SME ADVISOR issue 111 by SME Advisor Middle East

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ISSUE 111

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EDITORIAL COMMITTEE SME Advisor is delighted to announce that during 2015 we will be working with some of the leading names in the SME space key figures who have kindly agreed to take part in our new Editorial Committee. This panel will play a vital role in channeling the feature content of our magazine and ensuring that we are more topical than ever - analyzing and discussing the ‘real world’ issues of tangible value to our readership and bringing industry-leading expertise across the publication and its raft of prestigious related events. We are delighted to introduce the following SME personalities:

Avishesha (Avi) Bhojani Avishesha (Avi) Bhojani is the CEO of Bates PanGulf (BPG) Group. At the helm of the BPG Group since 1991, he is responsible for consolidating the Group’s interests across advertising, public advocacy, public relations, design, activation, media asset management and digital verticals, in the Middle East and North Africa region. He is also instrumental in the conceptualisation and execution of a number of strategic retail initiatives in Dubai such as Dubai Shopping Festival and Dubai Summer Surprises. Professor Val Lindsay, MSc (Otago), MBA (Victoria), PhD (Warwick) Dr. Val Lindsay is a Professor in Strategy and International Business, and Dean of the Faculty of Business at the University of Wollongong in Dubai (UOWD). She has a keen interest in teaching and research in the areas of international strategy, exporting, services internationalization, entrepreneurship, small and medium-sized enterprises, networks and clusters, and economic development. Essa Al Zaabi Essa Ali bin Salem Al-Zaabi is the Senior Vice President - Support Services at Dubai Chamber of Commerce & Industry, and the Director of the Dubai Chamber initiative, Tejar Dubai. He is a proven UAE leader and business entrepreneur, with the ability to rapidly mobilize teams to achieve organisational change and integration. A self-motivated team-builder and corporateperformance driver, he has held a number of key positions throughout his career that has reflected his passion and commitment to the development of UAE nationals as business professionals, young entrepreneurs and future leaders. Previously he has worked with the National Human Resource Development and Employment Authority, as the Director of Tanmia – Dubai Office, then became

the Vice President of Human Capital at the Dubai World Trade Centre, and later on the Deputy General Manager of the Emirates Institute for Banking and Financial Studies. His Excellency Abdullah Saeed Al Darmaki His Excellency Abdullah Saeed Al Darmaki is the Chief Executive Officer of the Khalifa Fund for Enterprise Development, a government entity that spearheads the support and development of SMEs in the UAE. His role is integral to the strategic planning and management of the organisation in alignment with the Executive Council’s objectives. With over 17 years of experience in Oil & Gas, Petrochemicals and Manufacturing industries, and a background in Sales & Marketing, he has held a number of leadership positions with governmental and private organisations in the UAE. Mohan Valrani Mohan Valrani came to Dubai in the year 1966 and has been staying in Dubai for last 48 years. Mohan Valrani is the Senior Vice Chairman & Managing Director of Al Shirawi Group of Companies, which is a large conglomerate in the UAE and one of the largest in the Arabian Gulf, with headquarters in Dubai (UAE). Apart, from his business activities, he is also deeply involved in social activities. He is the founder - Chairman of the India Club and on the Board of Trustees of The Indian High School and has been as instrumental in contributing to the success of these institutions. Roberto Mancone Roberto Mancone is the Global Head of Business Products for SMEs and MidCorporate for PFB Germany, PBC Int’l and Postbank. He is Chairman of the Global Credit Product, Deposit and Payments Executive

Committee of the Private and Business Clients Division of Deutsche Bank. He is Board Member of the Advisory Board of Deutsche Auskunftei Service GmbH, Chairman of Business Advisory Council of EFMA, member of ECGI (European Corporate Governance Institute) and Member of the Advisory Board of BAA, the Alumni Association of Bocconi University and SDABocconi. Yogesh Mehta Yogesh Mehta is the Managing Director of Petrochem Middle East. He graduated with a Bachelor of Science in Chemistry from National College Bandra in Mumbai, India. Over time he opened his own chemical trading business, which enjoyed fair success. He then relocated to Dubai in 1990 and within five years, he managed to establish a business by opening a state-of-the-art storage terminal for bulk and drum chemicals. Driven by passion and a need to succeed, he established Petrochem Middle East in 1995 with friend and business partner David Lubbock. Petrochem Middle East has since grown from strength-to-strength to become one of the largest independent petrochemical distributors in the Middle East. A self-made billionaire, his greatest attributes are mentoring and leading by example. Sultan Sobhi Batterjee Sultan Sobhi Batterjee is the owner and CEO of IHCC, the leading Hospital Construction Company in the Middle East and Africa, and Founder and President of Lifestyle Developers Ltd. He is a member of several social and economic associations including the Young Arab Leaders Society in Dubai, the young entrepreneurs committee Jeddah Chamber of Commerce and he is also a Board Member of the (EO) Entrepreneurs’ Organisation in the USA. He holds a number of academic honours including a Bachelor’s Degree in International Finance and Accounting from the Regent’s Business School in London and a Masters in Entrepreneurship from the Entrepreneurs’ Organisation/MIT and Strategic Diploma from Oxford among others.

FROM THE EDITOR MANAGEMENT Dominic De Sousa Chairman Nadeem Hood Group CEO Georgina O’Hara CEO - Business and Consumer EDITORIAL Group Director of Editorial Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Editor Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 Event Sponsorship Manager Gill Fairclough gill.fairclough@ cpimediagroup.com +971 4 440 9120 DESIGN Head of Design Glenn Roxas Senior Graphic Designer Froilan Cosgafa IV Production Manager James Tharian Data Manager Rajeesh Melath

Why the Future of Audit is the future of your business I was recently privileged to Chair the Abu Dhabi chapter of a pan-GCC event called The Future of Audit. Organised by the ACCA, it drew together 15 of the leading CFOs in the region in order to discuss whether the traditional form of audit is actually suitable for assessing the real commercial viability of a business. Among the factors being discussed were how a properly-conducted audit can comprehensively assess the range of risks confronting an organisation, and, combining these with the cold hard numbers, can offer financial institutions a powerful evidential basis for lending. Given that obtaining business finance is a perennial quest for literally tens of thousands of SMEs, it’s perhaps surprising, therefore, that according to figures from Dubai SME, some 27 per cent of SMEs have no audited reports or accounts whatsoever. Nor were the panellists at the event talking purely about MNCs or Enterprise-level businesses. They were addressing the realities facing SMEs, and how professional Audit is the most fundamental element in understanding a business’ opportunities and constraints, its strengths and its shortfalls. Without this, the role of CEO is literally like trying to be Captain of a ship without having a compass. Yet we still find a huge number of businesses who lack this basic data, and will as a result face automatic disqualification from any bids for extra finance. While some of the panellists made the defence that perhaps this knowledge of performance is actually privileged information that can’t fall into the hands of competitors, the argument doesn’t really wash, since we see a number of eminent family businesses engaged in the absolute epicentre of competition, who freely release performance data. Indeed for those businesses aspiring to IPO status, that data is a rite of passage into the public domain, where (not surprisingly!), the company will encounter shareholders and customers fully expecting every dirham to be accounted for. While it’s understandable that a micro-SME will only want to budget for a part-time bookkeeper, there has to be a tipping-point whereby the business sees that its raft of opportunities, liabilities and profit centres necessitate the attention of an individual armed with a Chartered qualification, who in the fullness of time will in turn will be replaced by a leading audit firm with multiple competencies, Where is your business on that journey? Will you be one of the 27 per cent? Or a company wellplaced to reap the fruits of its labours and totally understand its commercial footing? Enjoy this issue of SME Advisor!

