Newsletter Archives

India, Newsletter

MGI Worldwide and CPAAI Merge Create Major International Accounting Network

November 14, 2019

Global accountancy network MGI Worldwide, headquartered in the UK, and association CPAAI (CPA Associates International),with its headquarters in the US, have announced that they will be merging on 1 January 2020 to create a new organisation with 257 member firms around the world.

The deal, finalised recently in Dubai, UAE, will create an organisation with revenues approaching $1 billion, placing it in 16th position in the current global accountancy network ranking. Both organisations have been active for more than 60 years in their markets and combined will offer clients access to almost 9,000 professionals in almost 100 countries. The merger will also offer member firms greater resources, access to more expertise in new jurisdictions, a wider range of services and stronger brand recognition. Global quality assurance will be available to CPAAI firms as they join the MGI Worldwide network. The two groups’ well-established markets, with CPAAI especially strong in the US, China and Mexico and MGI Worldwide with a greater global reach, are highly complementary.

The deal was agreed by members at the time of the MGI Worldwide global annual general meeting in Dubai, UAE – with many making use of the latest technology to vote and take part in the debate via live-streaming. Clive Viegas Bennett, CEO of MGI Worldwide, said: “This merger greatly strengthens the already solid market positions of both organisations and the resources for our member firms. Our new global and regional management team will be unbeatable. “For members, our coming together will bring a wide range of new benefits, access to more business opportunities, wider geographical scope and significant knowledge and technology exchange. “The merger will help us not only retain the excellent firms within our existing organisations but also attract new members who are looking for a different approach and greater support from a global international network.”

Michael Parness, the President of CPAAI, added: “Our organisation and MGI Worldwide have a lot of shared values, a similar client base and business DNA, so this merger makes sense in a world that is becoming ever more interconnected. “Clients remain at the heart of all members firms’ objectives and the merger ensures that they will be able to call on the expertise and support they need – regardless of where they operate in the world. “We are very excited about what the future holds for our newly formed organisation and we cannot wait to start developing new strategies and connections so that we can grow and flourish in this competitive marketplace.”

The new group will be co-chaired by Roger Isaacs, the Chairman of MGI Worldwide and Jim Holmes, the Chairman of CPAAI. Clive Viegas Bennett will serve as Chief Executive Officer, with Michael Parness as Chief Operating Officer.

The organisation plans to hold more regional meetings for its members in North America, Latin America, Europe, UK & Ireland, Africa, Asia, Australasia and the Middle East, to keep them abreast of technical and business developments, exchange business and expertise and deepen their strong regional structure.

To find out more about each organisation and the merger, please visit www.cpaai.com and www.mgiworld.com

Newsletter, Saudi Arabia

Doing Business in Saudi Arabia Becoming Simpler

November 12, 2019

Saudi Arabia had announced multiple reforms in eight sectors which were being supervised by the World Bank.

Last week, there was an inauguration of the World Bank report on “Ease of Doing Business” in Saudi Arabia where various senior government officials, international diplomats, leading entrepreneurs and media was present. The presentation quality and the content were impressive.

The Commerce and Investment Ministry, led by Maid Al-Qasabi, was the main reason of these accomplishments in coordination and collaboration with other ministries. The World Bank report on “Ease of Doing Business” in Saudi Arabia was created on the basis of interviews with almost 50,000 international private-sector executives, who had found the Kingdom and made the utmost progress in the area of start-ups.

With regards to indicators, the Kingdom has come out with distinct rankings. For example, for setting up a new business, the Kingdom stood at the 38 position. It took the 28 ranking for receiving various permits, 18 place for electricity access, 19th position for property registrations, and the third rank for safeguarding minority investors. But, it slipped down a bit in regard to trading across borders (86 place), tax payments (57 position), enforcing contracts (51 rank), and resolving insolvency issues (168 place).

The result of this report has been mentioned is in the mainstream of the Saudi Vision 2030 mission, which aims to rely lesser on oil-based revenues and alongside implement the above-mentioned reforms to enhance revenues also from non-oil sectors and economic drivers. To go to the next level of reforms, Saudi Arabia should improve transparency even further, encourage fair competition and even better governance.

Though there is some degree of perplexity in the private sector of the country, which is still facing challenges in operating or establishing new businesses. Therefore, Saudi National Competitiveness Centre (NCC) should lay more emphasis on making the local sector completely aware of these improvements and how to take advantage from them in an effective and quick manner.

