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The Newest Investment Hub in UAE – Ajman Media City Free Zone comes up with a portfolio of commercially-viable Business Services

September 17, 2018

Have you heard that Ajman Media City Free Zone is the newly-made free zone in the UAE? Ajman Media City Free Zone has its headquarters in the Emirate of Ajman and is established with the goal of taking care of the dreams of new entrepreneurs and enterprises from across the globe.

Ajman Media City Free Zone is committed to start a new archetype in the media free zone space of the UAE and thus catalyze the demand of Ajman to grow as the new investment destination.

The AMCFZ is developed as a user-friendly zone, which will make the emirate of Ajman as one of the top international economic destinations for all the investors and enterprises, which is also the vision of Ajman 2021.

The go-ahead on no-deposit regulation offers motivation to new entrepreneurs:

This path-breaking decision eliminated all the security deposits, which were earlier taken to pursue visa process for new enterprises and companies who decide to base themselves in Ajman Media City Free Zone. The aim is that new entrepreneurs can get considerable benefits commercially and also don’t face any hassles in setting up a new company in UAE.

There are many challenges that any new investor faces while establishing a new venture like the expenses of setting up, the guidelines and regulatory necessities, and accessibility of a sustainable framework, which helps in setting up and function effortlessly.

Strategic Collaborations in Major Global Markets

While talking about latest developments in the global markets, the Executive Director of the AMCFZ, Mahmoud Khalil Al Hashemi said, “In India, we have successfully created long-term alliances with two of the largest media conglomerates, The Times of India and Hindustan Times. A MoU has been signed with The Hindustan Times already and the second MoU with the Times of India Group will be finalised soon. As part of the collaboration, the AMCFZ will identify value propositions, projects and events that can be localised for the UAE market and be brought to Ajman.”

Likewise, Egypt is another major market for the Ajman Media City, AMC. Over the coming months, the AMC is going to connect with some other major markets globally and conduct some road shows, presentations and also business visits with an aim to reinforce the relationship with various regional nations. The free zone is also getting a positive feedback globally and the exclusive services that AMC is offering will also propel the growth of Ajman, while enabling the emirates to enhance its role to bring a huge boost economically in the UAE.

Features of Ajman Media City Free Zone:

The presence of clients is not needed
The entrepreneurs can own their business completely or 100%
100% repatriation of the investment and profits
No levying of corporate or personal income tax
Multiple business activities can be done under a single license
The license is issued within one day
Easy registration process
Permission to set up the business without issuing a visa

Types of enterprises in Ajman Media City Free Zone:

Free Zone Establishment (FZE)
Free Zone Company (FZC)
Branch of a Local Company
Branch of a Foreign Company (BFC)

How can you set up a company in Ajman Media City Free Zone?

IMC is one of the few leading business consultancies in the UAE, which is known for offering you hassle-free, trustworthy corporate services. Our professionals can assist you in establishing a Freezone company in Ajman Media City or business set up in Dubai free zone.

Our professional consultants have the required know-how to set up and manage the functioning businesses in the free zone and help you with company formation in Dubai. Our experts will help you at each step and guide you in the end-to-end process of establishing a Freezone entity without any glitches.

Newsletter, Singapore

Hotel Re-Generate: What are the Trends that Impact Hotels

August 18, 2018

These days it is imperative for hotels globally to move towards tech-enabled processes so that they can survive and do well in a diluted market. Last year data shows that the hotel occupancy rate went up by 0.5% and stood at 75.1% in the United Arab Emirates (UAE). However, the proportion of the average daily rate fell down by 3.8% last year. The global travel scenario has become more competitive with many new entrants, and the increase of online intermediaries. Today, only those hotels will survive, which will be able to foresee the growing needs of the 21^st century, digitally native travelers who are on a look out for unique experiences, said a new report published by Grant Thornton UAE.

The report named Hotel Re-Generate: Mega Trends Impacting Hotels was launched during the 14th edition of the Arabian Hotels Investment Conference held at Ras Al Khaimah (RAK), UAE. This report talks about how UAE hotels can find new business opportunities and expand their market in today’s times marred with tech-disruption, ever-changing socio dynamics and preferences of the guests.

A large share of the travel industry goes to online and mobile transactions, especially given the demographics of a particular region where 40% of the population is under 25. Talking about UAE, where mobile phone penetration stands at 228%, it is expected that the launch of the 5G technology will be a game changer in 2018. The organizations that are slacking behind and who aren’t following the digital movement online would have to bear the brunt of loss of the important customer-behaviour based data, which would be the key to making any strategy.

