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Dubai Mainland Company Formation
  • Article, U.A.E

Mainland Company Formation in Dubai, UAE – IMC Group

Your Guide to Dubai Mainland Company Registration

A mainland company is a company licensed by the Department of Economic Development (DED) in the relevant Emirate of the United Arab Emirates. This type of license allows non-UAE nationals to own 100 percent of the shares in a private business entity.

Limited Liability Company (LLC)

L.L.C. allows you to do local trade and services. It is recommended for a company setup in Dubai who wants to pursue or during company formation in Dubai for retail business. A company registration in addition to local trade it also permits global trade. A Dubai limited liability company (L.L.C.) is an ideal vehicle to use for entrepreneurs doing business within Dubai, the U.A.E. and internationally. With company registration and company formation in Dubai L.L.C., you still can own only 49% of the equity. However, you can do that and keep more than 49% of the profits. U.A.E. law allows L.L.C.s to come up with flexible, differential profit sharing arrangements. These can give you an enormous advantage, especially since the 51% local equity rule is quite inflexible in most cases. It’s not surprising, therefore, that the L.L.C. is the most popular form of business organization in U.A.E.

  • Local & International Trade allowed
  • Office required
  • Visa provided
  • 51% shareholding held by local U.A.E. national except for professional licenses, where 100% shareholding is allowed

Benefits of Company set-up in Dubai L.L.C.

A Dubai L.L.C. offers unrivalled access to Dubai and the wider U.A.E. economy. Through a Dubai L.L.C., international entrepreneurs obtain Trade Licenses from the Dubai government. There are few restrictions on the activities of a Dubai L.L.C., and it is possible to obtain a license for all activities with the exception of banking, insurance and investment activities. Through a Dubai L.L.C., investors obtain a strong physical presence in Dubai. Although cost effective office space is hard to find in, we offer solutions to meet every budget and specifications. Incorporating a Dubai L.L.C., company registration now faces no specific minimum capital requirements, after this formal requirement was abolished in the U.A.E. Companies may or may not be subject to minimum capital requirements, dependent on the size, nature and goals of the business.It is easy to open global corporate bank accounts following company registration and Dubai L.L.C. set up.

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Revised Golden Visa Rules: UAE Makes 10-Year Residence Scheme More Investor and Family-Friendly
  • Article, U.A.E

Revised Golden Visa Rules: UAE Makes 10-Year Residence Scheme More Investor and Family-Friendly

Overview

The UAE Golden Visa programme paves the path to citizenship for international talents who like to invest, work, study and excel in key sectors and speciality areas in the Emirates.

The Golden Visa is available for international investors and top global talents and provides them with visas for up to 10 years duration. The top talents include people and researchers in the fields of science and technology including doctors, specialists, scientists and inventors. The visa is also available for talents from the creative arts and sporting fields, and business owners and real estate investors in UAE can also apply for this visa. The golden visa process is however different from applying for a normal residency permit or Emarati citizenship and outsourcing a professional pro services in Dubai UAE is often seen to hasten the golden visa dream to fruition.

UAE today can boast of several high-tech and high-growth fields that can provide ample opportunities for the global top talents to grow, prosper and contribute to the welfare of mankind and the society at large through innovative industrial applications, sophisticated healthcare systems, most advanced high tech agricultural techniques, robust financial solutions and smart start-up ecosystems based on industry 4.0.

The Dubai UAE is a dream home for many global talents owing to its rich cultural heritage, diverse population, huge promise for future growth, safety and political stability and high standard of living. The emirate has also lured many reputed international business houses to come, settle and invest in Dubai company incorporation.

Lots of people have so far been awarded a golden visa and a good number of high school students securing high grades with 95% and above were granted golden visas along with their parents and siblings. Around 44,000 visas were issued in Dubai in the first year only.

What is the golden visa system?

In 2020, the UAE implemented a new system for long-term residence visas to enable and attract foreigners to live, work and study in the country without the need of a national sponsor and with 100% ownership of their business on the UAE’s mainland.

These visas are issued for 5 or 10 years and are automatically renewable on expiry.

Golden visa is granted to investors engaged in business set up in Dubai UAE, entrepreneurs, specialized talents and researchers in various fields of science, technology and knowledge and bright students with promising and innovative scientific capabilities.

The golden visa UAE eligibility criteria were simplified in April 2022 and the categories of people eligible to apply for the long-term 10-year visa have been expanded under a new set of executive regulations.

What are the benefits of this newly revised golden visa system?

The UAE Cabinet, headed by Sheikh Mohammed bin Rashid Al Maktoum, the Vice President, Prime Minister and Ruler of Dubai, has introduced the new set of executive regulations of the Federal Decree-Law on Entry and Residence of Foreigners for solidifying the country’s position as the most attractive to live, work, and invest.

Investors, entrepreneurs, exceptional talents, scientists and professionals, outstanding students and graduates, humanitarian pioneers, and frontline heroes, who fulfil certain eligibility parameters will qualify for the 10-year golden visas.

Besides granting the stay of the above-mentioned beneficiaries for 10 years, the new regulations provide additional benefits of Golden Visa in UAE allowing the visa holder to sponsor his/ her family members, including spouse and children regardless of their age. The new rules will also enable the visa holders to sponsor domestic support services without putting any restrictions on the numbers.

Secondly, the previous restriction on the maximum duration of stay outside the UAE for the Golden Residence to remain valid has been scrapped.

The revised visa rules allow the family members to stay in the UAE if the original holder of the Golden visa passes away, and till the expiry of the visa.

