MUHAMMAD AHSAN TARIQ

SHARJAH MEDIA CITY FREE ZONE- AN EMERGING NAME IN THE U.A.E BUSINESS MARKET

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Why Sharjah?Sharjah, the third largest emirate in the UAE, lies partly on the Persian Gulf and partly on the eastern coast of the Gulf of Oman. It is positioned between Asia, Europe and Africa, making it a strategic location with access to markets which total more than 3 billion people. ‘Rising Sun’, as the meaning of its name suggests, is emerging from the shadow of its neighbours Dubai and Abu Dhabi, which is just a short drive away.Due to Sharjah’s global cultural affiliations, it was awarded with the title of ‘Cultural Emirate of the UAE’ and the ‘Cultural Capital’ of the Arab World in 1998. Along with the social and cultural development, its leadership is now at the forefront of the U.A.E’s economic growth and development by providing world-class Free Zone hubs and facilities for innovation, entrepreneurial, technological and industrial growth under the continued urbanization and modernization drive in Sharjah.Why Choose Sharjah Media CitySharjah Media City, commonly referred to as ‘Shams’, was launched in January 2017 with an aim to provide smart and innovative facilities and services along with a vision to make creative entrepreneurship accessible to all aspiring startups and SMEs, as well as for established companies striving to grow their business both locally and globally.The reason for Shams’ success since its launch is that despite the name, Sharjah Media City offers a diverse range of Business activities along with the Media related activities. With over 250+ business activities to choose from, entrepreneurs, SMEs, Freelance consultants and established companies are already operating in Shams with business profiles ranging from Media production, publishing, Telecommunications, IT consultants and Programmers on one end to wholesale & retail trading, legal & accounting consultancy services and management consultancies at the other.Shams’ vision to be the first free zone to go digital in executing its processes to cope with the technological advancement in the world make it stand out amongst Free Zones.More Reasons to Choose ShamsSince its inception, Shams has offered a diverse range of benefits to businesses and entrepreneurs alike. Some of the reasons which make Shams an emerging Free Zone include:Quick Setup Process:Shams aims to provide the quickest business setup timelines with License issued on the same day (or Maximum of 3 working days), providing that the documents are complete. We, at Affiniax, aim to provide seamless experience to obtain license and also post-license processes which includes Establishment card issuance, visa issuance and stamping to be completed in minimum time.Cost Effective Investor Friendly Benefits:At Shams, business can be setup with sums as low as AED 11,500 (3,130 USD). Additional benefits include:
  • 100% repatriation of capital and profits gain
  • 0% corporate and personal income tax
  • 100% foreign ownership
  • 0% import and export duties (Custom Duties)
  • No Deposits required by Shams
  • Allocation of up to 6 visas on a shared desk facility
  • Ease of selecting multiple activities on same license.
  • Presence of Shareholders are not required to incorporate a company
  • Easy and inexpensive recruitment of workforce
Variety of Office Space SolutionsWhether you are a like-minded freelancer looking for a shared workspace, or a business that requires a private working environment to conduct business activities, at Shams you will be able to find office space solutions to meet your needs and requirements.  It ranges from shared or dedicated desks to shared and dedicated office spaces. Shams also provide solutions for creative units and studios to cater to your business needs.Ideal Strategic LocationShams is strategically located and in close proximity to both Sharjah International Airport and Dubai International Airport. It is located within 15 minutes of Sharjah international Airport and within half an hour of Dubai International Airport. The city also provides high class infrastructure facilities along with well-planned urban development.Flexible Visa PackagesIn addition to many other reasons to choose Shams, another advantage of setting up a business in Sharjah Media City is Flexible Visa Options which allows businesses and entrepreneurs to apply for up to 6 visas from a shared desk facility. These visa holders are also eligible to apply for family and dependents visas.Sharjah media City is aiming to become a leader in providing world class and innovative business opportunities for those wishing to embark on their entrepreneurial journey in the UAE and strive to grow their business both locally and globally. Our expert team at Affiniax, ensures to provide smooth and hassle-free company formation and registration experience. For further enquiries and information please feel free to contact our team of experts at mail@affiniax.com or call us on +971 4 425 6616.