Paul Godfrey Senior Editor Printed by Al Ghurair Printing & Publishing LLC

Head Office PO Box 13700, Dubai, UAE Tel: +971 (0) 4 440 9100 Fax: +971 (0) 4 447 2409

Rushika Bhatia Editor Talk to us: E-mail: paul.godfrey@cpimediagroup.com Facebook: www.facebook.com/SMEadvisor

PRESENTING PARTNER

© Copyright 2015 CPI. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

Twitter: @SMEadvisorME LinkedIn group: www.tinyurl.com/smeadvisorme

STRATEGIC SME PARTNER

KNOWLEDGE PARTNER

Contents

“When setting up a business in any new market, the golden rule should be ‘research research, research’.”

p28

“The on-demand economy is set to permanently change the manner in which business operations are carried out.” p52

ON THE FRONT COVER

07 Editorial Committee SME personalities bringing industry-leading expertise across the publication and its raft of prestigious events. 09 Editor’s Note Paul Godfrey on why the future of audit is the future of your business. 12 Data and decision making Our infographic section showcasing key trends shaping the SME marketplace. Ground level 14 Building a website – in ten easy steps. We take you through the step-by-step process. 18 On the fast track: finance and the technology imperative. Are regional finance executives leveraging the benefits of technology? 22 Meetings – Critical tool or a waste of time? We present top tips to plan and execute meetings effectively.

sme advisor ISSUE 111

28 Business Banking 28 Method or maze? Understanding the essentials of starting a business in the UAE. Digitally Disruptive 32 Changing the possible. Etisalat and NBAD bring you a unique solution to empower your business. SME Strategy 36 Public-Private Partnerships – the skills and technologies to work with worldclass businesses. Here’s an exclusive preview.

48 The power to change. Allan Nielsen, leading life and leadership coach, on positivity, motivation and teamwork. The Next Level 52 The ‘Uber’ effect on SMEs. Noted industry commentator Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, highlights critical lessons. New Frontiers: Oman 56 GROUNDBREAKING SUCCESS. The Dynamics of Entrepreneurship conference makes waves in the Omani SME space.

Movers & Shakers 40 Opportunities unlimited. Paolo Serra, VP – Business Park, Dubai World Central, shares key insights on the freezone’s specialised offer.

Trade and Export ME 63 We present our comprehensive section, Trade and Export ME A practical, informative and incisive guide for the trading community in the region.

44 Going for growth. We meet with the renowned growth expert, executive coach and entrepreneur Verne Harnish.

Tech Trends 84 Business apps to boost productivity and profitability.

Data and Decision making

LOOKING TO 2020

The Dubai Expo 2020 is a major catalyst for the SME sector â&#x20AC;&#x201C; giving business a multitude of opportunities to shine on a global scale. We present compelling statistics...

General overview

40%

52%

strongly agree that they fully understand what Dubai Expo 2020 involves

believe that Dubai Expo 2020 will have a positive impact on their lives

95%

81%

are interested in Dubai Expo 2020

believe that the Expo will benefit other six Emirates

What are SMEs saying?

44%

think that SMEs will be mainly impacted by Dubai Expo 2020

89% of SMEs believe that the impact of Dubai Expo 2020 will be positive in the long-term

71% of SME owners think that the number of SMEs will increase as a result of the Expo

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Data and Decision making

Influx of visitors

Opportunities for SMEs Gain brand exposure

Dubai

Build supplier relations

By 2020, there will be about 15 million tourists per year visiting the UAE

Access to global markets Strengthen Public-Private Partnerships

Expo 2020 is expected to attract 25 million visitors â&#x20AC;&#x201C; out of which 70% will be from overseas

Impact on the economy

53%

57%

believe that it will contribute to a boom in real estate

The Expo win is estimated to add $24billion to the UAE economy

express that Dubai Expo 2020 will positively impact job opportunities

80%

28%

believe that Dubai Expo 2020 will boost trade within the UAE

say that the financial services sector will benefit significantly

Sectors to be positively impacted (in the period of 2018-2020):

60% Tourism

The Dubai Expo 2020 is expected to generate about 110,000 new jobs within the hospitality and leisure sector

55%

Real estate

45%

Communications/events

Hotel inventory will double to 164,000 hotels and hotel apartments by 2020

SOURCES: Gulf News, Dubai Expo 2020: A high stakes event by SWAT, The Global Economy in 2015 by Grant Thornton

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GROUND LEVEL

Building a website in ten easy steps!

A functional and welldesigned website can be one of the most critical factors in building an interface with your customers, suppliers, partners – and potentially investors. In the following feature, we take you through the step-by-step process of creating an effective online presence.

For an entrepreneur or small business owner/director, a website is a great boon – an easy, cost-effective and efficient platform to communicate with a mass audience! Therefore, it’s only fair that you give it sufficient attention and time to ensure that you are making the most out of it. Here, we present an easy ten step action guide for your small business to achieve online success…

Understand the purpose of your website.

Start by determining the purpose of your website. Generally, company websites are a platform to share the 14

company’s story – giving visitors a general overview of the products and services. Alternatively, it could also be to generate online sales, where you would create an e-commerce gateway for customers to directly make purchases. Remember that even if you decide to start with a basic website you can always upgrade your offer at a later stage.

Decide your domain name.

This is the URL you will be sharing with your visitors, so it needs to be www.smeadvisor.com

GROUND LEVEL

Your choice of website host will depend in part on the software you choose but also on the speed and number of visits you expect to receive.

catchy and something that they will remember. Keep it short, concise and free of complicated abbreviations. Very often, it is the case that the domains ending with ‘.com’ have already been registered and you would need to work with alternatives such as ‘.net’ or ‘.in’. This step involves careful research and planning – invest some time in coming up with a suitable domain for your business. It is also worth consulting an IT expert at this stage to ensure that you aren’t using a domain name that has already been copyright by someone else. www.smeadvisor.com

Select your web host.

After you’ve decided on your domain name, you will need to choose a web host. An online article on Fox Business by Michel Theriault explains: “Your choice of website host will depend in part on the software you choose but also on the speed and number of visits you expect to receive. With some companies, you can start off with less expensive but less powerful shared hosting services and, if required, you can step up to faster and more powerful

dedicated hosting. This option is something you should consider when choosing a host, even if you start with the least expensive option. Another consideration, particularly if you are setting up your website yourself, is whether your host provides for automatic installation of your chosen content management software. Most of the popular hosting services will enable you to do this with the click of a button. And in most cases you can use the same host from more than one website. If you are doing it yourself, the host’s support services should be an important consideration. While few, if any, will support the software, the hosting application and related issues can be complicated.”

Choose a web content management system.

A web content management system is a software that allows you to create and manage your website content, without the need to have 15

GROUND LEVEL

A web content management system is a software that allows you to create and manage your website content.

detailed programming knowledge. A basic software would allow you to upload information, edit content and manage participation. The primary advantages of using a web content management system are that it is accessible at a low cost and is fairly easy to use. There are several options available today – varying based on your need. Popular ones are WordPress, Joomla!, Drupal and so on.

Select a premade design template.

A simple way to get a ready template would be to purchase it online; themeforest.net and templatemonster. com are good portals. Think from a visitor’s point of view. What would they be looking for when they first visit your website? What is the first impression you want to leave on their mind? Select one theme and stick with that throughout the website. Your website should be simple, consistent and easy to navigate. If there’s too much going on, it could be a distraction to visitors. The navigation should be intuitive and not too complex. Having a lot of unnecessary images and links can turn off visitors. Lastly, don’t make frequent design changes on your website: let users build familiarity with your web portal, remember it and revisit it in the future.

Update the content.

What you’re saying to your audience is of paramount significance as this is directly impacts their interest in your page. Ensure that the information you are sharing on your page is relevant to your audience and more importantly a good indication of your brand value. Have a content strategy in mind – a) How often does the website 16

need to be updated – weekly or monthly? b) Who is responsible for managing all the online activity? c) Who is your target audience? d) How is your brand positioned in the market and how can you reinforce this with your website?

Set up a payment system.

While this step won’t apply to all business websites, companies that want to offer the option to pay online will need to integrate electronic payment systems into their websites. The easiest way to do this is through e-commerce software or third-party payment processors. Some Web hosts offer an in-house option for e-commerce integration, but not all do. So if you have to choose one on your own, be sure to do your research. Paypal is a popular and cost-effective option to facilitate easy payments. Visit their website for a step-by-step guide. Source: http://www.businessnewsdaily. com/4661-starting-a-business-website.html

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GROUND LEVEL

should be there, too. Implement a SEO strategy to drive traffic to your website and to rank high on search engines. There is also the option to use Google Adsense, which will show Google ads on your website. Of course, don’t forget to supplement these activities with a solid social media campaign targeting your followers on facebook, Twitter, etc.

10 8

Ensure Compatibility.