What are the different types of visas that one can apply for?

The types of golden visas one can apply for to obtain long residency status in the UAE along with the golden visa UAE eligibility criteria are mentioned below.

Golden Residence for Scientists is awarded to the highly successful scientists and researchers based on recommendations from the Emirates Scientists Council. Possession of a PhD or Master’s degree in engineering, technology, life sciences and natural sciences from the top universities across the world is mandatory including notable achievements in the field of research.

Golden Residence for Professionals is given to highly skilled workers with educational qualifications and professional experience in all disciplines and must have a valid employment contract in the UAE and should be classified in the first or second occupational level as per the Ministry of Human Resources and Emiratisation classification in line with the International Standard of Classification of Occupations ISCO by the International Labor Organization. Possession of a Bachelor’s degree or equivalent is a must with a minimum monthly salary of AED 30,000.

Golden Residence for Exceptional Talents is granted to the top talents from the fields of arts, sports, digital technology etc. and solely based on the talent of the individual irrespective of educational qualification or employment status or monthly salary or professional level. A recommendation and approval by a federal or local government entity are mandatory.

Golden Residence for Real Estate Investors is awarded to the Real estate investors if they purchase a property worth a minimum of AED 2 million. Investors are allowed to purchase the property with a loan from specific local banks.

Golden Residence for Entrepreneurs is issued when an entrepreneur is the owner or a partner in a startup registered under SME category with yearly revenue of not less than AED 1 million and the approval for the startup idea must be given by an official business incubator or the Ministry of Economy or the competent local authorities.

The owner or partner of a business project duly approved by the Ministry of Economy that has been sold at a minimum of AED 7 million is also treated as credible for Golden Residence.

Golden Visa for Outstanding Students and Graduates are meant for students with high academic performance in UAE secondary schools, and outstanding graduates from UAE universities and the top 100 universities globally fulfilling certain specific criteria such as CGPA.

The new regulations have rolled out new 5-years residence tracks to attract talented and skilled professionals, freelancers, investors and entrepreneurs. Skilled employees from the first, second or third occupational level and possessing a Bachelor’s degree or equivalent with an annual salary of AED 15,000 minimum are entitled to stay in UAE for five years. If you don’t qualify under the UAE Golden Visa for Investors, you can still reside in the UAE for five years as a freelancer or self-employed without any sponsor or employer. However, a freelancer or self-employed person must have a minimum Bachelor’s degree or specialised diploma, with an annual income of AED 360,000minimum from self-employment for the last two consecutive years.

The cost of a 10-year golden visa is roughly AED 1150 plus AED 1150 for application & issuance. The 5-year green residence schemes usually cost around AED 650 plus another AED 650 for application and issuance.

What is the procedure for applying for a golden visa?

The procedure detailing How to Apply for a UAE Golden Visa is explained below.

You need to log onto the Federal Authority for Identity and Citizenship (ICA) smart services website and access the golden services from the menu at the top.

If you belong to any of the eligible categories of golden visa and have not been nominated so far, you need to click on the “Start Service’ under “Visa – Golden Visa – Nomination Request for Golden Residence – New Request” for accessing the online form for submitting your details and the category under which you wish to be nominated.

Unified Identification Number (UID), the six-digit number assigned to you while entering the UAE also needs to be mentioned in the form. Filling up this form may be tricky at times and seeking help and advice from a pro services in Dubai is usually recommended.

A dedicated team has now been formed with representatives from the Dubai Immigration service, the General Directorate of Residency and Foreigners Affairs for quick and efficient handling of all applications for golden visas and other important residency visas. Named “You are Special”, the service can be accessed 24×7 online or by calling a phone number.

THE TAKEAWAY

The recent amendments to the golden visa rules updated the entire Entry and Residence scheme including long term residence visas with simplified requirements and many additional benefits. Under these revised visa rules, no host or sponsor is now required. The objective of this new scheme is to enhance the competitiveness of the nation, attract foreign investors for Dubai company incorporation and stabilize the job market.

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Looking For an Online E-Commerce Venture in Dubai: Here are Some Key Facts You Need to Know
  • Article, U.A.E

Looking For an Online E-Commerce Venture in Dubai: Here are Some Key Facts You Need to Know

An Overview

The global COVID-19 pandemic completely transformed the way we lived and shopped before and spurred the rapid growth of online shopping, with nearly three out of four consumers shopping more online than they did before the pandemic. Most online shoppers are also quickly moving away from cash and opting for contactless and digital payment experiences and customers made many purchases from online businesses that are not located in their own country. These are some key insights that would help aspiring e-tailers and businesses to leverage the shift towards online shopping and deliver convenient, fast and secure transactions after an e-commerce business set up in Dubai.

According to data and surveys conducted; FMCG, healthcare, apparel, groceries and electronic items have seen the maximum surge in online shopping in Dubai UAE. The rapidly growing e-commerce space has been primarily driven by high internet penetration and the more disposable income of people living in Dubai. The tech-savvy young population possessing the latest digital devices is also helping this e-commerce space to thrive in Dubai and other emirates.

As online electronic purchase has become the new norm, the growth of e-Commerce in Dubai UAE has become imperative due to the government’s initiatives toward the digitization of trade. Dubai is pivotally positioned on the international trade map and highly equipped with extensive high-tech logistics networks helping Dubai online business opportunities grow in the e-commerce space.

E-commerce in the UAE totalled more than $8 billion in 2021 and is expected to surpass $12 billion by 2025, with 60% online shoppers based in Dubai, a report revealed.

Why should you start an E-commerce business in Dubai?