Majority of travelers (about 86%) consider personalized offers very important while deciding when making a purchase. Using smart and latest technologies like artificial intelligence etc to examine the profile of a guest, their previous buying behavior, social media choices etc to design customized offers helps the hotels in driving mass-personalization and also find fresh opportunities for revenue generation. Having the required data along with investing money in the latest technology and tools could be very rewarding for the hoteliers as the revenue increases by as much as 6%.

Hisham Farouk, who is the CEO and Global Board Member at Grant Thornton United Arab Emirates is of the view that in the coming years, hotels will not remain as as just accommodation providers. Today’s travellers expect much more, and the only way to attract them is by offering a holistic set of solutions and alluring packages. Hotels should use cutting edge technology to make sure that every guest experience is personalized and unforgettable.

Do you know that Dubai ranks as the sixth most-visited destination in the whole world? It is also strengthening its position as a regional business hub. The statistics show that Ras Al Khaimah (RAK) is emerging as the nation’s prized possession, due to its hospitality sector, which is expected to further grow at a forecast of occupied room nights of 35.5m annually in 2019. It stands at a 10.2% compound annual growth rate (CAGR) over the next 2 years.

UAE’s market dynamics continue to spur and challenge the hotels, especially due to the investment landscape, simple procedures of doing business, and entrepreneurial skills of people. Because of these market forces, new competitors and solution providers will continue to rise, which would further motivate hoteliers to innovate and do something new. So this is the right time for a new business setup in Dubai. If you need any professional advice or assistance, do get in touch with us.

Newsletter, Singapore

How to Transform Family Businesses into an On-Going Legacy

August 18, 2018

Recently, a joint study was conducted by Singapore Chinese Chamber of Commerce & Industry (SCCCI) and PwC and UBS, where about 120 family businesses based in Singapore were studied and surveyed. This study was done to find out how these enterprises were managing transformation in today’s ever-growing business environment. This report named ‘Transforming family businesses’ said that though business transformation was earlier done to be competitive, now it’s even more valid for family-based firms to make their businesses future-enabled.

The changing dynamics do pose many challenges and obstacles, but it also brings with it many opportunities for these businesses to progress, provided they are ready to change and take that risk. Though, many family businesses or enterprises know that there is a need to upgrade and transform their business, they face some challenges in expanding out of the domestic market, accept digitization, or even hiring the next generation.

A Global View

The top three plans for most of the family businesses included expanding to new markets. Over 70% of the family businesses which took part in the survey said that they were planning to expand in other countries or have already started to set up their offices or presence globally.

Especially in Singapore as their market size is very limited and there is a need for local enterprises to look for new markets, revenue streams and customers so that they could remain competitive. But having said that, going into unknown foreign markets could be quite complex. The main challenges faced by these family businesses surveyed includes unfamiliarity with the rules and regulations in that foreign country (20.8%), finding the correct business partner (18.3%) and hiring the right king of talent (16.1%).

To tackle this challenge, these businesses could either leverage their own networks, or try to collaborate with some professional agencies that have experience in doing so.

Coming to terms with the Digital Wave

We are in an age of digital disruption and every family business today needs to re-look at their business models, systems and processes so that they don’t lose out. Though over 85% of family businesses that took the survey said they were open to participating in the digital economy, about 34.7% did not have any concrete plans in this regard. About 36.2% said that finding various ways to transform their business using latest technology was their top-most challenge. About 28% felt that the financial costs involved in digital transformation worried them and 26% said that competitors with first-mover advantages was their top concern.

But it’s important to understand that innovative strategies and digital transformation lays out many new business opportunities.

Bringing professionalism in family businesses

Professionalism is an important element of transformation and it means running the business in a more professional manner. This means bringing in processes and new strategies to improve the value offerings and how attractive the business looks to customers.

It is imperative to also build that mindset so that the business can prepare to drive performance and also eventually deliver value to all its customers and stakeholders. Hence, family businesses need to find areas where they could plug the gaps in skills and decide if they need to hire some reliable professionals who could run their business in the absence of the core team. This way by hiring talent from outside brings objectivity to the company.

