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International Fintech Investments go up to a Whopping US$57B in First Half of 2018

October 15, 2018

International fintech investments saw a sharp upward trend and set a record with US$57.9B worth of investments across 875 deals just within the first half of 2018. This was a drastic increase from the US$38.1B invested in the year 2017.

This year’s first half saw the successful closure of two gigantic deals: US$14B raised by Ant Financial in Q2’18, which was quite record-setting and second was Vantiv’s acquisition of WorldPay worth US$12.9B in Q1’18.

The volume of the deals was very robust and spiraled up from 834 in H2 in 2017 to 875 deals in H1 in 2018. In addition, worldwide median volume of late-stage venture financings shot up to US$25M during H1in 2018, which was up from the US$14M annual median size recorded in 2017. Early-stage deal size also went up; it was earlier at a median of US$5M in the year 2017 and went up to US$9.2M at the mid of this year.

“Large deals at all stages powered fintech investment in the first half of 2018,” said Ian Pollari, Global Co-Lead, KPMG Fintech. “But just as notable is the breadth of investment. We’re seeing a mix of fintech sub-sectors drawing increasing interest, including data, AI and regtech — these horizontal capabilities have appeal across the full spectrum of the financial services industry.”

“Not only is more investment flowing into emerging technologies like AI and subsectors like regtech, we are also seeing efforts to combine fintech capabilities and embed them within broader digital transformation programs,” added Anton Ruddenklau, Global Co-Lead, KPMG Fintech.

All venture capitalists were positive about the start-ups in the space of funding fintech, but M&A activity also seems to be mounting as more and more established fintechs seek exits. The M&A activity currently has matched the most active M&A periods observed till date.

The highlights of H1 2018

International fintech investment (PE, VC and M&A) has gone up to more than double. It stood at US$22B in the H2 of 2017 and it shot up to a record high of US$57.9B in H1 of 2018, pushed by nine US$1B+ mega deals.
The top four fintech deals of Europe were worth US$22.4B in investment and included the UK-based Vantiv’s acquisition of WorldPay, which was worth US$12.9B
In H1 2018, the investment in fintech companies only in Asia stood at US$16.8B with 162 deals, which was a raise from 119 deals in H2 2017.
Fintech VC size has stayed at steady levels since beginning of 2015, going up to 653 deals in H1 2018.
Median late-stage VC deal amount in the fintech sector drastically went up from US$14M in 2017 to US$25M in H1 2018.

US-based fintechs observed rise up in VC funding, crossing US$5B in H1 2018

In H1 2018, US fintech businesses pulled in US$14.2B worth of investments, which included over US$5B in VC investment. VC deal size kept increasing and went up from 276 deals in H2 2017 to about 328 deals in H1 2018, motivated to a large extent by the resurgent angel, seed and early-stage VC deals. Investors quickly invested in start-ups in rising fintech sub-segments, which included investment banking and regtech, and continuously poured in finances in mature, late-stage businesses such as Robinhood – whose US$363M was one of the biggest VC deals in H1 2018.

Biggest four deals in Europe were worth US$22.B

Total investment into fintech businesses in Europe touched US$26B with 198 deals in H1 2018, which was pushed by significant deals by WorldPay, iZettle, Nets, and IRIS software – which alone accounted for US$22.4B of this total. Though the deal value reached a new record high in Europe, the deal volumes came down from 268 in H2 2017 to 198 in H1 this year.

The UK was at the top in fintech investments in Europe with US$16.1B having charted about half of the top 10 deals in this region, though there were concerns regarding Brexit negotiations. Scandinavia’s fintech sector also did well, with the buyouts of iZettle (Sweden), Nets (Denmark) and Nordax Group (Sweden) figuring amongst the top ten deals in H1 of 2018.

The fintech sector of Asia touched US$16.8B because of Ant Financial deal

H2 2017 saw USS$2B which propelled the total fintech investments in Asia to a figure of US$16.8B with 162 deals in H1 2018 pushed by a huge US$14B Series C VC investments by Ant Financial. If we do not count this huge deal, Asia still recorded robust fintech investments in India, Australia, and Singapore which saw a quarter-over-quarter growth in overall fintech sector funding.