A Booming Market

The UAE outperforms its GCC peers in e-commerce revenue even though it is less populous than some other GCC nations. The world’s most frequent online shoppers are from Dubai and more than 80% of its population make product shopping online.

Support from the Government

The Dubai government launched the Dubai E-Commerce Strategy to make the city a global logistics hub for the Middle East region and contribute AED12 billion to the economy by 2023. The strategy focuses on attracting more foreign direct investments through new e-commerce business-set-up-in-Dubai  and reducing the activity costs by 20% through optimization of storage, customs fees, VAT and transportation.

Robust Transport Infrastructure

Dubai has today the world’s 3rd-best ranked transport infrastructure with best-in-class airports, seaports, roads and bridges.

Availability of Free Zones

More than 30 free zones are operating in Dubai where multiple benefits are offered to new businesses including easy business set-up and early issuance of Dubai-free-zone-E-Commerce-license, lower operating costs, reduced tax rates etc. These free zones also provide opportunities for professional networking.

What are the process steps for setting up an E-commerce business in Dubai?

You can set up a company in Dubai either in-person or online. Following are the steps you need to go through while carrying out E-Commerce-business-setup-in-Dubai.

1- Do Market Research to identify potential customers, their requirements and products on demand.

2- Decide on your licence type based on your business activities, structure, residency status etc.

3- Choose your operating location either in a free zone or mainland Dubai. You do not need a physical office to start an e-commerce business but need an operating location for license purposes. A free zone license provides several added advantages.

4- Register your Company Name with the Department of Economic Development (DED), Dubai.

5- Apply for an e-commerce license from DED that allows you to carry out multiple businesses through social media networks.

6- Apply for an Initial Approval Certificate as a NOC which is non-renewable and gives you business clearance for the first six months.

7- Design and develop your website which should be user friendly and secure after registering a domain for your website.

8- Establish a Payment Processing Portal on your website in compliance with Telecom Regulatory Authority (TRA) guidelines for electronic transactions.

9- Plan and implement logistics support for the customers of your e-commerce business. You can do it on your own or hire third-party logistics services.

10- Register with a port and customs authority to get the importer’s code and deal in imported goods, if necessary.

11- Open a Bank Account to handle all your business-related financial transactions.

How many types of E-commerce licenses are available in Dubai?

Several E-Commerce Licenses in Dubai.  have been introduced by the DED and include

1. E-Trader License usually issued to UAE and GCC nationals residing in Dubai and engaged in providing online services or selling online products. This one is a single ownership license and does not need a physical office. The eTrader cannot open a shop and in the event of any legal dispute, the licensee alone is held responsible.

2. Portal License is issued to non-UAE nationals and allows linking of buyers and sellers using website listing products and services.

3. Virtual Company License is a relatively new license type allowing foreign investors and UAE non-residents to take up commercial activities including computer programming and consultancy, designing, and services related to printing and advertising.

What is the procedure for getting an E-commerce license in Dubai?

Selling physical products through a web shop is a regulated activity in the UAE and you need a license. However, if you sell digital products, no additional license from DED is needed if you set up a right free zone company.

Following are the steps to get an e-commerce license in Dubai.

  • Apply to DED Trader website with the required documents
  • Make a DED trader account
  • Do Registration
  • Make the Payment
  • Obtain the License

There are some legalities, however, including the owner’s minimum age of 21, possession of a valid Emirates ID, license renewal within one month of expiry.

What are the documents needed for an E-commerce license in Dubai?

The following documents are required to the submitted while applying for an e-commerce license.

  • Filled-in application form
  • Copies of Passport/visa of the shareholders
  • Identity and address proof of the business owners and shareholders
  • Copy of sponsor’s passport/ Emirates ID
  • Local service agreement/ Civil works agreement
  • NOC from the relevant authority
  • Memorandum & Articles of Association

What are the business activities allowed under DED E-trader license?

Dubai-online-business-opportunities in the e-commerce space under the E-Trader license include the following allowable e-Trading activities.

  • Recreational Events and Sports
  • Professional, Personal and Household Goods
  • Jewellery and Precious Stones
  • Apparel and Gifts
  • Media and Publications Materials
  • Equipment

What about the E-commerce licenses in the free zone?

Free zones have their own rules and regulations and are not usually permitted to carry out commercial activities in the wider UAE, the mainland and offshore. This restricts a trader from freely trading and selling products online and the e-trader needs to get a separate license from DED as well.

Though E-Commerce activities are allowed in some free zones, the scope is limited and involves only selling electronically without permission for retailing.

In the UAE, a free zone company with an E-Commerce activity usually acts as a middleman till such time you acquire a license from DED.

What is the Cost of an E-commerce License in Dubai?

The cost of an E-commerce license in Dubai depends on several factors as below.

  • The license type, either mainland or a free zone
  • Business Size
  • Total office space including areas for commercial use
  • Number of visa applications
  • Business Type

The minimum e-commerce license cost is roughly AED 14K.

The Takeaway

The ‘e-trader’ scheme was introduced by DED for licensing online businesses established via various social media applications such as Instagram, SnapChat, Whatsapp or Facebook to enhance consumer confidence when shopping for products and services on social networking sites.

An e-commerce store is an online-business-in-Dubai-without-investment and holds great promise provided you have the networking and interactive skills and can build a great website with innovative features.

