HLB Hamt - Insight Issue 13

Issue 13

HAMT

AUDIT | TAX | ADVISORY

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Entrepreneurial spirit the key component in success of Allianz Marine and Logistics Services

14

Mastering the art of business with China

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UAE at the forefront of innovation

insight

Insight | HLB HAMT

CONTENTS

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06 Entrepreneurial spirit the key component in success of Allianz Marine and Logistics Services

10 The CEO of next decade

12 Automation Anywhere selects HLB HAMT as partner

14 Mastering the art of business with China

16 UAE at the forefront of innovation

18 Excise Tax in the UAE What you need to know

Partner’s message

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Vijay Anand, CEO, HLB HAMT

Leading by example: the role of the CEO

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HLB HAMT | Insight

n today’s business environment, companies cannot settle for incremental improvement – they must periodically undergo performance transformations to get, and stay, on top. However, in the volumes of pages on how to go about implementing a transformation, surprisingly little addresses the role of one important person. What exactly should the CEO be doing, and how different is this role from that of the executive team or the initiative’s sponsors?

The exact nature of the CEO’s role will be influenced by the magnitude, urgency, and nature of the transformation; the capabilities and failings of the organisation; and the personal style of the leader.

Despite these variations, our experience with scores of major transformation efforts, combined with research we have undertaken over the past decade, suggests that four key functions collectively define a successful role for the CEO in a transformation: making the transformation meaningful; role-modelling desired mind-sets and behaviour; building a strong and committed top team; and relentlessly pursuing impact.

Transformations require extraordinary energy, and employees must fundamentally rethink and reshape the business while continuing to run it day to day. Where does this energy come from? A powerful transformation story helps employees believe in the effort by answering their big questions, which can range from how the transformation will affect the company down to how it will affect them. The story’s ultimate impact will depend on not just having compelling answers to these questions but also the CEO’s willingness and ability to make things personal, to engage others openly, and to spotlight successes as they emerge.

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News

New members

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44 66 32 33

54 56 4152 34

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31 58 49 60 53 65

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Mexico LB MAAT Asesores, S.C., based in Mexico City.

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El Salvador HLB El Salvador, based in San Salvador.

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Northern Ireland HLB McGuire + Farry, based in UK and Ireland.

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Moldova HLB Moldova, based in Chisinau, the capital of Moldova.

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Russia NEO Centre, based in Moscow.

As one of the leading global accountancy networks. HLB International has continued its growth with the addition of these new member firms. They have allowed us to strengthen our position in developed economies, as well as expand our presence into emerging markets.

Latest News

Insight | HLB HAMT

HLB shortlisted for ‘Network of the Year’ HLB, the global advisory and accounting network, has been selected as one of the finalists in the category of ‘Network of the Year’ at this year’s Digital Accountancy Awards, to be held in London on 3 October.

To be considered for this award, nominees had to demonstrate the execution of profitable growth strategies, be recognised by the industry as a reputable brand and have excelled in a number of key strategic and operational areas.

The last 12 months has seen HLB grow by 15% – cementing its position

as one of the fastest growing top 15 networks – and breaking its former record in terms of annual global combined turnover, which is now at US$ 2.73bn.

Commenting on the nomination, Marco Donzelli, HLB’s CEO, said, “Over the past 12 months we took many transformational steps towards the future, so for HLB to be recognised in this way and acknowledged by the profession is a great achievement.

However, we could not have accomplished all that we have done without the fantastic commitment from our firms to constantly improve and take that journey with us.”

Excise Tax in UAE – Scope Expansion In UAE, tobacco and tobacco products, Energy Drinks and Carbonated drinks are subject to Excise tax and the nation has now decided to levy excise tax on all e-cigarettes, e-liquids and sweetened drinks with effect from December 1, 2019. With this introduction a substantial change to businesses that import, manufacture or trade these products is expected. This article intends to explain the new scope of excise tax and what businesses should do.

News

HLB launches its strategy to help shape a shared future

HLB announced its strategic vision for 2023 underpinned by an accelerated pace of change due to the wave of technological innovation changing the way people and businesses interact with each other.

