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Why is Post Covid and Post Brexit Corporate Migration to UAE intensifying among the UK SMEs
  • Newsletter, U.A.E

Why is Post Covid and Post Brexit Corporate Migration to UAE intensifying among the UK SMEs?

Shifting a company’s operations into foreign soil for business expansion is usually a complicated, time-taking and costly affair and due to these very reasons, only a few companies venture upon corporate migration without solid economic reasons such as favourable labour and market conditions spurring business growth.

Both large and small enterprises can benefit from relocating overseas and only when there is a real-time strategically assessed move considering all possible benefits and hurdles. Though in general, the main reasons driving a business to migrate to another country are taxes, regulations, market access and labour cost, the situation this time is entirely different compared to the past as the recent covid pandemic is constantly demanding the companies to be more agile and resilient for survival and growth.

Brexit has been a source of uncertainty for UK based business entities ever since the country’s electorate voted for this decision. As the consequences were unknown and unpredictable, many global establishments including Panasonic, Barclay’s, Honda, Sony, HSBC shifted their European headquarters out of the UK to mitigate risks and challenges.

The European Union (EU) has long been the UK’s biggest trading partner and accounted for more than 40% of all UK exports and almost half of all UK imports in 2019. In all probabilities, the effect of Brexit on the UK’s business and trade over the next couple of years could result in

  • Higher inflation
  • Increased import/export costs
  • Higher taxes
  • Supply chain disruptions and logistics issues
  • Skilled labour shortages
  • Subdued market due to lower demand from the EU


Persistent business challenges of every kind are apprehended besides the prevailing higher inheritance tax even after the last-minute trade deal with the EU and the resumption of vaccination programs.

Many UK businesses are mulling over relocating their businesses to the UAE fully or partially and this was also confirmed in a survey conducted in the recent past when more than 30% of SMEs expressed their desire for complete relocation or additional facilities setups in the business-friendly and no-tax desert nation.

With UAE’s foreign ownership laws outlined in the country’s 2015 commercial companies law being amended, onshore companies will no longer require 51% of local majority shareholding effectively lowering overhead costs and easier business set up for foreign investors in both mainland and free zones in the country including the most sought after DIFC company formation.

The UAE has always been considered an attractive business destination for UK companies with more than 5,000 British business setups and 120,000 British citizens and expats residing in the country. The UAE also provides powerful business solutions exclusively meant for UK citizens.

Apart from mainland and DIFC, other UAE free zones are also becoming vastly tempting to the UK companies due to diversified platforms and easy and low-cost business setups and include DMCC company formation and JAFZA company formation. UAE free zones, besides 100% foreign ownership offer a plethora of other opportunities to the business communities than the onshore ones.

The UK has also proven and very successful track records in the field of finance, technology, FMCG, renewable energy, healthcare and IT which are in great demand in the UAE and other gulf countries further validating business relocations. It is also worth noting that the UAE is the largest export market for the UK in the Middle East region. Additionally, the UK is also the biggest foreign direct investor in the UAE with a great reputation for ethical business conduct.

Migration to the UAE by a UK company is simple and straightforward involving only shifting to a new jurisdiction while maintaining the same legal identity without affecting the customer base and brand identity.

Relocating your business isn’t an easy decision though, no matter how much more cost-efficient it may appear. If you are considering moving your company to another country several other things need to be considered that can ensure you make the most of the opportunities presented including business rules and regulations, cost of removing the existing setup, language barrier, culture and future market challenges.

Even when the Brexit challenges are kept aside, setting up a business establishment in the UAE has always been a compelling proposition due to the world-class infrastructure built over the years with unmatched communication, transportation, education and healthcare facilities besides zero corporate tax environment, 100% repatriation benefits on profits, multiple corporate structures availability and double tax avoidance treaties with 115 countries.

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The UAE Israel Conclude Double Taxation Avoidance Agreement (DTAA)
  • Newsletter, U.A.E

The UAE Israel Conclude Double Taxation Avoidance Agreement (DTAA)

To promote bilateral trade and investment between the two countries, the UAE and Israel entered into a Double Taxation Avoidance Agreement (DTAA) on Monday 31st May 2021.

It was first tweeted by the Israeli Finance Minister Israel Katz who described the move as a boost to develop business and investment between the two nations after signing the Abraham peace accord last year.

“The agreement will accelerate the development of economic relations and contribute to prosperity in both countries,” Katz said in his tweet.

Katz noted in a briefing that the treaty is primarily based on the OECD model and it will provide certainty and favourable conditions for business activity and will also strengthen the economic ties with the UAE.

The treaty is subject to the parliament and cabinet approval of Israel and is expected to come into force on 1st January 2022. “Israel is a party to 58 double taxation treaties,” Israel’s Finance Ministry remarked.

