The UAE has the most diversified economy in the GCC. The country was reliant on oil and gas for centuries; but of late the government has started giving equal prominence to all the sectors. The move has helped the government in increasing its revenue and has led to an impressive development in sectors that include tourism, retail, manufacturing etc. Some of the leading industries in the UAE, that has been contributing immensely to the economy of the country include;

Retail

The retail industry has been witnessing a massive growth in the UAE, specifically Dubai. With numerous global retail players having established their base in the country, the industry is expected to thrive in the coming years.

According to reports, the value of retail sales in Dubai alone is expected to reach $43.8bn by the year 2020 and a growth of 5.6 percent is expected in the time period 2018-2021.

Dubai hosts some of the biggest shopping festivals in the world, that helps in boosting the local sales of retailers.

Hospitality

Hospitality is another fast-growing sector in the UAE, that has experienced envious growth over the past decade. Dubai attracts visitors from across the globe and is one of the most visited cities, with 15.93 million international overnight visitors in 2018.

The UAE hospitality market is expected to reach $7.6 billion within a span of 3 years at a five-year CAGR of 8.5 per cent. International tourist visits will increase to 25.5 million at a five-year CAGR of 4.3 percent.

Healthcare

UAE is home to a highly-developed healthcare system, that aims to become one among the best in the world by 2021. The UAE government’s various initiatives to promote the sector coupled with latest technologies that are being embraced, has helped the healthcare sector evolve rapidly.

A growth of 60 percent is expected in the healthcare industry between the time period 2016- 2021, that will be worth over AED 103 billion.

The highly specialised doctors along with events such as Arab Health Exhibition, that brings together healthcare companies, technology, and products, has helped the industry gain global recognition.

Manufacturing

Manufacturing is the second largest contributor to the economy of the country. It accounts for 80 percent of Dubai’s non-oil trade and 53 percent of the country’s total non-oil exports. Some of the primary sub-sectors of the industry are processed food and beverages, plastics and rubber, electrical machinery and equipment, chemicals and chemical products, minerals and mineral products, publishing and printing, pearls, precious stones and metals.

Organizations that plan to set up a manufacturing plant in Dubai are bestowed with a range of lucrative facilities.

Construction

Construction sector is an inevitable part of UAE economy, that has been flourishing leaps and bounds. The use of robots, unmanned aerial vehicles (UAV) and “intelligent” tools and equipment has helped in the automation of various tasks at construction sites and this has been a contributing factor to the thriving industry.

During the time period 2014-2018, residential construction accounted for the largest construction market in the UAE and it is expected to retain its position in the coming years. More than 15,000 projects worth $791 billion are at various stages across the UAE.

Media

Dubai, a hub for public relations companies, advertising firms, print, production and broadcast facilities, was recently named as the Capital of Arab Media for 2020 by the Arab Information Ministers Council. According to His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, “Media outlets are not mere channels to cover events and disseminate information. Media is a partner in achieving development goals, setting their direction and driving their impact. It is a role that comes with great responsibility.”

The sector experienced an unprecedented rise in 2019, when compared to the previous year.

Setting up business in UAE for any of these sectors are relatively easy and all you must do is seek the help of a reputed business consultant.

With all industries evolving at a faster pace than ever before, making the right decisions based on consistent and clear data is key for any company. Way too often, managers have to deal with several different monthly or yearly reports from each department, making data visualization and decision-making strenuous tasks, frequently resulting in poor financial and operational results. In order to facilitate the flow of information and avoid disastrous choices, companies should put in place a consistent and efficient reporting system, such as a dashboard.

A dashboard is a business intelligence tool used to display data visualizations in a way that is immediately understood, by summarizing information from different parts of the organisation to ensure that appropriate decision will be reached. Dashboards fall into three categories: operational, analytical and strategic. Whilst the first two will look respectively at real-time data to understand performance, and past trends that can influence future decision-making, a strategic dashboard tracks performance in relation to a company’s key performance indicators, to better align actions with strategy.

A management information system (MIS) dashboard can help identify the source of a problem in order to determine the future needs of the company. Moreover, it can predict future trends by using various market tools to analyse the current ones, while also helping assess monthly or yearly performance to increase efficiency.