DLD and RERA Introduce New Service For Real Estate Stakeholders in Dubai

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The Dubai Land Department (DLD), through the Real Estate Regulatory Agency (RERA), has launched an innovative electronic system called Mollak, an innovative, electronic web-based service developed by RERA for the purpose of registering Owners’ Associations and the Management Companies forming part of a Jointly Owned Property.Mollak, which means “owner” in Arabic, is developed specifically to assist real estate stakeholders, including property developers, owners, investors, Owners Associations and Association Managers to comply with all RERA regulations and management requirements in a simple and organized manner. This is in line with the vision DLD has for Mollak, which is to position Dubai as the world’s premier real estate destination and a byword for innovation, trust and happiness.Mollak simplifies the system of payments for Service Charges (also known as maintenance charges or operational charges for the Owners Association). The system will operate in a manner similar to the operation of an escrow account, increasing the convenience level exponentially in projects that have several different stakeholders.The system also operates within the real estate unit owners’ database and the database of real estate units registered and approved by the DLD, where no user may change the data. These two functions operating in tandem will also allow DLD to quickly resolve several ownership disputes as they will be able to examine their own financial records regarding service or maintenance charges as well as the ownership database.The system has already been through a highly successful pilot phase, wherein 468 bank accounts were successfully opened for project service charges, 88 management companies and 1,212 real estate projects were registered and approved by RERA, as well as 200,000 real estate units, comprising residential apartments, villas, offices and commercial shops.The system seems on course to fulfil its mission of creating an innovative and sustainable real estate environment that will promote Dubai as the world’s happiest city through smart services, professional human and financial resources and integrated real estate legislation.We, Affiniax Partners, are proud to be Registered Auditors for the Mollak System. To know more, please contact our Audit team at mail@affiniax.com

OWN FREEHOLD PROPERTIES IN DUBAI WITHOUT A DUBAI LICENSE FOR RAKICC REGISTERED COMPANIES

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Dubai Land Department (DLD) strengthen ties with Ras Al Khaimah International Corporate Centre (RAKICC) by signing Memorandums of Understanding (MOU) for the registration of freehold properties in Dubai. With this, there is no need for RAKICC Registered Companies to obtain a Dubai trade/commercial license to own a property in Dubai. No objection Certificate from RAKICC is one of the main requirements to acquire a freehold property. As of now, there are total of 23 freehold areas in Dubai and some of them are the following:
  • Dubai Marina
  • Downtown Dubai
  • Jumeirah Village Circle
  • Palm Jumeirah
  • Jumeirah Lakes Towers
  • Business Bay
And project developer such as:
  • Dubai Global
  • Dubai Holding Projects
  • EMAAR
  • Nakheel
  • Dubai Real Estate Corporation – Wasl Properties
  • Meraas Holding
This collaboration aims to open more doors of opportunities to invest in the Emirate’s Real Estate market and to disperse DLD’s expertise in Real Estate regulation and registration at the local, federal and global levels. For more inquiries or clarifications, please feel free to contact our Corporate Services team at mail@affiniax.com.

DMCC INTRODUCES DUAL LICENSING SCHEME BY PARTNERING WITH DED

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As part of a continuous effort to transform Dubai into an investment friendly ecosystem, Dubai Multi Commodities Centre (DMCC), the world’s flagship Free Zone and Government of Dubai Authority on commodities trade and enterprises, and the Department of Economic Development (DED), the Government of Dubai entity that regulates the economic activities of all onshore companies, have signed a strategic agreement to collaborate on the licensing of companies in Dubai- allowing them to operate within the Free Zone and onshore.The Memorandum of Understanding (MoU) introduces a dual licensing scheme to DMCC member companies, enabling them to establish a presence and operation in mainland Dubai under a DED license. It will also enable Free Zone businesses to carry out some service activities onshore, provided that DMCC member companies will obtain a no objection certificate (NOC) from the DMCC Authority.The partnership aims to further facilitate trade and boost economic activity with the potential change to the entrepreneurship and business outlook in the Emirate and to further improve transparency, governance and compliance in the business sector. This will also welcome new business opportunity and flexibility to conduct businesses across Dubai.We will keep you posted on any update regarding the above matter and its implementation.