Following the footsteps of the worldwide trend, the median fintech VC late-stage deal size in Asia went up drastically in H1 of 2018 – shooting up from US$25M to US$37.7M, making it the highest seen in any region. AI and blockchain remained the main priorities for fintech investors in Asia, along with insurtech and regtech.

The payments and regtech sub-sectors came to the limelight

Payments saw a number of large exits in H1 2018 and emerged as one of the most established sub-sectors of fintech. This included successful IPOs by EVO Payments and GreenSky, Vantiv’s acquisition of WorldPay in the UK and Paypal’s acquisition of iZettle which was worth US$2.2B. Even the regtech sector saw a great start in the first half of this year with US$1.37B investments which have already left the 2017 total behind.

Blockchain has gone past the experimentation stage

Blockchain has been drawing in huge attention from global investors in the first half of this year with funding coming in for experienced companies and consortia planning to get added rounds rather than going to new market entrants. Huge rounds in blockchain companies were observed in H1 2018, which included US$77M to Ledger in France, US$100M+ rounds to R3 and Circle Internet Finance in the US.

Strong stance expected for fintech investments

With a huge chunk of capital still to be deployed, the fintech centers globally growing, more and more companies want to utilize fintech so as to drive further innovations, investments in fintech are surely predicted to stay robust by H2 of 2018.

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Bahrain has approved a draft bill for VAT implementation on the New Year’s day in 2019 and announces the draft VAT law in Arabic

October 11, 2018

Some special meetings were organized both in the Bahrain National Assembly’s lower and upper houses on Sunday and Monday, and its Council of Ministers and also the Shura Council have given a go-ahead to the draft bills for the unified GCC VAT Agreement and also the draft VAT law. The law which establishes the Bahrain tax authority, the National Agency for Gulf Taxes, is also now approved. The draft VAT law has already been printed in the Arabic language.

It has been decided that VAT would be imposed in Bahrain at 5%, which is the standard rate and is as per the unified GCC VAT Agreement, which is going to be effective from 1 January 2019, and will place Bahrain at the third spot in GCC country’s after UAE and KSA, to have implemented VAT. As per the draft VAT law, the VAT regulations are going to be printed within 15 days of the effective date of the law (i.e. by 15 January 2019) and would list down the detailed applications of this law.

The Main Features of Bahrain’s New VAT system

Under the draft VAT law, the most important features of the VAT regime in Bahrain are as follows:

VAT Registration – In Bahrain, the compulsory and voluntary registration thresholds depend on the unified GCC VAT Agreement. Organizations that fully make zero-rated supplies could be exempted from the need to register. Every company or individual who is involved in an economic activity inside Bahrain would need to calculate their forecasted yearly revenue beginning from 1 January 2019 to find out if they have to register or not. The registration schedule is going to be based on the value of taxable supplies where the larger taxpayers would have to register first. The detailed schedule or timetable would be shortly announced.

Zero rated supplies – Bahrain is following UAE’s footsteps where a big list of supplies will be zero rated. The export of various goods and services, global transportation of goods and also passengers, the supply of investment-grade valuable metals, the supply of some specific medicine and health equipment had to be necessarily zero rated as per the unified GCC VAT Agreement. Besides this, Bahrain would also zero rate preventive healthcare services, the supply of some precious stones like pearls, construction of latest buildings, educational services, and local transportation services. Unlike the UAE and KSA, Bahrain also plans to zero rate about 94 food items as per the unified GCC VAT Agreement.

Exempt some supplies – Just as the UAE and KSA, Bahrain would also exempt the supply of margin-based fiscal or financial services and the supply of bare land.

Government supplies – The government supplies will also be taxable only until they are in its capacity as a public authority.

VAT Group – Bahrain plans to allow all the businesses or companies in the same group to get registered as a tax group thus allowing a single company to file a VAT return for the complete group.

