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Dubai’s eyes growth with large investments

Sheikh Ahmed bin Saeed Al Maktoum, Second Deputy Chairman of the Executive Council and the Chairman of Economic Development Committee has remarked that the growth of Dubai has reached astounding heights irrespective of the downward trends of 2016 and is all set to gallop past the global economic growth in the coming years.

In the annual report of Dubai Plan 2021, the focus is on the to the economic growth of the region and its diversification and sustainable policies leading to the new companies incorporation in Dubai have led to its economic growth. It is remarkable that the oil exports make up for the least 1 % of the total GDP.  A lot of untapped and potential opportunities have come up in the other sectors leading to all round development of the region.

In the area of tourism, there has been a rapid increase of 5% when compared to the year 2015. The increase in the accessibility and the infrastructure improvements in the tourism sector has made Dubai the favored destination. This action has led to unprecedented growth in the economy. There is a plan in place to attract 20 million customers by the end of the year 2020.

There has been a steady growth in all the sectors all around the country. Dubai has bagged the 26thplace among 190 economies and stood first in the Arab region. The economy of Dubai had an increase of 2.85% when compared to the global economic growth rate of 2.4 %. All said we could assume that Dubai will be playing a major role in the world economy and it is on its way to becoming a strong contender in the major sectors of commerce.

For new companies incorporation in Dubai reach our consultant at [email protected]

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The winner emerges: UAE bags the top spot in FDI

In a recent survey by the Arab Investment and Export Credit Guarantee Corporation, Dhaman UAE has bagged the top spot for the most foreign direct investments made in 2016. As per the Foreign Direct Investment market database, a total of 616 companies in 2016 launched 773 new foreign investment enterprises in Arab countries with a total investment cost of $94 billion. There has been an inflow of $9 billion or DH 33.3 billion in the year 2016 followed by Egypt in the second and the Kingdom of Saudi Arabia in the third place.

In the investment report released by the Kuwait based company, it is to note that the Gulfco-operation Council countries had surpassed their Arab neighbors in pulling of FDI towards their economy. There is also an improvement in the FDI sector as compared to the levels in 2015.

This report helps the investors to channel their funds by determining the strength and weakness of the countries. This report presents the most desirable country for FDI by keeping in tune with the foreign economic policies and the investment policies drafted by the country. In 2016, UAE and Egypt had absorbed more than 80% of the foreign direct investment when compared to other Arab countries.

For more information on Dubai Company formation reach our consultant at [email protected]

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Amendments in African taxes

Here are the following reforms of tax implemented in Africa. The tax in Africa has undergone drastic changes. It has summarised as follows:

Botswana

On 27th July of 2017, Botswana and France amended the protocol in regards to the Botswana / France income tax treaty of 1999 in the city of Gaborone.

Cameroon

The Cameroonianfinance minister has announced on 14th June 2017 onwards there will be the availability of online refund application of VAT for large enterprises. The online refund for VAT will also apply to the medium enterprises from October 1st,2017 onwards.

Kenya

The tax appellate tribunal has ruled that the bank charges related to the NOSTRO account will not be taken in the calculation of withholding tax.as the bank charges are neither interest nor an accrued income.

Liberia

On 24th July 2017, the Ministry of Finance and Development Planning has issued a list of sectors that qualify for tax incentives. Companies like tourism, manufacturing, energy, etc. are exempted from service tax and import duties.

Lesotho

The Minister of Finance has proposed the following changes in the Parliament:

  • Raising the individual income tax limit and annual credit limit
  • To enhance trade and business the business licensing bill and others were present

Malawi

On 30th June 2017, a host of regulations regarding tax was published in the official gazette. The main focus was on the taxing regulations.

Nigeria

Interest on unpaid taxes is 19%.The Federal court of Nigeria has ruled that the Tax Appeal Tribunal has jurisdiction in the matters of tax disputes.

South Sudan

The Minister of Finance has drafted the financial bill and prepared the draft budget for the year 2017-2018.
Tanzania
The Ministry has passed various amendments on the Finance Bill passed earlier this year.
Uganda

The High Court has ruled that the Tax Tribunal holds the original jurisdiction on the tax disputes.

For more information on African Taxes reach our consultants at [email protected]

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The changing era of Saudi economic status

The international monetary fund (IMF) has quoted that Saudi Arabia has begun to show “a considerable progress in reforming its economy as part of the IMF vision of 2030 program announced in the year of 2016. According to IMF, the fiscal consideration is “beginning to bear fruit.” There has been an effort from the government to increase transparency and business reforms. There are also progress in accepting of new companies incorporation in Saudi Arabia. The non-oil sector is expected to rise by 1.7 percent in the year of 2017.

There is a consolidation of growth as the medium-term structural changes implemented stage by stage. The IMF observed that the employment growth has slowed and has urged the state to quicken its employment drive. The negative impact of inflation is expected to increase in the coming months. The fiscal deficit will be lowered substantially from 17.2 percent to 9.3 percent and to drastically reduce to 1 percent in the GDP by the year 2022.