Passing the torch

Though it’s a good idea to involve the current generation, it’s also very important to hire professionals from outside to drive and achieve successful transformation. The next-gen is not only more updated and educated, but also more tech-savvy, possesses a global outlook and a capability to lead in today’s digital era.

The business owners should ensure that the most capable person runs the show, even if it is a professional not belonging to the family. About 55.4% of the family businesses who took the survey said that leadership was the most important aspect which the new generation should take over. About 52% felt that the new gen should take over financial management (52.4%) and 50% felt that next gen should handle the emotional intelligence. The seniors in the family businesses should make sure that their children take their company’s credibility to a higher level by sharpening their skills and then bringing their new outlook and expertise back to their family-run business.

The future of all the family businesses depends on how well they collaborate with the younger generation and how they use their capabilities so that they reap the benefits of today’s digital era expand in the market and protect their legacy.

Newsletter

Singapore’s middle-market companies’ ambitious goals spur it ahead of global peers

August 18, 2018

Many middle-segment companies globally are being positive about business opportunities, says the yearly report of EY Growth Barometer. An annual survey was done on about 2,766 middle-market executives located across 21 countries, which included 103 respondents from Singapore. It said most of the companies aim a growth of 6-10% (Singapore: 51%, Global: 60%), which is way higher than the International Monetary Fund’s current GDP forecast of 3.9% for the year.

Asia-Pacific drives the growth ambitions

Though middle-market companies have been showing bullish growth globally, Asia-Pacific region has been showing highest ambitions. About 40% companies based in China, Australia, and Southeast Asia and about 39% in Singapore, have targets of double-digit growth, which is way above the global average growth rate of 6%.

Embracing Artificial Intelligence (AI)

The limelight recently has been on intelligent automation and also machine learning as they enable high middle-market growth. As per the survey, Singapore ranks as the third-highest in usage of AI (at 9%), followed by China and Netherlands (both at 10%). Approximately 72% of Singapore-based companies have plans to introduce AI in the next couple of years.

However, Singapore is still not leading in area the mature application of some new technologies. Many enterprises still feel that technologies can only improve process efficiencies (29%) and help with financial data (25%), rather than more impactful role of enhancing customer experience and further creating newer business models. In addition, about 20% of the companies think of technological disruption as a huge challenge in terms of growth, behind cash flow.

The key to growth ambitions is recruiting skilled talent

About 30% of the Singapore’s companies are of the view that attracting skilled talent is a major factor which accelerates growth. Though the companies are planning to increase their overall headcount, about 40% of the companies plan to recruit more of full-time resources and approximately 39% aim to hire some more part-time employees, freelancers and contractors.

More than half of Singapore’s companies (54%) are of the belief that the ideal scenario is being able to hire younger and more digitally-native talent.

Singapore companies are also thinking of going out of the boundaries

About 30% Singapore companies are thinking of overseas expansion as their growth priority to tackle the restrictions of their small home market. Though M&A is the second-most important growth strategy (19%), another way could be inorganic growth, with which Singapore companies are thinking of international expansion.

Though Singapore-based organisations have increasing overseas ambitions, their slow or rather flat global growth is one of the biggest external risk for Singapore companies (for about 41%), as compared to 25% in the rest of the world.

Another big obstacle to growth is the lack of cash flows, which about 38% of the Singapore-based companies face. Therefore, working on supply chain and improving the efficiency of operations is touted as one of the main growth accelerators (29%).

Planning to start accounting services in Singapore or thinking of company registration in Singapore, look no further. Just get in touch with us at IMC and get a hassle-free experience.

Newsletter

Shaping India into a Model GST Country

August 16, 2018

It has been a year ago, when India got to know what indirect tax was – yes, we entered the GST era. GST came out with a slogan of ‘one nation, one tax’ and has been quite a path-breaking change, which absorbed many federal as well as state taxes and also created a uniform taxation system in our country. As the cascading was removed, the goods became more reasonable and better-placed in the global market and now credit options are freely available on most products and services, which further remove defects from majority of the supply chains.

GST has opened up a new path of fiscal federalism and in this case the central and state governments exercise the powers to levy a tax all products and services. The good thing is that all decision-making in the GST Council happens by consensus and after a healthy discussion. Introduction of GST has also helped in making India stand at par with other countries in terms of global laws. This makes it easier for any country to do business in India and also increases profit margins and efficiency, therefore, attracting more foreign investments.