100% FOREIGN OWNERSHIP IN THE UAE FOR CERTAIN ACTIVITIES

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His Highness Shaikh Mohammad Bin Rashid Al Maktoum chairman of the UAE cabinet, Vice President, Prime Minister and Ruler of Dubai has approved the sectors and economic activities eligible for up to 100% foreign ownership in the UAE.Total of 122 economic activities across 13 sectors were specified to be entitled for up to 100% foreign ownership. The decision aims to support the growth environment and to reaffirm UAE’s position on the global arena as a hub for investment.The sectors covered are
  • Renewable Energy
  • Space
  • Agriculture and Manufacturing Industry
  • Transport and Storage
  • Hospitality and Food Services
  • Information and Communications
  • Professional, Scientific and Technical activities
  • Administrative Services
  • Support Services
  • Educational Activities
  • Healthcare
  • Art and Entertainment
  • Construction
The Local Governments will specify the ownership percentage of foreign investors in these activities.We will keep you posted on any update regarding the above matter and it’s implementation.We at Affiniax Partners can assist you with Economic Department Company Formation. For more information towards the company formation please feel free to contact our Corporate Service team at mail@affiniax.com.

WHY INVEST IN THE UNITED ARAB EMIRATES?

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Introduction: United Arab EmiratesThe UAE’s status as a growing knowledge hub is enhancing its attractiveness as a business destination that offers a multitude of possibilities. There are more than 40 free trade zones in UAE which offer business stability and 100% foreign ownership.The taxation regime is extremely appealing with 0% Corporate Income Tax for most sectors and no Personal Income Tax or Social Security Contributions.Business confidentiality and having no restrictions in establishing more than just one activity in the UAE makes it easy for international investors to set up their businesses in the UAE. Moreover, strong and rapidly expanding infrastructure plays a major role in attracting businesses to the UAE.Dubai is fast becoming an important financial center that offers business support for foreign investors looking to invest in the region. With the World Expo being held in Dubai in 2020, a number of international companies and investors will be looking to explore opportunities in the UAE.Having nearly 30 years of presence and experience in the region, Affiniax Partners are well placed to assist your clients with their requirements in the UAE.Few aspects to consider when considering your move to Dubai:
  • Skilled local and International workforce.
  • The import and export sector benefits from a series of advantages and foreign companies are exempt from most tax and duties.
  • Entrepreneurs in Dubai can easily connect with countries worldwide when having a business in the UAE.
  • It is very easy to set up a branch or a subsidiary in Dubai.
  • The incorporation process in Dubai is not subject to complex formalities and entrepreneurs can easily set up their business.
  • The tax benefits are huge in Dubai, and entrepreneurs from abroad can enjoy tax exemptions like 0% corporate or income taxes.
  • The positive trends of the real estate sector in Dubai attract different foreign businesses every year.
  • A strong Currency with pegged AED to USD rate.
  • Dubai is an important tourist destination which offers plenty of opportunities in this area.
  • The UAE has already signed over 40 Double Tax Treaties with various jurisdictions and is in the process of agreeing on agreements with more jurisdictions, including the UK, Australia, and other EU countries.