DTAA being a bilateral agreement, the two countries involved formulate and establish rules that apply to income and assets of the two countries, the Israeli Finance Ministry highlighted on its website.

The UAE has so far concluded 115 double taxation agreements with its trade partners to help avoid similar tax imposition by two countries on the same taxpayer, and for facilitating the exchange of goods, services and capital. It was in 2020 October that the UAE officially announced that it had reached a deal with Israel on avoiding double taxation.

After the peace accord, several commercial agreements have been reached between the two countries and almost USD 280 million in trade treaties were signed within a couple of months. As per reports, the diplomatic and trade normalization between the two countries could give rise to more than USD 4 billion bilateral trade between the two countries.

The UAE also made a revelation saying that it was planning for a USD 10 billion investment fund for the strategic sectors in Israel besides the USD 3 billion joint investment fund established by the UAE, the US and Israel together after the accord.

Finance and economy experts welcomed the tax treaty in anticipation that it would enhance bilateral trade and investment relations in future and promote new company formation in Dubai by Israeli investors.

“Under the agreement, tax deductions, dividends and royalties are capped. The double taxation treaty would make the two countries more competitive and promote economic activity. It will make the two nations more attractive to international investors,” an expert remarked.

As per the experts, the tax treaties between the countries would help promote foreign investment flow between the two countries as investors only invest money after satisfactory earnings after deductible tax playing the most crucial role in foreign investments.

“Having a treaty in place, UAE entities will be able to repatriate returns on investment with a reduced rate of tax from Israel in form of dividend, interest or royalties whereas Israeli businesses will continue to enjoy tax exemptions on their investment in the UAE. This treaty not only will boost investment into the UAE from Israel but also from the global players having investments in Israel to route investment into UAE,” an Industry expert commented.

“We have a huge surge in investment into real estate from Israel whereas UAE outbound investment goes into Israel’s technology and defence sectors. It is a great initiative towards business harmonisation between both the countries, a high-level industry professional remarked.

“In countries that have worldwide taxation, a non-resident citizen who is working in UAE could be liable to pay tax on their income in their home country as well as in the country in which it is earned. UAE being part of an international tax framework, it provides important protection and benefits for UAE companies and expatriates,” emphasized an expert.

To avoid the same income being taxed twice, the UAE has signed double taxation treaties with many countries, as the Government has understood it as unfair and potentially discouraging for international trade and business that could adversely impact future business setup in Dubai and other emirates.

The DTAA however could be tricky and companies and individuals are advised to seek professional help from a reputed and professional accounting firm.

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The Growing Trend of Foundations in the UAE
  • Newsletter, U.A.E

The Growing Trend of Foundations in the UAE

What is a Foundation?

Foundation, a less familiar concept than trust is defined as a hybrid of trust and a company resembling a company in which it is a body corporate without any shareholder. It has a separate legal personality with its property like a company. A foundation is governed by a council following its charter and regulations (its constitutional documents) in much the same way that a company is managed by its board of directors following its constitutional documents.

Foundations have no beneficial owners and are, therefore ’ownerless’ structures even where the foundation property is held for the benefit of beneficiaries.


How is a Foundation formed in the UAE?

A Foundation is constituted by the below-mentioned components
  • A Founder, at least one founder as an individual or legal entity.
  • A Council constituted by the Founder with a minimum of two members to manage the foundation.
  • A Guardian as an individual or legal entity appointed by the Founder for mentoring.
  • An appointed Registered Agent Registered Agent only compulsory in RAK ICC with a necessary license from the regulatory authorities.
  • Beneficiaries appointed by the Founder as an individual, group or entity authorized to receive and make payments.
  • A Registered Office as the address of the Registered Agent.
 

What are the different types of Foundations?

Every Foundation has different government regulations and varies depending on the purpose of creating such an entity and include
  • Exclusively charitable.
  • Not charitable.
  • Benefits persons identified in its Charter or By-Laws.
  • A combination of the above three.
 

What are the reasons for the popularity of Foundations in the UAE?

A variety of foundation structures are being implemented to hold trading companies, real estate and liquid investments as investors are pouring in for business setup in Dubai and other six emirates. It is becoming a popular vehicle and offering many benefits including
  • Asset protection as assets are not readily accessible to creditors, governments or other family members.
  • Privacy as the beneficiary details are kept private ensuring the reduced risk of claims and legal actions from third parties against the founders and their families.
  • The flexibility of legal and beneficial ownership enabling families intergenerational legacy planning and wealth protection in different international jurisdictions.
  • Efficient succession planning based on the wishes of the founder under the terms of the foundation with no scope for probates.
  • Better governance of the family in line with a professionally managed corporate governance.
  • Facilitates charities depending on the wishes of the founder.
  • Maintenance of legacy.
 

Where in UAE are the Foundations flourishing?