VAT Returns – The VAT returns need to be filed and submitted within a month after the end of a tax period, which will be at least one month.

Books and Records – All the books and records have to be maintained for at least a three-year period.

What are Bahrain businesses required to do?

Businesses in Bahrain would need at least three to six months to be prepared for VAT. But there is lesser time remaining for the VAT implementation in Bahrain, companies must ideally begin preparing for VAT as soon as possible. The most important areas that the businesses need to concentrate on to implement VAT within their business are as follows:

Create a Project Plan: Develop a detailed budget for the VAT implementation (for example, consultants required, training, resources, IT systems needed), form a VAT steering committee and then allocate various responsibilities
Spread Awareness: Educate and train one’s staff on the impact VAT would have on accounting and reporting processes
Assessment of the VAT Impact: Take the VAT impact assessment and review the transitional provisions and categorize and map the VAT treatment of all business transactions
Evaluate Cash Flow: Gauge the impact on cash flow and accordingly estimate the working capital requirements
IT Systems: Review the capability of the existing accounting systems for VAT reporting and then think of upgrading or getting a new system
Pricing: Review the impact of VAT on factors such as demand and pricing
Contracts: Assess the existing contracts with various suppliers and customers and then include the VAT clauses in the new contracts
Processes: Decide on the amendments needed to the existing AP (accounts payable) processes and documentation like invoices and record-keeping
Customer and Supplier Management: Discuss with the existing suppliers and clients to inform them about the impact of the VAT and enter a negotiation with the new suppliers and customers
Compliance: Decide if it’s required and then accordingly register for VAT on time

We at IMC, have strong expertise and experience of VAT implementation and have been doing it in the UAE and the KSA. We can help you in assessing how VAT would impact your business and accordingly guide you with the VAT requirements in Bahrain.

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SEBI’s New KYC Norms for Foreign Portfolio Investors

October 1, 2018

SEBI is the market regulator in India and it has revised Know Your Client (KYC) norms for Foreign Portfolio Investors (FPIs) stating that residents, as well as non-residents, can now hold a non-controlling stake in such entities. SEBI has recently issued revised two circulars pertaining to the KYC requirements and their eligibility conditions for Foreign Portfolio Investors.

These circulars were issued by the SEBI after a panel suggested certain changes to the FPI guidelines that were proposed earlier. The changes have been brought after understanding the concerns of a certain market segment regarding the difficulties that overseas funds might face while ensuring compliance.

With the new KYC norms in place, NRIs, OCIs (Overseas Citizens of India) and RIs (Resident Indians) are now been permitted to hold a non-controlling stake in FPIs. According to the regulator, there would not be any restrictions on NRIs, OCIs, and RIs to manage non-investing FPIs SEBI-registered offshore funds as well as registered investment managers.

On fulfillment of certain conditions, these entities are eligible to be constituents of FPIs. If the assets under the management in the FPI are held by NRI/OCI/RI either singly below 25 percent or in the aggregate form below 50 percent, then such entities would be allowed to be constituents of the FPI. An NRI, OCI or RI can directly or indirectly own a non-investing FPI.

SEBI has further noted that NRI, OCI or RI shall be free from the restriction that they should not be in control of FPIs that are offshore funds and for which no objection certificate has been issued by the board as per the terms of mutual fund regulations.

For compliance, the existing FPIs and new applicants shall be given a time period of two years from the date of new rules coming into force or the date of registration, whichever is later. However, if there is any temporary breach, a time period of 90 days shall be given to ensure compliance.

SEBI further said that a list of beneficial owners must be maintained and provided by the FPIs under category II and III. Beneficial owners are the person who controls or owns an FPI. They are divided into three classes on the basis of their risk profile. The FPIs belonging to high-risk jurisdictions may apply for a lower threshold of 10 percent for identifying beneficial owners and ensure KYC documentation that is applicable to category III entities. SEBI further said that a beneficial owner must not be a nominee of another person.