The strategy includes harnessing transformative technologies such as AI, advanced automation, blockchain, amongst other; diversifying and expanding its offering by 2023; and

equipping its employees with the skills required to flourish in the future, as well as recruiting talented people to work with emerging technologies and share best practice for tomorrow.

Commenting on the strategy, Marco Donzelli, HLB’s Global CEO, said, “In today’s transformative times, organisations are having to redefine the way they work.

For HLB, our entrepreneurial culture allows us to continuously adapt to change and be agile in a fast-moving world and that is reflected in our 2023 strategy.

Designed to create more value for clients; afford greater learning opportunities for our people and deliver a positive impact on communities, our focus is on creating an organisation that is future-proof. The investments we are making today will create a lasting impact on generations to come.”

New Initiatives from Dubai Government to Promote Business

In a sign of continuing investor confidence in Dubai and new opportunities arising across diverse economic sectors, the Department Economic Development in the emirates issued 2934 new license for various

professional, commercial, industrial and tourism activities in June 2019.

BRL also issued 250 instant licenses, which processed in a single step without the need for either the memorandum of association or an existing location for the first year while the number of DED trader licenses, which allows to conduct business activities on social media platform reached 219 in the same period. DED trader is an initiative aimed to license business activities on social networking sites.

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HLB HAMT’s Annual Sports Day Celebrations

HAMT GROUP proudly celebrated its Annual Sports Day for 2019 with the spirit of UAE “Tolerance and Fitness”, which was scheduled on the 20th of December 2019 at the Institute of Applied Technology, Al Qusais.

The event has had wholehearted participation from the staff and family members in the previous years and this year as well.

There were some outstanding performances from the staffs and their family members throughout the events.

HAMT values this day as it fosters positive sporting values, promotes harmony amongst the group and the spirit of UAE.

Training

UAE Implements New Law to Support Financially Insolvent Individuals

HLB HAMT hosted CaseWare Training for HLB Middle East firms on 22nd and 23rd December 2019 at Rove Trade Centre, Dubai, UAE. Joining with CaseWare UAE on the entire user and customization training in line with ISA. Also, Introduction to work programs, CaseWare risk space, CaseWare cloud etc. were covered during the training.

HLB HAMT | Insight

The UAE Cabinet has approved a new Federal Law to manage insolvency cases, wherein support will be offered to debtridden individuals to repay debts within a span of three years. This will also ensure that they are protected from facing criminal prosecution.

Along with protecting debtors from legal

prosecution and decriminalising the fiscal obligations of insolvent persons, the new law will also see to it that they are provided with the opportunity to work, be productive and provide for their families.

The law will come into force in January 2020 and it will lead to greater transparency, in terms of civil debt repayment transactions. It will also reinforce the position of the country as an ideal destination for investment, where equal rights are given to all the parties. It helps in creating an atmosphere that encourages entrepreneurship and creates favorable conditions for doing business.

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Allianz

ENTREPRENEURIAL SPIRIT THE KEY COMPONENT IN PHENOMENAL SUCCESS OF ALLIANZ MARINE & LOGISTICS SERVICES

Insight | HLB HAMT

Allianz has disrupted the offshore marine and logistics industry since its entry to the market, and its unique approach to the sector has yielded a lot of success in terms of market share and large-scale projects.

Friedrich Portner has been tasked in addition to his role as General Manager of Allianz Gulf (one of the Group’s subsidiaries) with the responsibility of driving transformation across the Allianz Group.

In a compelling interview, which is part of HLB HAMT’s case study review – Friedrich details how the company has embarked upon its transformation objectives, and how the ‘entrepreneurial’ spirit is the key component behind the success of this ambitious, unique and hungry young company.

The company has enjoyed a meteoric rise since first penetrating the market in 2013. The speed of their ascent has been astonishing and according to Friedrich has now seen them become the market incumbent.

“The Allianz Group is a relatively new company which was formed in 2013. We’ve grown exponentially in that timeframe - and have gone from

being practically unknown and nonexistent in the industry, to becoming the market incumbent and industry leader in marine and integrated offshore logistics,” said Friedrich.

The decision by Allianz to create integrated offshore logistics services has resonated with the market, and that has enabled them to not only be able to look at more vessels, but it also allows the company to explore the holistic needs of their clients from an integrated perspective. This success of this solution has inevitable led to huge growth.

