Dear Friends and Clients,
Ras al Khaimah is once again the pioneer in innovative corporate constructs. Since RAK united the two free zones, there are always incentives for investors. This time, the Department of economic development is explicitly offering that RAKICC companies (offshore companies) can be shareholders in a mainland company and these mainland companies are granted all advantages. This construct is not absolutely new, as offshore companies are also allowed as shareholders in LLCs in other emirates, but there have always been restrictions on the granting of visas and the opening of bank accounts, as offshore companies are often regarded as tax evasion models. These disadvantages are to be avoided by the new agreement between RAKICC and the DED.
The offer of new types of visas does not stop. There is now already the green visa, i.e. a work visa without an employer or sponsor. A green visa holder can also have dependent visa issued for his family. Freelancer visas have been on the market for some time, but are mainly offered by free zones. Now such visas are also available through de DEDs for mainland activities. Also student visa including work permits will be granted now.
The Austria Pavilion at Expo 2020 in Dubai is now almost fully booked. We can only advise interested parties who want to organize an event there or receive their customers/visitors to contact the Austrian Foreign Trade Office quickly in order to get an appointment. The organization is in the hands of the Wirtschaftskammer Österreich (WKO) in Abu Dhabi.
The new UAE data law is just around the corner. It is largely modelled on the European data protection law and protects privacy, but also allows personal data to be used for commercial purposes. The exact wording is not yet available, but the law is expected to be passed in the oncoming weeks.
Renewable energy solutions are on the rise in the UAE. As the awareness for climate change grows and energy consumption increases this topic more and more becomes one of common interest. We regularly advise companies on investment opportunities in the UAE. One mandate, for example, comprises the erection of a sustainable food farm using renewables to generate green electricity, produce hydrogen, and desalinate water. We also recently hold a webinar on the UAE´s renewable energy landscape at the German Emirati Joint Council for Industry and Commerce.
In the Far East, Singapore is again setting a good example and has accepted the Hague Apostille for notarization. We also see this as a necessity for the UAE, as the setup of new companies with a foreign corporate shareholder is cumbersome and very expensive. Especially an innovative country such as the UAE, which is now showing particular interest in investors, should facilitate this authentication process in the sense of the Hague Convention.
Cambodia and Thailand in particular are trying to bring about investment-friendly changes in the law. On the one hand, e-commerce activities in Cambodia are put under VAT obligation, which seems logical if these goods are sold in Cambodia. On the other hand, there is an extension of BOI licensees in Thailand that allows foreigners to purchase land and employ as many foreign workers as they want without the need to hire Thai workers. Furthermore, tax incentives are granted in both countries for investors, and Thailand also offers considerable relief for long-term residents in terms of residence permits. The price level in both countries is still at the lower limit of modern developing countries, whereas infrastructure and services have already reached a level of modernity that can be compared with industrialized countries.
Following the political changes in Myanmar, we have also decided to reduce our office there to a Myanmar desk. We still advise on Myanmar law, but without operating a permanent local office. Our current focus is primarily on Thailand and Cambodia, where the future prospects are consistently positive.
Wishing you a busy and successful October, I remain.
Abu Dhabi introduces first clean energy certificate system in the Middle East
Abu Dhabi announced its plans to introduce a clean energy certificate system, the first of its kind in the Middle East. The new initiative is part of the UAE´s broader ambitions to diversify their economy, invest into renewables, and path the way for a more sustainable and decarbonized energy sector. The new certificate system is based on the attribute tracking system for renewable energy certificates developed by the International Renewable Energy Certificate Standard Foundation (“I-REC Standard”). The certificates will be issued in units of 1 MW/h by the Department of Energy upon receiving a request from the Emirates Water and Electricity Company. Companies or consumers (“Participants”) can obtain clean energy certificates by opening an account in the central registry platform. The Participants can then purchase certificates or allocate them to beneficiaries. Clean Energy Certificates are voluntary tradable financial instruments which certify the purchase of a specific amount of electricity that has been generated from a clean energy source.
RAKICC announces MoU with RAKDED
RAK International Corporate Centre (RAK ICC), announced that it has recently signed a Memorandum of Understanding (MoU) with RAK Department of Economic Development (RAK DED). The MoU will give global investors an opportunity to set up a corporate structure allowing offshore companies to carry out their commercial activities in RAK by establishing subsidiaries with RAK DED.
International business companies registered with RAK ICC with RAK DED subsidiaries can get both offshore and mainland benefits such as: zero corporate or personal tax, 100% repatriation of capital and profits, low import duty, no currency restrictions, options for office spaces, ability to open corporate bank accounts, global trade and investments, and eligibility for UAE residence visas.
UAE launches ‘Green Visa’ and ‘Freelance Visa’
The UAE launched a new resident visa category called Green Visa. The new visa scheme will allow expatriates to apply for work without being sponsored by an employer. Green visa holders will be allowed to sponsor their parents, they can also sponsor their childrens’ visa until they turn 25 instead of 18. It will be open for most categories of residents such as investors, entrepreneurs, those who are running SMEs, talented people, scientists, students, etc. Upon expiration, holders of such visa will be given a grace period of up to 90-180 days to exit the country.