Essentially, this system ensures data collated from different parts of your organisation are processed and then presented in a manner that will help make the right decisions. For example, different banks will have different reporting formats and tools, raising the question of whether integration can happen within the two and whether reported data is accurate.The needs for a strong and customisable visualization tool in terms of charts, graphs and data is fundamental.

By using MIS dashboard, banks can collect and understand consistent reports and financial statements of competitors using external sources, while also comparing assets, such as credit cards, applications or sales being audited across years. This helps identify their position in the market, loopholes, threats and action plans to fix any issue highlighted by the data.

Excel sheets have become a thing of the past, as a dashboard can show a greater and more in-depth amount of internal and external data in one report, avoiding discrepancies between departments. Thanks to this, spending per department can be compared and negative trends identified and corrected, resulting in more effective decision-making.

A business can have various MIS reports to benefit each division of the business, saving them time and gaining total visibility of all systems.

For example, financial MIS can provide financial managers with fixed and standard report formats containing major financial objectives, while also projecting financial needs. Similarly, accounting managers can benefit from aggregated information on accounts payable, accounts receivable and payroll.

Besides banking, other industries can greatly profit from an MIS dashboard. In IT, an MIS dashboard can report on infrastructure or operational issues, as well as calculate how many of these escalated to vendors, or ensuring the IT team is meeting SLAs. Each report can be customized depending on the company’s needs, tailoring frequency or data accordingly.

In retail, a MIS can be used for point-of-sale collection, logistics, inventory control and internal communication, all of which affect retail operations and marketing. The latest can also benefit from MIS dashboards by making sure its strategy is in line with KPIs such as sales effectiveness and sales revenue. The report can include charts, different dashboards, and comparisons between current and past years data and targets.

A similar approach can be applied by HR by analyzing recruitment data, as well as employee retention and month-on-month or year-on-year productivity. In conclusion, MIS reporting should be backbone of any organisation to ensure we achieve our goals and objectives by improving the performances and helping us look forward towards the growth and success of an organisation.

The current economic situation in the UAE indicates that some companies are vulnerable, and an increasing number of enterprises have sought mergers as a result. Mergers bring new opportunities and can increase revenue, and as such has become an attractive option for a lot of companies.

When you try to combine systems, there are a lot of advantages and challenges that come. The advantages include combined reports, bringing operations together, and that board members get easy MIS reports.

A lot of trading companies and banks in particular have taken the merger route to increase their stability, but this results in numerous challenges for IT systems. It brings both technical and digital challenges and can cause difficulties in combining technology operations into one. Companies “A” and “B” will almost always have different operations and that’s difficult to handle.

History of records won’t match for a data integrity report. Dimensions of reporting will be different for the two companies. There’s also an innovation challenge. When they merge, there needs to be a business reason for the merger. They need to innovate new things with their current systems.

Blockchain can help to avoid challenges. It can easily integrate systems and data sources can be validated and used to trust reports; it will give easier data analysis and trust of data for merging companies. Blockchain can be difficult to implement, but it promises to bring huge benefits. Banks will have to assess how to handle customers during a merger. Merging causes technology gaps and that’s not easy to manage. There will be issues around training and distribution, and how to handle shipments. Issues can occur without proper planning.

Organizations should always see challenges as advantages. They should look to bring new technology and IT systems and invest in security to avoid challenges. It’s an undoubted challenge for companies to implement new technology, but it must be done. IT systems must be farsighted when merging. Organizations need to evaluate the cost benefits and technology benefits, and then decide which technology to progress with. They shouldn’t just think about the present, but also the future.

Cloud is going to be a challenge with mergers. One company may be reliant on the cloud, but the other could be reliant on on-premise. The future will be in the cloud, so we need to keep an eye on the future. They also need quick wins to mitigate any problems occurring.

“Organisations need to adopt best practices to take strategic decisions.”

Organizations need to adopt best practices like COBIT 5 or COBIT 2019 to take strategic decisions. They need to do a proper analysis of what needs to be achieved and use a GAP analysis. Then they can plan projects to avoid future risks and proceed without any loss of business.

Proper project management is key. You need to build a project management office with the right stakeholders to plan properly for the merger. If you’re focused too much on project management, you can’t always focus on your own business, and sometimes that aspect can be outsourced.

