Dear Friends and Clients,
Are you enjoying the lockdown? In Austria, “protective measures” are already imposed again, such as business lockdowns, home schooling, curfews, home office and travel restrictions. Germany and other countries will likely follow soon in the wake of the next Covid wave.
Those who do nothing and simply find it burdensome will suffer. Others adapt to an unpleasant situation or take measures. So the question is: do you have the courage to take real action? Do you have the courage to become resident in a country that imposes less burdens and little or no taxes?
I took this step already 16 years ago and did not regret it for a single moment. Leave the foggy and cold autumn weather behind, the lockdowns and curfews and visit good old Europe only when it’s warm and pleasant and the “protective measures” have been abolished.
We make the change of residence quick and easy for you. Within a few weeks you will have your residence permit and enjoy the sunny Emirates from your seaside apartment or villa.
You can then manage and supervise your European business from a distance and explore the rising markets of the Emirates and the entire MENA region. You can still stay in your old home country for up to 180 days a year, can use your own flat in Austria for up to 70 days a year and only pay tax on the income generated “at home”. The future changes to the currently highly advantageous double taxation agreement between Austria and the UAE will not affect you either.
Do you have it in you? Wouldn’t it be time to take action?
Yours
Theodor Strohal
Office News
Strohal Legal Consultants UAE is pleased to announce that we have moved to a bigger office last October. Our new contact details are:
Villa 11, Al Basheeq Street, Khuzam Road,
PO Box 31484, Ras Al Khaimah, UAE
Tel: (971) 7 2338927
Mobile: (971) 503765847
Fax: (971) 7 2330044
Our new office offers us the opportunity to even better serve our loyal clients and work with our valuable business partners and we look forward to working with you at our new location.
Two Companies with active Bank Accounts for Sale
We currently have a mandate from clients to offer 100% of shares of two debt free companies with active bank accounts:
- RAK Free Zone Company with two bank accounts in Euro and AED.
- A Singapore Private Limited Company also with bank accounts in Euro and Singapore Dollar. If you are interested, just drop us a note.
Bank Accounts for Startups
The problem of opening bank accounts is one the main issues entrepreneurs are facing when starting a new business abroad. We have found a solution that can also be used for UAE or Singapore companies. We can establish the necessary bank connections via a parallel formation in the USA or also in other countries.
RAKICC offers 50 % Discounts
RAKICC announced exclusive discount rates to celebrate the 50th anniversary of the UAE National Day. It offers 50 % off on new Incorporation RAKICC government fees starting 21 November up to the end of the year. We do not stand back and also offer a 25% discount on our fees.
Amendments on Retirement Residency Announced
The UAE Cabinet on Tuesday amended the laws to grant residency to expat retirees. The retirees should fulfill one of the two criteria mentioned to be eligible for retirement residency. The criteria are: a single property or more than one property worth Dh1 million (evaluation to be carried out by the related entity in each Emirate), or a bank deposit of no less than Dh1 million, or an active income of no less than Dh180,000 per annum.
Compulsory Amendments to the Memorandum of Association for all Mainland Limited Liability Companies – Federal Decree Law No. 26 of 2020
Existing mainland companies are required to make necessary amendments to their Memorandum and Articles of Association (MOA) by January 2, 2022 – one year after the entry into force of Federal Decree No. 26 of 2020. Failure to comply with the amendments of the Decree Law may lead to a daily default fine of AED 100. In addition to this, non-compliance may also result to dissolution of the company. The following are some key amendments as required by the law:
- Article 92 of the Decree Law – The manager, or the person authorized by the managers, must invite the general assembly to convene upon the request of one or more partners who hold at least 10% of the shares of the company’s capital. This is as opposed to a capital of 25% as existing previously.
- Article 93 of the Decree Law – The notification of invitation of the general assembly shall be sent at least twenty-one (21) days prior to the date of meeting. This is in contrary to the previous 15 days.
- Article 96 of the Decree Law – Unless the company’s memorandum of association determines a greater percentage, the quorum for a valid meeting of the general assembly shall be the attendance of partners who hold at least 50% of the shares of the company’s capital instead of the previous 75%.