The announcement of this report is very timely with just a week for the Future Investment Initiative (FII) conference to happen and with various high-stature governmental delegations participating from the US, India, and Switzerland. It should offer more assurance in foreign direct investments (FDI) in various sectors in the nation.

The country and entrepreneurs should take advantage of the country’s rankings, while inviting international collaborations and partners to gain benefit from the new investment opportunities in Saudi Arabia.

India, Newsletter

India’s PM Narendra Modi Summons International Industrialists and Companies to Invest in India

November 12, 2019

India’s Prime Minister Modi recently attended the celebrations that marked 50-year of the Aditya Birla group in Bangkok this week. While addressing that gathering, he has invited global companies, industrialists and businesses to come and invest in India. Emphasising on innovations and start-ups, he said that the international companies and businesses would be received with open arms in the country.

The Prime Minister also mentioned that India has enhanced its ranking by moving up the ladder in the World Bank’s Ease of Doing Business. Now, the time is very suitable for company formation in India. He said that India is now going after the aim of becoming a five-trillion dollar economy by the year 2024. Mr. Modi also pointed that India’s GDP was approximately 2-trillion dollars when the government led by him took over in the year 2014; however, in just 5 years, it has now reached much higher at 3 trillion dollars.

The Indian Prime Minister also said that his government has done some noteworthy work in various fields, one being in taxation. In today’s times in India, the impact and support of painstaking taxpayers is treasured. He said that India is now one of the most people-friendly tax regimes and is dedicated to improving it further. He also mentioned that his government has worked hard to end the middleman culture and incompetence by bringing in Direct Benefit Transfer (DBT) system.

Mr. Modi also said that India is giving specific focus on improving connectivity with Thailand and all other Association of Southeast Asian Nations (ASEAN) countries as per its Act East Policy.

He anticipated that the direct connectivity between the ports of Thailand’s West coast and India’s East coast will enhance their economic partnership. He also said that his government’s steps and initiatives like ‘Swacch Bharat Mission’ (Clean India Campaign) and Smart City programme provide wonderful opportunities for improving this partnership.

While addressing the event, Kumar Mangalam Birla, the Chairman of the Aditya Birla Group, also said that India’s Prime Minister Modi has improved the country’s stature throughout the world. He said Mr. Modi has started various welfare schemes and now India is the third-largest nation globally in the start-up ecosystem after the US and China.

So if you want to know more about how to register a private limited company in India, please get in touch with us and we would be happy to assist you.

Newsletter, Saudi Arabia

New Developments in Store for Companies Functioning in Saudi Arabia

November 12, 2019

Saudi Arabian General Investment Authority (SAGIA) and the Saudi Ministry of Commerce and Investment have recently implemented new regulations that will affect the processing of many government services offered to companies. This article outlines the newly adopted regulations requiring compliance with International Standard Industrial Classification of All Economic Activities (ISIC) and looks at how they will impact business operations of companies operating in Saudi Arabia going forward.

Business activities & ISIC compliance

All of the Management Consulting Activities have been shifted to Ministry of Commerce and Investment (MoCI) under the professional sector and directly licensed by MoCI now.

The grace period granted by the SAGIA and the MoCI to update business activities of all companies established in Saudi Arabia has elapsed and such companies must now, as a matter of priority, amend their business activities to comply with the ISIC. The following considerations should also be noted:

The normal course of operations shall not be affected or jeopardized since companies should be able to provide the same scope of licensed activities in Saudi Arabia after complying with the ISIC.
The licensing officials will only apply the equivalent ISIC codes against the relevant currently approved business activities in respect of each company as may be deemed necessary to ensure the continued performance of the same licensed business activities in Saudi Arabia.
SAGIA does not currently charge any regulatory fees for the ISIC amendments of the Foreign Investment Licenses (FIL), noting that the expenses usually incurred are of two thousand Saudi Arabian Riyals (SAR 2,000) for each respective FIL.

In addition, one of the major recent developments under the ISIC is the licensing of the management consulting activities. All of the Management Consulting Activities have been shifted to MoCI under the professional sector and are now directly licensed by them.

At this stage, SAGIA will only be licensing “high management consulting services” which shall fall under SAGIA’s Services sector (the High Management Consulting Activities). The High Management Consulting Activities should mostly allow the performance of general consultancy services that are not classified under MoCI’s professional sector and without specializing in specific services, which include the accounting, taxation, management, economical, educational, translation and/or security sectors.