Foundations have become a popular option for regional wealth structuring and succession planning in the UAE and a growing number of foundations are now available across UAE and are mostly similar with a few exceptions.
  • The Dubai International Financial Center (DIFC), under the governance of the Foundations Law, DIFC Law No. 3 of 2018.
  • The Abu Dhabi Global Market ( ADGM) under the Foundations Regulations 2017 and
  • The RAK International Corporate Centre (RAK ICC) following the RAK ICC Foundations Regulations 2019.

Initially foundations were formed in the DIFC and then followed by ADGM and RAK ICC.

 

How the Foundations in DIFC, ADGM and RAKICC differ?

 
DIFC

The DIFC is the sole regime that allows DIFC company formation to get transformed into a Foundation.

DIFC Foundations are allowed exclusively for charitable purposes where ADGM may not allow unless a Guardian is appointed mandatorily.

A DIFC Foundation can issue securities representing the value of the contributed assets from the contributor and their entitlement to the same and allows user arbitration for dispute resolution. USD 200 is required for registration and yearly renewal of foundations.

 

ADGM

While the identity of the Council Members is available in the DIFC, it is kept confidential from the public in the ADGM.

It is the only regime where foundations are not needed to file and audit accounts unless demanded by the Registrar. Records of accounts however must be prepared and maintained as in other regimes.

ADGM Foundations are not allowed only for charity without additional purposes. USD 200 is applicable as the fee towards registration and renewal every year.

 

RAK ICC

RAK ICC does not maintain a publicly accessible register of information about a Foundation.

Information related to the Foundation benefits from the applicable privacy laws in the UAE and will not be disclosed unless required by the relevant authorities.

Within RAK ICC however, a Registered agent is a mandatory requirement whereas with DIFC and ADGM it is only optional.

Fees: Registration Fee / Annual Renewal (fee as at 2021): AED 750 (approximately USD 200).


What is the essence of a Foundation?

A Foundation is an establishment that can consolidate property and assets under one legal entity and are normally used for the following purposes
  • Private wealth management and preservation.
  • Tax planning.
  • Asset and creditor protection.
  • Succession planning.
  • Financial planning.
 
 

Foundations are also used for charitable purposes

 

Foundations often need legal help for effective wealth preservation through appropriate structuring which can ensure safe and undisputed transfer of assets to the beneficiaries and successors. IMC with a team of legal professionals can render requisite support and help you achieve your goals in this regard.

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UAE Issues Amendments in VAT Executive Regulations Reducing Penalties for Tax Non-compliance
  • Newsletter, U.A.E

UAE Issues Amendments in VAT Executive Regulations Reducing Penalties for Tax Non-compliance

Cabinet Decision No. 49 of 2021 has announced amendments of certain provisions of the old cabinet decision No. 40 of 2017 regulating the Administrative Penalties for Violation of Tax Laws in the UAE. This has also been confirmed by the Federal Tax Authority (FTA) on 29th May 2021.

Before this newly issued cabinet decision 49 of 2021, heavy penalties often used to be imposed on taxpayers for non-compliance with the VAT and excise rules and regulations. Though the imposition of the high penalty was originally aimed for increased tax compliance, it often put the taxpayers in difficult and stressful situations.

The amendments brought in are designed to help tax registrants and support them in fulfilling their tax obligations. It is hoped that the relaxation of penalties passed by the government should enhance the competitiveness of UAE for conducting business.

“The new amendment will become effective on 28th June 2021 and will reduce many administrative penalties imposed for violating tax laws. This comes as part of the wise leadership’s directives to implement the tax system according to the best standards that ensure further growth for the national economy and help achieve transparency and economic momentum, providing an ideal and resilient tax legislative environment that encourages self-compliance and keeps pace with change through constant issuance of decisions in accordance with phased requirements,” highlighted Khalid Ali Al-Bustani, the Director-General of the FTA in a press release on Saturday.

The Director-General wanted the tax registrants to avail the benefits announced in the new amendment. The newly passed decision offers additional reliefs to the tax-paying business sectors and shall support them in meeting their tax obligations with ease effectively contributing towards the enhancement of UAE’s economic growth.

Al-Bustani also stated that 16 different types of administrative penalties under the old cabinet decision of 2017 have either been reduced or the earlier method of calculating penalties amended (TAXP001). He also explained that the reductions are primarily enacted for tax penalties including administrative violations on Tax Procedures, Federal Decree-Law on Excise Tax, and Federal Decree-Law on Value Added Tax (VAT).


Al-Bustani added

“The amendment includes fundamental amendments that provide more facilities to help taxable persons achieve self-compliance and encourage the speeding up of voluntary declaration. Under these amendments, a late payment penalty will not be imposed on voluntary disclosures if payment is settled within 20 business days of submitting the voluntary disclosure, and the sooner the taxable person declares and pays due tax according to periods specified by the decision, the lower the value of the penalties will be. This constitutes an incentive and a good opportunity for tax registrants who have errors in declarations, tax assessments, or requests for tax refunds, to speed up the implementation of voluntary declaration procedures and avoid increasing penalties.”