 

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UAE Tax Registrants to Benefit from a 70% Discount on Tax Penalties as the Relief Period Extends
  • Newsletter, U.A.E

UAE Tax Registrants to Benefit from a 70% Discount on Tax Penalties as the Relief Period Extends

  • New Cabinet Decision Issued On 30.12.2021
  • One Year Extension of Grace Period Granted
  • Taxpayers to Benefit from 70% Discount on Penalties

Following a new Cabinet Decision No 108/2021, article 3 dated 30.12.2001, on Administrative Penalties for Violation of Tax Laws; the UAE Federal Tax Authority (FTA) has clarified to the taxpayers to benefit from the extended one year grace period for re-determination of administrative penalties on violation of tax laws until 31.12.2022. The earlier deadline as per Cabinet Decision No 49/2021 was 28.06.2021 and this new decision would make the amount of the total unpaid penalties outstanding until 28th June 2021 equal to 30% of such unsettled penalties, subject to fulfilling the conditions set by the Cabinet Decision.

In effect, the new Cabinet Decision should be seen as a replacement of the third Article of Cabinet Decision No. 49/2021 to provide an extended grace period for registrants to settle the outstanding payable taxes along with the 30% of administrative penalties up until 31 December 2022 and a 70% discount on tax penalties.

The Cabinet Decision effective from January 1st 2022, should be seen as an opportunity for businesses to benefit from the reduction of the administrative penalties, highlighted the FTA. The Cabinet Decision would reduce the burdens on business sectors and help improve their contribution to the growth of the economy of the country besides enhancing tax compliance.

Unsettled administrative penalties, not imposed before the effective date, will be reduced to 30% of the total unpaid penalties subject to meeting the below-mentioned conditions.

  • The unsettled penalty was imposed based on the old Cabinet Decision No. 40 of 2017
  • The unsettled penalty was imposed, in full, before the effective date of 28th June 2021, and
  • The tax registrant has met all of the following conditions
  1. Paid the total amounts of the payable tax by 31 December 2021 with no payable tax due to the FTA. The tax authority must have received the amounts by 31 December 2021 irrespective of the tax amount being payable before or after 28 June 2021, and
  2. Paid 30% of the unsettled administrative penalties before 28th June 2021 and no later than 31st December 2021

As per the new Cabinet Decision, FTA is responsible for determining the procedures for implementing the provisions for the re-determination of administrative penalties. FTA confirmed that administrative penalties imposed on the tax registrant will be redetermined within a maximum of 30 business days from the dates specified in the Cabinet Decision.

The review of records of some tax registrants is still underway to identify if there are eligible beneficiaries from the re-determination of administrative penalties scheme, FTA noted. The tax registrants who received notifications from FTA to provide supporting data must submit the required information urgently.

Tax Procedure Public Clarification, TAXP004 has been issued on 26 January 2022 by the FTA on redetermination of administrative penalties levied before the effective date of the Cabinet Decision No. 49 of 2021. With this new clarification, the earlier Public Clarification, TAXP002 stands replaced.

According to the new Public Clarification, FTA will again determine at the end of 2022, if the unsettled part of the administrative penalties which is 70% of the total amount of penalties originally levied, shall no longer need to be paid. The e-Services accounts of the tax registrants will be linked to this redetermination process by the FTA for accessing information.

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Oman’s Budget 2022 Highlights Strong Economic Growth Optimism
  • Newsletter, U.A.E

Oman’s Budget 2022 Highlights Strong Economic Growth Optimism

Overview:
The entire global economy went haywire since the outbreak of the Covid 19 pandemic and Oman is no exception. Besides, a steep drop in revenues due to lower oil prices also posed serious fiscal challenges to the Omani government and adversely impacted the national economy. Natural calamities like tropical cyclone Shaheen causing widespread flooding in the country’s northern coast also added to the country’s economic woes.

Regardless, Oman has been on track to realize the country’s 10th Five-year Development Plan (“10th FDP) for deficit reduction objectives and achieve a surplus budget by 2025 as the government implemented a series of economic reforms in policies and measures during 2021. The introduction of VAT is the most notable that would help supply the state exchequer to address fiscal deficit issues, diversify the non-oil economy and enhance the nation’s competitiveness and sovereign rating.

“The policies and measures implemented by the Sultanate of Oman recently have begun to show results,” highlighted Dr Saeed bin Saqri, the Minister of Economy. The government has made huge changes to the business, legal, and tax frameworks in the country for continued economic development through fiscal sustainability & economic diversification.

As per the report of the Ministry of Economy, the country is optimistic about an accelerating economy during 2022 and expects to register 5.8% overall growth. The steadily recovering investment climate in the country also suggests continued economic growth during the years of the 10th FDP.

The Fitch ratings, a global leading provider of credit ratings, commentary and research, recently revised Oman’s economic outlook from negative to stable on the back of the government’s commendable progress with implementation of its medium-term fiscal plan (MTFP) for balanced and surplus budgets and lower debt to GDP ratios leading towards reduced risks of defaults.

Standards and Poor (S&P) also forecasted the country’s economic growth to accelerate during 2022 on the back of higher global oil prices, increased oil and gas production and a growing non-oil economy. It also revised Oman’s economic outlook from stable to positive.

“We expect Oman’s real GDP to grow by 1.7 per cent this year and then accelerate to 3.1 per cent on average in 2022-2023 as oil and gas production ramps up after OPEC production limits are eased,” S&P highlighted in a research update released during last October. The growth in the non-oil economy would be mainly driven by the logistics, fisheries, agriculture, tourism and manufacturing sectors.

As the country witnessed economic normalization due to the lifting and easing of Covid-19 related restrictive protocols and boosting up of vaccination drive with almost 84% population double vaccinated, the non-oil revenue during January to October 2021 grew almost 40% Year on Year (YOY) primarily led by the introduction of VAT in April.