DOUBLE TAX TREATY: INDIA & UNITED ARAB EMIRATES

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The Double Tax Treaty between UAE and India was signed in 1989 and later amended through notifications of 1993, 2001, 2007 & 2013.Double taxation is defined when similar taxes are imposed in two countries on the same taxpayer on the same tax base, which harmfully affects the exchange of goods, services and capital and technology transfer and trade across the border.Public and Private companies, investment firms, air transport firms and other companies operating in the UAE, as well as residents, benefit from Avoidance of Double Taxation Agreements (DTA).Thanks to an intensive economic trade of more than 20 billion dollars between UAE and India, the two countries have signed an arrangement based on the promotion of mutual economic relations. Because of this tax convention, India and UAE have managed to avoid over-taxation of their legal entities and taken successful steps to prevent tax evasion.The following incomes are protected by the double taxation treaties signed between the UAE and India:
  1. Revenues from personal services.
  2. Revenues derived from shipping and air transportation.
  3. Interests, dividends, and royalties registered in both countries.
  4. Incomes from the alienation of immovable or movable properties are protected by this DTT (under specific conditions).
Companies with permanent establishments like factories, offices, branches, workshops, or any other workplaces in Dubai are covered.To determine the country of residence for a legal entity, the state takes into consideration whether the business has one of the following establishments on its territory:
  • A place of Management;
  • A Branch;
  • An Office;
  • A Mine;
  • A Factory or Workshop.

TRANSFER PRICING AND UNITED ARAB EMIRATES

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Transfer Pricing (TP) is a practice that allows for pricing transactions internally within businesses and between companies that operate under common control or ownership, including cross border transactions.The United Arab Emirates (“UAE”) joined the OECD Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) on 16 May 2018.Through joining the Inclusive Framework, the UAE has (for now) committed to implementing the following four BEPS minimum standards:Action 5: Countering Harmful Tax Practices More Effectively, Considering Transparency and SubstanceUAE ProgressThe implementation of VAT in the UAE as of 1 January 2018 (which requires taxpayers’ registration with the UAE’s Federal Tax Authority and in doing so, furnishing information to a central tax administration agency) has allowed the UAE to make progress in this regard.Action 6: Preventing the Granting of Treaty Benefits in Inappropriate CircumstancesUAE ProgressIt remains to be seen what approach the UAE may adopt in this respect.Action 13: Transfer Pricing Documentation and Country-by-Country Reporting (“CbCR”)UAE ProgressWe do not yet have visibility as to whether the UAE will sign the CbCR MCAA or choose one of the other mechanisms for implementing CbCR. It is currently also unclear whether the UAE will adopt the OECD CbCR Model legislation or enact its own tailored legislation.Action 14: Making Dispute Resolution Mechanisms More EffectiveUAE ProgressOther jurisdictions such as Singapore, Netherlands and Luxembourg have signed up to the MLI to implement the MAP-related changes rather than enter into a bilateral renegotiation of their existing DTAs. It remains to be seen on the official approach the UAE may adopt in this respect.Latest DevelopmentsDuring the second week of March 2019, European Union governments updated a blacklist of tax havens this week, adding the United Arab Emirates.Blacklisted states face stricter controls on transactions with the EU, although no sanctions have yet been agreed by EU states. Though, experts believe that such restrictions could include increased audit risks and denial of certain benefits.Abdulaziz al-Ghurair, the banking group’s chairman, told reporters during a banking conference in Dubai. “I’m sure in the near future this will be solved.” “Because we have chosen to be an international financial center, we have to comply with the world’s regulations …” Al-Ghurair said. “We had issues like this in the past and they’ve been solved.”Key Takeaways & opportunitiesWhilst the UAE has only become a member of the Inclusive Framework on 16 May 2018, the UAE has already been making strides into ensuring its compliance with the four BEPS minimum standards through its participation in various Conventions issued by OECD that are designed to facilitate the implementation of the four BEPS minimum standards. Further, the UAE has already in place in its domestic rule’s certain information collection mechanisms.As a next step, the UAE would need to review, update and put in place domestic legislation to comply with the minimum standards.With several transfer pricing regulations going to be introduced in MENA over the next few years, this should be viewed as an opportunity to introduce a structured intra-group pricing framework to align with investment strategies and overcoming risks by implementing technology solutions that align with existing business systems.A recent survey suggests that 82% of respondents agree that transfer pricing structures are under critical evaluation in the MENA region.