“We’ve enjoyed a lot of success

in terms of growth. We’ve managed to record double-digit growth every single year we’ve been in business, and on occasions we’ve managed to enjoy triple-digit growth. This has forced us to hire more people and expand our operations,” said Friedrich.

However, one of the knock-on effects of their success has rather inevitably forced them to adapt their systems and processes, and in an attempt for greater transparency Allianz Group has moved towards an ERP system.

“When we started the company six years ago, we had a simple

“I think in many large multinational corporations you see resistance to change.”

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Allianz

HLB HAMT | Insight

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Allianz

Insight | HLB HAMT

Friedrich Portner, General Manager, Allianz Gulf

“We’re working in total on over 60 projects that are based in the UAE, Kuwait, Saudi Arabia, Oman, India and Egypt.” finance system which was more than adequate for us at that time. However, as we grew, we realised that the system, whilst not becoming obsolete, was certainly not as effective as it could be, so two years ago we began to consider the adoption of an ERP system which integrates different departments with each other,” said Friedrich.

The General Manager of Allianz Gulf stressed the importance of not having to work in silos and that the implementation of an ERP system ultimately avoids that.

“The other significant benefit of the ERP system is that it also shares all your vital information with the group, management and shareholders which creates much more transparency. It’s very easy to have transparency when you’re a small company, but when you reach our size you need to be updated with all the information that is being circulated daily. Hence why the likes of digital, integrated and ERP systems are now becoming a necessity,” said Friedrich.

Whilst the benefits of an ERP system are obvious, they haven’t been without their teething problems, but Friedrich praised HLB HAMT for its role in helping them adapt and overcome the initial challenges they faced.

“Like any ERP system it looks very easy, but it’s inevitable that you will encounter problems on the implementation phase of the system. We went through a tedious blueprinting exercise before going live, but then reality hits the ground

Allianz

Friedrich explains how this economic low point in the sector presented his company with an opportunity to stake a big claim in the market due to its think outside of the box nature.

“The industry we’ve been involved in which is offshore has faced very challenging market conditions over the last three years. However, that presented us with a good opportunity, because whilst everybody else in the sector was struggling, we were able to capture market share and grow because we were thinking differently to everybody else.” said Friedrich.

Another illustration of the success Allianz has enjoyed is in the sheer scale and diversity of some of the projects the company is involved. One of which is the construction logistics support of 11 islands in Abu Dhabi.

“We’ve currently involved in a range of major projects. In Abu Dhabi for example, ADNOC has recently commissioned a company called National Marine Dredging Company (NMDC) to build 11 artificial islands.

This is a multi-year project, which involves the transportation of over 27 million tons of rock. This is one of our key projects and it is going to have a huge impact on the UAE in

terms of GDP. We’re working in total on over 60 projects that are based in the UAE, Kuwait, Saudi Arabia, Oman, India and Egypt, etc. – and we plan to expand in the forthcoming months,” said Friedrich.

In addition to this, Friedrich also discussed the Swissco acquisition that has significantly bolstered their asset portfolio - and expressed his confidence that they will also acquire another listed company, which should see them float on the stock exchange.

“We purchased Swissco, not the holding company, but the entities within the group. The acquisition allowed us to seize control of the operating companies for offshore which is very similar to what we do here, and we also acquired vessels and a drydock. We basically acquired the core of Swissco, but not the holding as that is the company that went into financial distress. We carved out the pieces that made sense for us during the acquisition deal. We’re also in the process of acquiring another offshore company, whilst we’re not there yet, we’re very hopeful we can get that deal across the line in 2020 which will also pave the way for us to launch globally.”

HLB HAMT | Insight

when you’re live. In the last 9 months since we implemented this ERP system we’ve been tweaking and adapting it with HLB HAMT. We’re very pleased with them because they have been hugely supportive in terms of helping us with this adaptation, because everybody at the beginning doesn’t see the problems, but they’ve played a pivotal role in allowing us to execute and create the productivity we need,” said Friedrich.