IMF executive directors concluded that Saudi Arabia is slowly adjusting to lower oil prices and balanced by the non-oil sector. IMF also lauded the authorities efforts in implementing the economic reforms. It is notable that Saudi Arabia that it there is good progress in identifying and removing the problem in the private sector and paving the way for new company incorporation in Saudi Arabia. But the IMF has urged Saudi Arabia to increase and boost its women workforce participation in its employment drive.Overall, one can say that Saudi Arabia is slowly but steadily moving towards progress.

For new companies incorporation in Saudi Arabia, reach our consultant at [email protected]

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Singapore: a perfect launch pad for company formation

Singapore has become a favored destination for foreign companies for setting up a company. The foreign companies have two options in starting a business in Singapore. They can either set up a branch office or by registering a company in Singapore. The company so registered will be the subsidiary company of the parent company. There are different benefits available for branch office set up and different benefits for setting up a company in Singapore. The benefits are the same in certain cases and varied in different cases.If it is a branch office, the office is not a separate entity. But in the case of a subsidiary company, it enjoys it’s independent entity right; meaning the assets of the subsidiary company are only liable in a legal dispute, and not the parent company. The parent company’s assets will not be in a bind but if it is a branch office the parent company’s assets are also liable in case of a dispute.

In the clause of activity, the branch office can only perform activities as chartered in the parent company’s articles. It cannot function beyond that. But the subsidiary company can have its articles and specify it functions according to the legal framework of the Singapore company laws. Having a separate legal status enables the subsidiary company in having its own functions.

The area of tax benefits, the branch office does not enjoy any tax benefits due to its non-residential status. The subsidiary company is a separate legal entity enjoys a host of benefits and exemption that are available to the Singapore resident companies.

In other words, being a branch office or a subsidiary company has its benefits, but the decision lies in the hands of the parent company in choosing the options based on its objective.

For starting a business in Singapore reach our consultant at [email protected]

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Hong Kong, the home of the uber wealthy

Hong Kong,  the top Asian city for the ultra wealthy. The poll is indicating the most number of ultra wealthy individuals with a (net worth of 30million or more) concentration in the world cities. Hong Kong has placed itself in the top spot before Tokyo. Hong Kong has the largest population of ultra net worth individuals who are willing to invest in the domestic market like reality, software and other markets. However, there is fierce competition from other Asian countries such as Singapore, China, and India for the top spot. The concentration of ultra high net worth individuals have gone up from 2.40% to 4.10%. The reason for this contribution of this ultra wealthy population is the emerging business expansion in Hong Kong. It is the result of the pace of economic growth in Hong Kong reaching new heights. Even though China is the world’s most populated country, its city of  Shanghai came in the 29th spot.

Globally Hong Kong has secured the second place just below New York trumping London, Paris and other major cities.

It also notable that on an average an ultra high net worth individual owns 3.3 homes in Hong Kong.

Asia’s contribution to the pool of ultra high net worth individuals has been on a steady rise especially due to its hurdle less business expansion policies in Hong Kong and other countries contributing to the same. One of the reasons for Hong Kong to snatch the top spot in the Asian country list is the rapid development of businesses and the equity market’s positive growth coupled with the investor’s fear in the market of China due to the reforms implemented in India. That said one can safely say that Hong Kong is a city to watch out for in the coming ages.

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Shoura Council approves VAT law

Saudi Arabia’s Shura Council, which is al known as the National Consultative Assembly, approved the added value tax draft in the 45th ordinary session under the chairmanship of Vice-Speaker Dr. Mohammed bin Amin Al-Jeffry.

This has been a major step towards the levy of sales tax in the country and create alternative sources of revenue by the Government, especially when they are taking measures to cope financially owing to the decreasing oil prices.

The approval by the most-powerful consultative body was given, only when the financial committee on VAT submitted its report to the council and it was verified that the draft law is in sync with the provisions of uniform consensus formed by the GCC countries.

This approval is the result of the follow up of the public consultation launched in June 2017 on the draft law. The Council also emphasized on the necessity of creating a unified program for the citizen’s account before the enforcement of any system.

So far, only two countries, Saudi Arabi and the UAE have decided to start enforcing the VAT laws by January 1st, 2018 and out of which, the UAE still has to determine and finalize the tax laws and other secondary rules on the tax enforcement and collection procedures.

The International Monetary Fund (IMF) is predicting that the introduction of VAT laws in the Gulf countries will help in growing their GDP by 1.4 percent, which will be a huge relief for these countries, amidst the obstinately falling oil prices.

The expected rate of VAT across GCC is expected to be 5% initially, which can be increased eventually. The initial framework of the VAT taxation laws will be similar to that of the countries in the EU and the UK and taxes on goods, services and imports will be levied.