Scope of application and implications

These recent requirements by SAGIA and MoCI will apply to all companies registered in Saudi and significant implications include the following:

Established companies in Saudi, to the extent required, must amend their FILs, Articles of Association and/or Bylaws (as the case may be) and Commercial Registration Certificates (the Constitutional Documents) in accordance with the ISIC.
Companies previously licensed by SAGIA to undertake any Management Consulting Activities must amend their Constitutional Documents to either reflect the approved High Management Consulting Activities or discuss with their respective Saudi legal advisors the available structuring options under the professional sector (if applicable).
Based on our recent interaction with SAGIA and MoCI, the substantive regulatory services, which include the renewal and/or amendment of the Constitutional Documents and appointment/dismissal of managers, will not be provided to companies that are not compliant with the ISIC. The officials will first request the respective company to amend its business activities in accordance with the ISIC (including the Management Consulting Activities) prior to processing any applications submitted to either SAGIA or MoCI.

Required action

The Constitutional Documents of companies must be reviewed and amended to reflect the ISIC requirements applied by SAGIA and MoCI.

Newsletter, Singapore

Expansion of Family Offices in Singapore

November 12, 2019

The last decade has been good for Asia as wealth has been created at a remarkable pace. This has resulted in the expansion and spurt of family offices in Singapore and Asia which are basically set up to assist the ultra-high net worth (UHNW) families to handle their wealth and also to help organise for the handover of wealth to the next generation.

The Monetary Authority of Singapore (MAS) hinted that between the years 2015 and 2017, the total number of family offices based in Singapore had multiplied four times. Though there is lack of official data which confirms the real number of family offices established in Singapore, the industry has seen a constant and stable growth in the years 2018 and 2019.

Singapore has been one of the preferred private banking and wealth management hubs for families in Asia, and it is thus a natural choice for setting up family offices.

Singapore is also a top choice because of its political stability, its highly educated, professional and efficient work force and a robust financial sector. It is surely advantageous that a good percentage of its proficient workforce has fluency in more than one language. This is because Singapore is a multi-cultural society and the education system there has always laid a lot of stress on its bilingual educational policy. Various UHNW families in this region usually feel more at home and comfortable in Singapore because of its culturally sensitive and global-minded workforce helping them with investment management and also on sensitive subjects like property planning needs.

Though most of the family offices based in Singapore are set up by Asian families, but there are many European and American families also who are opening their family offices in Singapore because they want to use Singapore as a doorway for their investments in Asia.

Service range provided

The main services offered by family offices based in Singapore are usually investment management or financial advisory. Since the growing Asian wealth reaches the inflexion point for inter-generational wealth evolution, many a times family office mandates also involve supporting with consolidating family governance and doing required arrangements to enable a smoother transition.

As the investments range across multiple countries or family members who dwell in various parts of the world, there is a rising consciousness of cross-border tax, legal, and regulatory challenges and for family offices to help the families to have a thorough plan for these matters.

In case where hiring a full-time in-house adviser is not possible or appropriate, then there are many international advisers based in Singapore who can help and guide family officers. Nowadays, family offices also invest a lot of time in arranging data and gathering information for families to comply with the dynamic regulatory and filing requirements internationally.

With regards to the range of investments, certain family offices have a primary task to handle the financial portfolio investments conservatively so as to stabilise the higher risks that they are exposed to in their domestic jurisdiction. However, some other family offices are operated like investment banks and also act as advisers to the chief family members. They assist in giving professional advice on a variety of matters such as how to handle the strategic listed stake in the founding business, find apt business opportunities which could be complementary to the existing businesses or otherwise, and assist in creating joint ventures or other club deals with various strategic partners. Though the family offices are based in Singapore, the several deals and investments they deliberate and do could be anywhere around the globe.

Singapore is an attractive destination to these family offices as it is a conducive place where one can actually expand and grow their business operations. It is reasonably simple to do business in this country, and there is a variety of liberal tax incentives that are available for sectors which the Government is wanting to foster. Proper structuring can usually be done efficiently, gaining from multiple tax and investment treaty networks which Singapore has to offer.