It’s important to ensure that your company’s website is compatible with all mobile devices, browses and platforms. Not only does this enable quick and easy access, but it offers your customer an enjoyable viewing experience. Compatibility means that your website is completely optimised to work on a mobile device. This includes design changes; does it fit on a mobile screen? Also, interface changes; making information accessible in a click or two versus a comprehensive options menu.

Simple tools like Google Analytics can help you get feedback on what areas of your website work and those that don’t.

Review your website.

Once your website is running, it’s time to check how well you did! Simple tools like Google Analytics can help you get feedback on what areas of your website work and those that don’t. It also gives you insights on your demographics, page views, returning visitors, time spent on each page and so on. Regular discussions with your web developer on these analytics is truly time well spent. Remember that having a website just for the sake of it is as good as not having one. Take time out to review the working of your website and it can work wonders for your business. Finally, it’s very easy to overthink and complicate things when building your website. So, try to keep it as simple as possible. Your website should give your visitors a clear picture of who you are as a company and leave them with one solid call-to-action. Good luck!

Promote your website.

It’s surprising how many businesses forget to promote their website. It should be prominent across all your marketing activities. This could include business cards, brochures, e-mails and social media. Basically, anywhere you have your agency logo, your URL www.smeadvisor.com

For an online version, please visit: www.smeadvisor.com/2015/05/ building-a-website/

GROUND LEVEL

On the fast track FINANCE and the technology imperative

In a region where 85 per cent of finance departments still use Excel, whatâ&#x20AC;&#x2122;s the role of leading edge developments like in-memory treasury analysis and e-banking architecture? Are regional finance executives leveraging the full benefits of contemporary technology? SME Advisor magazine investigatesâ&#x20AC;Ś

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GROUND LEVEL

Finance and technology are two game-changing entities for any business. Optimum competency in these two fields will provide a SME with immense advantage in its skill set. As the need for visibility and transparency in volatile business markets increases, SMEs have resorted to technologies such as the cloud, mobile technology and social media to ensure financial proficiency. They have adopted applications that have analytical, mobile and social capabilities embedded into the workflow. With this immense body of data at their fingertips, SMEs are empowered by exciting new technological advancements in the Finance arena of modern accountancy management. Organisations are no longer content to focus on containing costs and keeping score. Modern finance seeks to change the game, leveraging its operational knowledge and analytical expertise to provide management with data-driven insight and forwardlooking guidance on where to invest to drive innovation and growth. The realities of this are underwritten in the following comment from Rima H Ahmed, Director of Finance & Shared Services – Middle East Region of Manpower Group Middle East: “The right technology forms an important aspect of effective management of that transformation. Technology helps accelerate transformation to drive efficiency & effectiveness across the business.” The benefits of speed-driven technology SMEs have begun to recognise the value of digital technologies for finance and the business at large. They are committed to upgrading the skills of finance professionals with next-generation applications that are analytical, mobile and social. A large number of SMEs are sponsoring enterprise-wide transformation projects where finance can bring its operational knowledge, analytical insights, and budgetary discipline to

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bear on behalf of the business. They are empowering their finance teams with sophisticated analytical tools and modern applications with embedded business intelligence to enable this real-time, forward-looking planning and decision-making. Rima continues: “Effective treasury and cash flow management forms a critical part of a finance executive’s role and helps ensure funds are available as and when required to facilitate growth plans and maintain a sustainable successful business. Having the right technology that has a fully integrated online transparent treasury management portal helps drive speed and efficiency of transactions, especially if working on a multi-currency agreement - wherein both the speed of the FX platform and time taken are critical elements affecting the outcome of business decision. An integrated and effective fiduciary management system helps finance executive in providing the information and advice required to set up appropriate investment and well-diversified strategies in addition to continuous monitoring and oversight of risk. In short, technology provides them with the right level of information, speed and transparency on a real time basis, in order to verify the transactions and help in quick decision making.” Automation is the key Accounting processes of today comprise cloud technology, cashless payments, digital currencies, social media apps, mobile banking, FX robots and much more. Many companies have already implemented financial close automation to completely transform back office finance from a tedious, timeconsuming set of tasks to an efficient process that provides transparency and insight for better control with less effort. These changes have delivered rapid and measurable results - quickly and effectively. Cloud computing software has begun to take over the financial

GROUND LEVEL

realm with its ease and agility. It allows companies to break down organisational barriers and address the changing behaviour of customers, competitors, markets and economic conditions. Technologies like dashboards and real-time information access are changing the nature and structure of the accounting department. Data and efinancial reports can be securely entered from anywhere in real time through smartphones and tablets. Online Treasury Management enables teams to efficiently monitor account activity and access the information they need. Account information, balance sheet figures and other data reports are available 24/7 for perusal. SMEs have begun to realise that improving connectivity is the main priority while managing the functions of banks and corporate treasury departments. The need for complete visibility of their operations, accountability, and risk and fraud control continue, as do the efforts of the banks and other third-party cash and treasury management systems and service suppliers to develop the solutions required. One of the most recent and exciting developments in the treasury management space is the introduction of mobile corporate banking. Banks and financial software vendors are launching a number of mobile corporate banking applications that enable treasurers to remotely authorise payments, view trade documentation such as letters of credit and conduct electronic invoice presentment and payment on a mobile device. Many banks are automating labourintensive processes to cut personnel costs. Business intelligence gained from data analytics is helping banks grow their relationships with corporate customers. Regulatory compliance is another area where technology is helping banks. For one, it enables consistency in data reporting and realtime storage and retrieval, helping banks evaluate risks better. Secondly, it helps banks gain new insights by layering external information on internal data.

Technology also allows increased transparency of bank operations, helping with both regulatory compliance and offering customers real-time information on accounts. If there is a dispute over online transactions, a bank could offer updates to customers on the status of their cases, thereby avoiding calls to customer support centres or branch visits. Also, analysis of customers’ transaction patterns could help the bank identify potentially fraudulent activity and reduce risk. Enterprise-wide cash management systems and services, incorporating not only the traditional FX and other instruments but also elements relating to the physical production of goods and services, such as energy costs and commodity forecasts, are now becoming essential. The cash and treasury management system is fast becoming the working capital engine of the corporate treasury department and core to the company’s success. Eventually, corporate treasurers will simply need to decide the best combination of the ever-increasing range of internet-based services to create a solution to fit their particular needs. The power of the net The Internet now seems to be driving the future of cash and treasury management systems: cloud computing and downloadable apps have made the finance function easy and accessible. Many of the banks are reviewing the possibility of implementing an appbased approach to the provision of their electronic banking services. Several corporate treasury management systems suppliers are also building their own versions of app markets. Although networking has always played an important part in cash and treasury management conferences and other events where companies, bankers and suppliers meet and socialise, webbased business networks will make interaction between cash and treasury management professionals so much easier. The Internet is omnipresent and free. Business networks are not only beginning to transform the way cash and

Rima H Ahmed, Director of Finance & Shared Services – Middle East Region of Manpower Group Middle East

treasury products and standards are developed and supported, they are also offering treasury professionals a new opportunity for sharing their expertise and experiences. For any organisation, security and data privacy are always at the forefront. The practical risk for most companies is their ability, willingness and commitment to the change management processes and education of their employees when rolling out a new cloud application or ERP system. The enforcement of proper technology into the operational system will accelerate business intelligence and analytical skills which will in turn aid the overall growth of a company. SMEs have to recognise the need for proper technology and implement it in a way that suits the best interests of their company. Most technology evolutions follow a consistent path: costs reduce over time as adoption of technology increases. It stabilises the system as solutions become robust and feature-rich. “Technology is being used to break down barriers whilst still maintaining controls and governance and enabling the businesses to operate in a more robust matter. By increasing the flow of information, and understanding it from different angles, it supports more effective decision making processes,” says Rima.

For an online version, please visit: www.smeadvisor.com/2015/05/on-thefast-track/

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COMPLEXITY

TURNS LOYAL CUSTOMERS INTO FORMER CUSTOMERS.

SIMPLE

KEEPS THEM COMING.

It’s not about how much consumer data you have. It’s about how simple it is to put it to work for your customers. SAP helps bring together insights into every customer, and lets you engage them in the exact time, place and channel that’s right for them. So your customers feel cared for, respected and, most of all, delighted. That’s running simple. Find out more at sap.com/runsimple

GROUND LEVEL

Meetings critical tool or waste of time?

