• Economy

    Major JV between China and Iran

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    Davidson & Co’s Corporate and Commercial team has been providing local and international clients with legal services for over ten years. Our Corporate and Commercial division has a growing clientele base that includes local, regional and international companies, banks and financial institutions, international and regional law firms and high-net-worth individuals.

    Recently, we acted in a corporate restructuring involving the establishment of a joint venture company and multiple share transfers to facilitate the investment by a major state-owned petroleum energy and chemicals company in China of over USD 500,000,000 in a long-established methanol plant based in Iran.

    This joint venture marks the Chinese entry into the Iranian methanol market. The above corporate restructuring is expected to significantly boost annual revenue generated in Iran and China.

    Our team on this transaction comprised of Partner, Andrew Lyons and Associate, Rhea Bindra. Managing Partner, Jonathon Davidson commented: “We are delighted to have continued our long-standing relationship with our clients based in Iran, by acting on yet another successful corporate restructuring, which is expected to prove a very progressive move for them in the Iranian and Chinese markets.”

    This transaction is another indication of continued M&A activity, which we are seeing within the oil and gas sector. The matter allowed us yet again to demonstrate our deep understanding of the realm of corporate and commercial law in the region and abroad.

    We aim to simplify the issues involved with transactions and make it our focus to help our clients understand their investment risks, at every stage.

    Reach out to us for a confidential discussion on any Corporate or Commercial matters and to find out how we can help.

    Our team would be delighted to hear from you.

    Rhea Bindra
    rbindra@davidsoncolaw.com

    Yousif Ahmed
    yahmed@davidsoncolaw.com

  • Economy/ Private Client

    Davidson & Co – start planning for the future with us

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    At Davidson & Co, we pride ourselves on being one of a limited number of firms within the region offering a full range of private client services including succession planning and asset protection for individuals and High Net Worths; family governance and advice to family offices. Essentially, we help clients plan for the future. At the helm of our team and cementing our position as market leaders, is Andrew Young, who features amongst the top 50 private client advisors globally in the prestigious Citywealth Leaders List as listed in Chambers HNW 2018 “Leaders in their Field” for the UAE.

    The value of making arrangements for families and the next generations to come is often overlooked, and there is a common misconception that succession planning and asset protection is only relevant for the rich and famous, or the elderly.

    When it comes to succession planning and asset protection, there is no ‘one size fits all’ approach. Davidson & Co we are able to tailor our services depending on a client’s personal circumstances and wishes. This may range anywhere from the preparation of a Will through the DIFC Wills and Probate Registry Service Centre, to the implementation of an offshore Private Trust Company (PTC) trust structure, foundation or single family office for high net worth individuals who own assets located all around the world.

    Over the past number of years there has been a significant drive to enhance and mature the succession planning vehicles available in the region and there is, therefore, no better time to start planning for the future with us.

    Our team would be delighted to hear from you.

    Victoria Smylie
    vsmylie@davidsoncolaw.com

  • Corporate Law/ Economy

    Ministry of Economy: 100% foreign investment proposed for both mainland and free zone companies within the UAE

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    The UAE consists of various corporate structures ranging from sole proprietorships to fully fledged private companies. The mainland companies as well as the businesses operating within the free zones, comprise mostly of Limited Liability Companies (LLC).

    At present, the rule is that only the companies based within the free zones give the foreign investor a full 100% right to ownership of their business. The law within the on-shore civil law jurisdiction that governs companies outside of the free zones in the UAE, requires an Emirati national to possess a majority ownership of 51% while the investor can hold only a 49% ownership. This was done to boost local entrepreneurship and to stimulate national business growth.

    The United Arab Emirates has however proposed a new resolution that encourages greater FDI (Foreign Direct Investment) by way of providing sole ownership to foreign investors, without the need for an Emirati national to be a majority stakeholder in the business.

    Recently in May, at the UAE Cabinet meeting chaired by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the regulation for businesses within the free zones was amended to now allow foreign investors to own a full 100% ownership of their companies in the free zones.

    It is unclear as to when the resolution will be implemented but Hamad Bu Amim, President of the Dubai Chamber of Commerce and Industry, has stated that, “The move sends a clear message that the UAE is a competitive market which is open to international investors and conducive to business growth. At the same time, I expect that the new measures will help raise the UAE’s global profile as a preferred investment destination, positively impact the local business environment and ultimately enhance the country’s economic competitiveness”.

    For more information on company set up in the UAE or any other legal requirements please get in touch with Davidson & Co today.