However, GST is a still a concept that is work in progress, and for it to be effective in the true sense, the central and state governments have to restructure the law, processes and its compliance. One of biggest challenges is that the GSTN or compliance portal of GST is not up to the mark or its best potential. It is still under automating the returns and is not able to match the invoices from the perspective of credit. Because of this, the government has now proposed to simplify the returns and, from the next year, GST will transition to a single return and the credits would be taken according to the invoice details that are uploaded by the vendor.

The current GST structure is divided five categories or rates for goods and services. These are: 0%, 5%, 12%, 18% and 28%. This needs to be simplified so that the advantages from GST could be maximized. This is also important to bring the Indian tax system at par with the global standards and also get a solution for issues regarding the interpretation and categorization of goods and services, and therefore reduce the chances of disputes. Because of the introduction of GST, the services industry went through a major transformation in its processes and functioning due to the rise in compliance procedures, which came about due to decentralized registrations.

However, the biggest plus point is that the government has taken many proactive and corrective actions like administrative simplifications and also changes in the rates. But there’s a long way to go! Besides having a better GSTN portal, a simpler return and a better law to bring it closer to an ideal GST, the current credit scheme also needs to be widened and the existing rates need to be streamlined. There is also a need for the multiple rate structure to be narrowed down to a two-rate structure. In addition, the tax base needs to be broadened to tax some particular petroleum products and property market in the coming times. The government should also re-look at the TCS and TDS provisions and also the reverse charge on the supplies from unregistered dealers. The GST refund process and mechanism should also be simplified and the exporters should be facilitated, so that it’s easier to do any business in India.

Tough the foundation stones have been laid, and the industry and revenue are moving towards a positive direction, there surely is a requirement to make amends in the law and procedures and then we can say that India is truly a model GST jurisdiction.

In case you have any questions around GST registration in India or taxation services in India, do get in touch with us. Our professional services at IMC promise you a hassle-free experience in this regard.

Newsletter

VAT Updates: The new list of designated zones, eligible goods under profit margin scheme and the VAT treatment of various compensation-type payments and labor accommodations

August 16, 2018

The new list of designated zones

Continuing the lines of the Cabinet Decision (59) of 2017 on Designated Zones, the UAE Federal Tax Authority (FTA) announced that it has granted the following free zones as designated zones last June 18, 2018:

Al Ain International Airport Free Zone in Abu Dhabi
Al Butain International Airport Free Zone in Abu Dhabi
International Humanitarian City, Jebel Ali in Dubai

Businesses registered and situated within these designated zones are eligible to the special provisions for supplies of goods under the UAE VAT law.

Should you want to discuss this article in further details and you want to know the impact in your business or planning to set-up a business in a free zone, please get in touch with some of our VAT consultants in Dubai.

VAT treatment on various compensation-type payments

The Federal Tax Authority (FTA) issued a Public Clarification VATP001 in order to provide guidance on the VAT treatment of compensation-type payments such as compensation for the loss, settlement of a dispute, payment made for damaged goods, penalty or fine. The said Public Clarification states that if there is a payment for the consideration for supply, a VAT is due on such payment.

In determining whether a payment is consideration for any supply, it is necessary to consider the contractual and legal arrangements in full to determine the reason for the payment.

Eligible goods for the profit margin scheme

The Public Clarification VATP002 provides a list of goods that are eligible to the profit margin scheme. The FTA also clarified that only those particular goods which has previously been subject to VAT before the supply in question are included in the profit margin scheme.

As a result of this Public Clarification, stock on hand of the used goods that have been purchased or acquired before the effective date of Federal Decree-Law No. (8) on Value Added Tax (VAT law), or which have not previously been subject to VAT for some reasons, are not qualified to be sold under the profit margin scheme. Hence, the VAT is due on the full selling price of such goods.

VAT treatment on labor accommodation

Based on FTA’s Public Clarification VATP003, a clear distinction is required in determining whether the labor accommodation is a supply of residential property or a serviced accommodation. VATP003 states that the services for the supply of residential property are exempt from VAT (or zero-rated if it is related to first supply of residential property). On other hand, a serviced accommodation is subject to 5% VAT.

All suppliers need to check the extent on which the additional services have been supplied related to the accommodation in order to determine the nature of the supply. Some additional services like telephone, internet access, room cleaning, catering, and laundry service could be counted as indicators for service accommodation. Whereas, if the cleaning of communal areas, maintenance services of the property, pest control, utilities or access to the facilities have been supplied, the same could be considered as supply of residential property.