Budget 2022
Oman’s 2022 State Budget (RD 1/2022) was approved by His Majesty Sultan Haitham bin Tarik on 1st January 2022 through a Royal Decree and was officially published on 2 January in the State Gazette. The nation’s General Budget was documented based on Oman Vision 2040 and the 10th FDP and in close alignment with the objectives of medium and long-term plans and objectives of fiscal policy measures. The budget deficit projected was the minimum in the last 11 years, OMR 1.5 billion and down 32% YOY.

The revenue growth sharply outpaced the growth in state spending and the government mostly maintained spending on basic services like health, education and social welfare. Any additional revenue accrued from higher oil prices than that very conservatively assumed will be used to lower fiscal deficit and loan repayment, as per the budget highlights.

The Ministry of Finance (MOF) emphasized in its budget report saying, “The State’s General Budget for the financial year 2022 is consistent with the objectives of the Tenth Five Year Development Plan.” It also said, “The 2022 budget aims to achieve a set of economic and social development objectives.”

The budget outlined the economic and social guidance for 2022 and was centred on nine measures including sustainable levels of public spending; improving non-oil revenue contributions; prioritising projects involving the productive sectors; distributing government subsidies to low-income households for demand generation; maintaining spending on basic services; enhancing digital transformation; continuing improved sovereign credit ratings to boost up investor confidence; support training programmes and those linked to job schemes, while boosting job creation; and extending all necessary support for small and medium enterprises for doing business in Oman.

Oman 2022 budget projected total revenue   OMR 10.6 billion while the projected expenditure was OMR 12.1 billion with a projected deficit of OMR 1.5 billion. The 32% lower fiscal deficit is primarily due to higher oil and gas receipts.

The MOF said that a cautious approach was taken and the budget was estimated based on an oil price of USD 50 per barrel. The government has considered the ongoing uncertainty of the global oil prices because of the new Covid-19 variants such as Omicron.

International institutions including the International Energy Agency (IEA), the International Monetary Fund (IMF) and credit rating agencies (Fitch, Moody’s, Standard & Poor’s, and other global agencies) however forecasted the average oil price to be hovering between USD 53 and USD 84. The budget estimated an increase in revenue by 23% to OMR 10.6 billion against OMR 8.6 billion in 2021.

The Takeaway
In all likelihood, Oman is set to witness higher economic growth this year in the light of a better and stronger performance of its hydrocarbon sector with improved natural gas production and higher crude oil output. Besides, the continued structural reforms by the government are expected to bolster foreign direct investment through new company formation in Oman.

The second half of FY 2021 witnessed higher growth momentum as increased revenue contributions came in from the non-oil sector due to the easing of Covid-19-related restrictions and VAT and excise tax implementation. The economic stimulus package announced during late November also supported the economic turnaround on the back of improved domestic demand. As revenue generation increased sequentially supporting government coffers, the estimated fiscal deficit narrowed sharply by more than 70% by the end of 2021 as against 2020.

Last but not least, the Omani government’s recent announcements of several projects towards fueling the digital transformation drive, improving fiscal performance management and enhancing SMEs and startups in the private sector will aid in achieving all-around economic prosperity.

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RAKEZ Unveils Dual Licensing Structure to Woo Investors
  • Newsletter, U.A.E

RAKEZ Unveils Dual Licensing Structure to Woo Investors

In an attempt to uphold its position as one of the most business-friendly and innovative UAE free zones, Ras Al Khaimah free zone (RAKEZ) has rolled out Dual Licensing in January 2022 after introducing a women entrepreneurship package and gaming license programme. The newly announced licensing structure is strategically designed to attract more foreign investment in the country through new company formation in Dubai UAE.

The Group CEO of RAKEZ, Ramy Jallad noted, “We are always keen to provide our clients with the best solutions. We launched the Dual Licence structure for this very reason – to offer them the best of both free zone and mainland benefits, all without the need to incorporate a separate company. This package opens up a new market for their business, and substantially expands their accessibility and reach; all whilst reducing the red-tape requirements of the past.”

Dr Abdulrahman Alshayeb Alnaqbi, Director General of RAK DED, remarked, “We are pleased to collaborate with RAKEZ on yet another great initiative for the benefit of global investors who chose Ras Al Khaimah to base their operations. We will continue to work together to further elevate Ras Al Khaimah’s investment landscape and make it even more welcoming and dynamic than it is today.”

Dual License, launched in collaboration with Ras Al Khaimah Department of Economic Development (RAK DED) will allow investors to operate in both mainland and free zones from one office without requiring an additional mainland facility. This is a cost-effective business solution and will grant investors 100% foreign ownership including bidding rights for government contracts.

RAK DED is the authorized entity responsible for issuing licenses for Ras Al Khaimah mainland companies. It will issue a trade license to the free zone companies that wish to extend their activities in the mainland and make products and services offerings. A company holding a Dual license will be recognized as a ‘Branch of a free zone company’ with a legal identity as its parent company. The scope of business activities of the mainland branch should be similar to that of its parent entity in the free zone.

UAE mandates all mainland companies to have a physical office for opening bank accounts. A trade license is only issued on submitting the lease agreement to the respective DEDs of each emirate and after banks verify the physical office address for approving bank account opening. A free zone company in RAKEZ holding a Dual license can however start a mainland branch without any physical office space in the mainland and can carry out business activities on the mainland from its office in the free zone.