Meetings within any business are an integral way to communicate with your team, brainstorm ideas and tackle difficult situations. But, if not handled properly, frequent and long meetings can eat into the productivity of your business. In the following feature, we share top tips to plan and execute meetings effectivelyâ&#x20AC;Ś 22

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GROUND LEVEL

Before you send out an invite for a meeting, try to ascertain what you are trying to achieve through it.

Preparation is the key to success – particularly when it comes to meetings. A little planning can help you transform your meetings into a productive tool for your business. We present some of the important things to bear in mind when setting up meetings. What to do before the meeting? a) Identify the objective of the meeting: Before you send out an invite for a meeting, try to ascertain what you are trying to achieve through it – • Share regular updates: is this a weekly or monthly staff meeting to catch-up with your colleagues? • Solve a problem or roadblock: are you trying to find a solution to a specific challenge? • Work on a specific project: is the meeting scheduled to finish work on a specific project? • Interact with another division of the company: you might have a new launch, product or a fresh development that you would like to share with another department within your company. Or, there might be an event or project that requires cross-departmental inputs. These are just a few examples – there are several different purposes for holding a meeting. But no matter what the reason for the meeting is, make sure you fully understand the objective and the kind of outcome you

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GROUND LEVEL

SHOULD YOU ATTEND THAT MEETING? A decision tree to help you decide. YES

YES

Is this meeting a team priority?

Is this my priority?

NO Delegate Decline

Most meetings don’t result in any solid outcomes due to lack of follow-through.

are looking for. More importantly, ask yourself if the purpose warrants a face-to-face meeting.

skills or project managers – depending on the objective and type of meeting.

b) Have an agenda: a well-prepared agenda sets the tone for the meeting and gives everyone a clear direction. Prior to the meeting, make sure there’s an agenda in place, which has been circulated to all members of the meeting. This doesn’t have to be very detailed, but it should be a clear outline summarised in a few bullet points. The agenda should also include a realistic timeline within which all the points are to be discussed.

d) Assign a meeting leader: with one person leading the meeting, it is easier to keep everything on track and ensure that there is a balanced discussion. This person is usually the person who calls the meeting, but doesn’t necessarily have to be.

c) Include the right people: try to trim the number of attendees as much as possible by inviting people that are absolutely relevant to the topic of discussion. This could include key decision makers, employees with problem-solving

Running the meeting effectively a) Stay on topic: following your meeting agenda will help you stick to the core areas of discussion without deviating too much. Ensure that the messages shared during the course of the meeting are short, concise and clear. Any detailed discussion with individual members of staff can always be done at a later time.

b) Manage the time: the time of every staff member within an SME,

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GROUND LEVEL

YES Is a meeting the best solution?

How can I make this meeting as small and short as possible?

NO Block time in your calendar to do the task Source: Elizabeth Grace Saunders

particularly those of the owners and directors, is extremely valuable. So, you definitely don’t want to spend it being part of long, pointless meetings. Again, it is the duty of the meeting leader to monitor start and finish times, and to follow the timeline set in the agenda.

c) Encourage active participation: in any meeting, there’s always a mix of highly active members, who aren’t afraid to voice their opinions, and members that are in the room for the sake of being present. It is the job of the meeting facilitator to get everyone’s attention, spark a conversation and get diverse views on the topic. d) Identify action points: this is the most critical step during the meeting. Very often, staff members are left confused or directionless after a meeting. To ensure that you get the outcome you desire, make a list of key

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action points – perhaps towards the end of the meeting, so that everyone knows exactly what the next steps are. What happens after the meeting? Most meetings don’t result in any solid outcomes due to lack of followthrough. It is also often the case that people tend to get caught up in the next important thing and forget what they discussed in the meeting completely. To avoid this, undertake the following three steps –

a) Follow-up on the meeting points: let the members of the meeting know how you intend to follow-up with them, and when. The follow-up could be in the form of another meeting at a later stage or a status report that needs to be submitted before a deadline.

Be wary of the challenges 1. Speed – Most companies have difficulty starting and finishing on time. 2. Mobility – In many cases, all the relevant members of the meeting may not be physically present at the same place. Consider holding a virtual meeting or having a conference call. 3. Organisation structure – Today, companies are more flat in structure, which encourages increased participation with a democratic decision making process. Understanding what suits your business best can help in facilitating useful meetings.

b) Delegate tasks and assign responsibilities: allocate five minutes after the meeting has concluded

GROUND LEVEL

KEY STATISTICS ON THE REGIONAL OUTLOOK

80% have agendas

on hand before a meeting

88% say their

meetings start on time

52% say their

meetings finish on time

60% say that everyone

contributes during meetings

76% believe meetings

Source: Bayt.com

reach consensus on key decisions

to discuss what the next steps will be and who will be responsible for what. Assign specific roles or tasks to everyone and ensure that they are fully comfortable with them.

c) Record and share the minutes of the meeting: summarise what was discussed in the meeting in a brief e-mail so that everyone has a record of it on file. This is a good reference point for future meetings. Cost of the meeting Remember the old adage, “Time is money”. It couldn’t be truer in the case of SMEs. With limited time, money and resources your disposal, the last thing you need is meetings adversely affecting the productivity of your employees. Here’s a quick four-step formula to calculate the cost of your meetings: 1. Write down the number of participants 2. Calculate the hourly worth of each participant based on their monthly salary and add it up for the group 3. Multiply that figure into the number of minutes the meeting is intended to run 4. Consider the time contributed towards pre and post event preparation The final figure is the cost of your meeting! Ask yourself if the outcome of the meeting is worth bearing this cost. Conclusion Finally, if you are employees are sharing ideas, asking meaningful questions and listening effectively, you are doing it right!

79% say action items are recorded during meetings

For an online version, please visit: www.smeadvisor.com/2015/05/meetingscritical-tool-or-waste-of-time/

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BUSINESS BANKING

Method or maze?

Understanding the essentials of starting a business in the UAE

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BUSINESS BANKING

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First things first. We’ve all heard stories about how it’s possible to set up a business online in countries like Australia or the UK in less than one hour, and then print out the certificate of incorporation. These stories are perfectly true - it’s as simple as that. So why, in a nation universally ranked as the most eGovernment-aware in the world and with the highest level of 4G activation, does it take many days to set up a business in the UAE? The reason is that in those other countries, there is no reference to the precise economic or legal status of the business, or indeed, to your own identity as a citizen or expat - as long as you are not subject to criminal proceedings, you can set up a business. Whether you can run it or not, time will tell. Yet in the UAE, there are a series of identification procedures and approvals that require not only the right paperwork, but necessitate that all stakeholders have exactly the same understanding of what the business will do. Which means that this is an altogether different view of business start-up. So rather than look at the international timeframes, it’s best to ensure that you’re as fluent as possible with what’s expected here. There are basically four steps to business incorporation. These are • Economic and Legal identification/ registration • Trade name registration

• Approvals • Licensing You can’t miss out any of these, leapfrog between them or try to get them running in parallel. (The following description is based on the procedures current in Abu Dhabi).

STEP

WITH ITS ROCKSOLID GEOPOLITICAL ADVANTAGES AND GREAT ECONOMIC STABILITY, THE UAE IS INCREASINGLY POPULAR AS A KEY LOCATION FOR BUSINESS STARTUPS. YET WHILE THE LICENSING PROCESSES AND PROCEDURES ARE MORE STREAMLINED THAN ANY OTHER GCC STATE, THEY CAN PRESENT CHALLENGES FOR ENTREPRENEURS IN A HURRY OR THOSE POORLYINFORMED ABOUT THE NECESSARY STEPS. SME ADVISOR PROVIDES THE FOLLOWING CHECKLIST BLUEPRINT TO OVERCOME THE ISSUES AND SUPERCHARGE THE ROUTE TO EFFECTIVE START-UP…

Economic and Legal identification/ registration.

This is where many entrepreneurs literally ‘fall at the first hurdle’, because this stage involves accurately describing the type of activity you are doing - and then fitting it into one of six pre-ordained categories, which do not necessarily correspond with your own understanding of your industry vertical. You are also required to describe the exact nature of your operation, eg, is it a branch of a foreign company, a limited liability company, and so on? If the alignment of the first element is incorrect, the range of activities which you will be able to undertake might be severely limited and not reflect the true status of your business or its capabilities. Note also that the rules, requirements and fees of setting up a business vary based on the type and nature of activity. The chart below summarizes the styles of activity falling under the different

Type of licence

Type of licensee

Issuing entity

Commercial Licence

Owners of companies or establishments, for practicing business activities. (example: general trading, construction, real estate, transportation, clinic, other).