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The African world of tax

The recent changes and amendments in the taxation area of African countries:

Ghana:

The Ghana parliament has abolished the customs duty on spare parts of two wheelers and has introduced an import levy of 0.2% on all imports coming on from countries who are not the members of the African Union (AU). The government has also issued a guideline on the payment and record keeping method of VAT.

Kenya:

The Finance Act has been concurred as a law by the parliament on June21st,2017 and imposed new rules regarding capital expenditure, investment deduction, reduced corporate income tax amnesty and tax representation.

Malawi:

The Parliament has been presented the budget and there is a revision of excise duty in the case of cigarettes which are imported or locally produced. The budget has been presented with the revision in the tax increment in channel subscription, fresh milk exemption and exemption in the import of buses and minibuses.

Mozambique:

There have been certain changes made in the exemption of VAT  in regard to mining and drilling of any gas or oil sectors. Any ancillary services like artistry,scientific, educational and transport services granted within the country.

Nigeria:

The government has declared a scheme for voluntary declaration of assets and income with a nine-month window for the declaration. The budget has been made into law by the Nigerian Parliament and there is also a declaration of reduced export and import documents with effect from July21st, 2017.

Rwanda:

The budget has been presented to the parliament with a reduction of customs duties for cashless economies and increase in import duties.

Seychelles:

An information exchange treaty has been implemented between Seychelles and Gurnsey and it applies from 14th June 2017.

Sierra lone:

The budget was presented with the tax measures like royalty tax, payroll tax rate and limitation on carrying tax losses.

Tanzania:

The budget has been presented by clarifying contradictory provisions, revision in wear and tear, the introduction of withholding tax and VAT for ancillary services.

Uganda:

The budget has proposed the following tax measures:

  • Reintroduction of 15% withholding tax,
  • Decrease of 5% in gaming tax,
  • The scope of anti avoidance has been expanded,
  • The minister has been granted power to estimate rental income in case of a false information,
  • The In duplum rule to introduced which limits interest accrued on unpaid tax.

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Employment rules amended and introduced in Singapore with effect from July 1st, 2017

The Singapore government has amended and introduced many reforms in regards of re-employment and leave grant for new parents in the year 2017. Previously the employment eligibility age was fixed at the age of 62 and the employers have been notified to make appropriate changes in the internal human resources policies.

New rules regarding re-employment:

  • The age limit has been raised from 60 to 67 years of age;
  • There will no reduction in wages when the employee reaches the age of 60 as there was a reduction of 10% before;
  • The new employer must take the obligations of the previous employer;
  • The Employment Assitance Payment(EAP) has been raised to a minimum of S$4500 toa maximum ofS$13000 if the employer is unable to find a new employer or is unable to take the employee back on board.
  • Employee consent should be obtained before the transference to a new employer.
  • These changes are applicable to the citizens and the permanent residents who turn 65 on or after July1st,2017.
  • An employment claims tribunal has been set up.

Changes in the leave grant for new parents:

  • Paternity leave for new fathers has been increased to two weeks.
  • Adoption leave has raised to 12 weeks in total where first 4 weeks of pay will be provided by the employer and the balance 8 weeks will besponsored by the government. This is applicable for the first and second child. If a third or fourth child is adopted the government will fund for the whole 12 weeks.

The sharing parental leave has been increased from 1 to 4 weeks. In this, the mother can share their leave with their working spouse.

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Financial and Regulatory technology in the Middle East

Financial and regulatory technology has always been as a back end support in the Middle East in regards to the banking and insurance companies. But due to the launch of the FinTech Hive Accelerator Programme by the Dubai International Finance Center, there has been an opening of development avenues in the area retail banking app, share trading platforms, diverse payment platform integration, better understanding of crypto currencies like Bitcoin and to fill the gap between the legacy technology and the existing financial platform.

Fintech Hive Accelerator Programme:

Fintech Hive Accelerator Programme is a providing and emerging platform for the financial and technology sector. This program is supported by Accenture for the period of 12 weeks where the developers are given an opportunity to develop, design and test the software in accordance with the financial regulations of the Middle East. The developers also receive direct access to the financial institutions with responses from targeted user groups. There is also grant of “Innovation Testing  License” if the technology meets certain criteria which can proceed to grant of Full Financial Services.

The “Sandbox” and FSRA Laboratory Guidance:

The financial Services Regulatory Authority of Abu Dhabi has proposed a “Sandbox” which means a controlled environment for the developing and the testing of the software developed in regards to the financial and the regulatory framework of the Middle East. The developers will be granted a Financial Services Permission to carry out the necessary regulatory technology advancements.

This development has led to a practical and hassle free benefits for the end users as well as the authorities in the matter of seamless integration of financial services and in keeping in accordance within the regulatory framework. As for the developers, it has paved way for their innovations to be noticed.

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