SEBI further clarified that senior manager officials are the ones who hold a senior management position and take key decisions relating to FPIs must be identified and disclose their personal information.

SEBI stated that where the companies and trust provide services of lawyers, accountants, etc. to FPI must provide the information such as real owners of such service providing entities.

The new rules shall be applicable to the investors of the P-Notes or Participatory Notes. The KYC documentation in relation to category III FPIs shall require an annual audited financial statement or a net worth certificate from the auditor. However, such documents are exempted during investigations or an enquiry.

In relation to the exempted documents, FPIs must submit an undertaking that the relevant documents would be submitted to the designated depository participants or custodians upon demand by regulators or law enforcement agencies.

The custodians should preserve and maintain the records of concerned FPIs for at least five years from the date of cessation of the transaction. In addition, if there a litigation going on, such records must be maintained until the completion of the proceedings.

The regulator shall give FPIs a period of 180 days to comply with new rules. On failure to comply, a further 180 days shall be given to close down their existing positions.

FPIs under category II and III registered prior to the current circular must disclose the list of beneficial owners and other KYC documents applicable.

Former RBI Deputy Governor H R Khan and public comments on the draft proposals headed the panel to prepare the final guidelines.

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A Quick Guide on the Mandatory Reporting Requirements of U.S. Bureau of Economic Analysis (BEA) for Foreign Investment in U.S.

September 19, 2018

The U.S. Department of Commerce has an agency called U.S. Bureau of Economic Analysis (BEA) that tracks the international commerce and publishes leading indicators of the economy like GDP. The economic statistics prepared by BEA help in gauging the performance of the U.S. economy and the role of the U.S. in the global economy. In relation to this, the agency collects the data of inbound and outbound U.S. investments. In order to collect the data, the BEA conducts 7 mandatory surveys on a quarterly, annually or five-yearly period.

Who Must Report?

For the mandatory reporting obligations, BEA collects data from;

Any person or business of U.S. origin holding a 10% or greater interest in a foreign business.
Any person or business of foreign origin holding a 10% or greater interest in a U.S. business.
U.S. subsidiaries of foreign businesses.
Foreign subsidiaries of U.S. businesses.
U.S. or foreign-owned businesses that have transactions with the U.S. service sector.

Cross-border investment whether it is direct or indirect with ownership interests requires reporting under BEA obligations. Any failure to comply with any of the BEA norms attracts both civil and criminal penalties.

The BEA has made is mandatory for all foreign people who are making investments in the U.S. to give transactional reporting. The reporting has to be made within 45 days of acquisitions, expansions and business formation.

Reporting Obligations and Timeframe

If the company makes a U.S. direct investment abroad then the compliance includes quarterly, annual and quinquennial i.e. 5 years reporting obligations.
If the company makes a foreign direct investment in the US then the compliance includes quarterly, annual, quinquennial i.e. 5 years and transactional reporting obligations.

Reporting Obligations for Non-U.S. Person or Business Owing Business in the U.S.

The reporting obligation for a non US person or business owning a business in the U.S. can be divided into four parts; Transactional Survey, Quarterly Survey, Annual Survey and 5 Year Benchmark Survey.

Transactional Survey

Transactional survey of the foreign direct investment in the U.S. is compulsory for every acquisition, formation and expansion of U.S. business. It must be filed within 45 days of the transaction. However, there is an exemption for filing if the transaction is below the threshold limit of $3 million.

Quarterly Survey

Quarterly survey of the foreign direct investment in the U.S. is mandatory for every foreign person owning 10% or more of a U.S. business enterprise. The reporting must be done upon request from BEA, 30 days after each quarter or 45 days after year-end.

Annual Survey

Annual survey of the foreign direct investment in the U.S. is mandatory for every foreign person owning 10% or more of a U.S. business enterprise. The reporting must be done upon request from BEA or 150 days after year-end.