Like so many enterprises in the digital era, the Allianz Group has had to embrace transformation, but said that unlike large multinational organisations they haven’t been met with resistance by the internal workforce. He credited that to the entrepreneurial dynamic within the team.

“I think in many large multinational corporations you see resistance to change. However, our company is very entrepreneurial and that is one of the reasons why we were able to grow so fast. In our team everybody undertakes challenges and is very hands-on. In addition to this, our team overall is on average relatively young, now we do have many experienced people in our team, but in truth the dynamics of this company is fundamentally driven by our younger people,” said Friedrich.

Despite that mindset Allianz isn’t immune to challenges and Friedrich explained the major challenges they now encounter.

He added, “Whilst we don’t face resistance in the traditional sense when it comes to transformation, we still face challenges none the less, although it’s a different challenge.

When you’re growing, you’re really focusing on your day-to-day business to catch-up - and then we as agents of transformation come in and add another layer of work for the team.

From that perspective it’s not that there was resistance to it, but then you’ve just added the challenge of capacity. The question then becomes what is more important, the day-today business or the transformation?”

The offshore industry has experienced a downturn in the market over the last number of years, but

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CEO’s role

THE CEO OF NEXT DECADE

Insight | HLB HAMT

Sumesh Kunnath, Partner at HLB HAMT, explores the challenges CEOs will face in the next decade and how to face them successfully.

There are many things that CEOs need to prepare or to be ready to accept in the next decade – and it won’t be as easy as the previous one.

There are many things to adapt to, like AI, IoT, blockchain, big data, EQ and MQ of employees, amongst others.

Managing people and processes wil alsol be challenging – if CEOs don’t adapt to this fast-changing world, the consequences will impact all aspects of the business in any company, including their business model. In fact, business velocity has never been this fast, and CEOs need to take care of some essential aspects in order to succeed in the next decade.

Culture of innovation A McKinsey report revelead that culture is the number one obstacle

to the digital effectiveness of any company. The older the company is, the more likely it is to be stuck with policies, procedures, layers of management, and risk averseness – the so-called “corporate cholesterol”.

In light of this, CEOs need to

“The regulation brings UAE business entities into more transparency and compliance and affirms the UAE’s commitment to the stakeholders.”

bring more diverse thinking and team collaborations across the organisation. They have to create an environment that encourages creativity and innovation – IT engineers are now involved in different parts of the business, and the boundaries of professions are now faiding to allow for a culture of innovation, which is penetrating the core of every business.

Transformation of productivity and smart machines Typically, digital advancements will result in a productivity increase of ten to 30 percent, and this is expected to continue in a more structured way going forward, with productivity growth of two to three perecent annually. It is also proven that

Substance regulation

of artificial intelligence (AI), as well as software and devices that are more accessible to their personal or teambased activities. This will require CEOs to carefully balance their business between people and technology.

data. Organisations need to respect the local regulatory controls and law applicable to their company.

When approaching the organisation’s data and planning to implement some tools, CEOs need to consider the following aspects as a minimum: visibility, flexibility, adaptability, and scaling HLB HAMT have extensive global expertise in data analytics and automation, and employ many data scientists and solution experts to assist our vast clientele.

Sumesh Kunnath, Partner, HLB HAMT

HLB HAMT | Insight

combining emerging technologies with existing ones leads to significant productivity boost and reduced cost.

To make the most of this, CEOs need to keenly identify the business areas and scenarios that need a productivity boost – once identified it will easier to decide the solutions or technologies to use to increase such productivity.

Recent studies indicate that smart machines are getting smarter and more universal, not only for completing tasks previously reserved for humans, but also to complete what was thought to be impossible even for machines. By the end of the next decade, companies will start to increase the functions of smart machines, software, apps. Employees will be able to develop personal toolkits of virtual twins with the help

The world of data At present, there is an increased clatter on data analytics, data management and data governance in the business world. Currently only 15 to 25 percent of the organisations are using data properly for their decision making or business understanding purposes. Data has become the business rather than a by-product of the business – it has crossed all the borders of both small business and big corporations.

An organisation’s data is available from each part of the business, from the reception desk, to accounting and finance, as well as CRM, IT Helpdesk, logistics, social media. Organisations need to combine all their data to have full visualisation and understand all key matters of the business – this will enable them to make logical and timely decisions.