When it comes to solving conflicts between two parties, meanwhile, the board must decide on some issues. There aren’t always clear answers. Boards have to take tough decisions. It’s important to be flexible enough to decide things based on logic.

Expo 2020 is one of the most anticipated events in the Middle East, which is expected to leave a huge mark on the economy of the country. Ever since UAE was declared as the venue to host the event, endless debates and discussions on the changes it is going to bring to the economy of the nation has been doing the rounds. The event will undoubtedly be a game-changer for Dubai and the country and will help in elevating the country’s position on the global level.

Expo 2020 is not an everyday event, it is one of its kind the Middle East has ever witnessed, and it will leave a substantial, sustained impact on the economy. This will be via construction, visitor and commercial activity, which will happen in the pre-expo phase, during-expo phase and legacy phase respectively.

The event will be held for 173 days and will host 192 country pavilions; a perfect platform to learn about innovative technologies from around the world that is going to shape the future.

Expo 2020 is expected to contribute around Dh123 billion to the UAE economy in the decade after the it ends. 50, 000 jobs will be created as part of the expo, which is expected to rise to 94,000, during the exhibition months. The acquisition and purchase of goods and services related to expo 2020, will result in a revenue of Dh100 billion and almost Dh38 billion will be added to the local economy till October 2020.  During the time of the expo, an additional amount of Dh22.7 billion is expected to be added to the economy.

The event has been garnering worldwide attention from the last many months and millions of people are expected to make it to the event, to experience the taste of innovative technologies that will be showcased here. This will benefit both public and private sectors and will help in boosting business, hospitality, real estate, recreation, and many other tourism sectors.

According to Najeed Mohammed Al-Ali, Executive Director of the Dubai Expo 2020 Bureau “Expo 2020 is a critical long-term investment in the future of the UAE. Not only will the event encourage millions around the world to visit the UAE in 2020, but it will also stimulate travel and tourism and support economic diversification for years after the Expo, leaving a sustainable economic legacy that will help ensure the UAE remains a leading destination for business, leisure and investment.”

Visitors attending expo 2020 will spend on tickets, merchandise, food and beverage, hotels, flights and local transport, which will in turn drive economic activity. There will be a surge in VAT revenues as well, as a result of increasing spending during this time. The VAT revenue is expected to cross $8 billion (AED30bn) in 2019.

The six-month long exhibition, that commences on 20th October 2020 and lasts up to 10 April 2021, will bring together the best of trade, innovation and products from across the globe. It explores the theme ‘Connecting Minds, Creating the Future’.

Tickets for Expo 2020 will be available to the public starting April 2020. Mark the date in your calendar; do not miss the opportunity!

We are living in a VUCA world that is gaining REFLEX. But what does this mean? The rapid growth and development in technology have given us some of the best products ever seen, from smartphones to driverless cars. This improved connectivity has made our world more volatile, uncertain, complex and ambiguous (VUCA), with the result being an explosion of data. However, the growth in data is rising faster than technology can keep up with, thereby Rapidly Enhancing Complexity (REFLEX) in developing better tools to handle data. While the growth of data and development of analytics tools and techniques is one part of the equation, to keep up with this constant transformation, the other part is the need to embed analytics in operations to drive better outcomes, like increasing top-line growth, improving customer and employee engagement, cost reduction, streamlining procurement and mitigating risks. At HLB HAMT Chartered Accountants, we are working on a roadmap to embed analytics into our internal audit function in the coming years to ensure we remain relevant to our clients, employees, and wider stakeholders. Such a transition will help us deliver internal audit engagements that are:

• Faster
• Cheaper
• Impactful
• Innovative

Like any initiative, embedding analytics into the internal audit function starts with setting the vision, defining objectives, designing KPI’s and then asking relevant questions along the way:

• What are our current analytics capabilities?
• What are our desired analytics capabilities or the future state?
• How and where to implement those capabilities and solutions?
• How to reposition our resources to drive these efforts?
• How can we use analytics to be more strategic not just for our clients but also with competitors?