Abu Dhabi Department of Economic Development (DED)

Agricultural Licence

Owners of agricultural farms, or processors of animal and marine products

Abu Dhabi Department of Economic Development (DED)

Professional Licence

Individuals who practice a profession or craft, relying on physical effort, or aided by tools and equipment. (example: carpenter, mason, welder)

Abu Dhabi Department of Economic Development (DED)

Occupational Licence

Individuals who practice a profession or craft, relying on their mental and intellectual abilities and talents (example: consultant, writer, lawyer, auditor)

Abu Dhabi Department of Economic Development (DED)

Industrial Licence

Owners of factories of all manufacturing industries

ZonesCorp

Tourism Licence

Owners of facilities that are specialised in tourism activities. (example: hotel, travel agency, boat rental firm, tourist camp)

Abu Dhabi Tourism & Culture Authority (TCA)

BUSINESS BANKING

Study the technical requirements of each licence category before you make your application, to ensure there are no unpleasant surprises. You can make an informal enquiry, for example, to the Abu Dhabi Department of Economic Development, before you make your official application. This can save weeks of frustration later on.

STEP

Trade name registration

This is where your start-up plans begin to seem more concrete, as you ratify the chosen name for your business and receive the registration paperwork with its name in place. But - a ‘golden rule’ to note: never embark on this next stage before Step One is properly completed. This is because the chosen trade name must reflect the nature of the activity and its legal status. If this is not settled first, the trade name will have to be altered again. The whole point of the trade name is to differentiate your business from everyone else’s, so as well as accurately reflecting the type of work you do, it must be a truly unique name. The Department of Economic Development has the right to cancel or change a trade name if it finds out that the trade name is identical to an existing trade name or not compliant with the terms and conditions set by the Department. There are a number of conditions impacting the registration of the trade name • The name cannot have been previously registered - or be currently used - for the same category of activity or for a similar type of activity.

Fast track tips It is not uncommon for up to seven or eight name choices to be rejected on the basis of similarity to an existing name, so it can pay to ask an agency to do a search on your behalf before submittal.

ApprovalS

At this point, you are getting closer to getting the business properly up and running. After obtaining the trade name registration certificate, applicants can apply for a preliminary approval from the Department of Economic Development (DED), to enable processing of all other approvals with ease and speed. Although most economic activities require only the preliminary approval, some applicants many have to approach other authorities, as advised by the DED. These other approvals are granted after fulfilment of specific terms and conditions, according to the type and nature of the business activity.

Fast track tips The preliminary approval is only valid for a period of three months from issuance date, so ensure that any supplementary approaches to other authorities are in process asap. Also, note that if the preliminary approval expires, applicants must obtain a new certificate before proceeding to the next step.

STEP

Fast track tips

• It’s imperative that the name is compatible with the required type of activity and legal status. • The name should must not contain mention of any religion, denomination or governing authority, or names or logos of any local, Arab and international bodies, institutions and organisations. • The trade name should not be identical or similar to any local or international trade name registered with the Ministry of Economy. • It must not violate public law and order • It mustn’t mislead the consumer with regard to the type of business, its importance, size, etc. • The Trade name will be cancelled automatically at the end of the booking period if the name-holder fails to obtain a trade licence.

STEP

licence classifications (see, for example, how surprising the activities under the category ‘Professional Licence’ actually are). It also explains which issuing body you will need to deal with.

Licensing

Upon obtaining all relevant approvals, applicants can approach the DED to pay fees, submit documents, complete all formalities, and collect their business licence. Note that there are certain technical terms, though, that recur time and time again, and you will want to ensure that you are fluent with these. For example 1. Establishment: The establishment is a facility owned by only one person, and is licensed for practicing an economic activity (commercial, professional, industrial, agricultural or occupational). It is the most common form of business practiced in Abu Dhabi. The financial liability of the establishment will lie with the owner, who has to bear all financial obligations. If the owner is a foreigner, a UAE National is required to act as a service agent for the establishment. An establishment must take on one of these legal forms: • Sole proprietorship (owned by a UAE National) • Sole proprietorship (owned by a GCC National). • Sole proprietorship (owned by a foreign investor). • Sole proprietorship (Mubdia’h programme for UAE National women). 2. Company: A company is an establishment which is owned by two or more partners who are natural persons, or legal entities. A company must take one of these legal forms:

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BUSINESS BANKING

• Limited Liability Company (LLC). • General Partnership. • Limited Partnership Company. • Private Joint Stock Company. • Public Joint Stock Company.

When setting up a business in any new market, the golden rule should be ‘research research, research’.

3. Branch: A branch is the local representation of a company or establishment that Is registered in Abu Dhabi, or elsewhere in the world. A branch must take on one of these legal forms: • Branch of a local sole proprietorship establishment (registered in Abu Dhabi). • Branch of a local sole proprietorship establishment (registered in another emirate). • Branch of a local company (registered in Abu Dhabi). • Branch of a local company (registered in another emirate). • Branch of a GCC company. • Branch of a foreign company. • Branch of a GCC company (with a foreign investor). • Branch of a local company (free zone). • Branch of a foreign company (free zone).

Fast track tips

provided. This is precisely why an increasing number of businesses choose to work with a Facilitation company, which provides a complete, 360-degree licensing, visa and registration service. While this can bring a good deal of peace of mind, the sense of convenience may come along with a number of compromises, since the facilitation service will tend to work with those authorities that it feels comfortable with - and these may not have either the location or the registration categories that are best suited for your business. For example, Fujairah Studio City and RAK Free Zones are both popular with facilitation companies, but it is a mute point as to the flexibility this will then give you regarding the necessary location of your office. When setting up a business in any new market, the golden rule should be ‘research research, research’ - and this is also the case with the UAE. The rewards of a successful business start-up can be substantial and the process, while detailed and demanding, is well worth pursuing with seriousness and dedication.

It’s necessary to keep in mind that for all the above, foreign documents should be translated into Arabic by a legal translator and attested by the Ministry of Justice. Be aware that an exceptional category is that of the car rental sector. Car rental businesses must obtain separate approval from the DED’s Car Rental Committee. In terms of capitalisation, the capital of branches of foreign companies and establishments should not be less than AED 250,000. Thus sum should be held as liquid capital.

Facilitation services You might feel that the fourstage process above represents a considerable amount of work, and that there isn’t too much scope for error if documents are improperly

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For an online version, please visit: www.smeadvisor.com/2015/05/methodor-maze/

//DIGITALLY DISRUPTIVE

Changing the POS sible a one-stop solution to transform your business Etisalat and National Bank of Abu Dhabi (NBAD) have joined forces to empower SMEs with a uniquely mobile and convenient Point of Sale (POS) technology. It gives your customers the full bandwidth of payment options, reduces operating costs and liberates your business from the physical constraints of a hard-wired set-up. With the capacity to do transactions on the move, anytime, anywhere, Mobile Cashier gives you fantastic payment mobility and makes conventional cash till and POS set-ups a thing of the past. Take a walk around any mall and it’s obvious that POS technology has come a very long way indeed. Relatively junior staff manage the whole range of card and cash transactions via a laptop that combines stock management and inventory functions, has automatic card and cash reconciliation and a host of features like CRM, real-time forecast comparisons, warehousing schedules, and so on. Yet look again and there’s a classic limitation that in effect means that we’re not so far from the world of the

old-fashioned cash register. It’s this: POS systems rely on a physical location and a centralised point of input. In most of the instances, POS systems are not even linked to the store’s back-end platforms, which often cause errors and result in complex financial reconciliation due to manual entry of the transaction details by the sales person. What are you going to do if • Your representatives are always on the move? If you’re a pizza delivery specialist, don’t you need an instant and portable solution for taking cards?