Every business line, function and touchpoint in an organisation can be enabled for data collection with the help of AI in order to quickly and intelligently process it in a meaningful form.

Another aspect CEOs need to consider when handling data is privacy and ownership of

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Automation Anywhere

Insight | HLB HAMT

AUTOMATION ANYWHERE SELECTS HLB HAMT AS PARTNER Automation Anywhere, a global leader in Robotic Process Automation (RPA) has said that it was a ‘no-brainer’ to select HLB HAMT as their partner - as they seek to expand their presence in the Middle East region.

Automation Anywhere

The company has secured significant

year, but that if it launched last year then that would’ve been counterproductive as just wasn’t the right time to go to market. The company’s Head of Global sales is now based in Dubai, which only services to solidify the viewpoint that now is the ideal time for the global leader in RPA to seize the opportunities in the region.

Koutsikos also articulated why they selected HLB HAMT as their partner of choice.

“HLB HAMT was an easy decision for us. Their expertise, knowledge, experience and market reputation meant it was essentially a no-brainer for us to go into partnership with them. They can help us navigate around any potential issues that may arise, or we encounter - and they really enable us to focus on the technology, which is what we’re good at it and want we want to focus on whilst they can look after all the other stuff,” said Koutsikos.

The VP of Sales at Automation Anywhere believes that 2020 will be the breakout year for intelligent automation as it continues to bring enormous potential to automate endto-end business processes.

“Whilst it is now common for RPA platforms to now offer AI capabilities, today RPA and AI are used as two separate entities – one is rules-based and the other is adaptive and predictive. Over the next twelve months, RPA and process analytics will become entirely infused with AI and machine learning (ML), accelerating process mining and discovery, and dramatically simplifying human effort in these areas,” said Koutsikos.

He concluded by saying that in the future bots will be able to automatically identify the best processes to automate, act upon this insight - and optimise deployments throughout to guarantee the best possible results.

HLB HAMT | Insight

capital investment over the last number of years including a $300m cash injection from Japanese conglomerate SoftBank. However, following the additional $290m Automation Anywhere raised in Series B Funding in November last year, the US-based firm now feel that the time is right to attack the emerging market in the Middle East.

The new capital will help Automation Anywhere accelerate its vision to empower customers to automate end-to-end business processes – bridging the gap between the front and back office with an artificial intelligence (AI) powered intelligent automation platform.

In addition, the funding will advance the company’s focus on improving human-to-bot collaboration through attended automation, resulting in enhanced customer experiences and increased employee productivity.

Automation Anywhere’s products combine traditional RPA with cognitive elements such as natural language processing and reading unstructured data. These include bots with machine-learning capabilities. The RPA platform allows organisations to build world-class Intelligent Digital Workforces.

Kerry Koutsikos, VP of Sales Middle East at Automation Anywhere said now was the perfect time to attempt to penetrate a market that he believes is brimming with opportunity and potential.

“We didn’t need the additional investment we just received in the last Series B funding round to commence our efforts to expand our presence here in the Middle East region. But we do now feel the time is right, because we’ve got our house in order - and are well placed to really make the impact we want,” said Koutsikos.

He pointed out that the company has been in the region for well over a

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Dubai Govt Initiatives

MASTERING THE ART OF BUSINESS WITH CHINA Coco Liu, Chief Regional Officer, Asia Pacific & Head of Global Business Channels, shares some useful tips to be successful in doing business with the world’s second largest economy – China.

Insight | HLB HAMT

Coco Liu, Chief Regional Officer, Asia Pacific & Head of Global Business Channels

Since ancient times, Chinese people have been quoting a saying: “天時地利 人和 “, meaning “the time is right, the terrain is favourable, and the people are unified”, as key elements for success.

As world’s second largest economy, the biggest exporter and second largest importer, the largest FDI destination and second largest FDI source country, China is a very attractive business partner. The buzzword “Guanxi” (personal relationship) has been in the Chinese business books for decades, but people can still be confused about how to build harmony of people in the context of geographical convenience and perfect timing.