The Dual license has come as a ‘new year present’ offering considerable benefits to the investors. Once a RAKEZ Dual License is obtained, free zone companies can have wider access to the mainland customers to distribute products and offer services. As per rule, free zone companies are only allowed to conduct business activities within the free zone premises.

The dual license helps companies to avoid additional cost burdens on mainland office rentals and maintenance and provides complete access to the mainland without paying any such fixed costs and overheads. Daily operational costs are also avoided as there is no need for separate administrative and accounting setups.

RAKEZ Dual License however puts some restrictions on the business activities and only allows activities permitted by RAKEZ and RAK DED. Activities falling outside its domain and requiring ministerial approval are not allowed.

With the introduction of the Dual Licensing, the entire landscape of business setup in Dubai free zone and UAE has been completely transformed offering tremendous cost benefits to foreign investors. However, before opting for this license entrepreneurs and investors must carefully consider the restricted activities and seek the advice of corporate service providers based in Dubai UAE.

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UAE to Introduce Federal Corporate Tax from June 2023
  • Newsletter, U.A.E

UAE to Introduce Federal Corporate Tax from June 2023

On January 31, 2022, the Ministry of Finance announced that the United Arab Emirates (UAE) will introduce a Federal Corporate Tax on business profits effective from June 1, 2023. The new tax regime has been introduced with the aim to incorporate best practices globally and minimize the compliance burden on businesses.

The statement mentions that the tax will be levied on all corporations and commercial activities in the UAE with a few exceptions. The new regime implies a standard statutory tax rate of 9% for taxable income exceeding 375,000 UAE dirhams ($102,000). Furthermore, to promote the growth of small businesses and start-ups, there will be a 0% tax rate for taxable income up to 375,000 UAE dirhams ($102,107.50). Having said that, the legislation is yet to be issued and the details for the corporate tax regime are subject to finalization.

The announcement brings a significant shift for a nation that’s long attracted businesses from around the globe because of its status as a tax-free commerce hub.

IMC Group has summarised the key aspects of the announcement which are as follows:

Corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with international accounting standards, with minimal exceptions and adjustments. The corporate tax will be applicable to all persons including individuals and legal persons undertaking business activities under a commercial license in the UAE. It also includes entities operating in the banking sector.

Entities subject to corporate tax are allowed to carry forward excess losses and utilize them as of the effective date.

The corporate tax will be applicable to all businesses and commercial activities with the following two exceptions:

  • Entities engaged in the extraction of natural resources will be exempt and will remain subject to taxation at the Emirate level.
  • Entities operating in free zones without any business conduct with mainland UAE will continue to receive tax incentives on complying with all the regulatory requirements. However, they would be required to register and file a corporate tax return.

Other key elements of the announcement

Foreign investors who do not carry on business in the UAE will not be subject to corporate tax.

There are no withholding taxes on domestic and cross-border payments.

UAE businesses will be exempt from paying tax on capital gains and dividends received from their qualifying shareholdings.

Corporate tax will not apply to qualifying intra-group transactions and reorganizations.

In order to give relief from double taxation, foreign taxes will be allowed to be credited against UAE corporate tax payable.

The corporate tax regime provides generous loss utilization rules and will allow UAE groups to be taxed as a single entity provided certain conditions are met or to apply group relief in respect of losses and intragroup transactions and restructurings. Besides, businesses will not be required to make advance tax payments or prepare provisional tax returns.

Transfer pricing and documentation requirements will apply to UAE businesses with reference to the OECD Transfer Pricing Guidelines.

Key takeaways


The introduction of the new corporate tax regime is bound to help UAE achieve its strategic ambitions and incentivise businesses to establish and expand their activities in the country. The move is expected to bring UAE in line with other competitive economies around the world.

However, the potential implications can be far-reaching. But for now, the tax and finance teams need to focus on developing a roadmap to prepare for the implementation of corporate tax. For that, it is imperative to get a deeper and thorough understanding of the rule and laws pertaining to corporate tax in order to completely assess the implementation plan. This might require many structural and organizational changes such as a change in legal structure, tax function, business model, accounting, contracting and transfer pricing, etc. Our tax experts at IMC Group can help you assess the potential impact of corporate tax in the UAE and how it may affect your business. As a part of our services, we can assist you with the following:

  • Access the qualitative impact and perform readiness assessment covering systems, governance and technical aspects
  • Access the quantitative impact and perform modeling work
  • Offer knowledge sharing and conduct training for your in-house tax and finance teams
  • Offer implementation support with respect to tax, accounting and systems perspectives.

 

There will be further announcements from the Ministry of Finance toward the middle of the year to help businesses prepare for the introduction of corporate tax and become fully compliant.

Keep watching this space for more updates on corporate tax in the UAE.

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What are the important changes made in the UAE New Trademark Law
  • Newsletter, U.A.E

What are the important changes made in the UAE New Trademark Law?

Overview

2021 remained a year of legislative reforms for the UAE and witnessed 40 decree-laws and amendments being rolled out for gaining a competitive advantage in the global economic landscape. One of the biggest additions is the recently introduced new Federal Trademarks Law No. 36 of 2021 (“New Law”), which has come into force on 2nd January 2022. The New Law has replaced the previous Trademark law, the Federal Law No. 37 of 1992. Though the amendments have been made keeping in perspective the GCC Unified Trademarks, some new provisions on different aspects and procedures have been introduced in the new law.

