Dear Friends and Clients,
What comes as a result of the Covid 19 lockdowns? Is there a big bang and the demise of the capitalist economic system? Is there a complete reorganization of our monetary system, will currencies be abolished? Should we buy bitcoins, real estate or gold? Or withdraw the little cash we have left from our account and hide it under the mattress?
Questions upon questions. I know of no one who can answer them, or at least no one whose answer I would trust.
One thing is beyond doubt: we are facing uncertain times. But when were times safe?
We have learned a lot from the lockdowns: It is not absolutely necessary to travel to do business. Even old dinosaurs like me have learned to use Zoom meetings and Cisco WebEx. We have learned more from our immediate surroundings, hear the chime of the room clock again and the bird at dawn.
Let’s have a look around in this closer environment, namely the Emirates, which have set signs in the last months. And – let’s believe in facts, not in rumours! The political course has been set a new, historical images of the enemy have been dissolved.
New forms of business are being offered.
Ras al Khaimah has further made an important step towards full implementation of the rules of the Foreign Direct Investment Law and now allows 100 per cent foreign ownership for mainland companies in key strategic sectors such as industrial, manufacturing, agricultural and services.
RAKICC launched the Foundations a few months ago. A foundation is used for enhanced succession planning and asset protection, providing a robust governance structure, and guardian oversight. They have a distinct legal personality that separates liability, whilst maintaining control of assets, and have perpetual existence after the lifetime of the Founder; RAKICC only charges AED 750 for the setup and the same amount annually.
RAK Economic Zone (RAKEZ), the free zone home to 15,000 companies, now offers a completely new product on the market, the “Midshore Corporation”, which merges some of the key offshore and free zone company set-up benefits into one offering. RAKEZ announced the new company formation structure under the emirate’s programme to attract more foreign investment.
You can find more details below in the newsletter.
But Ras al Khaimah is not the only offering new innovations. Dubai is not to be sneezed at: “Family Property Contracts” are designed to protect and distribute family assets.
Also the new DIFC “Innovation Licence” and the “10 Year rent to ownership scheme” show innovation and creativity.
The opening to other states in the Middle East and the wise leadership of the country guarantee a rapid overcoming of the economic difficulties caused by Covid 19.
We can therefore be proud to live and do business in this state.
Ras al Khaimah promotes 100% Foreign Ownership of Mainland Companies
In order to attract more foreign direct investment to Ras al Khaimah, RAKEZ and DED Ras Al Khaimah announced their new program which allows more 100% foreign owned mainland companies especially in the key strategic sectors: industrial, manufacturing, agricultural and services.
Previously, foreign investors could only hold up to 49% of a mainland UAE company. In order to promote foreign direct investment in selected sectors, the statutory obligation was relaxed in 2018 by the Foreign Direct Investment Law which provides a mechanism under which foreign shareholders could now own up to 100% shares of a UAE mainland company. The law stipulated a “negative” list of sectors, wherein full foreign ownership would not be permitted. On the other side, in 2019, the Federal Cabinet issued a “positive list” listing the sectors and businesses in which up to 100% foreign ownership should be permitted. The positive list includes a total of 122 business activities from 13 different economic sectors, in particular:
- renewable energy
- production and production
- transport and storage
- hospitality and gastronomy
- Information and communication
- construction industry
- commercial hotel
- art and entertainment
- food sector
- retail trade
- education sector
- hospital operation
According to the latest announcement from RAKEZ & DED Ras Al Khaimah (RAK DED) will now receive and approve applications, ensuring that they fall under the “positive list” of eligible sectors. RAK DED will then reserve the trade name and issue the FDI license, according to the mechanism set by the FDI Law and the UAE Cabinet. Thereafter, RAKEZ will issue its license and documentation to the investor.
Companies set up under this FDI structure will be considered national companies, and will have full confidentiality of technical, economic and investment information. According to RAKEZ and DED RAK FDI companies will also be eligible to make financial transfers outside the country for project returns, and will have their assets protected from being claimed by the state for public use or benefit through a guaranteed no expropriation.