In the past decade, the Chinese business behaviours have been fastmoving, more forward-thinking, outward-driven, dynamic and confident.

The approach of doing business with

Dubai Govt Initiatives

China, should not only follow the three principles of deep-rooted cultural dynamics, but also needs to recognise the new patterns in the new epoch. 天時 Timing – Ensure your business is in line with the “tone at the top” Chinese economic trends and business behaviours are heavily driven by government policies and strategies.

Before 2015, real estate and tourism used to be the most popular sector of Chinese overseas investment. However, after Chinese government introduced strategic assessments in 2016, it is no longer really the right time to promote real estate projects to Chinese investors.

Driven by new national strategies, the perfect timing to collaborate in sectors such as advanced manufacturing, automation, pharmaceuticals and cryptocurrency has arrived.

人和 Harmony of people First, build friendship before talking business. Cold calls and blunt sales pitches won’t help to bring relationships closer or gain trust at personal level.

“The approach of doing business with China, should not only follow the three principles of deep-rooted cultural dynamics, but also needs to recognise the new patterns in the new epoch.” position yourself as a business partner, sharing your professional expertise, local knowledge and resources? Have a chat about the clients’ development plan and let them know you are always there to help, even someone not from your practice: a banker, a lawyer, a surveyor, or even a driver or cleaner.

This will not only help you to gain trust to be engaged for your services, but also gain the advantage to grow together as reliable business partners.

Third, embrace the convenience

of digital communications: WeChat. WeChat is widely used in Chinese speaking world, for daily communications and business.

Exchange business cards at the beginning of the meeting is a standardised manner of introduction; a request to be connected by WeChat at the end of the meeting will indicate on how successful the meeting goes and if the other party is interested in continuing the conversation with you.

It is common for Chinese businesspeople to use WeChat to share contact cards and files, have one-on-one or group video and audio calls, to publish newsletters and articles on public accounts, and even transfer funds! It will be very useful to include your WeChat QR code in the contact details, which will not only bring the relationship closer, but also largely enhance the efficiency of communications with Chinese stakeholders.

Fourth, be patient. Chinese business culture is traditionally hierarchical and disciplined. In modern times, Chinese businessmen grow in their confidence and competitiveness, while they still follow the collective approach and respect modesty.

Chinese do not like to say “no”, but silence doesn’t mean that the message did not get through. Following the Confucians thinking of pursuing harmony of people, the decision-making process in China is normally a collective approach, to ensure the balance of all parties are considered. As a result, the decision-making process is taking longer than the Western approach.

Last but not the least, it will be a bonus if you are able to set up a China Desk. In many cases, the decisionmaker in the Chinese HQ are not English-speaking. The presence of China Desk is not just for translation or as a cultural bridge, but more importantly, to demonstrate your efforts to collaborate with Chinese business partners. This will be equally appreciated by English-speaking stakeholders from the Chinese side.

HLB HAMT | Insight

地利 Location – Fit your business vision in China’s global geographic blueprint In 2013, Chinese government launched the Belt and Road Initiative involving infrastructure development and investment in Asia Pacific, Eurasia, West Europe, Middle East and Africa and even Americas. Many people misunderstood it as China’s one-way route of investment just along the ancient Silk Road. The truth is, the Belt and Road is also an inclusive platform for global business to trade and invest, and to collaborate with Chinese partners to do business and provide services in these 152 countries.

Try to link your local expertise with the Belt and Road definition of locations: Australian drilling companies can work together with Chinese mining companies in Mongolia, Dutch retailers can use the cheaper logistic routes to sell to Russia’s Far East, and British architect firms can participate in the civil renovation projects in West China.

Chinese people prefer to know more about each other before going into serious business talks. In China, many business deals are agreed at restaurants or tea houses instead of boardrooms.

While Chinese businesspeople overseas also follow “when in Rome, do as the Romans do”, but they do appreciate any efforts to respect their own culture. It is always worth trying to offer a business lunch, either to meet for the first time, or as a follow-up of a boardroom meeting.