  • Economy/ Employment/ Family Law

    Visa amnesty begins in the UAE

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    Starting August 1 2018, the UAE government have granted a three-month general visa amnesty for foreigners violating the residency law.

    All individuals who are overstaying in the country can either regularize their visa status legally or exit the country without paying overstay fines.

    For those who wish to leave the UAE, amnesty-seekers have to get an exit permit and emergency certificate (if they are without a passport) and have a flight booked for within 10 days of making an application.

    For those who wish to stay in the UAE, individuals can regularize their status if they have a job offer or apply for a six-month temporary visa to search for a new job. Additionally, absconders can get an absconding case closed for a nominal fee.

    The amnesty will run until October 31 3018 with a possible two-month extension depending upon the circumstances.

    For any of your visa, employment or company set up requirements please do not hesitate to get in touch.

  • Economy/ Employment/ Private Client

    The UAE launches a 10-year residence visa

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    The outcome of a cabinet meeting chaired by His Highness Sheikh Mohammed Bin Rashid Al Maktoum on Sunday 20th May 2018 is set to improve the trust and confidence of foreign investors, creating countless new opportunities within the UAE.

    The meeting established the implementation of a 10-year residence visa aimed at applying to foreign investors and specialists such as doctors, engineers, researchers and scientists. The new rule will also apply to the family members of any such entitled persons. Eligibility for the visa will also extend to top performing students.

    His Highness Sheikh Mohammed Bin Rashid Al Maktoum stated, “Our open environment, tolerant values, state-of-the-art infrastructure, and flexible legislation are the best plan to attract international investment and exceptional talents. The UAE will remain the land of opportunity, the best environment for realising human dreams and unleashing their extraordinary potential”.

    The new law is expected to be implemented by the end of 2018.

    Amendments to Foreign Ownership (Company) Laws

    In the same meeting, the Cabinet also announced proposed changes to the foreign ownership system of UAE based enterprises, approving a decision to allow 100 percent ownership for international investors in specific business sectors.

    The current position, found under Article 10(1) of the Federal Law No. 2 of 2015 (UAE Commercial Companies Law), requires onshore companies inaugurated by international persons to have a UAE National partner holding a 51 percent share of the company. The introduction of the new law would allow certain foreign investors to have 100 percent sole ownership of their enterprise, bringing the position of onshore LLC companies in line with existing Free Zones, and offshore entities.

    For any of your visa, employment or company set up requirements please do not hesitate to get in touch.

  • Economy/ Legal Update/ Taxation/ Uncategorized

    Federal Tax Authority announce list of Designated Zones in the UAE

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    Cabinet decision No. (59) of 2017 on the Executive Regulations of the Federal Decree-Law No. (8) of 2017 (UAE VAT Law) has provided for 20 Designated Freezones in the UAE (as listed below), which will be treated for VAT purposes as being outside the UAE.

    Under the UAE VAT Law and Executive Regulations, a Designated Zone is defined as “a specific, fenced geographic area which has security measures and customs controls in place to monitor entry and exit of individuals and movement of goods to and from the area.”

    Subject to the below exceptions, in general, if a supply is deemed to have taken place in a designated zone, VAT should not be charged. The place of supply is generally determined by looking at the location of the goods, activities or parties to a transaction. The rules are as follows:

    • Goods that arrive into a Designated Zone from outside the UAE are not treated as imported into the UAE, and no VAT should be charged on the arrival of such goods; and
    • A transfer or sale of goods from a place in the UAE which isn’t a Designated Zone into a Designated Zone is not an export for VAT purposes, and therefore will not give rise to zero-rated VAT treatment.

    The transfer of goods between Designated Zones will not be subject to VAT, as stated in Article (51) of the VAT law, provided both of the following conditions are met:

    • The goods (or part of the goods) are not released, used, or altered during the transfer between Designated Zones; and
    • The transfer is in accordance with the rules for customs suspension pursuant to GCC Common Customs Law.

    The Federal Tax Authority may also request that, where goods are moved between Designated Zones, the owner of the goods provides a guarantee in respect of the VAT in case the conditions outlined above are not met.

    However, there are exceptions within the VAT Executive Regulations that state that certain types of supplies taking place in the Designated Zones are to be treated as if they actually took place within the UAE, and are therefore subject to VAT. These supplies include:

    • Any services provided;
    • Water and all forms of energy; and
    • Goods sold for use or consumption.

    Designated Zones:

    Abu Dhabi: Free Trade Zone of Khalifa Port; Abu Dhabi Airport Free Zone; and Khalifa Industrial Zone.