• Your customers prefer to pay for goods with-in the store aisle and do not want to go to the predefined cashier location or wait in the queue? • You want to enable your sales team with real-time information of the inventory availability, additional product information, and to close sale and

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//DIGITALLY DISRUPTIVE

The entry-level Mobile Cashier package costs only AED299 - and for this, you get your app to download, and the Mobile Cashier card swipe device. accept payment at the same time while staying in front of the customer? • You’re committed to an event, exhibition or conference and need a one-time facility for taking card transactions? • You’ve traditionally been cash-based and now want to accept credit and charge cards - but need to make the upgrade quickly and cost-effectively without disruption? Now Etisalat, in collaboration with NBAD, have developed a powerful, go-anywhere solution - Mobile Cashier. It uses a small and highly mobile card reader linked with an app that basically turns your phone or mobile device into a sophisticated mobile cash register. It’s perfect for staff engaged in deliveries, working ‘in the field’ or at a special event. It can easily incorporate a back-end inventory system, and the app allows you to work in any one of six languages - English, Arabic, Russian, Tagalog, Hindi and Urdu. Merchants can accept payment directly on their mobile phone via the connected Bluetooth card reader. Plus, Mobile Cashier can incorporate bar code screening and cheque capturing - and allows you to see all your activity and transaction history on the mobile device (and you can also view it in more detail via a dedicated web portal). Of course, managed by Etisalat and

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//DIGITALLY DISRUPTIVE

Mobile Cashier can incorporate bar code screening and cheque capturing and allows you to see all your activity and transaction history on the mobile device (and you can also view it in more detail via a dedicated web portal).

Plus - coming soon.

POS as a Service. Watch this space to discover how your business will soon be able to turn on or turn off the benefits of Mobile Cashier and buy in purely according to changing needs…..

NBAD, everything is secure and meets the highest levels of international certifications and Central Bank of UAE regulations. Service being offered by two UAE Super Brands ensures that all your sensitive transactions information is staying with-in the country and never transmitted overseas. Adding value to your customer offer Saleh Abdullah Al Abdouli, Chief Executive Officer at Etisalat UAE said: “Etisalat’s partnership with NBAD is significant as it provides merchants and service providers an added value to offer customers flexibility in making payments utilizing different payment instruments, from different business locations, anywhere and anytime. This gives retailers a competitive advantage and ultimate convenience to their larger customer base.” Another factor with Mobile Cashier is that there’s no need for any kind of sophisticated screening matrix or firewalls on staff mobiles - the system runs exclusively via an app ensuring that there is no interaction between personal and business use of mobile device. Extremely low costs The entry-level Mobile Cashier package costs only AED299 - and for this, you get your app to download, and the Mobile Cashier card swipe device. (Then, you’ll simply pay a merchant service fee for the processing of each payment). You can also pay a little more and get an optional portable palm-sized printer, enabling you to print a paper receipt if requested by the consumer. Getting the service couldn’t be simpler: you provide exactly the same information as for a mobile device and the service goes live within 48 hours, after clearance of your details from the Central Bank. Plus, you won’t need an advanced phone: Mobile Cashier works on any device that is Android 2.2 upwards - and that’s 80 per cent of all those currently in use. There’s complete information, training and support on the website, mcashier.ae - so your staff can ‘learn as they go’ and there’s no complicated face-to-face tuition required.

You can also customise the app with your own business’ images and messages, completely integrating the facility into your day-to-day business culture. A first for a mobile network in the ME and a first for your business This is the first time that a mobile network operator in the region has been able to offer a service of this kind. It’s also terrifically secure in terms of functionality - for example, if a call or SMS comes through mid-transaction, it won’t interfere with the processing of the transaction at all. While Mobile Cashier is of course ideal if your representatives need a high level of mobility, it’s also a perfect solution for start-ups and businesses coming to a new location. The two-day connectivity window means that you can commit to a firm opening date, and the use of an app and mobile devices lets you completely bypass the need for a traditional PCcentred terminal. There’s simply no need to invest in a system of this kind, even as your business grows. That not only saves money, but means that your staff can be more customer-centric, not hidden away behind a computer. Mobile Cashier is also robust enough to cope with the vast majority of transaction levels (although if you’re running a hypermarket with thousands of daily transactions, it’s always advisable to invest in more ‘bullet-proof’, hardwired devices). Non-surprisingly, this transformational service innovation received highest Global recognition as earlier this year Mobile Cashier won GSMA Global Mobile Award in Barcelona, Spain in the category “The best use of Mobile for Retail, Brands and Commerce”. Get the benefits of Mobile Cashier To start using Mobile Cashier for your business, visit mcashier.ae and see the ‘How to Subscribe’ section on the site.

For an online version, please visit: www.smeadvisor.com/2015/05/changingthe-possible/

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SME Strategy

Presenting partner

PUBLIC PRIVATE PARTNERSHIPS the skills and technologies to work with world-class businesses

strategic SME partner

Etihad Towers, Abu Dhabi, June 3rd

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SME STRATEGY

HOW MUCH DO YOU KNOW ABOUT PUBLIC PRIVATE PARTNERSHIPS (PPPs) AND THEIR COMMERCIAL OPPORTUNITIES FOR YOUR BUSINESS? WOULD YOU, AS AN SME, BE ABLE TO COMPLETE A TENDER APPLICATION FORM EFFECTIVELY? WOULD YOU HAVE ITS KEY SKILLSETS READILYDOCUMENTED? ARE YOUR OPERATIONS CERTIFIED TO INTERNATIONAL QUALITY STANDARDS? SME ADVISOR PRESENTS A WORLD-CLASS DEBATE THAT WILL ADDRESS ALL THESE ISSUES AND HELP YOUR SME FULLY REALISE THE POTENTIAL OF PPPs. HERE’S AN EXCLUSIVE PREVIEW…

Laudy Lahdo

General Manager - Middle East, Servcorp

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Etihad Towers, Abu Dhabi

Public Private Partnerships – the skills and technologies to work with world-class businesses is an important event that explains one of the most dramatic and disruptive trends affecting the region’s SMEs. Public Private Partnerships (PPPs) are a key theme of the further development of the UAE economy, featuring in both the Abu Dhabi Economic Vision 2030 and the Dubai Vision 2020. They’re also big news in SE Asia and Europe, where they are proven catalysts in creating rapid economic growth. PPPs propose a framework where SMEs can work in tandem with bigger businesses and the public sector to develop key infrastructure projects. The idea is that they build the competencies

Alexandar Williams

Director, Business Development, Department of Economic Development, Dubai

and cashflow of smaller businesses while giving the public sector access to niche, state-of-the-art skills and entrepreneurial spirit. PPPs are becoming the driving force behind the success of SMEs – primarily because they are synonymous to knowledge exchange. They allow SMEs to benefit from tendering opportunities and work alongside larger firms to gain added exposure and expertise. In addition, to gain these contracts, SMEs need to meet certain prerequisites, which encourage them to raise operating standards and apply international best practices. Of course, PPPs also open doors to large public investments allowing SMEs to supercharge growth and undergo rapid expansion.

Rajiv Shah

CEO, Gulf Investment Consultants

SME Strategy

HE Maryam Matar Chairman, GDA UAE

The debate will be digitally recorded and become the basis for a specialist White Paper report in the PWC Insight series.

Archie Berens

Managing Director, Bell Pottinger

Enjoy a lively, practical debate The event follows the format of an expert panel discussion tackling the key topics of relevance and importance to SMEs. There’s a live audience - with active participation encouraged! The round table discussion will look at how SMEs can Understand how to apply for - and win - competitive tenders Use technology and connectivity to work ‘smart’ and leverage critical change in performance Meet the high expectations of the public sector in terms of project management and structured delivery Understand aspects such as quality classifications, risk management and public liability The expert panel will comprise Government representatives, economists, captains of industry and key figures from the SME community. Some of the leading panellists include – Alexandar Williams, Director, Business Development, Department of Economic Development, Dubai Rajiv Shah, CEO, Gulf Investment Consultants HE Maryam Matar, Chairman, GDA UAE Archie Berens, Managing Director, Bell Pottinger

Paolo Serra

VP – Business Park, DWC

Paolo Serra, VP – Business Park, DWC Powerful research agenda – a specialist White Paper report The debate will be digitally recorded and become the basis for a specialist White Paper report in the PWC Insight series. This will be published online and contain unique primary data that PWC has sourced in relation to the event’s debates and topic coverage - making the occasion a milestone in the evolution of the regional SME dialogue. The event takes place Wednesday, June 3rd in the luxurious setting of Etihad Towers, Abu Dhabi. Registration and networking start at 8:30am. There will be a delicious buffet lunch to close the event at 12:30pm.