Once the vision and the strategic direction are set, the next step is to design the data analytics competency model. I believe a deeper understanding of the competencies needed to succeed in this journey will help organizations of all sizes to bridge the gap between people, processes, technology, and data. According to a survey conducted by PwC in 2018, 52% of organizations in the Middle East see the lack of in-house data analytics skills as a challenge compared to 53% globally. In fact, embedding analytics in internal audit is 7-step approach analytics in auditing is a game-changer. What I described so far is just the first step. A leading stationery manufacturer required rationalizing their portfolio of 720 SKU’s (stock-keeping units/ products) to turn around the widening losses over the years and to remain competitive. The task was to rationalize its portfolio based on two criteria:

• What products to discontinue manufacturing and why?
• What products to continue manufacturing and why?

Traditionally, they relied on profit and loss accounts by department or sometimes by category, not by SKU, to find answers to such questions. Such an approach was not effective given the lack of visibility and granularity at the SKU level. As part of the team, I drew up upon multiple internal and external sources of data to shed light on the status of the portfolio. A closer look at the analysis revealed that around 300 SKUs were responsible for less than 7% of the total revenue and almost 20% of total expenses. Using analytics, the client was able to make confident decisions on each SKU and to revise their portfolio to 386 SKUs, improving profitability and their market positioning. In another case, one organization in the hospitality industry had problems with the high procurement cost of raw materials, despite strategic partnerships with vendors. Traditionally the approach is to validate the reliability of the procurement cycle by checking purchase orders, invoice and GRN (goods received note) to ensure the effectiveness of internal controls.

However, in this instance by taking an insights-driven approach enabled by analytics to be helped to understand all purchase orders over a period of three years. The analysis revealed contrary to expectations, the business was making purchases outside strategic vendors. Furthermore, for some raw materials, they were overpaying by as much as 30%. The analysis was drilled further down into the data to shed more light on the nature and extent of the purchases. To do this, the organization had to answer specific questions like what made the procurement manager to approve purchases away from strategic vendors? Why there was a significant variance in procurement and whether procurement expenses were reported on time? If quality and on-time delivery are key, then why initiatives were not made to establish new strategic partnerships? Overall, analytics helped to go beyond a checklist approach and make recommendations on rationalizing their procurement processes for improved savings.

The role of payroll system is not limited to calculating wages of employees; it includes talent management capabilities that simplifies HR processes. An integrated talent management solution will have the tools and reports required to maintain compliance, including employee verification, tax compliance, minimum wage and overtime compliance and equal employment opportunity compliance.

Out of the diverse payroll services available, choosing the best one that suits your business is essential.

You need to ask the right questions while evaluating the efficacy of your payroll system.

• Money spent on payroll system

Enterprises need to analyse the size of their business and allocate a fixed budget for payroll processing. It is advisable to go for a system which offers a transparent cost per employee per month structure.

• Flexibility of payroll system

The payroll system must be flexible and compatible enough to grow with your business, to add or modify any number of salary components and to quickly adapt to new regulatory changes.

• Security of payroll system

Payroll systems store sensitive employee data including their contact details that makes it vulnerable to hacking. While evaluating payroll management systems utmost importance should be given to data protection and security and password protection of the payroll system must be ensured.

Managing a company’s payroll might seem like a simple and straightforward process. But it may not be as easy as you believe. A small mistake is all it takes to cause reputational and financial damage.

If handling the payroll of a company with a single office is this crucial and risk worthy, have you thought about companies with multiple branches spread across the globe? Multi-country payroll (MCP) comes into play here. It enables employers to manage their regional payroll operations efficiently, mitigate operational risks and overcome other challenges faced.

International payroll outsourcing enables consolidated reporting and analytics, thus providing better control and visibility of payroll operations across diverse nations. Compliance with different countries’ laws, currencies and time zones are some of the many benefits of MCP.

Why to opt for multi-country payroll

• Unified Service

Provides with a common reporting and governance framework across all geographies that allows unified service levels.

• Standardise Process

Standardizes processes within an enterprise, ensuring a productive and efficient workforce.

• Single point of contact

Helps in maintaining a single point of contact for employees across the globe, saving a lot of time and effort.

Out of the global human resource outsourcing markets, international payroll services outsourcing is the fastest-growing. According to a study by Everest Group Research, the MCPO market has grown rapidly at a CAGR of 19-23% from 2014-2016 to cross US$1.5 billion.