Second, offer your assistance to achieve win-win, instead of selling for the sake of sales. From a country appreciating Confucian dynamism, Chinese like the ideas of collaborations, sharing and win-win. If you are an accountant, try not act as a salesperson of tax and audit services. Why not

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UAE Iniatitives

UAE AT THE FOREFRONT OF INNOVATION John Varghese, Managing Partner, at HLB HAMT reflects on the initiatives taken by the UAE’s government to encourage entrepreneurship and create favourable conditions for doing business.

Insight | HLB HAMT

UAE is one of the rapidly growing economies across the globe that promises a fertile ground for businesses. The country’s government is on a constant lookout to ease the process of doing business and provide secure living conditions for its residents via diverse initiatives.

This year witnessed numerous such strategies that have the potential to bring about major transfiguration in the nation.

100 percent ownership on mainland Until recently, 100 percent ownership on UAE mainland was just a dream for many. The ownership ratio of 51: 49 percent stood as a barrier for investors planning to establish their business on mainland – but not anymore.

The government has proposed a new law that will permit complete foreign ownership in 13 selected sectors. The sectors include renewable energy, space, agriculture, manufacturing, transport, storage and many more. The production of solar panels, power transformers, green technology, and hybrid power plant, e-commerce transport, supply chain, logistics, and cold storage for pharmaceutical products are some of the activities included in the project.

Other areas of ownership by foreign investors include hospitality and food services, information and communications, professional, scientific and technical activities, administrative services, support services, educational activities,

healthcare, art and entertainment, and construction.

The new law does not apply to free zones and offshores where 100 percent foreign ownership is already permitted.

Six-month multiple entry visa The six-month multiple entry visa will be granted to certain categories of individuals, that include investors, talented individuals and outstanding students.

The Federal Authority for Identity and Citizenship has activated three new services on its portal. All the services grant visa for a period of six months, with variations in the number of visits. Investors can make multiple visits to complete residency procedures with the help

UAE Iniatitives

of a six-month visa. In the case of entrepreneurs and outstanding students, several trips can be made with their six-month visa to complete long-term residency procedures.

Talented individuals will also be granted a six-month visa, but the number of visits will be restricted to just one.

The new visa scheme will help individuals in identifying opportunities of their interest. An Emirates ID card will be issued by the ICA to the sixmonth visa holders that will help them complete procedures such as opening bank accounts, property registration and other transactions, easily.

People who fulfil the conditions for long-term residency can apply through e-channels and through their accounts on the system without a sixmonth entry visa.

The government has also come up with a permanent resident system named ‘Golden Card’, for investors and for exceptional workers in the fields of health, engineering, science and art.

“These initiatives will reinforce the position of the country as an ideal destination for investment.” difficulties and it will stop them from taking extreme steps.

World Logistics Passport The world logistic passport, part of Dubai Silk Road strategy, offers certain operational and financial advantages to businesses, specifically the ones into shipping.

The passport aids in connecting government bodies, such as Dubai Customs and Dubai Trade, with logistics service providers like DP World and Dnata, and it also eases the process of commercial transactions among different authority bodies in the city.

With the passport, Dubai’s products, services and integrated transportation systems will witness a rise in its demand. It will also enhance the roles played by Dubai customs in trade, regional as well as global.

Nine initiatives and 33 projects will be included in the strategy. This will be in collaboration with authorities that include Emirates airlines, Dubai Airports, Dubai South, Dubai Free Zones (DFZ) Council, Dubai Maritime City Authority, Dubai Roads and Transport Authority, DP World, Dubai Municipality and Jebel Ali Free Zone.

Virtual License With the recently launched virtual scheme, residency in Dubai is no longer mandatory for you to obtain a license. The first of its kind, virtual license is granted to individuals who don’t stay

in Dubai, at a cost of Dh850 per year.

For two-year visa one will have to pay Dh1,508, and Dh2,161 for three years.

Nationals of countries that have double taxation avoidance agreement with UAE can avail virtual license. Virtual companies can conduct selected professional activities that include services related to printing and advertising; computer programming, consultancy and related activities; and design activities.

These initiatives will reinforce the position of the country as an ideal destination for investment, where equal rights are given to all the parties.

It helps in creating an atmosphere that encourages entrepreneurship and creates favourable conditions for doing business.

