:

2. Work faster and smarter:

3. Easy data backup and storage:

4. Secured data & privacy:

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