Family offices can also participate in offering a philanthropy advisory service and assisting in developing more well-thought-out and strategic policies for various families and their foundations. Asian families are gradually giving more meaningful amounts to several international philanthropic causes. Family offices enable in bringing a more professional attitude to the philanthropic projects and endeavours of the family. They could also offer administrative support to the family foundations or handle the funds that are donated to the foundations. It is important to note that not all family foundations handled by the family offices based in Singapore have to be registered as a Singapore charity; however, they may be designed to be eligible for such registration if it is advantageous to get registered. Income and profits of a registered charity in Singapore gets a tax exemption and some specific donations can eligible for a very substantial tax deduction of 250 percent for the donor.

Newsletter, Singapore

Why Establishing Your Company Office in Singapore Makes Sense for Business in ASEAN?

November 12, 2019

Singapore has been a preferred centre for establishing regional headquarters for carrying out business opportunities throughout Asia and ASEAN. The country got the status of a favoured investment hub and business destination in Asia mainly because of its simplified legal and tax procedures and because it’s one the most investor and business-friendly places in the world. Also, its financial system is very integrated with global financial markets, which acts as a bonus for company formation in Singapore.

This business setting has helped global investors to take benefit of Singapore’s approach to some of the biggest combined free trade sectors through ASEAN, including ASEAN-Hong Kong, ASEAN-China, and ASEAN-India free trade agreements (FTAs).

However, there are several other factors that help in making Singapore one of the best places for firms that want to start their business operations in the region.

Easy and well-organised set up process

If you are wondering on how to start a business in Singapore, you must know that the business processes and legal regulations in the country are quite easy and transparent, which means that most of the information that any business might require is usually available online. Hence, it becomes easier for global decision-makers to know more about the domestic market when they decide to enter it.

Businesses who have decided to set up their office here can use Bizfile, which is an electronic filing system combining all the tax and business needs in a single form, thus lessening the need to spend extra time and effort at various service centres. Bizfile is handled by the Accounting and Corporate Regulatory Authority (ACRA), which is the statutory body accountable for the supervising new companies getting formed in Singapore.

Another benefit is that the effort, cost and time spent in setting up in Singapore is comparatively lesser. Foreign entrepreneurs can pay US$254 (S$300) to register a company through Bizfile and it costs about US$10 (S$15) for registering the company’s name. The good part is that usually the applications are processed on the same business day; but, the process can also take anywhere between 14 days to two months if they are to be reviewed by any government agencies.

The well-organised and cost-effective nature of corporate set up in Singapore has amounted to over 37,000 global companies and almost 7,000 multinationals working in the country. This is also one of the reasons why the city-state is always positioned among the top three economies world-wide and in the Ease of Doing Business report.

Favourable tax environment

Singapore’s positive tax regime is globally recognized for permitting entrepreneurs and businesses to enjoy low tax rates and various types of tax relief – via incentives, exemptions from specific incomes and comprehensive tax treaty networks.

Singapore’s corporate tax regime is supposedly one of the most attractive and best in Asia. Entrepreneurs can take benefit of the flat 17 percent corporate income tax rate for any profits they make over S$300,000 (US$217,000) and it is 8.5 percent for profits that go up to S$300,000 (US$217,000).

Additionally, as the Singaporean tax system functions on a territorial basis, businesses are not taxed on most of the globally-sourced incomes (like incomes from dividends or from branch profits) that are sent into Singapore; as long as they are paying tax in the source country at a rate of minimum 15 percent. Another benefit is that there is no capital gains tax in the country.

Robust DTA and FTA networks

One of the major advantages of setting up a holding company in Singapore is the country’s network of 24 FTAs and 85 double taxation agreements (DTAs).

There are mainly two types of DTAs operational in Singapore – comprehensive and limited. Comprehensive DTAs include all income types and permit exchanging of tax information; however, restricted DTAs cover income which is derived from shipping and air transport.

These DTAs also comprise treaties done with ASEAN’s 10 member states, which are, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam; thus offering companies with a better competitive edge while entering this market.

Besides, this country also boasts of exclusive access to the biggest combined free trade sectors due to its multiple agreements with ASEAN and its FTAs with countries such as China, India, Hong Kong, and the EU. Singapore is also in the process of negotiating new FTAs in collaboration with the Eurasian Economic Union (EAEU) and Pacific Alliance-Singapore.

Singapore – an easy entry into ASEAN

Singapore is well-positioned to assist the investors to steer through the challenges and newer opportunities offered by ASEAN markets. For example, its effective setup processes, integrated supply chains and competitive tax environment have enabled Singapore to move ahead of conventional holding locations in the region, like Malaysia, and give competition to well-established international investment centres such as Hong Kong.