The New Law addressed various aspects of Trademark registration in UAE that were not fully covered earlier including the registration of non-traditional trademarks. Rules on infringement of trademarks have been made more stringent with increased sanctions and penalties. The new law also allowed multiclass application which was not included in the previous law. The registration of Geographical Indications is an innovative addition and newly introduced in UAE Trademark law.

The procedures outlined in the New Law are detailed in executive regulations.

What are the most important changes brought in the New Trademark Law?

Following are some of the most important changes brought in by the new trademark law 2021 in the UAE.

Enhancing the domain of Nontraditional Trademarks

Nontraditional visible and invisible trademarks have been included for registration in the new law such as holograms, single colour, 3D shapes, scents, sounds etc.

Trademark Registrability

Though the list of non-registrable trademarks remained more or less the same, the new law brought in an amendment to specifically prevent registration of trademarks which are translation, phonetic translation or transliteration of any well-known and already registered trademarks to reduce the risk of infringement.

The new law also made functional 3D trademarks non registrable.

Multiclass Trademark Registration

While the previous law only allowed single class applications, the new law now allows trademark applicants to include the multi-class in a single application.

Increased Penalties

UAE trademark office has raised penalties for trademark infringement in the new law enforcing AED100,000 to AED1,000,000 for counterfeiting, imitation, bad faith usage, possessing material for counterfeiting, engaging in export-import of counterfeit products. Owning a counterfeit product or selling it attracts a fine of AED 50,000 – 200,000. The fine used to be AED 5000 minimum in the previous trademark law.

More Elaborated Procedures on Infringement

The new law has provided more elaborated procedures on infringement including exhaustive reporting of infringement; withholding products, tools and equipment used in the infringement and legal proceedings; preventing suspected counterfeit products from entering commercial channels; preventing suspected counterfeits from being exported and preservation of evidence.

The new law seeks initiation of urgent proceedings in any matter of trademark infringement and within a maximum of 20 days.


Registration of Geographical Indications

Previously not regulated in the UAE, the addition of GIs in the new trademark law complies with the International Trademark registration system.

Geographical indications (GI) are signs used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. To function as a GI, a sign must identify a product as originating in a given place and can be a sign or many signs in any form such as geographical names, personal names, numbers, colours and words.

In the new Law, UAE addresses the emergence of conflicts between geographical indication tags and trademarks with their rapidly increasing usage as forms of intellectual property rights and prevents the registration of a GI in the event of any confusion with a trademark application or any trademark registered and used in UAE in good faith.

Establishment of Complaints Committee

A committee has been established to hear all complaints and objections to the decisions issued by the UAE trademark office of trademark applications, cancellations and oppositions.

Challenging the Decisions of Complaint Committee

As per the new law, all decisions issued by the Complaint Committee can now be appealed before the Federal Court of Appeal instead of the Court of First Instance significantly reducing the litigation time with only two stages of court proceedings.

Request for Cancellation of a Trademark

The new trademark law stipulates that the Ministry of Economic Affairs should now receive the requests for the cancellation of trademarks. Earlier a competent court was supposed to receive such requests.

Prior Use for Cancellation

The new law regulates the rights of a prior user of a trademark for trademark cancellation.

Customs Seizure based on Trademark Rights

As per the new trademark law, UAE customs can now seize imported goods that infringe trademark rights and this provision was not covered in the previous law. Once a request is filed with the customs authorities for import seizure by someone being the owner of infringed trademark rights, goods that allegedly infringe trademark rights can be stopped from shipment clearance for 20 days. Certain exceptions are however provided in the new law.

Electronic Notification

The new trademark law specifies the requirements for electronic notification which was not included in the previous law.

Revised Timelines

The New Law revises the timelines for examination of trademark applications and stipulates it to be 90 days maximum from the date of application. It used to be 30 days as per the old law.

The time frame for appealing against the decision of the Trademark Committee regarding any rejection of trademark applications has been revised as 30 days in contrast to 60 days specified in the previous law.

Trademarks Registered in Bad Faith

Trademarks registered in bad faith can be excluded following the new law and complies with the Paris Convention.

Trademark Licenses

The new law stipulates that trademark licenses no longer need to be registered with the Ministry.

Conclusion

On 2021 September 28th, the UAE joined the Madrid System and became a signatory to the Madrid Protocol for international trademark registration alongside the national filing system.

The new trademark law has come into force after the UAE government received concrete and comprehensive feedback from trademark professionals and owners of well-established brands.

It is recommended that startups and SMEs willing to expand their businesses in UAE, MENA and international markets by promoting brands may look for a trusted partner and hire a professional and locally based corporate service provider for an easy and hassle-free Trademark Registration in Dubai.

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Single Family Office in Dubai
  • Article, U.A.E

Advantages and Disadvantages of Outsourcing PRO Services in Dubai

Dubai is one of the world’s most prosperous economies. As such, it is natural that business owners and entrepreneurs from around the world would like to set up shop in this flourishing city. Now, any business owner in Dubai needs the help of a professional PRO. PRO is an abbreviation for ‘public relations officer’. A PRO helps your business with all the required government approval, documentation, and legal compliance required for the business. Given the importance of a PRO, it is essential to choose nothing but the best PRO services in Dubai for your company.

A good way to find the right PRO service company is by outsourcing this requirement. However, many people wonder whether outsourcing PRO services is a good idea or not. To help you arrive at the correct conclusion, we have listed down the advantages and disadvantages of outsourcing PRO services in Dubai. Let’s take a look –

Advantages of outsourcing PRO services

Here are the advantages of outsourcing professional PRO services –

  • Receive professional guidance

The biggest and most important benefit of outsourcing PRO services is that you get access to the best professional guidance. You can choose a knowledgeable PRO service provider that enjoys a good reputation in Dubai. They will help you informed of all the latest regulations so that you are always on track.