Payroll Fraud

There has been a significant rise in the number of businesses falling victim to fraud and turning a blind eye on the issue can only worsen the situation. Fraud by itself can be dangerous to the overall functioning of an enterprise, and if it happens to be related to payroll, the problem escalates.

Payroll fraud is theft of funds using a company’s payroll system, which is the number one source of accounting fraud and employee theft according to the Association of Certified Fraud Examiners. Employees who have access to the systems through which workers are paid can misuse their access to issue false payments.

Fraudsters misuse payroll data in a number of ways, common ones being timesheet fraud, falsifying wages, commission fraud, bonus fraud, expense reimbursement fraud, ghost employees and misclassification.

Timecard falsification and ghost employees are the two common types of payroll fraud. In timecard falsification, an employee provides inaccurate data about hours worked, leading to a miscalculation of wages. Even though it may not look as serious as stealing cash from an organization, it is equally punishable. A ghost employee is someone who is not part of an organization but is recorded on the payroll system. In such cases, the person who has ‘created’ the ghost employee collects their salary.

27 percent of all businesses fall prey to payroll fraud and it is interesting to note that smaller organizations that has an employee strength of less than 100 employees get affected more when compared to larger organizations. The occurrence is nearly double!

A sad truth about payroll fraud is that it is often long-term and many of the times it is the trusted employees of an organization who get involved in payroll fraud. By the time you realize what is going on inside your own firm, the damage would have been done.

Prior to hiring an employee who will be responsible for payroll management or who can access the bank accounts of a company, a background check on the person is mandatory. An individual with history in deceiving a company financially will tend to do so even if they switch companies. Also, reviewing payroll reports regularly to check for errors in calculations and to figure out whether any ‘ghost employee’ has been listed, is equally important.

Preventing payroll fraud is indeed a challenging task but given the massive loss it can cause to a business, employers need to be extra vigilant.

A series of initiatives that the government has implemented over these years has helped the country maintain its status. The initiatives include;

Mohammed bin Rashid Centre for Government Innovation

The Centre established in the year 2014, was a move by the government to make the country one of the most innovative across the globe and it has been successful so far. The centre has been fruitful in fulfilling many initiatives;

• Innovation diploma

Conducted in collaboration with the University of Cambridge in the UK, the programme intends to prepare a generation of innovative CEOs, who can be of boon to the government industries.

• Government innovation labs

Labs that use innovative methods to inspire creative ideas and come up with strategies for the various challenges faced by government entities, is also a part of the programme. All stakeholders come together and discuss various government challenges through solution-focused perspectives.

• Ibtikar talks

These talks aim to enhance the efficacy of processes and keep updated with the latest technological developments. It also stimulates innovation in significant sectors and increases the cooperation between various government organizations.

• ‘CEO of Innovation’, a new post in government entities

A new post was added in every government department, titled CEO of innovation. This shows how seriously the UAE government has taken the concept of innovation.

Emirates Science, Technology and Innovation Higher Policy

The policy was announced in the year 2015. 100 national initiatives are covered under the strategy and the estimated budget is more than AED300 billion. Special fields such as aviation industries, global pharmaceutical industries, solar power, civilian nuclear energy programme and robotics are given special prominence.
A sustainable economy that will rely on science, knowledge and technology is intended out of this policy.

Dubai Future Accelerators

The accelerators are programmes and integrated systems that will enable entrepreneurs and innovators to convert their ideas into successful companies. As a part of the initiative, renowned global companies and entrepreneurs collaborate and address certain key opportunity that include;

• The application of artificial intelligence and robotics
• Genomics
• 3D printing
• Biotechnology
• New business models and best practices

Dubai – hub for innovation and technology

His Highness Sheikh Mohammed bin Rashid Al Maktoum has been coming up with constant strategies to enhance Dubai’s position as a hub for innovation and technology. Some of the efforts include Museum of the Future, World’s first 3D-printed building and the various free zones that promote innovation in the city.

According to Sultan bin Saeed Al Mansouri, UAE Minister of Economy, on the country coming first in Arab nations with respect to innovation, “Newer initiatives will be rolled out with the chief goal of further expanding fundamental and applied research conducted in the country and linking it to robust financing mechanisms. In addition, the country is looking to enhance the knowledge economy by amplifying the number of intellectual property applications and registrations made inside the UAE through the attraction of foreign companies and the introduction of licences for IP holding companies.”
UAE will hopefully retain its position in the coming years as well and with numerous strategies in place, it won’t be tough.