In a press briefing, FTA noted that the tax authority shall redetermine the administrative penalties (TAXP002) enforced on the taxpayers before the final rollout of the amendment scheduled on 28th June 2021 and will include the reassessment of the penalties which have not been fully paid, to be equal to 30% of the total of such unpaid penalties. It was emphasized that to take advantage of such a scheme, the taxpayers must settle their payable tax in full by no later than December 31st, 2021, and 30% of the total administrative penalties due and unpaid by 27th June 2021, by no later than December 31st, 2021. The detailed implementation procedure shall however be decided on a later date, the FTA remarked.

Two new detailed clarifications on this amendment have already been published by the FTA within the framework of the ‘public clarification service’ provided on the FTA’s official website and as a part of their ongoing awareness program.

The public clarifications hosted on FTA’s website are meant for making the existing and potential taxpayers more acquainted with tax aspects with easier and simpler explanations and help them put into effect the UAE’s tax principles effectively.

01

The first public clarification (TAXP001) includes some basic amendments made to the table of administrative violations and penalties related to the application of Federal Law on Tax Procedures (Cabinet decision No. 51 2021) for ensuring the right interpretation of these amended penalties and with added certainty.

02

The second public clarification (TAXP001) specifies the methods and procedures used for re-determining some of the administrative penalties imposed in the old cabinet decision that would come in force before the effective due date of the new amendment on 28th June 2021.

The Cabinet Decision No. 49 of 2021 however presents both opportunities and threats to businesses falling under VAT executive regulations.

Though an early voluntary disclosure of any tax fallout is encouraged with the enactment of nominal penalties, it would be quite a large amount for cases where non-compliance is not detected timely and not disclosed. It becomes of paramount importance to critically review records and audit findings for identification of non-compliance in VAT payment and preferably get their systems re-audited by an experienced and qualified third party.

It is also important for companies to identify the applicability of disclosure by reviewing VAT treatments in previous years.

It shall also be equally necessary to identify any unpaid tax penalties if the companies can benefit from the tax reliefs announced.


How IMC can help you?

IMC with its many years of extensive and proven experience in tax compliance, management and planning in the GCC region and especially in the UAE can support companies in identifying all taxation and planning aspects of businesses in light of the recent amendments.

Once a business is aware of any tax errors, it will need to consider which penalties may be applicable (e.g. penalties for the errors, late payment penalties, etc.) and the steps that should be taken to minimize the impact of the penalties.

The new amendments in VAT executive regulations are welcome and expected to address the requirement clarifications of the business community before rollout.

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Dubai-business Outlook for Startups and SMEs during Covid Pandemic
  • Newsletter, U.A.E

Dubai-business Outlook for Startups and SMEs during Covid Pandemic

Dubai is one of the most open economies in the world with a strategic location between Asia, Africa, and Europe. Even at a time when the pandemic gripped the world in 2020, Dubai witnessed USD 3.26 billion FDI  during the first half of 2020 and ranked fourth globally with several new business setups in Dubai.

To fuel entrepreneurship and grow the country’s SME sector, a special position of Minister of State for Entrepreneurship and SMEs was created during the July 2020 cabinet reshuffle. The Dubai government also initiated several support services to enhance the non-oil private sector’s contribution to economic growth and in line with the Dubai Vision 2021.

The Dubai government is leading from the front to mitigate the adverse effects of the covid pandemic and regulatory authorities are relentlessly striving to develop and ease regulatory and legal frameworks for Dubai company incorporation besides the identification of alternative funding routes and providing additional government support.

“We find a paradigm shift in the thought process of investors. The freedom to do business and safety are the key drivers of growth in the SME sector. The paperless e-governance added to the transparency and precision in administrative matters. Over the past decade, the UAE has evolved as the most sought-after destination for investors to set up their establishment so that they can cater to clients in MENA, and South Asia,” highlighted Syam Panayickal Prabhu, Founder and Managing Director, Aurion.

Dubai’s 50 free zones reverberate at the core of its startup ecosystem comprising some of the world’s leading free zones including Dubai Silicon Oasis (DSOA) or IFZA, Dubai International Financial Centre (DIFC), Jebel Ali Free Zone (JAFZA), and Dubai Multi Commodities Centre (DMCC) and offer numerous advantages to new businesses including 100% foreign ownership, zero corporate tax, nil import-export duties, 100 percent repatriation of revenues and profits, minimum documentation requirements and easier startup, easy recruitment and visa processes.

Saud Salim Al Mazrouei, Director, Hamriyah Free Zone Authority added, “Free zones are a driving force in the growth of the economy in the UAE. They help stimulate economic development, create jobs, boost and diversify exports, and expedite the industrialization process of an economy at lower costs for the government. Incidents like the Covid-19 pandemic with a sudden drop in oil price can serve as a catalyst for long-term sustainable economic reform.