  • Saves on time

As a business owner, the one thing you may be short on is time. You have meetings to attend, staff to manage, and clients to talk to. A professional PRO can help save you time on all the paperwork and regulations you need to keep up with. This can give you great peace of mind.

  • End-to-end service

The best PRO service will pick up the paperwork and documentation right from your office and deliver it where it needs to go. As a business owner, you would not need to worry about making the visits yourself.

  • Leaves you free to focus on work

With your PRO needs getting managed by experts, you are left free to focus on what really matters…growing your business in Dubai. You don’t need to worry about keeping track of the latest government rules, documentation, and permits for your business as you have professionals to manage all this for you. Plus, you save yourself from unnecessary fines.

Disadvantages of outsourcing PRO services

Now, let’s look at the downside of outsourcing professional PRO services –

  • Costs involved

Hiring a professional PRO will cost you, no doubt. However, the advantages of hiring these professional services outweigh the costs. You receive complete assistance from professionals who know what they are doing and who will guide you every step of the way. Plus, if you had to hire a PRO on staff, you would probably have to spend a lot on salary and benefits. Outsourcing can prove to be much cheaper, especially for a startup.

  • Concern about quality

When it comes to outsourcing, you may worry about the quality of the PRO service provider. However, if you choose a good service provider known for their excellence in service, you can rest assured that you are in good hands. A good PRO service provider will give you all the information and receipts you need so that you stay informed every step of the way.

As we can see, the advantages of hiring professional PRO services are definitely worth their weight in gold. To know more about PRO services in Dubai, get in touch with us at IMC Group. We provide professional services including company formation in Dubai and PRO services such as yearly license renewal, regulatory approvals and NOC letters, immigration and labour cards, corporate bank account opening, copyright and trademark, and much more.

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The New Electronic Transactions and Trust Services Law Signals a New Stage of Digital Transformation in the UAE
  • Newsletter, U.A.E

The New Electronic Transactions and Trust Services Law Signals a New Stage of Digital Transformation in the UAE

A new Electronic Transactions and Trust Services Law, Federal Decree-Law No. 46 of 2021 has recently been issued by the Telecommunications and Digital Government Regulatory Authority (TDRA) and ushered in a new stage of digital transformation in the UAE. The new law repeals the existing e-transactions and e-commerce law, the Federal Law No.1 of 2006. The new law comes into force on 2 January 2022 and mandates legal compliance 12 months from this date.

Rolling out of this new law is in line with the European eIDAS regulation and introduces regulatory frameworks for safe access of online services and carrying out digital transactions online. The new law aims to position UAE as a leading digital economy and enhance national business and economic indicators including the Ease of Doing Business Index, Online Services Index (OSI), the Global Entrepreneurship and Development Index, the Global Competitiveness Index and other indices.

The law outlines measures to regulate Electronic Identification and Trust Services in the country. While the issuance of controls regarding trust services will lie with the Federal Authority for Identity and Citizenship, the law will be regulated by TDRA issuing the standards and procedures of electronic identification and verification such as a digital ID in consultation with the concerned parties.

Electronic identification will enable businesses and consumers to identify and authenticate themselves online and electronic trust services will enhance security through Electronic Signatures, Electronic Seals, Electronic Time Data and Electronic Document Delivery. The law shall also regulate the validity of all documents as in the old law.

Trust services are defined as electronic services that create, verify and validate electronic or digital signatures, time stamps, seals and certificates. They may also authenticate websites and preserve the signatures, seals and certificates that are created. A person or legal entity who handles such trust services is called trust service provider (TSP).

All trust service providers must get a license from the TDRA however the details of licensing requirements have not yet been published. All the licensed trust service providers will be provided with a ‘Trust Mark’ by the TDRA as evidence of government certified trust services complying with all the legal requirements of the soil.

As per the new law, the TDRA shall prepare a ‘UAE Trust List’ to document all the certified licensees and subsequently publish the list with details of their trust services. The authority shall specify all the regulatory requirements for the service providers for being eligible for inclusion in the list.

The Chairman of the Board of Directors of the TDRA, Talal Humaid Belhoul highlighted saying “The issuance of the Electronic Transactions and Trust Services Law comes into effect at an important stage in the history of our country, as we celebrate the golden jubilee of the UAE. In this stage, we start a new chapter towards the UAE Centennial 2071 by enhancing digital transformation that impacts the economy, society, and the whole life in the UAE,”

Director-General of the TDRA, Majed Sultan Al Mesmar remarked, “The issuance of the decree-law on Electronic Transactions and Trust Services marks a start of a new stage in the process of comprehensive digital transformation in the UAE. This law deals with many details of the daily life of the various segments of society, including individuals and companies. It will have a positive impact on the higher goals of the country, in terms of promoting the digital economy and consolidating the global reputation of the UAE as an investment hub.”

UAE government, in its stride for a nationwide digital transformation, introduced the new law for improving the licensing processes of digital services that support all transactions including civil, commercial and all real estate transactions. The effectiveness of the judiciary shall be vastly improved with the easy and early settlement of all civil and commercial disputes. The law shall also enhance the acceptance and creation of records through easily accessible and retrievable electronic files.

Government procurements can be done quickly and also at a lower cost through electronic bidding and tendering. Issuance of permits and licenses shall be simple with digital signatures, electronic payment of fees and approvals accorded in the form of electronic records. All cross border transactions shall be easy, safe and secure.

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