5 Year Benchmark Survey

5 year benchmark survey of the foreign direct investment in the U.S. is required of all parties where a foreign person owns 10% or more of a U.S. business enterprise. The reporting has to be done within 150 days after year-end.

Reporting Obligations for a U.S. Person or Businesses having Ownership Interest in a Foreign Business

The reporting obligation for a US person or business owning a business in the U.S. can be divided into three parts; Quarterly Survey, Annual Survey and 5 Year Benchmark Survey.

Quarterly Survey

Quarterly survey of the U.S. direct investment in abroad is for U.S. persons who owns 10% or more of a foreign business enterprise. The reports must be filed upon request from BEA or 30 days after each quarter or 45 days after year-end.

Annual Survey

5 Year Benchmark Survey

5 Year Benchmark Survey of the U.S. direct investment in abroad is for U.S. persons who owns 10% or more of a foreign business enterprise. It is the most comprehensive survey required by all the parties. The parties must file report within 150 days after the year-end.

Reporting Obligations for a U.S. Service Sector Business Transacting with Non-U.S. Parties

Reporting obligations for a U.S. service sector business are compulsory regardless of the fact that the ownership belongs to the U.S. or foreign ownership. The BEA services surveys track the foreign trade in services by U.S. companies. The BEA surveys apply to U.S. service sector companies regardless of the ownership.

The BEA surveys can be divided into three parts; quarterly survey, annual survey and benchmark survey.

Quarterly Surveys

Quarterly surveys are for financial services, insurance services, U.S. ocean carriers, U.S. and foreign airline operators, selected services and intellectual property.

Annual Surveys

Annual surveys are for foreign ocean carriers.

Benchmark Surveys

Benchmark surveys are for financial services, intellectual property trade, insurance service and services like consulting, advertising, etc.

Bureau of Economic Analysis Compliance for Sample Organization Structures, Parent/ Subsidiary Relationships and Business Ownership Interests

A U.S. business ownership abroad requires BEA reporting if it holds 10% or more ownership stake in such company. For example, U.S. Company holding 10% or more stake in a South African company requires BEA reporting.

A Foreign company having 10% or more stake in a U.S. business requires BEA reporting. For example, the South African company holding a 10% stake in a U.S. company is eligible for BEA reporting.

Reporting Obligations for Indirect Cross-Border Investment and Business Ownership

Any U.S. business that holds indirect business interest due to cross-border investment or business ownership requires BEA reporting.

About us

IMC Group is one of the leading firms that provide global compliance services. With our consulting services, we ensure that our clients from varied industry sectors comply with the complex BEA requirements in full and in a timely manner. Our experienced and expert team fulfils the burdensome mandatory reporting obligations of BEA in a smooth and simplified manner so that you can focus on running your business without any stress.

We guide you in implementing the best practices for collecting and retaining data, reporting processes and procedures as well as guide you on the response practices.

Our BEA Compliance Services

Few of our services include;

BEA compliance assessment.
Identifying when the business requires BEA reporting obligation.
Effective and efficient maintenance of routine procedures, monitoring, collection of data, etc. to the BEA.
Analysing complex BEA data requests and keeping a track of them.
Gathering, retaining and reporting information in the prescribed manner.
Completion and filing of BEA report.

To utilise our services you can reach us via email or phone.

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NRI Offshore Fund Managers Request to SEBI for Some Relief

September 17, 2018

Non-resident Indian (NRI) offshore fund managers seek Securities and Exchange Board of India (SEBI) to permit them to own a minimum of 5 percent in their fund.

There was an announcement on April 10, in which the market regulator said that the NRIs are not allowed to invest as foreign portfolio investors (FPIs).

It was also said that FPIs that were supported by NRIs discussed this with the SEBI officials on Thursday. The regulator will be finalizing and taking a decision on this matter within the coming week.

This decision is important as many India-dedicated funds are presently functioning while violating the circular from SEBI. If a solution to this issue is not found by December, they would be obligated to wrap up these funds.

The estimates and statistics suggest that about one-third of the total FPI assets are managed by Indian companies or are promoted by NRIs or PIOs (person of Indian origin).

