Dear Friends and Clients,
We expats in the Middle East have gotten a thick skin by now. Nothing can shake us so easily. The sabre rattling in the immediate neighbourhood leaves us as cool as some economic challenges. Most of us have made a living here and are not willing to give it up just like that. Our home countries may be more secure in terms of foreign policy, but the reasons for staying here far outweigh the ones for leaving.
We live in an (almost) tax-free paradise, although sometimes the fixed fees are tantamount to income taxation, albeit low. We enjoy a level of security that European countries can only dream of, and a nearly disappearing crime rate. We are spared internal unrest such as demonstrations, strikes, domestic political turmoil and political power struggles and can pursue the main objective of our presence here: Earn money and live pleasantly. And even if much has changed over the last 14 years since we started working in the UAE, expat life always requires a high degree of adaptability.
The implementation of the Cabinet Decision No. (7) 2018 by RAKICC is an important step towards the public commercial register. The tendency of secrecy to allow only the owners and directors to view the company documents may be advantageous for some “investors”, but it promotes legal uncertainty. The convenience of the Western public registers, such as land register and company register, have not yet been achieved, but a first step has been taken.
The appointment of 2 US judges by the Abu Dhabi Judicial Department (ADJD) raises some questions among us lawyers. Why are judges from a common law country appointed in a country which has introduced French civil law? The DIFC Courts already have predominantly common law judges, which is however justifiable with the completely independent legal sphere of the DIFC. In Abu Dhabi, on the other hand, these US judges will have to decide on cases of UAE law – a civil law system.
And when it finally comes to news from Far East, the surge of the Thai Baht is worth being looked at closely. Expats and investors in the Middle East are spoiled by the “Dollar Peg”. There is not much happening in the area of exchange rate fluctuations, only the USD to Euro remains volatile.
But the Thai Baht has gained almost 30% against the Euro since 2013 and the high flight is not over yet. Now that General Prayut, who came to power through a military coup in 2015, has retained his office as prime minister in free elections, we can also talk about political stability. So if you are interested in currency speculation, think of the Far East currencies and above all the Thai Baht.
We live in an interesting time and the information age is contributing to it. Let’s make the best of it.
The National Economic Register established: RAKICC will publish basic company details
RAKICC has recently sent out a communication regarding the publication of the basic company details of all companies registered under RAKICC to the National Economic Register of the Ministry of Economy in accordance with Cabinet Decision No. (7) 2018. The Ministry strives to provide all the data by 1st of June 2019. The information to be provided by RAKICC about onshore, offshore, mainland and free zones are:
- Company Name
- Registration Number
- Date of Incorporation
- Registered Office Address
- Company Status & Date
Entities that have been struck off for more than 3 years under the Business Companies Regulations will have a “Dissolved” status. All information regarding the Registry can be found on the links below:
UAE: New system installed to boost finance sectors integrity
A new system called Persona Non Grata (UAEPNG) has been developed by the Central Bank of the UAE. The UAEPNG system has been formed to ban people who have been terminated for committing fraud or persons having questionable professional integrity in joining the banking and financial firms in the UAE. This does not affect bank customers as the system only applies to the people working in the financial sector. More details regarding UAEPNG system will be announced soon.
Golden Card – UAE starts issuing permanent residency
His Highness Sheikh Mohammed Bin Rashid Al Maktoum, ruler of Dubai, has launched the issuance of permanent residency, also called as Golden Card Scheme. A total of 6800 individuals from 70 different countries were chosen and qualified for the Golden Card with a cumulative total of AED 100bn in investment. Permanent residency will be granted to qualified investors, entrepreneurs, professional talent, researchers in the field of science and knowledge, and outstanding students. The UAE government hopes that through the implementation of the Golden Card Scheme, it will attract more foreign investment that will boost UAE’s economy.