Another visa class was introduced for freelancers. The Freelance Visa will be granted to owners of independent business, or self-employed individuals. It is launched to attract experts, retirees and specialized people on certain fields.
More information about the new visa categories will be announced soon.
Guidelines and procedures for juvenile work in the UAE
Work permits for students in the UAE can be obtained through the Ministry of Human Resources and Emiratization website and is valid for a period not exceeding one year. The authority offers the service for “any establishment to recruit a national or foreign worker in the age category of 15-18 years and residing in the country”.
Process: Applications shall be printed at the service centers “Tasheel” or through establishments participating in the Ministry’s e-forms program. In case of fulfilling the conditions and documents, the customer can print the approval notice by visiting the Ministry’s website www.mol.gov.ae.
ADDED reduced economic activities licensing fees
The Abu Dhabi Department of Economic Development (ADDED) reduced the fees for economic activities in the emirate to AED 1,000. This includes the reduction of fees for establishing a commercial company and the documentation of incorporation contracts, fees paid to service providers, Tadweer fees, the activity fees, and the fees paid to the Abu Dhabi Civil Defense Authority (ADCDA) for Certificate of Conformity as well as the membership fees of Abu Dhabi Chamber.
“RTA Invest” platform launched for investors and entrepreneurs
Dubai’s Roads and Transport Authority (RTA) has launched “RTA Invest”, an investment platform that is dedicated to serving investors and entrepreneurs interested in engaging with the authority in projects. The platform offers a portal for reviewing prospective commercial projects offered by the RTA and details required about the available investment projects. It also enables investors to submit proposals and discuss project details and suggestions with the RTA. Potential investors can bid for tenders and submit unsolicited proposals and ideas to the RTA. The platform also offers fair and transparent opportunities for investors worldwide and provide them with instant access to projects and opportunities. It consists of a diverse array of investment opportunities including advertising at metro stations, bus stations, roadside assets, bridges and buses, and brand naming rights. It also encompasses public-private projects such as real estate, infrastructure and mobility-related projects as well as retail area vacancy status such as metro shops, metro kiosks/vending machines and bus station shops.
Austria’s officials on Expo2020
Austria’s Minister of Digital and Economic Affairs, Margarete Schramböck, has said that Expo 2020 Dubai paves the way for opening new markets, enhances international cooperation, and provides the opportunity to highlight the quality of research and development of Austrian innovations. She stressed that Austria upholds – with its international-oriented startups – the spirit of innovation and technical knowledge, and that its participation in the Dubai Expo aims to offer useful and meaningful solutions and products.
Harald Mahrer, President of Austrian Federal Economic Chamber, highlighted the importance of Expo 2020 Dubai in strengthening Austria’s communication with other countries at the international level as well as developing the country’s economy.
The Austrian pavilion participating in the exhibition will present projects and innovations in various fields, designed and developed by research institutions and companies that have cooperated with universities and technical colleges, and have succeeded in achieving accomplishments that have a positive impact on the environment and climate.
UAE’s new Data Law
The UAE will roll out a decree in the coming weeks called the UAE Data Law. It is the first federal law of its kind that will be drafted in partnership with major technology companies as part of the country’s “Projects of the 50”. It will give individuals the freedom to control the way their personal information is used, stored and shared. It will also protect the privacy of individuals and institutions and limit entities’ use of personal data for profit. The UAE data law guarantees personal privacies and the ability for the private sector to grow, innovate, and prosper. It gives individuals the right to be forgotten, the right of access, the right of correction, and the right to be informed. The new law is not just considered as a ‘UAE Law’ but it is also a global law. It can serve international markets without having to increase investment on compliance issues or even cater to specific needs that the UAE has.
Dubai International Arbitratiom Centre was reconfigured
The Dubai International Arbitration Centre was reconfigured with a decree enacted in September, changing the existing framework of arbitration in the Emirates. All areas of jurisdiction and obligations previously carried out by the various specialised arbitration centres, are to be conducted by the single Dubai International Arbitration centre. The reason being, to centralise and stream-line the arbitration institutions in the Emirates, in order to make arbitration a more favourable alternative method of dispute settlement.
Abu Dhabi establishes Creative Media Authority
The UAE President established the Creative Media Authority (CMA) as part of the Department of Culture and Tourism – Abu Dhabi. The authority aims to act as a regulatory and supervisory body for private sector companies in the creative industries, ensure the infrastructure is in place for creative industries to expand and thrive, develop initiatives to attract, incentivize and develop SMEs and professional talent within the sector, develop the gaming and esports sector in the emirate, and support and launch prizes that contribute to the development of media production and interactive media. The establishment of the CMA is part of the emirate’s 10-year investment strategy across Abu Dhabi by both public and private sectors to develop Abu Dhabi’s culture and creative infrastructure.