There are also 6 business accelerators and 5 incubators in Dubai to support startups and SMEs including DIFC’s FinTech Hive and Dtec at DSOA providing support through startup incubation and venture capital funding. The Dubai Future Accelerators program facilitates partnerships between public and private sector organizations and startups in Dubai.

Dubai has long been eyeing a leading world position in innovation and technology, and financial technology acronymed as FinTech playing the most pivotal role in accelerating the business growth of Dubai startups during the covid pandemic. DIFC FinTech Hive is offering accelerator programs for FinTech startups with a total of USD 100 million funding support that has already benefited four companies.   

Most important for the growth of the SMEs and startups is the availability of funds and Dubai is continuing its efforts to look for additional and alternative funding for addressing economic diversification strategy. Venture capital and crowdfunding are being encouraged by the Dubai government for sustaining startups and SMEs even with lower assets and proven and credible track records. As per a survey conducted by Dubai SMEs, almost 9 percent of SMEs received additional funding through the venture capital route.

Dubai also offers abundant diverse and talented human capital and secured top global ranking in terms of employee training and workforce motivation.

Though the IMF and World Bank have lowered the economic recovery forecast for all major economies, Dubai expects a fast V-shaped recovery in 2021 facilitated by Dubai Expo 2020 which promises to add USD 33.4 billion to the UAE economy by 2031.

As the consequences of the Covid-19 pandemic becoming severe, the Dubai government has started firing its arsenals on all cylinders to boost the economic diversification program and focusing on some strategic sectors including commercial trade, tourism, renewable energy, manufacturing, media, financial services, aviation and healthcare, and all SMEs and startups in general.

The increased economic contribution of private sectors to the national GDP is at the top of Dubai’s agenda as per the UAE’s Vision 2021 which was 70% some two years ago and is now expected to reach 80 percent by 2021.

In Dubai, almost 99 percent of companies from the private sector belong to the SME and Startup category and are projected to contribute nearly 46 percent of Dubai’s GDP.

“As always, the UAE is doing a fantastic job at attracting international interest on all levels of business and lifestyle, and therefore, it remains a top-ranked international destination to do business and to live”, commented Karl Hougaard, Founder and Managing Partner, Trade License Zone in a recent interview.

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UAE Participated In IMFC Meeting
  • Newsletter, U.A.E

UAE Participated In IMFC Meeting

UAE Minister of State for Financial Affairs, Obaid Humaid Al Tayer participated in the recently held spring meeting of the International Monetary and Financial Committee (IMFC) convened in a virtual format together with the annual meetings of the International Monetary Fund (IMF) and the World Bank Group during April 5 to 11 2021.

Ministers of Finance and development, Central Bankers, representatives of civil society organisations and private sector executives attended this meeting to discuss global economic concerns, the latest global economic developments and the financial and economic outlook due to the Covid-19 pandemic. The agenda of the meeting also included poverty eradication, the effectiveness of financial aids, global economic and financial systems including issues of high debt risks and international economic and development policies.

The Minister of State for Financial Affairs emphasized UAE’s resolve to work hand in hand with the international communities to overcome the risks and challenges posed by the pandemic and ensure sustainable economic recovery and growth.

Abdulhamid Saeed, Governor of the UAE Central Bank, Kristalina Georgieva, Managing Director of the International Monetary Fund, and many finance ministers from different countries also took part in this meeting.  

Al Tayer appreciated IMF’s initiatives and timely interventions for world economic recovery with a revised growth prospect of six per cent for 2021 globally from a negative growth experienced during the previous year that also supported more foreign company formation in Dubai.

The minister also echoed similar concerns as reflected by IMF over the possibility of an imbalanced economic recovery in the Mena region widening the inequality gap arising out of disproportionate economic and social effects and stressed upon fiscal priorities aimed for achieving inclusive sustainable economic development.

“We welcome the Global Policy Agenda devised by Kristalina Georgieva, managing director of the International Monetary Fund, as a comprehensive framework for recovery. The UAE will continue supporting the IMF’s endeavours to mitigate the financial and economic repercussions of the pandemic to achieve global recovery and attain strong, sustainable, balanced and comprehensive economic growth,” he remarked.

Al Tayer added that healthcare continued to be the topmost priority including production and distribution of vaccines for speedy economic recovery. He also informed that USE joined the global efforts to develop and produce covid 19 vaccines with a targeted figure of 200 million doses of Hayat-Vax vaccine annually.

The minister welcomed the initiative of IMF to reallocate Special Drawing Rights (SDRs) for middle and low-income countries as it would help them to fund healthcare systems and take preventive measures against the virus. He also appealed for increased lending and technological support to these countries.