Will your company be a leader in the UAE’s new partnership agenda - or left behind in the rush?

For an online version, please visit: www.smeadvisor.com/2015/05/eventpublic-private-partnerships/

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MOVERS & shakers

Opportunities unlimited Dubai World Central’s SME offer

With its strategic location, premium Business Park, unrivalled logistics corridor and state-ofthe-art infrastructure, Dubai World Central offers a package that businesses simply can’t afford to refuse. SME Advisor caught up with Paolo Serra, VP – Business Park, who heads up the freezone component of the master-planned city, to explore the vibrant opportunities…

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MOVERS & shakers

By 2020, we envision DWC progressing towards becoming a model urban destination, serving as the preferred address for businesses and people.

Paolo Serra, VP â&#x20AC;&#x201C; Business Park, DWC

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MOVERS & shakers

What makes Dubai World Central (DWC) attractive as a hub for business? One of our foremost features is the logistics corridor, which is an integral part of our value proposition. DWC is directly linked to the Jebel Ali port via this logistics corridor, which means businesses have access to the sea port and airport, all within the freezone without the need to import or export. The benefits of such a facility are immense; it significantly reduces costs and time.

What are some benefits you offer to businesses? What is your SME offer? In terms of the components within DWC, we offer a 360 degree solution with our different districts including Aviation, Logistics, Residential and several other components. In addition, some of our other benefits are that: • We are an extremely cost effective freezone. • We offer state-of-the-art infrastructure with advanced facilities and round the clock technical support. • Our internal regulations and procedures are very streamlined. • We can license a variety of activities from trading, consulting, aviation and logistics to marketing and IT. • Our leasing terms are flexible and we offer tailored office spaces for SMEs and large corporations – whether core and shell or fitted out offices. We provide companies with the platform to grow and expand their business, which is becoming extremely important in today’s competitive markets. The Business

Park currently has 11 modern buildings and the next phase of buildings will be underway shortly; you will never face a situation where a company can’t grow in terms of office size or the number of staff they can hire because there is no space. The cherry on the cake, as we say, are some of our extra features such as a great ratio of parking spots, we have our own district cooling facility so that we can manage costs effectively.

What kind of businesses does DWC look to work with? Within the Business Park, we have companies working within a diverse range of industry sectors, and they all vary in size. Right from a single shared desk to a 15000 m2 space, we have a raft of office options to cater to a healthy mix of start-ups, SMEs and large corporations. We have over 2500 companies established at DWC, 60% of which we consider as SMEs. Some of them operate within our business centre, which offers services such as smart desk, smart offices, which are on a shared business or an exclusive basis – fully furnished. On the other hand, many of them are based in fully developed offices. As DWC, we look for businesses with a core specialisation in logistics and aviation related activities. Whenever we have companies within these verticals, we really try our best to support them. We assist them with their initial set up and guide them to the right authorities to get their paperwork approved. In addition, we have a lot of traders because of the sea port and airport access, and we encourage them because we want them to make use of the logistics infrastructure we offer. This in turn adds value to our airport. As

you may already know, in 2013, all cargo operations moved to Al Maktoum International Airport. For an SME looking to start a trading company or begin trading operations, DWC has access to all entities within the ecosystem that they would need to collaborate with in order to get started. With our swift business facilitation, business owners can focus on the commercial side of their business.

How do you support and retain businesses that are growing from small to medium and medium to enterprise levels? We have been successful in retaining the companies that we work with – a large percentage of them have either renewed their contract with us or upgraded to a bigger office. We are cost-effective and try to minimise the cost of relocation or expansion. I believe that companies that work

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MOVERS & shakers

need for a residential community, retail developers and so on. We are slowly evolving into a self-sustained, futuristic city!

What kind of partnerships do you have in place that help you improve your overall offer?

with us understand DWC’s growth strategy and have a long-term vision, essentially they are growing with us. The expectation is that by 2020, more than 50 per cent of the GDP of Dubai will be generated within DWC. This is a major shift in where the heart of the city lies and companies that operate within DWC have identified this potential. Of course, not to forget that we are a relatively young freezone, which enables us to be agile, flexible and innovative.

How is DWC aligned with the Dubai Vision 2021? We see ourselves being completely aligned with the 2021 strategy. This strategy is focused mainly on ‘people’ and this is where our urban destination concept comes into play. We don’t just focus on the business side of things but also take into account all the human factors surrounding it such as the

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As a freezone, we work very closely with several leading governmental authorities of Dubai such as Department of Economic Development, Dubai FDI and Dubai SME. We have strong associations with most of the trade embassies in the region, which enables us to facilitate trade and expansion. If there are any trade enquiries, we forward them to the relevant companies within the Business Park. We also host a lot of events, which are great networking opportunities for the companies operating here. Through these events, we try to connect SMEs with their larger counterparts so that they can build supplier relations. We are relatively young freezone, which enables us to be agile, flexible and innovative.

What are some of the major initiatives you have in the pipeline? Speaking of the Business Park, we have already started planning the development of new buildings. We have recently launched a full-fledged new retail strategy, where we are inviting qualified retailers of any size. In addition, we have introduced a new size of offices – especially to meet the needs of SMEs. We’ve reduced the size of our smallest office space available, which helps them be more cost effective and just move in and start running operations straight away.

Did you know? A multimodal logistics platform, DWC has direct access to the UAE’s main trans-emirates highways, the future Etihad Rail network, Al Maktoum International Airport and Jebel Ali Port, providing unmatched speed, connectivity and flexibility. Source: www.dwc.ae

What makes the freezone concept so appealing to this part of the world? The concept of a freezone varies from country to country. In many countries, the freezone concept is attractive due to the tax benefits it offers. However, since we don’t have tax in this part of the world, I think the primary reason that companies prefer to work with freezones is because of the 100 per cent ownership clause. Also, because it is easy to set up and cost effective. I think the stability of this region has also created a lot of confidence within foreign investors. Within DWC specifically, I think the freezone concept has helped incubate specific industries – logistics and aviation, in particular.

For an online version, please visit: www.smeadvisor.com/2015/05/ opportunities-unlimited/

MOVERS & shakers

Going for growth an exclusive with Verne Harnish

At critical points in the life of an SME, business owners take time out to plan their strategy for growth. It can be in the form of injection of finance, recruitment of better quality staff or entering new markets. The reality, however, is that whichever catalyst is the driver for a company’s growth, it brings its own challenges. How can an SME prepare itself for the roadblocks and create a solid template for growth? Renowned growth expert, executive coach and entrepreneur Verne Harnish shares compelling insights…

How would you define business growth?

A Gazelle is defined as any company growing at least 20 per cent per year for four years in a row – or roughly doubling every three to four years. However, growth isn’t just about top line revenue growth – it is growth in terms of learning; growth in terms of profit; growth in terms of changing strategic direction. It is “grow or die” in the broader sense.

What are key factors that contribute to the fast-paced growth of a business? There are four key decision areas you must get right – and there are right and wrong answers – People, Strategy, Execution and Cash. If you are able to attract the right customers, employees, advisors (relationships), etc.; design an industry dominating strategy; drive flawless execution; and generate/ attract enough cash, you can scaleup more rapidly.

What lessons can be learnt from John D. Rockefeller’s era and why do you see him as an inspiration for today’s businesses?

Rockefeller was first and foremost highly disciplined – one of the most important traits of a successful business leader as well as a company. He also understood the importance of controlling the chokepoint of an industry – in 44

his case it was the transportation of oil. He embraced the power of frequent communication, right from the leading edge telegraph system he deployed to his daily luncheons with his brain trust. The beauty was that he combined all this to create a highly successful company, which still is one of the top five largest market cap companies in the world, while amassing wealth unrivalled even today.

It can be hard for businesses to keep culture consistent as they scale up. How can they deal with this? This would be through frequently shared stories (legends) and recognition aligned with the core values of the organisation. The most effective way to connect with and teach large numbers of people has always been through storytelling, which is what powers the music and movie industries – two powerful drivers of culture in general.

Tell us about the “one-page strategic business plan” method. How can this help businesses?

As the company scales, it becomes increasingly more difficult to keep everyone aligned. The first step is having the page! So we created a one-page form that helps a company summarise its vision – from the core values to the quarterly theme and everything else in between. To date, over 40,000 firms around the world are using this simple tool to summarise and communicate their strategic plans.

