SLG Newsletter May 2018

 

Dear Friends and Clients,

There is great news for us expats! We can now get: 10-year visas, 100% foreign-owned onshore companies, and improved investments conditions.

The outlook for 2018 is excellent. We are living in the right part of the world. But as I can see many clients are cautious about the future. Political risks in neighboring countries, economic challenges, banking issues (waiting months to open an account), long waiting times for approvals from immigration authorities (share transfers). All this makes people insecure. Are we right to stay in the Middle East? Should we concentrate more on Europe or elsewhere?

The answer is clear: It is good to do business here but keep your eyes open for options. China will pave the way to the future. Smaller countries will follow and some already offer opportunities they never did before. And the Middle East will prosper because of their geographical position and the infrastructure and technology provided.

But have you thought about diversification? You should – early enough – take your action in the right direction.

Cambodia offers 100% foreign-owned companies,  less than 1000 USD annual flat tax. Company setups take 2 months, bank accounts opening in 1 day with international banks like ANZ and 30 min with local banks.

Or look to Vietnam where you can achieve over 15% profit on real estate because land is cheaper to buy than rent.

Bahrain has an excellent banking system and corporations (with bank accounts) can be set up in a matter of days.

Myanmar, which is becoming the next tiger in Asia, offers 100% foreign business with bank accounts in 1 day. 

We also know reputable banks outside the UAE opening accounts for foreign companies. So, set up your UAE company and then  form branches in countries with easier banking conditions and low or zero tax.

Tax-wise, we always have creative ideas for how to use tax advantages despite all the new regulations in the EU and those implemented by the OECD. We consultants always have to be one step ahead. And we are.

We still follow what Judge Learned Hand, who served on the United States Court of Appeals for the Second Circuit, stated in 1934 in the famous case Helvering v. Gregory that:

“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”

In our recent history (since the foundation of our present chamber in 1979) our clients have had innumerous tax audits between various inland revenues. There has not even been ONE case where the tax authorities have neglected or ruptured the tax avoiding and corporate set up systems we had structured for our clients.

Just call, we are here for you. A small group of experts, based in Singapore, Myanmar and UAE (why there? Because we don’t like to pay taxes ourselves) who can give you the right advice at the right time.

Yours,

Theodor Strohal

The “new” General Data Protection Regulation (GDPR) of the European Union

On the 25th May 2018 the GDPR of the European Union (EU) came into effect, which shall strengthen the data protection for citizens in the EU. This affects also our office. Up to now, we inform you monthly through our SLG newsletter. It is very important to us to inform you and to guarantee you, that we use your email address exclusively for the dispatch of our newsletter and that we under no circumstances will pass it on to third parties.

You have the right to revoke your consent at any time by sending an email to office@slg-strohallegalgroup.com if you do not wish to receive any further emails from us in the future. If you want to receive our newsletter from us, you do not need to do anything at all. In that case you authorize us to keep you informed and allow us to send you our newsletters and keep you informed about our activities.

Please do not hesitate to contact us, if you have additional questions in this matter.

Tax avoidance: Multilateral BEPS convention entry into force 1st July 2018

The organization for Economic Cooperation and Development (OECD) informed that the “Multilateral Convention to Implement Tax Treaty related Measures to Prevent Base Erosion and Profit Shifting” (the MLI) will enter into force in five European jurisdictions beginning on 1st July 2018. To the five jurisdictions belong among others Austria, Jersey and Isle of Man.

The MLI, adopted in November 2016, was jointly developed by more than 100 jurisdictions under a mandate from the G20. However the MLI does not amend the language of existing treaties, but rather works alongside covered tax treaties and modifies their application. Its final version is published once each jurisdiction has ratified the MLI, following domestic ratification procedures. Once a jurisdiction has ratified the MLI, its effects can be broadened by, for example, withdrawing a reservation or adding additional treaties to that jurisdiction’s list of CTAs. However, new reservations cannot be made and existing notifications cannot be withdrawn.

Right now there are more than 1,200 tax treaties worldwide and more than 78 countries (and counting) have already signed the MLI to implement it to their countries. Therefore the impact will be significant.

UAE launches 10-year residency visas

On Sunday, his Highness Sheik Mohammed bin Rashid Al Maktoum, announced the decision after chairing a Cabinet meeting, that investors and specialists such as doctors and engineers will receive UAE residency visas valid for 10 years. The families of this group of expatriates will also receive the same visa validity. Furthermore, Sheik Mohammed announced, that global investors can have 100 % ownership of their companies in the UAE.

The system will grant investors and talents up to 10-year residency visas for specialists in medical, scientific, research and technical fields, as well as for all scientists and investors, entrepreneurs innovators as well as five-year residency visas for students studying in the UAE, and 10-year visas for exceptional students.

Emirates NBD finalizes agreement to purchase Turkey’s fifth largest bank

Emirates NBD has finalized an agreement to purchase Denizbank from Sberbank of Russia for $3.2 billion. Sberbank agreed to sell its entire 99.85 % stake in the bank, ceasing to be a shareholder in Denizbank upon completion of the transaction. “Denizbank is one of the most attractive assets in the Turkish banking sector”, said Herman Gref, CEO of Sberbank. Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD further commented that the move will help establish Emirates NBD in Turkey, cementing its place in the region. Shayne Nelson, Group CEO, Emirates NBD said, “The transaction represents a significant milestone for Emirates NBD and is expected to be accretive to shareholders in the first year. Denizbank is a well‐ managed and prominent organization in the Turkish banking market, which with the current deal structure, comes at a reasonable price on acquisition for Emirates NBD.”

New Dubai Land Department structure approved

Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, issued the Executive Council Resolution No (17) of 2018 that approves the new organizational structure of the Dubai Land Department (DLD). The new structure of the DLD includes the Real Estate Regulatory Agency (Rera), the Dubai Real Estate Institute (DREI) and the Rental Disputes Centre (RDC). Pursuant to the resolution, the departments of Monitoring and Risk Assessment, Strategy and Corporate Development and Legal Affairs will now report to the director-general. The organizational structure features three main sectors — Corporate Support, Real Estate Registration services and Real Estate Investment Promotion.

Nasdaq Dubai is planning to start with equity futures of Saudi Arabian companies

To give investors new hedging tools to take long and short positions on the shares, Nasdaq Dubai plans to start equity futures of leading listed Saudi Arabian companies. The companies are some of the Middle East’s largest businesses in sectors including petrochemicals, real estate, banking and transport, the exchange said in a statement. Trading will begin in the third quarter. Nasdaq Dubai Chief Executive Officer Hamed Ali said, “the framework that we have built for trading and clearing Saudi futures is based on intensive consultations with regional and international market participants including brokers and potential investors” and that “our futures will provide further impetus to investment into the Saudi capital markets and help develop new links with market participants.” Nasdaq Dubai started with the UAE futures trading in September 2016 with single stock futures on seven UAE-listed companies. The number has since then increased to 17, and in February 2018 the exchange added futures on Dubai Financial Market’s DFMGI share index as well as the ADI index of Abu Dhabi Securities Exchange