He also noted, “Beyond just recovery, we must pursue socially inclusive and environmentally sustainable models of growth as the only path forward in the post-COVID-19 era, where the IMF can support by facilitating the exchange of expertise, supporting capacity building, and enabling funding efforts.”

Al Tayer added: “As a general principle, we urge the IMF to advance its climate agenda in accordance to the Paris Agreement, which enjoys multilateral consensus, by supporting countries to achieve their Nationally Determined Contributions, while considering their national circumstances and development priorities.”

UAE has taken several social, economic and political measures to mitigate the adverse effects of the pandemic and has demonstrated its commitment by promoting new business set up in Dubai, he highlighted. He also made some additional recommendations including maintenance of a strong, adequately resourced and quota-based fund and highlighted the need for transparent communication to win and maintain public trust.

The IMF Board of Governors responsible for monitoring and management of the world financial and monetary system and timely actions on disruptive issues e.g. covid 19 pandemics are provided with appropriate reports and suggestions during the IMFC meetings.

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Why You Need PRO Services as an Employer in Dubai? Things You are not Told by Everyone
  • Article, U.A.E

Why You Need PRO Services as an Employer in Dubai? Things You are not Told by Everyone

Overview

More and more investors across the globe are discovering Dubai as their future business destination and many companies located in the UAE are planning to hire people from abroad to meet their human resource recruitments. Skilled professionals in great numbers from other countries are also seeking to work in this business and tax-friendly Middle East state.

However, this process of global hiring poses serious issues when the companies recruiting manpower do not have the right resources to successfully address all the regulatory requirements of the local administration and other government authorities.

Though there are many guidelines available, practically it is very difficult for someone new, to properly understand all the processes involved in appointing and retaining new hires till the time it is done by oneself. Multiple visits to government offices are normal and on various pretexts either for a document or payment of fees or some other reasons making it very complicated and embarrassing just to realize the importance of external support from an experienced and professional pro services in Dubai.

Areas for Employers to Outsource PRO Services In Dubai

 

1. Immigration & Labour Contracts

For a new business set up in Dubai mainland, one must register with the Department of Naturalization and Residency (DNRD) and the Ministry of Labour (MOL) for allowing the business entities to hire and appoint the required labour and professional staff from overseas.

For businesses established in free zones, a registration with free zone authority is a must. On registration, you must interact with the Free Zone Authority to initiate the process of residence visas and work permits. However, a legal document detailing the conditions and procedures of employment between the employer and employee becomes mandatory for ensuring securities of both parties.

The labour contracts are required to be documented both in English and Arabic necessitating careful drafting and translation and needing help from pro services in Dubai. Moreover, even after the introduction of online services by the UAE government for easing this process, it remains to be very complicated and almost always requires assistance from pro services.

2. Employment Visa & Residence Permit

For entry and work in Dubai, both an Employment Visa and Residence Permit are required. These documents are to be provided by the employers and pro services in Dubai can be of great help in obtaining these documents as they are well conversant with the procedures involved and familiar with the working of the immigration department.

3. Emirates ID

Emirates ID is an identity card issued by the Federal Authority for Identity and Citizenship. It is a legal requirement for all UAE citizens and residents alike and they should carry it with them at all times. Employers are not allowed to withhold the Emirates ID cards of their employees. The ID card comes with an electronic chip containing all employee data.

Obtaining an Emirates ID card for your employees can be complicated and time-consuming due to the application process and documentation requirements as it requires filling up of an eForm at one of the authorised typing centres or through the online form available on the website of Federal Authority for Identity and Citizenship (FAIC) and then receive an SMS containing information about the registration centre. Dubai pro services can save the employers lots of time, money and hassle only requiring employee data to be given to the services.

4. Dispute Resolution

Where there is a dispute between an employee and employer, an application must be made to the MOL for resolving the dispute. In case, an employer is faced with such a situation, he/ she can seek guidance from Dubai pro services.

5. Transfer of jobs

The rules relating to workers changing jobs from one company to another are restrictive, complex and changeable. So when employers need to transfer their employees to any other company owned by them, pro services can often facilitate this process of transfer of jobs between two companies jointly owned by an employer.

6. Medical Insurance

Employee health-related issues take utmost priority in Dubai. It is a must for employees to undergo strict medical examination during the Visa approval process. The medical insurance is integrated with the Emirates ID and Dubai has made it compulsory for all employers to have employee medical insurance.

The medical insurance is tricky considering the cost and suitability aspects and local pro services based in Dubai can help employers to choose the best medical insurance scheme out of many different alternatives available to them. Because of the familiarity of Dubai pro services with local insurance agents, they can assist employers to choose the most cost-effective and useful scheme.