Before you plan a visit to any country, be it for a short trip or to start a company, basic knowledge about the laws and regulations governing that place is a must.

UAE has issued several laws related to the economy, trade, trade license and investment since its formation in 1971. There are many local laws pertaining to alcohol consumption, dressing and public displays of affection as well. Expats should be aware of these as ignorance of the law will not be considered or accepted as an excuse in court and breaking the law will get you into legal trouble.

Labor law

Federal Decree Law No. 11 for the year 2008 governs the labor rights of employees in the public sector and in the private sector, the Federal Law No. 8 of 1980 is applicable. These laws oversee issues associated with working hours, vacation and public holidays, sick and maternity leave, employing juveniles, employee records, safety standards, termination of employment and end of service gratuity payments.

Generally, free zones are not governed by the UAE Labor Law as each free zone has its own employment law.

Commercial Companies Law

The law specifies that UAE should be the nationality of every company established in the country. All mainland companies are subject to Commercial Companies Law, whereas free zone companies are exempt from the provisions of this law. The new UAE Commercial Companies Law (Federal Law No. 2 of 2015) (“CCL”) came into force on 1st July 2015.

As per the new CCL, all companies with public accountability are required to use full IFRS as issued by the IASB. IFRS standards play a pivotal role in global financial reporting as they are being embraced by countries across the globe. Companies listed on NASDAQ Dubai, Dubai Financial Services Authority (DFSA), and Abu Dhabi Securities Exchange need to comply with IFRS standards.

Anti-Money Laundering law

Money launder­ing, illegal transfers of money and criminal activity are well monitored in UAE and the country maintains a strong Anti-Money Laundering (AML) system. To better scrutinize cash flows and combat terrorist financing, the government has taken various steps.  This includes the enactment of Anti-Money Laundering law and the counterterrorism law. Two laws serve as the basis for the country’s Anti Money Laundering (AML) and counterterrorist financing (CTF) efforts: Law No 4/2002, the Anti Money Laundering law, and Law No. 1/2004, the counterterrorism law.

Bankruptcy Law

The Federal Bankruptcy Law (under the federal decree No. (9) for 2016) identifies various techniques to avoid bankruptcy cases and the liquidation of debtors’ assets, that include consensual out-of-court financial restructuring, composition procedures, financial restructuring and the potential to secure new loans with respect to the rules and regulations.

Tax laws

The landmark Federal Law No. 7 of 2017 (Law No. 7) issued by The United Arab Emirates (UAE) Ministry of Finance (MoF) “sets the foundations for the planned UAE tax system, regulating the administration and collection of taxes and clearly defining the role of the Federal Tax Authority (FTA).” The law deals with tax procedures, tax implementation, tax rates, tax obligations, cases of tax exemption, as well as procedures and rules of tax registration and cancellation.

There are many more laws in UAE and these are just some of the major laws that primarily concerns businesses.  It’s the responsibility of every one of us to follow and respect the laws of a country, if we wish to live and work there.

UAE is basically known to be tax-free country, and this was true to a great extent, until the introduction of Value added tax. VAT was introduced in UAE on 1^st January 2018 at a standard rate of 5 percent.

Apart from VAT in UAE, there are certain other forms of tax that one should be aware of.

Property tax/ fee

The property registration fee in UAE is 4 percent on the purchase price. For commercial sector, this has to be paid by the buyer and an additional 5 percent VAT is also applicable. In the case of residential sectors that are ready for occupation, as a general practice, the fee of 4 percentage will be split 2 per cent each between the buyer and seller.

However, the transfer of properties between close relatives are charged at a nominal value which ranges from 0.5 – 0.75 percentage.

Excise tax

Excise tax is levied on specific goods that are harmful to human health or the environment. The excise goods that will be charged tax in the UAE include;

• Carbonated drinks

This includes any aerated beverage and any concentrations, powder, gel, or extracts intended to be made into an aerated beverage. Unflavoured aerated water is exempted.