John Varghese, Managing Partner, HLB HAMT

HLB HAMT | Insight

Insolvency law The UAE Cabinet approved a new Federal Law to manage insolvency cases, wherein support will be offered to debt-ridden individuals to repay debts within a span of three years. This will also ensure that they are protected from facing criminal prosecution.

Along with protecting debtors from legal prosecution and decriminalizing the fiscal obligations of insolvent persons, the new law will also see to it that they are provided with the opportunity to work, be productive and provide for their families.

The law will come into force in January 2020. Court will appoint one or more experts to help debtors take care of their financial obligations.

These experts will work with the debtor and creditors and work out a plan, that will help settle the financial liabilities and fulfil all obligations. This will be done within three years.

The news comes as a saviour for people struggling with financial

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Excise Tax

Insight | HLB HAMT

EXCISE TAX IN THE UAE WHAT YOU NEED TO KNOW HLB HAMT Partner Jay Krishnan, outlines how the UAE government is continuing to take progressive measures through excise tax as part of its efforts to reduce the consumption of unhealthy and harmful commodities.

Jay Krishnan, Partner, HLB HAMT

Excise Tax

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“The other benefit of the excise tax on these products is the fact it’s going to generate additional revenue.”

“There is a lot of consumption of carbonated drinks, energy drinks and tobacco products in the UAE, and the government are attempting to reduce the consumption of these products, but the other benefit of the excise tax on these products is the fact it’s going to generate additional revenue,” says Krishnan.

is added and ready to drink beverages.

• Any gels, powders which can be convertible to sweetened drinks.

Facts: Introduced in Oct. 2017, based on GCC Common excise introduction rules.

From 01.12.2019 – minimum excise tax is fixed: • 0.40 AED on individual cigarettes.

• 0.10 AED per gram of water pipe tobacco or similar products.

Purpose: • To reduce the consumption of harmful and unhealthy commodities.

• Additional revenue raising.

No registration threshold limit Products included under excise duty: • Carbonated drinks.

• Energy drinks.

• Tobacco and tobacco products.

Advancement: 1.12.2019 • All sweetened drink with added sugar is included under excise tax.

• Electronic smoking devices and tools, liquids etc.

Rate of Excise tax: • 50% on carbonated drinks.

• 50% on any drink with added sugar.

• 100% on tobacco and tobacco products.

• 100% on energy drinks.

• 100% on liquids used in smoking devices.

What is sweetened drink: • Source of sugar or other sweetners

On 01.10.2017 – more than 1700 product items were subject to excise tax (60% are soft drinks, 26% tobacco products and 14% energy drinks) • Now after the advancement, this number will more than double.

Step by step guide for business persons: • Classification of goods.

• Identify excisable goods.

• Registration with FTA. • Identify tax trigger points and tax liability.

• Evaluate pricing impact.

• ERP and process changes to be implemented.

What HLB Hamt offers: • Registration.

• De-registration.

• Goods classification, qualifying for excise tax.

• Inventory counting.

• Advise on stockpilers.

• Ongoing return filing and compliance services.

• Tax agent.

• Consulting on latest amendments.

Books of accounts and record maintenance is mandatory for 5 years from the financial year.

HLB HAMT | Insight

The UAE government is continuing to show leadership when it comes to clamping down on unhealthy products being produced for human consumption following its decision to double the number of products that will now be subject to excise tax.

In 2017, more than 1700 products were subjected to this new excise tax with 60% of them being fizzy soft drinks, 26% were tobacco products and 14% were energy drinks.

However, in December 2019, the UAE government decided to bolster its campaign by doubling the amount of produce that will be subject to increased taxes.

Partner at HLB HAMT, Jay Krishnan said, “The excise tax was first introduced on 1700 products in 2017, as part of the UAE governments objective which was to ultimately reduce the consumption of carbonated energy drinks and cigarettes.”

The primary objective of this health initiative being spearheaded by the UAE is to ultimately reduce the consumption of unhealthy and harmful commodities.

Who are required to register for excise tax?

• Importer of excise goods.

• Manufacturers.

• Stockpilers.

• Warehouse keepers - distributers from a designated zone.

Exclusion from sweetened drink – any drink containing at least 75% of milk. Milk substitute, baby formulas, baby food.

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