Conclusion

Reinforcing the importance about pro services in Dubai, it is equally important to state that information are sometimes very hard to come by in Dubai despite every government bodies owning their websites with regulations, procedures, fees etc. and employers can only seek help and guidance from local expert pro services in Dubai for managing employees and running their businesses.

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DIFC Innovation License for Startups
  • Newsletter, U.A.E

DIFC Innovation License for Startups

Dubai International Financial Centre (DIFC) is the fastest growing financial center in the Middle East and Africa (MENA) region and has been dedicated to the economic excellence of the nation by promoting technological innovation and providing a conducive and enabling environment to the technology and financial services industries.

 

DIFC, acting as the harbinger of economic prosperity in the Middle East, Africa, and South Asia (MEASA) region as the largest financial free zone has recently announced a new license for startups called Innovation License when the DIFC corporate startup license holders under this scheme will join the communities of more than 200 technology companies, 2000 plus firms with more than 25000 professionals.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai originally announced this Innovation license during early 2020 to attract new categories of businesses to the financial center as a key initiative of Dubai Future District with a provision of subsidized commercial licensing option for USD 1500 per annum minimum.

Innovative and creative business entities will be able to grow and expand their business utilizing the legal and regulatory framework of DIFC complemented by world-class intellectual property and data protection rights.

“The new DIFC Innovation License provides an important springboard for future economy pioneers to establish, upscale, and future proof their business within the stable framework of a world-leading global financial center,” added Salmon Jaffery, Chief Business Development Officer, DIFC.

Salmon Jaffery also highlighted, “It is an exciting new offering that we hope will attract technology-led, sector agnostic start-ups that will disrupt the technology and financial sectors. These types of businesses have an important role in shaping the economic future of Dubai, UAE and the region. They will be welcomed by members of DIFC’s ecosystem and become a central part of the new Dubai Future District.”

Officially launched in August 2020, the initiative has already started witnessing new startups and entrepreneurs opt for Innovation license and in the applicable areas of IT infrastructure, Software Development, Internet and cloud migration consultancy, Smart Technology, R&D, and computer consultancy

Besides offering co-working spaces at an affordable rate of USD 500 per month, DIFC provides numerous benefits to Innovation License holders including a registration fee of USD 100, USD 250 data protection fee; securing up to 4 visas when renting flexible desk space, and 50 percent subsidy on additional visas.

IMC is a Dubai-based PRO services company with a team of highly qualified and result-oriented professionals and is well conversant with the local laws and regulations. In addition to rendering our round-the-clock active support in the entire licensing and registration process, we will also help you in identifying the most suitable business activities that can result in a high level of success under this new DIFC Innovation Licensing scheme.

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  • Newsletter, U.A.E

World Alliance of Inter Financial Centres (WAIFC) Accorded Membership to The Dubai International Financial Center (DIFC)

In March 2021, the WAIFC board unanimously agreed to recognize the DIFC, the leading financial center in the MEASA region as a member of the association, the 4th from the GCC to spearhead the development of digital finance and in the areas of Fintech, Sustainable Finance, and Innovation.

As a non-profit organization located in Brussels and founded in July 2018 in Paris, the WAIFC represents the top nineteen global financial centers across four continents that promote and share best practices in the field of finance with a varied scope of activities and benefit from the collective strength of its members. The alliance as city governments and other financial institutions also facilitates cooperation amongst the group members and interaction with the general public besides developing and promoting their financial Centres.

As a member of WAIFC, DIFC as the highest-ranked financial center in the MEASA region will now collaborate with other leading global financial centers in Tokyo, London, Paris, Frankfurt, Toronto, and in many other countries on global best practices some of which are already entered into memorandums of understanding with DIFC.

DIFC with the vision to drive the future of finance is focused on embracing new and innovative technologies in the field of finance and aims for achieving sustainable economic and social goals including Environmental protection.

“We are very pleased to have DIFC join our association. Dubai is a leading global financial center, and DIFC will undoubtedly bring a valued contribution to our initiatives. We are very much looking forward to working with the colleagues in Dubai,” remarked Jennifer Reynolds, the Chairwoman of the WAIFC.

CEO of DIFC Authority, Arif Amiri highlighted: “DIFC is pleased to be joining the World Alliance of International Financial Centres. The Centre is looking forward to representing Dubai and building partnerships with other members so we can be a collective force for good. Together we can make progress in areas such as FinTech, innovation, sustainable finance, and developing digital economies. We can align our approaches which will allow us to cohesively drive the future of finance.”

Dr. Jochen Biedermann, Managing Director of the WAIFC, added: “DIFC has been an observer to WAIFC since last year, and we are delighted that it will join WAIFC as a full member now. DIFC has had a phenomenal development in less than twenty years from its first steps to one of the world’s leading financial centers. We are very much looking forward to exchanging best practices and learning from each other.”

Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of DIFC with his able leadership taken DIFC to the pinnacle of its performance during 2020 amidst global economic uncertainty caused by the pandemic and elevated the country’s status as a pivotal global economic destination with many businesses reporting exponential growth, including capital markets, asset management, FinTech, professional services, and banking aided by a conducive FinTech and venture capital environments, cost-effective licensing and easy DIFC management startup license, flexible regulation, innovative promotional events, and easy access to funds for start-ups.

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A Complete Guide to Setting up Your Company in Dubai – For Indian Companies
  • Article, U.A.E

A Complete Guide to Setting up Your Company in Dubai – For Indian Companies

Are you an individual striving for a company formation in Dubai as it’s one of the most top cities in the United Arab Emirates? Or are you a businessman interested in expanding his business in Dubai to gain more business and grab profitable opportunities?

If it’s a Yes then, you have landed in the right place. We are here to provide you our full assistance throughout the expansion or formation of a company in Dubai. The procedure to form a company or to expand your business in Dubai can be overwhelming sometimes. We also understand that the company’s formation in Dubai can be challenging for you. Therefore, we are here to guide you throughout the process.

The Essential Steps for the formation of a company in Dubai are as follows:

Step 1: Apply or get in touch with IMC for rendering professional and well-informed services regarding the Company formation in Dubai or any place in UAE.

Step 2: Choose a company name or a trading name for your business in Dubai and make sure to reserve and register the said name with the concerned authority.

Step 3:  For setting up the business in Dubai, the company’s concerned member is required to register the company in the records of the Department of Economic Development.

Step 4:  Apply for buying a rented or lease premises for the business in Dubai or UAE.

Step 5:  The company’s concerned member has to notify the MOA and AOA and other necessary documents with proper legal stamps at the Department of Economic Development.

Step 6:  Once you submit all necessary company documents and receive the sanction from the Department of Economic Development, you can initiate the further procedure to file all the compliances and licenses.

Step 7:  File for getting an appropriate trade license according to the nature of the work of your company.

Step 8:  The concerned authority must apply for the registration of membership at the Dubai Chamber of Commerce and Industry (DCCI).

Step 9:  Get the Establishment card for the Ministry of Labour.

Step 10:  Apply for the registration of the company’s employees at the Ministry of Labour.

Step 11:  Apply for the registration of the company’s employees General Authority for Pension and Social Security.

FAQs

1. What are the beneficial reasons to set up a business in Dubai?

While reading this article, the first question that must have popped in your mind is why Dubai? Or why and how it is beneficial to expand and set up the business in Dubai or any place in UAE.

If you think logically, there are various reasons why an individual must expand or set up his business in Dubai. One of the reasons is that the Dubai government has ensured to offer profitable opportunities for doing business to various companies and entrepreneurs from the rest of the world. Some of the reasons are as follows:

Support from the UAE Government

The UAE government ensures to provide attractive opportunities for doing business and flexible policies for registration of companies. It offers flexible service tax exemptions and other tax exemptions for ease of business. Moreover, the government provides convenient networking and excellent infrastructure. Also, the Dubai government encourages Indians who have a business set up in Dubai or all over the UAE territory and provide numerous flexibility in import duties, free trade, and various other policies and regulations for advancing the development of their economy.

Geographical benefits of Dubai

The territories of Dubai or any UAE place are a gateway location between the Eastern and Western countries. Dubai’s location provides incredible ease to the Dubai companies to broaden their customer base throughout the globe. Moreover, Dubai’s location plays a significant factor in spreading the business further to Middle East regions. Dubai is considered to have the biggest marine terminal, high connected airlines, and the most connected airline to fly at the lowest costs, making Dubai the best place for manufacturing and trading companies.

2. What Pro Services do you need in Dubai and from where?

The long and challenging procedures to set up a business in Dubai can be an overwhelming process for many of you. Therefore, we advise you to avail of pro services in Dubai to apply for numerous essential licenses from the concerned authorities.

Some of the Pro Services that can be available for the formation of the company in UAE are as follows:

  • Furnishing compliances, permits, registrations, and necessary licenses of the company.
  • Furnishing compliances, permits, registrations, and necessary licenses of the company.
  • Furnish the company business license from the local authorities and ensure the renewal of necessary licenses.
  • Moreover, furnish the certificates and sanction from concerned authorities such as Certificate of Origin, Attestation, payment of DEWA, or Etisalat more.
  • Ensure to monitor the ministerial guidelines and policies from concerned legislative authorities and intimate the concerned department regarding the same.

IMC is one of the best company formation service providers to render impeccable services in furnishing compliances and licenses in Dubai or all over the UAE.

Conclusion

The above-mentioned benefits and features are worth grabbing the opportunity to set up your business in Dubai or any other contiguous place in UAE. In case you are still feeling clueless regarding the compliances to set up your business, you must contact and avail the best Pro services of IMC to form or expand the company in Dubai or all over the United Arab Emirates.

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