FDI companies can be established as Limited Liability Company (LLC) and Private Shareholder Company by one or more shareholders.
If you have further questions regarding the set-up of an 100% owned mainland company, please do not hesitate to contact us.
RAKEZ introduces Midshore Free Zone Solution
RAKEZ has introduced a new midshore free zone solution called RAKEZ Global Product, which merges some of the key offshore and free zone company set-up benefits into one offering. It allows investors to re-domicile or set up a new company through a RAKEZ registered Corporate Service Provider (CSP).
- Corporate re-domiciliation from UAE or global jurisdictions
- Ability to admit corporate shareholders/directors
- Remote company set-up (no presence & original documents required)
- Eligibility to hire employees
- Selection of facilities like co-working spaces, physical offices, warehouses or land for development
- Assistance with the UAE Economic Substance Regulations
- No corporate tax
- Access to 116 Double Taxation Treaties
- Eligibility to apply for UAE Residence Visa
- Eligibility to apply for a UAE bank accounts
- Migration and continuance permitted
- Ability to acquire real estate in the UAE
- Full repatriation of capital and profit
- World class reputation with transparent regulations
List of Business Activities:
- Holding companies
- Trading and General Trading
- Shipping, Transport & Logistics
- Investment Activities
Update on UAE traveling guidelines
UAE residents abroad, who have a valid visa and plan to return to the UAE – except for Dubai residents – are no longer required to obtain an approval for re-entry. Travellers should however update their data, including a valid Emirates ID, passport number and citizenship at uaeentry.ica.gov.ae before entering the UAE. Returning residents further have to take a Covid-19 PCR test at an accredited lab within 96 hours of their flight which has to be presented at the entrance of the airport and/or at check-in.
These are the steps to be taken:
- Update your data on the ICA website. Dubai residents should apply for an entry permit through the General Directorate of Residence and Foreigners Affairs – Dubai website.
- Take a COVID-19 RT-PCR test at a trusted and certified laboratory; often, most local airports have established designated testing centres; a printed certificate (also) in English language is recommended, although at least Dubai airport also accepts digital certificates (but no SMS confirmations); travellers from high risk countries such as India, Pakistan or Bangladesh must get a certificate from a UAE government designated laboratory.
- Book your ticket (could also be done as step 1 or 2 as most airlines offer free re-bookings).
- Present your negative COVID-19 certificate at check-in and on arrival at the UAE airport.
- All travellers to Dubai, including passengers with a connecting flight, must complete a health declaration form handed out at check-in, in the airplane or at arrival and present it to the staff at check-in and/or at UAE entry.
- Take a COVID-19 lab test upon arrival at the airport (make sure it is in fact still required for your emirate as info is changing constantly).
- Download the Al Hosn Mobile App.
- Follow 14-day quarantine procedures (if applicable; according to most sources a quarantine is not required for residents that have presented a negative test result certificate at the airport but according to some information channels the quarantine must be adhered with by non-Dubai residents even in case of a negative test).
Tourists are not yet allowed to enter Abu Dhabi but can land in Dubai as long as they have a negative PCR test or DPI blood test. They do not need approval to travel to Dubai but must be tested in advance from their country of origin. New arrivals into the country may also be asked to take a second PCR test at the airport and may leave quarantine in Dubai once a negative result is released.
Please note that the requirements are changing constantly, sometimes at a weekly basis, and that publicly available information is partly conflicting. Therefore, please make sure to confirm the information given above with the airline and the UAE public authorities within the last days prior to re-entry.
Covid-19 relief measures
Dubai South has extended relief measures until the end of the year. COVID-19 stimulus packages were first introduced in May 2020 to extend help to businesses in the UAE. The measures include reduction on set-up fees and renewals, flexible payment terms, and waiver of penalties.
Ajman Free Zone announced its economic incentives packages which are valid up to the end of year 2020. The incentives are as follows:
- 6 months’ flexible instalment plan on executive office rent, office rent, and warehouse rent
- 3 months’ flexible instalment plan on business center
- 25% off on-site accommodation
- 100% waiver on e-channel guarantee fee.