- Article 73 of the Decree Law – The memorandum of association must include the methods for settling disputes that arise from the affairs of the company, whether between the company and any of its managers or among the partners in the company.
Virtual License now available in Abu Dhabi
The Abu Dhabi Department of Economic Development (ADDED) has announced at GITEX Global (Dubai 2021) the launch of the “Virtual License”. It will allow non-resident foreign investors to acquire an economic license to do business in Abu Dhabi without any prior residence procedures and from any location outside the United Arab Emirates.
The Chairman of the Abu Dhabi Department of Economic Development stated that virtual license is an unprecedented proactive initiative targeting attraction of Foreign Direct Investments (FDIs) through facilitating the economic activity licensing procedures and requirements, regardless of the location of the investor and no residency requirements shall be met before the issuance of this license.
The virtual license covers 13 economic sectors such as: agriculture, manufacturing, repair, contracting, maintenance, and installations, retail trade, transport, services, leasing services, health and entertainment event organization and management and provision of the supporting services, wholesale trade, and import and export. The activities are subject to local fees AED 1,000 as max., provided that all other federal fees be paid upon completion of the remaining requirements according to the activity selected and the legal form preferred.
The foreign investor can apply for a license in any of these economic sectors and thoroughly (100%) own it choosing any of the two approved legal forms: Limited Liability Company and Sole Proprietorship L.L.C
Acting Executive Director of the Abu Dhabi Business Centre, stated that the virtual license does not require prior approvals from the concerned entities; rather, this initiative focuses on granting an economic license to natural or legal persons residing outside the UAE to encourage them to do business in the Emirate of Abu Dhabi.
ADJD launched ICR service in AD courts
Abu Dhabi Judicial Department (ADJD) has launched the artificial intelligence-backed Interactive Case Registration (ICR) service in Abu Dhabi courts, the first of its kind in the world. The service intends to enable court users to file cases without the need to be fully conversant with the applicable laws and court procedures, thus permitting the completion of the proceedings by interacting with the digital service which they feed data to determine the type of case and the competent court, and obtain a case number and a date for the first hearing in the case. The Interactive Case Registration service, depends on artificial intelligence to accurately determine all at once the type of lawsuit, the competent court, and the applicable fees, through easy steps and a user-friendly interface ensuring accuracy and speed, using the connection with other government databases to retrieve case party details, handle the digital payment and other procedures to complete the registration such as verifying the details of the parties and legal notices.
IFZA extends offers in November
International Free Zone Authority (IFZA) extends its offers up to 30 November 2021.
·1-year business license offers
a. One residence visa free for life for packages with visa allocation
b. AED 2,000 / USD 500 off the standard price for Business Licenses with zero visa allocation
*Prices guaranteed for the next 3 renewals.
·Multi-year business license offers
– One residence visa free for life for packages with visa allocation
– 15% discount on all new 2-year business licenses, 20% discount on all new 3-year business licenses, 30% discount on all new 5-year business licenses
The above offers can be availed with a lock-in AED 5,000 down payment and allows investors to complete the company formation until 31 March 2022.
Far East:
Thailand submits ratification for RCEP trade pact
Thailand has already submitted the ratification for the Regional Comprehensive Economic Partnership (RCEP) trade pact and the free trade deal will come into force on Jan 1 next year as scheduled. The pact, signed by 15 countries last November, will come into effect 60 days after it is ratified by at least six ASEAN members and three other signatory countries. Among the signatories, Singapore and China have completed ratification procedures. Currently, five ASEAN members — Singapore, Brunei, Laos, Cambodia, and Thailand — have submitted their ratifications of the pact.
Foreign business confidence in Thailand improves
Foreign business confidence in Thailand boosted after the government announced to open the country for foreign tourists and increase vaccine roll out. The foreign business confidence index (FBCI) stood at 41.7 in the third quarter on a scale of 100 points, up from 27.7 in the second quarter. The index was conducted by the University of the Thai Chamber of Commerce (UTCC) during August-October and sampled 66 presidents, vice-presidents and secretaries-general of the Foreign Chamber of Commerce in Thailand whose members are from 29 countries. It questions them mainly on two areas: Thailand’s economic prospects and their own business confidence.