• Energy drinks

Any beverages which are marketed, or sold as an energy drink, and contains stimulant substances that provide mental and physical stimulation or includes caffeine, taurine, ginseng and guarana, will fall in this category. Substances that have similar effects as the ones mentioned above and any concentrations, powder, gel or extracts intended to be made into an energy enhancing drink will also be levied tax.

Tobacco and tobacco products are also categorized as excise goods.

Rate of excise tax

The rates of excise tax in the UAE are;

• 50 per cent for carbonated drinks
• 100 per cent for tobacco products
• 100 per cent for energy drinks.

Excise tax intends to reduce the consumption of unhealthy and harmful commodities. Businesses that are engaged in any of the below activities must register for excise tax;

• the import of excise goods into the UAE
• the production of excise goods, wherein the goods are released for consumption in the UAE
• the stockpiling of excise goods in the UAE in certain cases

Also, anyone who is responsible for overseeing an excise warehouse or designated zone i.e. a warehouse keeper should register for excise tax.

If you are on a vacation and planning to stay in any of the hotels in UAE, do not forget to check the tax charges. Certain restaurants, hotels, hotel apartments, resorts etc. in the UAE charge tax. Hotels charge ‘Tourism Dirham Fee’ per room per night of occupancy in Dubai and the price range from AED 7 to 20 depending on the category/grade of the hotel.

Whereas in Abu Dhabi, a fee of 4 percent of hotel stay bill and AED 15 per night per room will be levied.

In Ras Al Khaimah, hotels charge AED 15 tourism fee per room per night.

The UAE charges corporate tax on oil companies and foreign banks and rest of the industries are exempted. Companies functioning in UAE free zones doesn’t have to pay corporate tax for a specific period.

Unlike many other countries, UAE individuals are exempted from paying income tax.

If you are someone planning to start a business in UAE or going on a vacation to the country, basic knowledge on taxation is a must

Investing your time and money in something worthwhile, that can promise you higher ROI is really crucial. When it comes to investing for your dream business, the risk level increases. There are quite a few points that you must consider before you go ahead with establishing your business.

And, yes, location is a primary concern.

So, where do you plan to set up your company?  If you are looking for a place that is progressive, has excellent infrastructure and favorable business regulations, then, UAE is the place for you.

We all are aware of the country’s evolution from an impoverished desert village to a sustainable city with excellent standards of living. The strategic location, world-class infrastructure, political and economic stability are some of the factors that attract people to UAE.

All these years UAE enjoyed a tax-free living and its only a year back that VAT got implemented. But, the rate of VAT is on one of the lowest in the world and it doesn’t affect normal life and businesses to greater extend.

So, after the initial confusion regarding in which country to establish your business, now it’s time to select the type of business structure. You are at the liberty to select from various structures like free zone, mainland and offshore.

While all these business forms offer numerous advantages, the one that best suits your nature of work, should be taken into consideration. If you like to reach out to local market without the help of any distributor, then I/we would suggest Mainland.

UAE mainland opens door to a wider market by letting you trade with other mainland companies. Unlike free zones, you don’t have to go through the task of finding a local distribution agent and pay customs duty.

A mainland business license lets you work on government projects that are extremely profitable. Competition will also be less, as free zone companies are not provided with the opportunity to work for government entities.

Moreover, mainland companies don’t demand for a minimum capital requirement, which makes the establishment even easier and affordable.

Selecting the type of license is the first step in starting a business in UAE. You can choose from commercial, professional and industrial license.

Companies engaged in buying or selling of goods can opt for a commercial license. Entities involved in industrial and manufacturing activities, should apply for industrial license. And, professional license will be granted to service providers, professionals, artisans, and craftsmen.

Mainland Companies are of various types and their activities differ.

LLCs can conduct any industrial, commercial, professional and tourism business. In the case of public joint stock companies, any industrial, commercial or professional business activities can be practiced. But, a Private joint stock company can perform only commercial and industrial activities.

A branch of a local or GCC company can conduct activities included on the main company license and a branch of a foreign company can conduct only selected commercial and professional activities. When it comes to branches of free zone companies, commercial, industrial and professional businesses are permitted as long as the activity of the main company is authorized on the mainland.

The UAE government is on a constant lookout to ease the process of doing business in UAE. The recent amendments in policies prove the same