Newsletter

Oman Announces Setting up its First Smart City in the SEZ of Duqm

August 16, 2018

Oman is currently working on a project with South Korea with an aim to develop its first-ever ‘smart city’ which will be located in the Special Economic Zone (SEZ) in Duqm, said a report.

Oman has already taken the first step and signed and finalized a memorandum of understanding (MoU) with South Korea to start developing this smart city. A specific report on this was published by the Oman Daily Observer, which said that this new smart city will be planned in the Special Duqm SEZ and will be one of its kinds.

The South Korean entities now plan to start a comprehensive research and study focusing on finding out how the smart city principals could be developed in the SEZ of Duqm. To state the facts, South Korea has the credit of having developed the world’s first-ever smart city, which is known as the Songdo International Business District, which spreads across a huge 600 hectare area along the picturesque waterfront in Incheon Province. It will cost over $40bn to build it and the smart city would include over 100 buildings, after it is completed.

The dotted line of this MoU was signed by the relevant parties in the Oman-Korea Business Forum. This forum was attended by various high government officials both from Korea and Oman. Korea’s Prime Minister Lee Nak-Yon led the delegation and from Oman, the Minister of Commerce and Industry, Dr. Ali bin Masoud Al Sunaidy and the Minister of Oil and Gas, Dr. Mohammed bin Hamed al Rumhy, represented their country.

This MoU surely is like the first step towards a breakthrough task of applying the concept of smart city in Duqm. After this welcome step, if you are thinking of setting up your business in Oman or have any queries about company formation in Oman or accounting services in Oman, look no further. Get in touch with us and our experts at IMC will help you get a seamless experience.

Newsletter

New Policy Issued on Artificial Intelligence in Healthcare by the Department of Health in Abu Dhabi

July 17, 2018

The Department of Health in Abu Dhabi (“DOH”) has come up with a fresh policy and guidelines around using Artificial Intelligence (“AI”) in the healthcare sector, with the objective of urging its implementation in a safe and secure manner.

As per the policy AI is defined as “the mimicking of human thought and cognitive processes to solve complex problems automatically”… “such as machine learning, distributed intelligent systems, [and] expert systems”.

Though the policy still doesn’t address many key points, most of the vital requirements of an effective AI in healthcare framework are taken care of. The DOH has developed guidelines and a regulatory framework, which will be able to administer the following elements of AI implementation in healthcare:

Making sure of the safety of its usage and implementation with responsibility;
Maintaining privacy and security;
Ensuring transparency and also oversight;
Making sure that the implications are ethical.

The new policy would be applicable to:

All of the licensed healthcare professionals and providers in Abu Dhabi
National and those international end-users who are locally based and who use, or want to use, Abu Dhabi-based residents or patient (both clinical and non-clinical) data in AI field, directly or indirectly;
Pharmaceutical manufacturing companies based in UAE;
All the healthcare insurers based in Abu Dhabi;
All the licensed healthcare researchers in Abu Dhabi who are doing some form of human subject research; and
All patients in Abu Dhabi.

The policy also lays the guidelines for the minimum acceptable requirements for AI (and its tools) introduced in Abu Dhabi. This includes all the certifications done by recognized international agencies, auditable validation statements and compliance with ADSSSA guidelines.

In addition, all the users of AI except the patients need to ensure the following:

Have clear governance on implementation and usage of AI
Lay guidelines and clear boundaries around the sharing and access of patient information so as to safeguard privacy and ownership of this information
Conduct timely audits to check the AI functionality and how is it being reported to DOH
Comply with all the regulatory requirements listed by UAE and DOH, including the guidelines that govern e-health, data protection, exchanges regarding health information, information security, and also AI.

The policy also proves that DOH’s recognizes the important role of AI and the benefits it can give if it is properly used in the healthcare sector. To encourage the application of AI in the healthcare arena, there is a need to have a clear regulatory framework. By implementing such a framework, the organizations can develop compliance structures that are needed to ensure a compliant adoption of AI into the healthcare industry.

Our team will keep you posted about any new implementation frameworks that are expected from the DOH. If you have any queries or need any assistance regarding the new AI policy or UAE healthcare industry report, our professional experts would be more than happy to help.

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The new list of designated zones

VAT treatment on various compensation-type payments

Eligible goods for the profit margin scheme

VAT treatment on labor accommodation

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