Expo 2020 COVID-19 safety rules
Expo2020 Dubai announced its COVID-19 safety rules for those who wish to visit the world fair. Visitors aged 18 and over either be vaccinated against Covid-19 or have a negative PCR test result taken within 72 hours. The PCR test will be free of charge on testing centers across the city upon presentation of the EXPO 2020 ticket alongside an Expo 1-Day or Multi-Day Pass. Vaccination is a must for all Expo and international participant staff, volunteers, contractors and service providers. Mandatory vaccination for Expo staff, volunteers, contractors and service providers. Facemasks are mandatory at both indoor and outdoor venues. Visitors will need to maintain a two-meter distance at all times. Sanitation stations are available all over the venue. RTA also announced the deployment of 126 public buses to serve Expo 2020 commuters for free from 9 locations across Dubai. Additionally, two routes will be launched to from hotels to the Expo site.
Cambodia’s “Single Portal” phase two business registration launched
The Royal Government of Cambodia (RGC) on September 1 deployed Phase II of its online business registration platform, known as the “Single Portal”. Four new agencies have joined the Single Portal in Phase II, adding more classes of business licenses and permits available for application on the platform, with an emphasis on priority sectors, in a bid to support national economic growth during the Covid-19 crisis. The updated Single Portal system aims to improve the business and investment environment in order to enhance Cambodia’s competitiveness, and is tailored to economic sustainability amid Covid-19, as part of a wider push to digitalize public services.
Incentives launched by BOI
The Thailand Board of Investment (BOI) at a meeting approved incentives to encourage companies to reduce greenhouse gas emission as well as an enhanced scheme for electric vehicles and measures to mitigate Covid-19 impacts and support local vaccine development.
These measures comprise the following:
1) The grassroots economy support scheme will also cover the support to local organizations involved in the development of sustainable agricultural activities such as low-methane rice farming. This new addition is expected to encourage competent companies in taking part in the movement towards sustainable agriculture, In addition, the deadline for applications under the grassroots economy support scheme will be extended to end 2022.
2) 3-year tax holidays will be offered to investments in machinery upgrades aimed at reducing greenhouse gas emissions. This will be an addition to the existing productivity enhancement scheme. This new measure is expected to contribute to the country’s commitments on greenhouse gas reduction.
3) Adjustments to the conditions and benefits applying to some business categories to encourage eco-friendly technologies:
– Investments in cold storage facilities and cold storage transport operations using natural refrigerants, that reduce impact on the environment, will be granted 3-year corporate income tax exemptions.
– Petrochemical production facilities implementing Carbon Capture Utilization and Storage (CCUS) technologies will be granted 8-year corporate income tax exemptions.
4) Introduction of a new promotion category for natural gas separation plants which if they are implementing CCUS technologies will be granted 8-year corporate income tax exemptions.
Thailand cabinet approved measures to attract more foreigners
The cabinet has approved measures to attract ‘high potential’ foreigners to stay in Thailand long term. It aims to draw four groups of individuals to draw more investments in the country. The group includes wealthy global citizens, pensioners from overseas, those wanting to work in Thailand and highly skilled professionals. A long term visa for 90 days will be granted to the mentioned group without the need of a 90-day reporting. There would be amendments to laws and regulations relating to land holding, work management and permission for foreign nationals to work for employers in and outside the country, exemption from regulations on employment of foreign and Thai employees, tax exemption and other benefits.
Apostille Convention Enters into Force for Singapore
The Apostille Convention entered into force for Singapore on 16 September 2021. Users requiring documents to be produced overseas in Contracting Parties to the Apostille Convention should approach the Singapore Academy of Law for the issuance of apostilles. Also, users requiring documents to be produced overseas in non-Contracting Parties to the Apostille Convention may also approach the Singapore Academy of Law and, thereafter, the relevant embassies to legalize the documents (if required).
VAT rules for non-resident operators in e-commerce
The Ministry of Economy in Cambodia and Finance has issued a Prakas introducing new rules and procedures governing value-added tax (VAT) on goods and services provided via e-commerce. The new legislation, dated September 8, primarily targets e-commerce transactions between Cambodian taxpaying consumers and sellers active in Cambodian territory who are non-residents and do not have permanent establishment in the Kingdom. The taxable value of a supply is the transaction value, the Prakas says, adding that any form of compensation arrangement other than cash shall be included in the value, based on market rates.
If the taxable value of the digital goods or services supplied does not represent the actual value, the tax administration may determine one, which shall be deemed valid until there is evidence accepted by the tax administration, the document adds.
The Prakas complements Sub-Decree No 65, dated April 8, which regulates VAT on electronically supplied goods and services, and is designed in accordance with the E-Commerce Law, which came into force on November 2019.
Cambodia’s Law on Investment approved by National Assembly
Cambodia’s National Assembly (NA) approved the draft Law on Investment, which will play a vital role in attracting local and international investors in the country. The draft law will now be sent to the Senate for a vote. Once approved, the bill will be returned to the NA to proceed with a signature from the King or acting head of state to become law. The key elements of the draft law are the establishment of an investment incentive regime, modernization, increasing the productivity of local industries, strengthening connectivity to regional and global supply chains, transferring technology, enhancing Cambodia’s competitiveness, diversifying the economy and providing protection of legitimate rights and interests to investors in Cambodia.