However, as per the guidelines by SEBI, an NRI or PIO cannot be a “beneficial owner” of a foreign fund. He or she is not entitled to invest as an FPI.

Getting seed capital for the fund is a common practice when we start any pooled fund. This process is termed as ‘skin in the game’ and helps to build confidence. In fact, doing this is a statutory obligation in many countries for starting a fund.

For example, in Singapore, the founding members or the fund managers have to necessarily invest a mandatory seed capital of about $240,000 or more while starting the fund.

The main reasons for SEBI taking a tough stance regarding NRI investments coming through FPIs are the concerns regarding money laundering and regulatory arbitrage.

The FPI guidelines were framed so as to pull in additional foreign investments into the country. Therefore, these funds are granted with various incentives, which include a simple and easy process for registration, flexibility in case of taxation and also in compliance. Indian officials have a doubt that permitting NRIs to make investments via the FPI route could end up in round-tripping. Also, there could be loose ends in the form of opportunities for arbitrage as it would support domestic money to be channelled via the FPI route to shun taxes.

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Oman is Planning a Mandatory Health Insurance from January

September 17, 2018

The Council of Ministers of Oman has decided to execute a national insurance policy in 2017

Oman is ready to make it obligatory for organizations and businesses to provide health insurance to their staff beginning from January.

Waleed Al Zadjali, the head of Oman Medical Association said while confirming this news:

Oman’s Capital Market officials said that they were dealing with the relevant institutions regarding the strategy and the future plans were still in the “drafting stage” after the Council of Ministers took a decision last year.

Nasr Al Salhi, who is the authority’s director of valuation and risks surveillance department said that the work was still “in progress” and the first step was to link the insurance companies with various hospitals and develop an electronic system which could take care of medicines and treatments, thus outing a check on manipulating practices like price increases etc.

The execution will be done in phases like in the neighbouring United Arab Emirates.

Oman’s Chamber of Commerce and Industry had earlier said that a fair health insurance cover should ideally be given to all the private sector employees by 2018.

But there are some companies which have got affected by difficult market conditions and the strict government measures and do not give importance to providing insurance to employees.

Dubai’s health insurance law has made it compulsory for the employers and sponsors in various brackets to provide coverage in a phased manner starting from 2014 to March 31, 2017.

The execution of that structure enhanced the profits made by the UAE’s health insurers in the year of 2016 in spite of difficult market environment linked to the lower oil price.

Saudi’s Council of Cooperative Health Insurance has also started with the concluding phase of a unified health insurance structure in April 2017.

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Singapore and Japan Signed the dotted Line and Agree to Strengthen the Support Given to Start-ups and other Businesses

September 17, 2018

The Japanese and Singapore start-ups and other enterprises are now looking forward to new initiatives, actions and exchanges of important information under the recent agreement they have got into.

Singapore and Japan got into a new partnership recently on August 29, 2018 which is meant to bolster the support that all the start-ups and other entrepreneurs and enterprises get from both the countries.

The memorandum of understanding (MOU) was signed by two parties – Singapore’s Economic Development Board (EDB) and Enterprise Singapore, and the Japan External Trade Organisation (JETRO).

The agreement was signed on the occasion of the 50th ASEAN Economic Ministers’ Meeting at the Shangri-La Hotel. This MOU aimed to reinforce the ties between Japan and Singapore so that their innovation ecosystems could collaborate. This will enable the three agencies to make the access easier and generate more opportunities by taking new initiatives, organizing events and exchanging information for all start-ups and other businesses.

Through this MOU, Japan has been included in the Singapore’s Global Innovation Alliance (GIA) initiative.

A major proposal in the Committee on the Future Economy report, the GIA was launched last year with a goal to fortify Singapore’s association with all the foremost innovation hubs and important markets globally.

This partnership is also touted to provide precious access and new opportunities for both Singapore and Japanese businesses so that they can collaborate, get into fresh partnerships and also co-create best-in-class solutions. Therefore, company formation in Singapore will be even easier and beneficial.