American Judges appointed in Abu Dhabi Commercial Courts
Abu Dhabi Judicial Department (ADJD) has positioned 2 newly appointed American Judges to work in the Abu Dhabi Commercial Courts. The two judges are Oran Whiting and Colene Marie Otol, both lawyers work in the Full Chamber of the Commercial Court of First Instance. The initiative’s aim is to settle disputes with values over AED1 million having foreign experts to make decisions during the lawsuits to help foreign investors. This follows the move done by ADJD last year approving and including the English language as one of the official languages in the court with the aim to give better assistance and service to foreign businesses in Abu Dhabi.
Dubai free zones are planning to allow a single license for all free zones
During the Dubai Free Zones Council’s 12th meeting, a preliminary agreement was made and the council came up with the “One Free Zone Passport” initiative. This allows free zone companies to operate in all other free zones on a single license. Because of the UAE’s announcement of allowing 100 percent ownership in mainland companies, the free zones have been stimulated to find ways to boost foreign investment. The members of the council have removed the need for a bank guarantee and replaced it with an insurance policy instead. The DFZ council also mentioned that it will discuss the exemption of the registration of leased properties by free zone companies with the Dubai Land Department.
Excise tax on e-cigarettes and sugary drinks in Saudi Arabia imposed
Saudi Arabia has included more products to be added on the previous list of goods on excise tax which was first introduced last June 2017. A 100 per cent tax will be imposed on e-cigarettes, including its accessories. 50 per cent tax will also be levied on soft and sugary drinks. The country’s General Authority for Zakat and Tax (GAZT) is yet to announce the implementation date of the new rules which aims to boost non-oil revenue and reduce the consumption of harmful products by the residents.
Oman’s ‘sin tax’ registration system started from June 15
Oman has launched the electronic system for taxpayers on June 15 giving consumers and companies a 90-day registration period. 100 percent tax has been implemented on tobacco, alcohol, energy drinks, and pork meat. 50 percent tax has been imposed on carbonated drinks. The implementation of tax can generate up to OMR 100 million annually as estimated by the Economic and Financial Committee of the Shura Council. GCC member countries have agreed to introduce taxes to be able to increase non-oil revenue and reduce the consumption of unhealthy goods with Oman delaying its introduction for 18 months.
Myanmar: Government to establish Centre to mediate business disputes
The Ministry of Investment and Foreign Economic Relations has announced that the government will set up an arbitration body that will facilitate in resolving business issues over foreign investments in the country. Myanmar is struggling to attract foreign investors due to slow reforms and humanitarian concerns in the Rakhine State. The government is hoping that with this move and all the other new laws implemented, it will help reach this year’s goal to get US$5.8 billion worth of foreign investment, but as of this quarter, only US$2.5 billion has been received.
Myanmar: Advanced income tax on imports, exports reinstated after one year
The Ministry of Planning and Finance has issued Notification 38/2019 that will require companies involved in export and import to pay a 2 percent advanced income tax (AIT). However, businesses hope that the government will reconsider its move regarding the implementation of the AIT as it will cause more difficulties for low and medium scale companies. The government issued the new notification after finding out about anomalies of some businesses who export products using the names of other companies under the self-assessment system (SAS) to exempt themselves from tax.
Turbo-Powered Thai Baht Could Get a Further Boost from GDP
The Baht is looking to repeat its performance this year again as one of Asia’s best currencies. Monday’s growth data shed light on a key pillar of its recent strength and may help it stay in pole position at least through the first quarter.
After being beaten by only the yen in 2018, the Thai currency has outshone all its regional peers so far in 2019, rising by 4 percent against the dollar. A robust domestic economy has helped it outperform both the won and Taiwanese dollar, which also have the benefit of a current-account surplus.
The Thai Baht has experienced a sustained period of strength for several years now and this is anticipated to continue throughout 2019 with experts even suggesting that the currency could hit 30 against the US Dollar as early as the start of Q2. The currency’s strength has been attributed to a burgeoning economy which has in itself seen sustained growth, albeit having slowed more recently.