But there are many softer factors that place Singapore as one of the best and ideal places for companies that want their regional headquarters to grow and expand into ASEAN and Asia.

People of this country share multiple cultural and linguistic connections along with ASEAN members, while English is their main working language. Its highly-skilled and professional workforce is armed to act as an intermediary for investments coming in Asia while communicating to the best of their ability with global investors.

Singapore’s significance as a management hub for getting into the ASEAN markets is now growing in importance, more than ever.

India, Newsletter

India Ranks 63rd in the World Bank’s Report Titled Ease of Doing Business 2020

October 25, 2019

India has stepped up 14 places to take the 63^rd position among 190 countries in the World Bank’s Ease of Doing Business ranking which was released on Thursday after the announcement of numerous economic reforms by the Narendra Modi-led government.

India was at the 77th place among a total of 190 countries in the last year’s ranking, which is a gain of 23 places. The report evaluates enhancement in the ease of doing business environment in cities like Delhi and Mumbai, which also shows that company formation in India is much simpler now.

“Sustained business reforms over the past several years has helped India jump 14 places to move to 63rd position in this year’s global ease of Doing Business rankings. India put in place four new business reforms during the past year and earned a place in among the world’s top ten improvers for the third consecutive year,” the World Bank Group’s Doing Business 2020 study said.

The newest reforms are in the Doing Business areas of Setting up a Business, Managing the Construction Permits, Handling the Trade Across Borders and also Resolving Insolvency.

In Doing Business 2020 report, India along with other top-gaining countries executed a total of 59 regulatory reforms in the years 2018/19—which accounted for almost one-fifth of the total reforms recorded globally.

Junaid Ahmad, World Bank’s Country Director in India said that India’s remarkable headway in the Doing Business rankings over the last few years is an incredible accomplishment, specifically for an economy which is so enormous and complex. Special attention given by the country’s top leadership, and the relentless attempts made to propel the business reforms agenda, both at the central and the state level, aided India to make such significant improvements. Now, the focus should be carrying on with this trend to maintain and further improve this ranking.

Doing Business recognises the 10 economies that have progressed the most on the ease of doing business after executing the regulatory reforms. In Doing Business 2020 report, the 10 top improving nations are Saudi Arabia, Togo, Jordan, Bahrain, Pakistan, Tajikistan, Kuwait, India, China, and Nigeria.

The founding of a modern insolvency regime in the year 2016 under the comprehensive policy to reorganise corporate law paved the path for steady upsurge in the number of reorganizations, in spite of some implementation-related challenges. Consequently, the overall rate of recovery for creditors moved up drastically from 26.5 to 71.6 cents on the dollar. “India now is by far the best performer in South Asia on this component and does better than the average for OECD high-income economies,” it said.

Concluding the procedures necessitated building a warehouse now costs only 4 percent of the total warehouse value. Creating quality control measures has also improved, and now only six economies globally have a score, which is more than India’s 14.5 out of 15 on this index.

Importing and exporting has become much simpler for companies for the fourth year in a row. With the newest reforms, India now stands at the 68^th position worldwide on this indicator and does considerably better than the regional average. The time needed for the logistical processes such as exporting and importing goods is also now significantly reduced.

Doing business ranking is constructed on quantitative indicators on regulation for setting up a new business, handling construction permits, getting facilities like electricity, registering the property, protecting minority investors, getting credit, paying taxes, doing trade across borders, applying contracts and also resolving insolvency.

Newsletter, U.A.E

UAE Announces the Introduction of Economic Substance Regulations

October 23, 2019

In the earlier part of 201, the Cabinet of Ministers in the UAE announced the release of Resolution No 31 of 2019 (Resolution), which was regarding the Economic Substance Regulations (ESR) that would be applicable with immediate effect.

ESR was introduced to make sure that all the companies that are conducting their business in the UAE, pursuant to the trade license gained from relevant authorities, comply with the Economic Substance Test. The resolution offers useful and important guidelines and parameters to perform any such substance tests.

This particular resolution is also a move to meet the EU’s obligation to remove UAE from the EU black list. EU has had a list of non-co-operative jurisdiction aimed for tax purposes. Consequently, on 10 October 2019, the EU has struck off UAE’s name from its black list.

Where is it applicable?