As a result, this will augment the ecosystems affecting start-ups and innovations in both happening in both these countries.

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UK Aims for Generation of Huge Investment in Africa to Initiate Revolutionary Growth

September 17, 2018

The UK is aiming to pump up about £8 billion of investment in both public and private sectors in Africa to create more opportunities and jobs so as to advance development in the coming four years.

The UK’s Development Finance Institution or the CDC Group plans to put in about £3.5 billion in Africa to support thousands of new opportunities and jobs.
The UK also aims to pump up additional private investment of £4 billion only for African nations, especially from the City of London.

The UK is coming up with many steps to improve the investment in various enterprises and infrastructure all across Africa. This includes raising an additional £4 billion investment from the private sector by collaborating closely with the City of London.

The Prime Minister also has set a new target for the UK to be known as one of the biggest G7 foreign direct investor in Africa by the year 2020.

As per statistics, Africa will see its population doubling by 2050 and to cater to that, approximately 18 million additional jobs every year would be required. It is of utmost importance that the private and public investments give rise to improved opportunities in this country to avoid the future generation to face poverty, instability or mass migration, which could impact Britain in a huge manner.

This development also implies that the level of this opportunity across Africa is humungous. As per IMF data, Africa’s GDP is going to touch $3.2 trillion in the coming five years and this is also the right time for company formation in Africa.

International Development Secretary, Penny Mordaunt was of the view that Africa’s promising markets pose as a huge and unexploited potential to the UK. There is a huge scarcity of investment, required infrastructure and also jobs in here and the City of London is well-positioned to assist in filling this gap and also reaping benefits for the economy of UK.

Some mutually-beneficial collaborations are being built, which will help in enhancing long-term revolutionary growth and also create more and more superior jobs, while also enabling the investors in UK to reap benefits of this opportunity.

In addition to the announcement of a huge investment coming through CDC and PIDG, the UK is also aiming to pump up another £4 billion of private investments, especially from the City of London. So, it would sum up to about £8 billion (around $10 billion) of investment aiming to assist the African countries from the year 2018 till 2021.

This collaboration aims to mobilise more capital out of pension funds, other investors, and insurance companies so as to help the City to take on a bigger role as Africa’s partner of choice in terms of financial services as the UK leaves the EU.

This will also generate the prospect to advance the returns out of investments for the UK’s pension pot, while boosting the important long-term investment for all African businesses, thus transforming the poorest nations of the world into the UK’s trading partners.

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MAS and DFSA Get Together to Sign an Agreement in the Fin-tech Sector

September 17, 2018

The Dubai Financial Services Authority or popularly known as DFSA and the Monetary Authority of Singapore, MAS, jointly got into a Fin-Tech agreement, which would help to provide a better framework for collaboration and referrals done between the teams involved in innovation at both the ends.

The agreement is done to make both the authorities commit to create an environment supporting the steadfast development of various financial services while using latest technology.

The DFSA’s Chief Executive Ian Johnston said, “We are pleased to formalise an agreement with MAS to support the growth of innovation in financial services. Co-operation between MAS and the DFSA will help create synergies and greater understanding between our two markets and will enable FinTech firms to extend their reach globally.” The agreement is based on a referral system that aims to help the authorities in referring various innovator enterprises between their respective innovation and development functions. It also outlines a clear process-map which outlines how to share and utilize information available on innovation in each relevant market.

In addition, the agreement talks about the vision and goals of both the authorities to jointly work on new innovation projects while applying major technologies like digital or mobile payments, flexible platforms (API), distributed ledgers, blockchain, big data, and other latest technologies. MAS and DFSA are also the members of the newly-established Global Financial Innovation Network, GFIN. This network consists of a total of 12 financial regulators and other global organisations. The GFIN wants to carry out joint projects and then share their experiences of various financial advancements to enhance economic stability, reliability, and customer outcomes and inclusion.