RAKICC announced that it will be extending the grace period on the imposition of penalties for late renewal until September 30. Companies that are unable to comply during the said date will pay the regular renewal fee plus 50% penalty. Also, with effect starting October 1, companies that have been inactive for 6 months will be liable to be listed for strike-off and likely to be struck-off after November 2020.
Establishment of Sharjah Seaports, Customs & Free Zones Authority (SSCFZA)
The ruler of Sharjah has issued a Decree Law No. 05 of 2020 which establishes the Sharjah Seaports, Customs and Free Zones Authority, SSCFZA. Its headquarters shall be based in Sharjah and may establish branches within and outside the emirate and upon the approval of the Sharjah Executive Council. Pertaining to the new Decree-Law, the Sharjah Customs, Customs Centers, border crossings a border checkpoint, Hamriyah Free Zone, Sharjah Airport International Free Zone, shall be under the Authority, any other entity to be annexed to the Authority is based on a decision by the Ruler. The Authority shall be exempted from all local government taxes and fees in all its forms and manifestations. The new decree law will be effective once published in the Official Gazette.
The “Family Property Contract” – new law for Dubai businesses
The Government of Dubai has issued Law No. 9 of 2020 that regulate family-owned businesses. The new law seeks to protect families’ wealth, enhance the contribution of family businesses to economic and social development and foster the growth of family businesses. It has a validity which can extend up to 15 years and can be renewed for another 15 years. It is applicable to existing and new family ownerships, including corporate equity securities and proprietorship. The law is not applicable for family ownership in public joint stock companies and movable and immovable property. For the family ownership contract to become legally binding, all parties of the contract must be members of the same family and have a single common interest. It must clearly define the share of each member, and parties of the contract must own all the legal rights of the monies and assets that are under the purview of the contract. Then it must be duly attested by the notary public according to the rules and regulations stipulated in Law No. 4 of 2013.
Dubai DIFC offers Innovation License
DIFC has launched a new license for start-ups, entrepreneurs and technology firms. The new “Innovation License” is a key initiative for Dubai Future District. It will support innovation, creativity and entrepreneurship in the region. It comes with subsidized commercial licensing options starting at USD 1,500 per year. Holders of this license can secure up to four visas when renting a desk space as well as a 50 percent subsidy on additional visas.
Launch of ten-year rent-to-own scheme at Dubai South Properties
Dubai South Properties has introduced the new rent-to-own scheme for new tenants of The Pulse. It offers quarterly payments towards their unit which allows tenants to have full ownership after a period of 10 years. The new scheme has easy exit terms, no commitment to purchase, and tenants get 2 months of free rent during the start of their contract.
Myanmar: Covid-19 update
Myanmar is still not accepting visitors to the country but with exceptions to foreign investors and key personnel from China and Japan and will be extended to other countries soon. Those who wish to travel to Myanmar are advised to contact the nearest Myanmar Embassy. Medical expenses should be borne by the traveller which is around USD 140.
Travel requirements for business executives are as follows:
- RT-PCR Test with COVID-19 free medical certificate obtained within 36 hours upon boarding.
- Swab test to be conducted within one day of arrival in Myanmar
- 5-day quarantine in a pre-arranged facility for visitors with negative results
- Another swab test is required after all the above requirements are met.
Myanmar: New Trademark Law
Myanmar has adopted a new trade mark law which signifies the inception of a modern intellectual property regime. Upon entering into force of the new law all previous registrations will become invalid. A new registration will be absolutely necessary as the new law replaces the current first-to-use system with a first-to-file system.
Southeast Asia: Start-up investment doubles despite Covid-19
Investment in start-ups has grown in Asia despite of the COVID-19 pandemic. The data was shared by Singapore-based information platform Deal Street Asia. Indonesia topped in deal value, followed by Singapore, Vietnam, Philippines, and Myanmar.