ESR is applicable to all UAE companies who have gained a trade license or permit from relevant authorities to perform ‘Relevant Activity,’ which includes the Free Zone and also the Financial Free Zone.
Nonetheless, this resolution would not be applicable to the companies that are owned by the Government of the state, other Government authority or body, or Emirate of the state directly or indirectly.

Relevant businesses and their core income-generating activity

Relevant Business or Activity	Core Income-generating Activity
Shipping	Managing the crew or voyages Maintaining or overhauling the ships Managing and tracking shipments
Holding Company	All the activities performed and related to the business For income besides dividend or capital gains, any activities to earn such other income
Banking	Raising the funds and controlling the risk Taking hedge positions Offering loans or credit
Insurance	Forecasting and calculating the risk Insuring and re-insuring against any possible risk Underwriting insurance and re-insurance
Investment Fund Management	Making decisions upon holding or selling Computing the risk and reserve
Lease-Finance	Agreeing on the funding terms Recognising and acquiring assets that are to be leased (for leasing activity) Managing and controlling the risks
Headquarter	Taking various management decisions Managing the operating expenditure on the behalf of various group entities Managing and coordinating group activities
Intellectual Property or IP (where IP is patent/non-trade intangible) and it is a High-Risk IP Licensee*	Making strategic decisions and handling the risk factor related to developing, exploiting or protecting the company’s intangible assets Carrying out ancillary trading activities aimed for exploiting intangible assets
Distribution and Service Centre	Transportation and storage activities Handling inventories

* High-Risk IP Licensee is defined as a licensee who:

Did not create an IP that is held for business and acquired an IP from any related persons, in deliberation for funding any research and development activities carried out by another person located outside of the UAE and licenses such IP to related persons or generates any income
Does not perform any research and development activity, or any marketing, branding, or distribution activities as part of main income-generating activity

What are the main parameters for the Economic Substance Test?

Licensee should mandatorily satisfy the below-mentioned criteria to be able to meet the Economic Substance Test in relation to the Relevant Activity:

Perform the core or key income-generating activities in the UAE
Licensee should be guided and managed in the UAE
- Required frequency of the Board of Directors meetings to be held in the UAE
- Directors should be having the required knowledge and expertise to carry out their duties
To hire the required number of qualified and trained full-time employees, or satisfactory outsourcing expenditure spent for third party service providers
To own the required amount of physical assets in the UAE

Requirement from the compliance point of view

Notifications to be submitted
Licensee has to notify the authority on following every year:

Whether or not it is performing the Relevant Activity
If yes, then the gross income for the Relevant Activity depends on the tax outside the UAE
If the financial year is followed by the licensee
Reports to be submitted
If the licensee is performing the Relevant Activity, then it is needed to submit a detailed report every year within 12 months from the end of that Financial Year, detailing all the operations-related information, which includes but is not limited to employee details such as their experience, qualifications, type of contract, duration of employment, etc. and also detailed information on intangible details of the licensee.

What are the various offenses and penalties that are prescribed?

The resolution has recommended the following offenses and their penalties as mentioned here:

Offenses	The related penalty
Failure to comply with the Economic Substance Test	AED 10,000 – AED 50,000 (First Year)
Failure to comply with the Economic Substance Test	AED 50,000 – AED 300,000 (Subsequent Year)
Failure to give the required information or provide inaccurate information	AED 10,000 to AED 50,000

However, before a penalty is levied, the relevant authority should issue a notice (that is, giving an opportunity of being heard) to the licensee.

In addition, the authority can neither decide the economic substance test of the licensee nor levy any penalty after 6 years from the end of that financial year (an exception is only if there is deliberate misrepresentation or any fraudulent action done by the licensee or any other individual)

What lies ahead?

The UAE has announced Country-by-Country-Reporting (CbCR) Regulations recently, which are in line with its commitment for implementing the Base Erosion and Profit Shifting (BEPS) standard for Action Plan 13. After the introduction of ESR, UAE has been able to send a positive signal to the rulers of its trade partners located in the other jurisdictions.
Additionally, announcement of these regulations have already aided the UAE in striking off their names from the EU blacklist. However, the execution and implementation process of these regulations in the UAE, could pose some challenges as it does not have any taxation related law till date.
In spite of the regulations offering some very useful guidelines, the licensees will need a lot of judgment professionally to decipher if a particular activity meets the substance test or not.
The above-mentioned regulations also bring out extra compliance requirements on part of the licensee and all the businesses operating in the UAE who are still struggling with the GST-related issues and compliances in the area.