    Dubai: Jebel Ali Free Zone (North-South); Dubai Cars and Automotive Zone (Ducamz); Dubai Textile City; Free Zone Area in Al Quoz; Free Zone Area in Al Qusais; Dubai Aviation City; and Dubai Airport Free Zone.

    Sharjah: Hamriyah Free Zone; and Sharjah Airport International Free Zone.

    Ajman: Ajman Free Zone.

    Umm Al Quwain: Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port; and Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road.

    Ras Al Khaimah: RAK Free Trade Zone; RAK Maritime City Free Zone; and RAK Airport Free Zone.

    Fujairah: Fujairah Free Zone; and Fujairah Oil Industry Zone (FOIZ).

     

  • Economy/ Taxation

    Proposed removal of UAE from EU tax-haven blacklist

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    The UAE is amongst 8 countries recommended to be removed from the EU tax-haven blacklist. The blacklist was introduced by the EU in December of last year, as part of an initiative against tax evasion and to urge countries to observe and adhere to EU standards of tax matters.

    The recommendation for removal comes from the UAE Code of Conduct working group on business taxation, and is likely to be implemented towards the end of the month. The effect of the recommendation will see the UAE move from a list of countries which are deemed non-cooperative for tax purposes, to a gray list of countries that will be observed to ensure that their tax practices are compliant with EU standards.

    The recommendation is due to be discussed and approved by EU finance ministers at their next meeting on 23rd January 2018.

  • Economy/ Family Law/ Legal Update/ Private Client

    Davidson & Co recognised as one of the top 50 private client advisors globally

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    Citywealth Leaders List

    We are delighted to announce that Andrew Young and Davidson & Co have been featured amongst the top 50 private client advisors globally in the prestigious Citywealth Leaders List, ranking ahead of other private client firms in the Middle East, and cementing our position as market leaders in this area of expertise.

    Andrew has over 30 years experience advising individuals, families, and family offices in relation to both personal and business assets.


    Private Client Services

    As our economy continues to expand and the private wealth of individuals across the globe is on the rise, at Davidson & Co we recognise that it is now more important than ever to make suitable arrangements to manage your assets and your families future.

    Accordingly, we are delighted to announce the expansion of our Private Client team headed up by Andrew Young. The addition of Victoria Smylie to the team makes Davidson & Co one of the largest dedicated private client teams in the region.

    Andrew and his team are expertly placed to advise expats, UAE residents, or international persons with a connection to the UAE on:-

    • Asset protection and wealth management
    • Estate and tax planning
    • DIFC Wills and Probate Register
    • Multi jurisdictional estate planning
    • Multi jurisdictional structuring for wealth preservation and family succession
    • DIFC trusts
    • Foreign trusts

    The value of making arrangements for you and your families future is often overlooked, and there is a false belief that wealth planning is only suited to the rich and famous.

    In order to ensure that your estate, big or small, passes in a tax efficient manner, in accordance with your wishes, and without any complications or ambiguities, it is crucial not to delay making the necessary arrangements.

    Not only is Davidson & Co one of a limited number of firms within the region offering private client services, as a multi servicing firm, we are able to draw on the expertise and skills of our corporate, litigation and employment experts to provide an all encompassing service for you, your family and your businesses.

    Please get in touch to discuss your specific circumstances with our friendly team who would be delighted to assist.

  • Economy/ Legal Update/ Taxation

    VAT Update – Insight On the New UAE VAT Law

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    This is a short update from our previous blog article relating to the implementation of VAT in the UAE.

    On 23 August 2017, Federal Law No. 8 of 2017 concerning Value Added Tax (the “UAE VAT Law”) was issued together with the launch of the official tax website for the Federal Tax Authority. Further detail will become available in the yet-to-be-published Executive Regulation.

    Here’s a summary of what we know from the UAE VAT Law:

    • Implementation Date – 1 January 2018. The VAT registration process will open from mid-September 2017.
    • VAT rate – 5%.
    • What will be taxed – “taxable supply of goods or services for consideration and deemed supplies by a taxable person conducting business in the UAE and the import of taxable goods.” Includes imports of goods and services subject to the reverse charge mechanism.
    • Who will be required to account for VAT – The supplier of the goods or services; the importer of taxable goods; and the taxable person registered for VAT who acquires goods.
    • VAT registration – VAT registration will be compulsory where the annual supplies exceed AED 375,000 (the mandatory registration threshold). VAT registration will be optional if the mandatory registration threshold requirement is not met but the taxable supplies or expenses exceeds AED 187,500 (the voluntary registration threshold). In addition:
      • Group VAT registration will be available for related parties who meet specific criteria
      • Government entities will also be required to register for VAT.
      • Individuals not registered for VAT will be required to pay tax on import of taxable goods from outside the GCC at the time of import.
    • Zero rated supplies – Certain exports, supply of certain education and healthcare services and related supplies, supply of crude oil and natural gas, certain investment grade precious metals, supply of new-build residential properties within 3 years of completion and supply of certain means of transportation.
    • Exempt supplies – Certain financial services, residential supplies other than the first supply noted above, bare land and local passenger transport.
    • Free Zone – Subject to certain exceptions, a designated zone that meets specific criteria in the regulations shall be treated as being outside the UAE and goods transferred from one designated zone to another designated zone will not be subject to VAT. Exact details will be in the Executive Regulations. In particular, it remains to be seen how financial free zones such as the ADGM and the DIFC will be treated.
    • Invoices dated pre 1 January 2018 – Various transitional rules apply for cases where (i) payments or invoices are advanced before 1 January 2018; (ii) where contracts are concluded before 1 January 2018 and are silent on VAT; and (iii) contracts are concluded before 1 January 2018 but the supply is made after this date.

    For example, if a contract entered into in 2017 for a supply to be made in 2018 does not contain express provisions about tax on that supply, the price will be considered to include VAT if chargeable, whether or not the tax liability has been taken into account in determining the price. It is therefore recommended that express provision be made for VAT now in the supply of future goods/services.

    • Retaining VAT invoices – Any taxable person must retain VAT invoices issued and received for a minimum of 5 years.

    With four months remaining for VAT to apply in the UAE, it is important for individuals to consider the impact of VAT on their business and to comply with VAT obligations by seeking independent financial advice.

    Davidson & Co. are available to assist with any VAT implementation queries you may have specific to your business criteria, including the review and amendment of commercial agreements to understand the applicable VAT position.

  • Corporate Law/ Economy/ Legal Update

    The Continued Growth of the DIFC

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    Abu Dhabi Judicial Department (“ADJD”) and the Dubai International Financial Centre (“DIFC”) Courts  

    On the 30th of April 2017, the DIFC announced the execution of a Memorandum of Understanding (“MoU”) with the ADJD concerning legal cooperation between the two parties in light of enhancing the judicial efficiency in the UAE.

    The parties are yet to release more information about the MoU and their mutual goals, however the main objective of the MoU is for both parties to work in partnership in overcoming potential legal obstacles in the UAE. The MoU identifies eight specific fields of corporation between the parties with a view of adding to the list.

    Below are examples of some of the areas of corporation outlined in the MoU:

    1. Exchanging expertise in the field of e-services and information technology with the aim of improving the efficiency of the judicial system (such as in e-management of claims and judicial e-announcements) and improving access to information of the courtrooms for judges and litigants (recording the hearing minutes electronically).
    2. Exchanging opinions on the applicable fees for civil and commercial cases of dual jurisdiction in accordance with all applicable laws & regulations.
    3. Facilitation of the procedures of judicial cooperation, particularly in terms of judgment enforcement in accordance with all applicable laws & regulations.
    4. Exchanging information and opinions on judicial supervision and best internationally adopted practices.

    This MoU is moving towards creating a strong relationship between the parties but also a platform for further growth and cooperation in the future. The MoU also suggests that states in the UAE are working together towards raising the DIFC’s status within the region and also the UAE as a global financial hub.

    Dubai Department of Economic Development (“Dubai Economy”) and the DIFC

    In 2010, the Dubai Economy and the DIFC signed an agreement with a view of unifying licensing procedures in the DIFC and Dubai mainland.

    More recently, on the 1st of May, the DIFC have announced signing an MoU with the Dubai Economy in accordance with which the Dubai Economy would provide companies registered in the DIFC with licenses to operate in Dubai mainland. This is increasingly beneficial for businesses in the DIFC wishing to branch out as this development would enable them to contract with third parties and attract new customers or clients in Dubai mainland.

    The parties have in line with this new plan, concluded to set up a data room which would enable both parties to exchange data and information efficiently.  Such flexibility within the system is likely to improve transparency and increase consumer protection.

    This decision is also likely to further the diversity of services available to third parties and businesses established in Dubai mainland whilst creating some friendly competition between the companies operating in Dubai mainland and those migrating from the DIFC.

    Overall, this move towards simplifying the rules and regulations will create a business friendly environment for investors in the DIFC and is a stepping stone to developing a unified business environment for foreigners in the UAE.