Affiniax Partners Joins Allinial Global

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Affiniax Partners has joined Allinial Global as a member

Affiniax Partners is very pleased to announce it has joined Allinial Global (formerly PKF North America), a member-based association that has dedicated itself to the success of independent accounting and consulting firms since its founding in 1969. Allinial Global is based in North America but offers international support by connecting its firms to providers and global networks of accounting firms worldwide, fostering the independence, profitability, and continuous improvement of its members. Affiniax Partners has 4 partners and a total of 60+ employees.

“We joined Allinial Global because of our strong commitment to our clients,” said Sumeet Nayyar, CEO & Partner. “Through this global association, we will have access to cutting-edge skill-building and niche information designed to bring greater profitability to the business owners we serve. We will enjoy all the advantages of national firm resources while still maintaining our independent status.”

Allinial Global firms continually seek new ways to better meet the needs of their clients. In this cooperative environment, firms share ideas, training programs, and technical expertise. “We look forward to being active participants in the Allinial Global Association, working closely with other successful firms nationwide,” commented Sumeet Nayyar.

KINGDOM OF SAUDI ARABIA AND UNITED ARAB EMIRATES DOUBLE TAX TREATY – OFFICIAL PUBLICATION

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In its official gazette (Umm Al-Qura) the Kingdom of Saudi Arabia (KSA) on 1 March 2019 published its Double Tax Treaty (DTT) with the United Arab Emirates. This marks the first DTT among the Gulf Cooperation Council (GCC) countries. It is considered as the foundation for the accelerated cross-border trade between these two countries. The official notification on the UAE gazette for the treaty is still awaited which will ultimately set the DTT in force. The DTT will be effective on the first day of the second month in which UAE will issue the DTT in its official gazette.The DTT was officially signed on 23 May 2018 between UAE & KSA. The DTT is in line with the Organization for Economic Co-operation and Development (OECD) Model Tax Convention. Both UAE and KSA resident individuals and companies will be subject to the provisions of the DTT.Some important features of the treaty are as follows:Permanent EstablishmentThe treaty follows the OECD definition for Permanent Establishment (PE) i.e. a fixed place of business through which the enterprise is engaged, in whole or in part.Under the DTT, if services are carried out by an establishment of a Contracting State through employees in the other contracting state for a period of 183 days in a 12-month period, the establishment will be considered to have a PE in that other state.Dividends: Dividends will be taxed in the source country, with a maximum 5% Withholding Tax rate (which is the current statutory Withholding Tax rate in KSA for dividends) if the recipient is resident of the other country.Royalties: Royalties will be taxed at a maximum rate of 10% in the source country if the recipient is the resident of the other country. Which is a reduced rate (compared to 15% domestic rate of KSA).Interest: KSA Withholding Tax on interest income will be exempt if the recipient is resident of another country, i.e. interest will be taxable in the source country (statutory rate of Withholding Tax on interest income in KSA is 5%).Capital gains: Income derived by a resident of a Contracting State from immovable property situated in the other Contracting State will be taxed in that other country. Such that the income will be taxed in the country of origin. Disposal of shares will continue to be subject to KSA capital gains tax rate of 20% where appropriate.Business Profits: The profits of an enterprise shall only be taxable in the source country unless the enterprise is carrying out business in the other Contracting State through PE. Accordingly, the income from services which are not delivered through PE in another country will be exempt from Withholding Tax in that country. The domestic Withholding Tax rates on business profits in KSA are between 5% and 20%.If you wish to better understand the DTT and how it would affect your business or circumstances, Contact us at mail@affiniax.comDownload: Unofficial Translation of Double Tax Treaty – KSA and UAE
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