Draft decree approved to regulate digital platform service providers
The Thai cabinet approved a draft decree to regulate digital platform service businesses to maintain financial and commercial stability and to protect its consumers. Such businesses will need to notify the government before operating. The law will apply to various digital platform services including online marketplaces, social commerce, food delivery, space sharing, ride/car sharing and online search engines.
New competition law promulgated in Cambodia
Private sector actors and experts have welcomed the promulgation of the new competition law, to create fair competition and attract more investments. The Law on Competition was endorsed by the King for immediate promulgation on October 5 after the Senate reviewed and approved in on September 20. The law aims to stimulate fair business practices; promote economic efficiency and shoring up new businesses; protecting the national economy from harmful anti-competitive behaviors; and assisting customers in procuring a broader range of diverse, high-quality goods and services at lower prices. The new law establishes provisions and procedures applicable to unlawful practices of restraint of competition and promotes and protects the benefits of the competitive market economy of Cambodia, particularly prohibiting Horizontal Agreements, Vertical Agreement, and Abuse of a Dominant Position.
Key features on Cambodia’s New Investment Law
The New Investment Law implements an online registration process for Qualified Investment Project (QIP) applications. A registration certificate will be issued within 20 working days.
New Encouraged Sectors
The new law provides incentives for priority areas such as (but not limited to):
- skills training, research & development, and innovation
- small and medium enterprises,
- environmental management and protection and biodiversity conservation,
- establishment of industrial parks and commercial hubs,
- development of physical infrastructure, and
- logistics and digital industry
Incentives and Privileges
The investment incentives on the New Investment Law are classified into three types, being:
1. Basic incentives
Options:
a. Tax on Income exemption and the other a special depreciation rate, and
b. Ability to deduct certain expenses using an inflated rate.
2. Additional incentives
- VAT exemptions for the purchase of locally produced production inputs; and
- Deduction of expenses at the rate of 150% related to, among other things, research, development, innovation and human resource development.
3. Special incentives – will be granted to the investment projects that have high potential to contribute to national economic development. The specific type of projects and incentives will be set out in the law on financial management.
Guarantees and Protections
The investors are eligible to receive investment guarantees and protections including, but not limited to:
- compensation for the losses as a result of civil war, armed conflict and a state of national emergency;
- fair treatment for domestic and foreign investors, with the restriction on land ownership by foreign investors remaining unchanged;
- protection against nationalization or expropriation;
- restriction against pricing regulation;
- no restriction on foreign exchange control and profit repatriation; and
- Intellectual property protection.
Draft law on Public-Private Partnerships approved by the Cabinet
A draft Law on Public-Private Partnerships (PPP) was approved by the Cabinet this October 2021 in Cambodia. The bill was designed to replace the Law on Concessions after a review determined that it was “not fully compliant with international excellence and the actual situation of the management and implementation of PPP projects”. The areas of contention include: the roles of competent institutions, forms of payment, state guarantees, the rights and obligations of contracting parties, and project operation management procedures. The Prime Minister said at a Cabinet meeting that the draft law would be very important in promoting economic growth in Cambodia, especially after the Covid-19 situation has improved.
Key amendments on Cambodia’s Labour Law
Cambodia’s Labour Law has been promulgated last 5 October 2021. The law has been amended twice before in 2007 and 2018. The third amendment constitutes of the following significant changes:
- Enterprise can now divide work into three shifts – The hours of each shift shall not exceed a worker’s maximum working hours per day, as stated in Article 137 of the Labour Law. The enterprises can also divide the work schedule of each shift into two separate sessions.
- No replacement of public holidays falling on a Sunday – In any case that a public holiday falls on a Sunday, workers are no longer entitled to a day off in lieu.
- Individual labour disputes can be brought to the Arbitration Council – this is applicable when disputes between two parties cannot be resolved by the labour inspector.