Multinational companies are recommended to be pro-active and reconsider their current operational activities to alleviate and avoid any probable risk of non-compliance with regards to the above regulations.

Newsletter, Saudi Arabia

Saudi Arabia Opens to Foreign Holidaymakers, Chases Tourism Investment

October 21, 2019

Saudi Arabia opened its doors to global tourists recently and announced a new visa regime, which will be applicable for 49 countries. The sultanate is also encouraging foreign companies to come and invest in a sector which hopefully would contribute almost 10% of the gross domestic product by the year 2030.

The kingdom, which was comparatively closed for decades, has recently, relaxed some of its severe social codes such as differentiating men and women in various public places and necessitating women to dress in all-covering black robes called abayas.

The tourism chief, Ahmed al-Khateeb mentioned before the official announcement that abayas would now not be compulsory; however, modest dress should be worn, which covers shoulders and knees, especially in public places and also at public beaches.

He also said that alcohol would remain banned. Visas, however, are now easily available online, either on arrival or at various Saudi diplomatic missions for a cost of about $120 which includes a health insurance fee. Outbound countries comprise of the United States, China, Russia, Japan and many European states as of now. More countries are slated to be added later.

Visas permit multiple entries and one could stays up to 3 months. There are no constraints for unaccompanied women, as was in the past, and Muslims can also do pilgrimage other than the Haj season.

Till now, any foreigners who were travelling to Saudi Arabia were majorly restricted to resident workers and their dependents, Muslim pilgrims who are allotted special visas to visit the holy cities like Mecca and Medina, and other business travellers.

The plans to welcome considerable numbers of tourists who come for leisure have been discussed for long, but was not accepted due to conservative views and bureaucracy. An added benefit was the e-visa meant for sporting events and concerts, which was announced last December.

This move comes as a part of the de facto ruler Crown Prince Mohammed bin Salman’s impressive plans to cultivate new industries to deter the world’s top oil exporter off crude and open up the country’s society by introducing formerly banned entertainment.

In quest of investments

In addition, the tensions with arch-enemy Iran have also flared up. Riyadh accuses Tehran for an assault earlier this month on Saudi oil facilities, which is denied by Iran.

However Khateeb, the chairperson of the Saudi Commission for Tourism and National Heritage, mentioned that the country is quite safe and this attack would not influence the plans to attract more tourists.

Tourism remains high on the crown prince’s memo or agenda, in spite of a shortage of infrastructure. To push further growth, Khateeb projected that almost 250 billion riyals ($67 billion) of investments are required, which includes 500,000 new hotel rooms by the year 2030 — half from government-supported mega projects and other half coming from private investors.

The government has also signed a memoranda of understanding which totalled to approximately 100 billion riyals with about regional and global investors like conglomerate Triple Five and UAE-based developer, Majid Al Futtaim. This of course signals that the next few years are going to be a perfect time for company formation in Saudi Arabia or foreign company registration in Saudi Arabia.

The government wishes to entice 100 million annual visits in the year 2030, which is up from about 40 million currently. The contribution to the country’s GDP is aimed to reach 10% from the current 3%.

This country, which shares its borders with Iraq in the north and Yemen in its south, claims of vast tracts of desert but also lush mountains, untouched beaches and heritage and historical sites that include five UNESCO World Heritage Sites.

This development drive has a purpose of adding almost 1 million tourism jobs. However, adding hundreds of thousands of Saudis into the workforce still remains as a key challenge for the crown prince, who has been able to manage making a dent in the official unemployment rate which is currently over 12%.

Outsourcing

Business Admin & Finance

Organizational Support

Ongoing Support

Accounts

Financial Insights

Tax Solutions

Corporate Complaince

Blog

Business activities & ISIC compliance

Scope of application and implications

Required action

Service range provided

Easy and well-organised set up process

Favourable tax environment

Robust DTA and FTA networks

Singapore – an easy entry into ASEAN

Where is it applicable?

Relevant businesses and their core income-generating activity

What are the main parameters for the Economic Substance Test?

Requirement from the compliance point of view

What are the various offenses and penalties that are prescribed?

What lies ahead?

In quest of investments

Recent Posts

Get updated by Signupto our Newsletter!

Get Started

About

Locations

Get Started

About

Locations

Get Started

About

Locations

Get updated by Signup
to our Newsletter!