There are various regulators from countries like United Kingdom, Australia and Hong Kong as members of GFIN. The GFIN also further builds upon the mutual relationships between each regulator. An example of this is that the DFSA has mutual Fin-Tech co-operation agreements with Investment Commission and Australian Securities, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Commission, the Hong Kong Insurance Authority, and the Malaysian Securities Commission.

These agreements enlarge the on-going association between the MAS and DFSA who have signed an MoU since 2008, which gives administrative co-operation in the banking, insurance and other capital markets. It also helps in a give and take of information for various purposes.

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UAE is Leading the Path for Foreign Investment

September 17, 2018

The United Arab Emirates is known as a country which encourages new businesses in the mainstream media and also in widely-followed surveys done to gauge competitiveness. Many steps and initiatives have been taken in recent months to turn Dubai and Abu Dhabi into places where doing any new business is easy and cost-effective and where people can start and run their own businesses without any hassles.

Openness for business

Recently, the UAE Cabinet announced a couple of major amendments.

1. Guidelines for Long-Term Residency Visas

As per the new visa regulation, 10-year residency visas will be offered to professionals and experts in medical, Science, research and other technical fields, and also for all innovators. It will also include a five-year residency visa for all the students living and studying in the UAE and it could be extended for up to 10 years for ‘exceptional students’.

2. 100% or Complete Foreign Business Ownership

This step was like a master stroke, which will give a push to the economy and also pull in more foreign investments. The announcement said that UAE will now allow global investors in some sectors to completely (100%) own their company by the end of this year.

As of now, the foreigners were permitted to own up to 100% of their enterprise by business set up in Dubai free zone or choosing one of the various Free Zones in the UAE; or else, the limit for foreign ownership in UAE was set at 49%.

This proves that the UAE government aims to remain as the global leader and also as the “business hub” for global investors, thus making company registration in Dubai attractive.

More Steps to Cut Down the Business Costs

Corporate Fines Slashed

In May end, the Dubai’s Department of Economic Development (“DED”) talked about Decree No. 20 of 2018, which gave exemption to various companies, which function in the Emirate, from paying the fines that were imposed on them, and which also helped in the renewal process of licenses. HE Sami Al Qamzi, who is the Director General of Dubai’s DED, said that [the Decree] will prove beneficial as it will increase the financial advantages of the business owners whose licenses have expired, restore the needed legal records and licenses, and assist the entrepreneurs in Dubai to improve their competitive edge.

It was further clarified that this waiver of the fines was applicable to fines issued before 14 April 2018. Companies, which have received fines since that time, can pay the pending amounts owing in installments by a special arrangement with the DED. The businesses were given a timeline till the end of this year for renewal of their licenses to run their business in Dubai.

Added Benefits

3 Year AED 50bn Stimulus Package

The Executive Committee of the Abu Dhabi Executive Council also spoke about a three-year AED50 billion (US$13,624 million) financial stimulus proposal.

The plans for the project, with a goal to support Abu Dhabi’s financial development by coming up with 10 major initiatives was announced. Some of these initiatives are detailed below:

Abu Dhabi Office Space Exemption: All new enterprises, which register themselves in Abu Dhabi are exempt from the obligation of needing an office space here for up to two years.
Boosting Development and Competitive Edge: Various new partnerships in public-private sectors in the Emirate of Abu Dhabi: The proposals marked for the 3Q18 also talk about motivating and organising local production and providing support to SMEs to enhance their competitive edge in domestic market, in addition to the issuance of dual licenses for enterprises in Abu Dhabi Free Zones to help them to operate outside of the free zones and to contribute in the government tenders.
Instant Licences: In Q4 of 2018, the Executive Committee will come out with its plan for the execution of instant licensing systems in the category of commercial licenses and all services that the Government provides. This is in addition to the reassessment of the building guidelines for infrastructure, housing properties, commercial spaces and also industrial sectors, as well as the developmental needs and community facilities of other housing areas in Abu Dhabi, Al Ain and Al Dhafra.

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