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Verne Harnish

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A Gazelle is defined as any company growing at least 20 per cent per year for four years in a row â&#x20AC;&#x201C; or roughly doubling every three to four years. 45

MOVERS & shakers

Get customers to fund the growth of your business instead of an angel investor or professional investors.

Why did you select the ‘Gazelle’ analogy as a way of describing elite growth SMEs, and as the title of the business? This is a term MIT professor David Birch used to describe this group of fast growth firms, in contrast to the mice (small businesses that never scale) and elephants, the slow moving behemoth companies represented by the FORTUNE 500.

If you had three ‘top tips’ for SME owners, what would they be? • Get customers to fund the growth of your business instead of an angel investor or professional investors/ banks. John Mullins has written an excellent book entitled the Customer Funded Business. It’s a lot less stressful and you’ll be able to better control your own destiny. • Determine the word or two you want to own in the minds of your market – this is the key to successful branding e.g. when my wife and I had our first child 18 years ago, we wanted the “safest” automobile – so we purchased a Volvo. This is the most important real estate you need to own – a small sliver of your targeted customers’ mind share. • Act on the idea that your people (customers, employees, shareholders, etc.) will only care for your business if they first feel like you care for them.

What are the biggest challenges that hinder growth for SMEs in the UAE? It would be best to ask our local partners in the UAE. We have over 46

180 coaching partners on six continents precisely because they are more familiar with the unique challenges facing firms in their marketplace – and there are differences depending on the region. In general, the top three challenges are: • Leadership development – developing leadership talent fast enough to keep up with the growth of the firm • Scalable infrastructure – putting the processes and systems to keep everything running smoothly • Marketing effectiveness – being able to attract the right people, customers, investors, advisors, etc. to fuel growth

Of the four key decisions the Gazelles approach includes People, Strategy, Execution and Cash. Which one do SMEs in the Middle East mostly falter with? In our latest survey in the Middle East, the biggest challenge is on the people side of the business – how to attract, train, and retain sufficient talent to scale-up the business.

Finally, tell us a little about your event in Dubai. What are key messages you hope to share at the event? It’s a one-day workshop (and you’ll do some work), where we share a set of tools and techniques, tens of thousands of used, to handle the chaos that comes with scaling up a business. The focus is on reducing by 80 per cent the time it takes to manage the firm so there’s more time for market-facing activities. Moreover, these tools help you better enjoy the climb as you grow the company. For an online version, please visit: www.smeadvisor.com/2015/05/goingfor-growth/

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Presenting partner

strategic SME partner

Presenting partner

ISSUE 104

ISSUE 106

Kcal’S PrOSPectuS

StarS Of BuSIneSS

Close-up oN A teMplAte for Growth

ISSUE 107

strategic SME partner

Be iN it to wiN it – Apply Now!

the Age of the sMe

strategic SME partner

Hire, don’t fire!

At your service

Welcome to sme beyond borders

Well, maybe.. master customer service essentials

IPO?

Meet the experts: NAsDAQ AND GrANt thorNtoN

Aiming high in the new YeAr with the white house's LAURA SCHWARTZ

THE ART OF

LEADERSHIP A meeting with HE Abdullah Al Darmaki, CEO, Khalifa Fund for Enterprise Development

Connectivity is king Digital solutions with Salvador Anglada, Chief Business Officer, Etisalat

M&As

StrategieS for getting the Staff you need

Street

life

the low-down on car fleet maintenance

the end of the beginning?

2015 JuSt a number or the year you make a difference?

SME Advisor – a champion of the SME sector – has built its peerless reputation on the ability to get in front of SME decision makers, speaking frankly and directly to the movers and shakers of the industry. Providing a trustworthy conduit that’s evolved for nearly a decade and creating one of the region’s best-known ‘how to’ blueprints for everyone looking to build a prosperous SME agenda. In 2015, the publication brings together diverse media and integrates different formats into a seamless mix – events, online and hard copy. Will you be part of this exciting journey?

SUBSCRIBE NOW! www.smeadvisor.com ADVERTISING & SPONSORSHIP Gill Fairclough Tel: 04 440 9120 gill.fairclough@cpimediagroup.com

EDITORIAL Rushika Bhatia

Tel: 04 440 9115 rushika.bhatia@cpimediagroup.com

SUBSCRIPTIONS Rajeesh Melath

Tel: 04 440 9142 rajeesh.nair@cpimediagroup.com

MOVERS & shakers

Allan Nielsen

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MOVERS & shakers

The Power to Change

DUBAI IS HOME TO ONE OF SOCCER’S TOP FORMER STARS - ALLAN NIELSEN, WHOSE INSPIRATIONAL TEAM-PLAY AND EXTRAORDINARY CAREER FOCUS TOOK HIM TO THE HEIGHTS OF SUCCESS WITH LEGENDARY CLUBS LIKE BAYERN MUNICH AND TOTTENHAM HOTSPUR, AS WELL AS SEEING HIM MAKE HISTORY WITH NATIONAL TEAM DENMARK IN THE WORLD CUP. NOW, ALLAN HAS A NEW CAREER, AS ONE OF THE REGION’S ELITE, LEADING LIFE AND LEADERSHIP COACHES. IN AN EXCLUSIVE INTERVIEW WITH SME ADVISOR, HE SPOKE TO SENIOR EDITOR PAUL GODFREY ABOUT THE FACTORS THAT TOOK HIM TO THE TOP AND THE ASPIRATIONS THAT FUEL HIS QUEST FOR SUCCESS IN A NEW CAREER…

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MOVERS & shakers

The main role of a Life and Leadership Coach is helping you get from where you are, to where you want to be. Helping you in the process discover the answers you probably already have inside yourself.

Allan, what was the one over-riding factor that made you decide to be a Life and Leadership Coach?

The reality is, I realised that throughout my career, I had always been envisioning the key steps that I needed to follow in order to achieve my objectives. I was always asking questions like ‘what are the essential things I need to do in order to achieve this?’; or ‘how can I communicate with myself to ensure I’m properly focused?’ So in these ways, I’d actually always been a Life and Leadership Coach - my own one! A good example of this was how, when I was playing for Tottenham Hotspur, we reached the semifinals of the FA Cup. Everyone was wondering how we would get to the final - and then win. But for me, I thought through the entire process in my mind’s eye: what it would be like to hear the closing whistle, how it would feel to go up and collect the trophy? So I already felt very calm, natural and relaxed about the prospect of winning.

Successful people use professional Coaches for the same reason, that Athletes use Sport Coaches. They want someone to work with them, to encourage them, to help them move beyond limitations and create the rich and satisfying life they really want. In short - “THEY WANT TO STAY ON TOP OF THE GAME”. Classic objectives can include: • Get unstuck, climb out of your box • Create healthy habits • Have more fun • Unleash your creativity • Improve your relationships • Connect to your life purpose and your inner passions • Develop your leadership potential • Identify and reach your goals

What do you miss most about your life as a professional footballer? I look back at those days with pleasure and pride. I can’t say that I miss them, though. I wanted to finish at the peak of my career - which indeed I did. Now I want to be at the peak all the time.

How do you define the role of a Life and Leadership coach?

What is the single most important element in Motivation?

The main role of a Life and Leadership Coach is helping you get from where you are, to where you want to be. Helping you in the process discover the answers you probably already have inside yourself. A Life and Leadership Coach finds the roots of a person’s purpose and then uses them as the catalyst for progress and the achievement of defined goals.

The key factor in motivation is progress. When there are concrete signs of progress, there is every reason to keep going to meet and exceed your goals.

Why did you decide to set up your own business - and here in the UAE?

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MOVERS & shakers

When you do it alone, the constraints are your biggest challenge. You don’t have the resources of a large organisation to buffer your decisions or give you a supportive infrastructure.

I always had the passion for coaching. The passion for asking questions about motivation and personal success. I see people achieving a lot, but do they have control? Do they have anybody to give them an honest answer? It was natural for me to take this passion and turn it into the core element of a business. Also, as a professional footballer, I had experienced very sophisticated coaching techniques and I knew how they could be applied to an individual’s objectives - and the difference that they could make. The reason for my relocating here in the UAE (from my home base in Denmark) is because my wife is a professional showjumper, and here in the UAE she is ranked as the No.1 in her sport. This is a very vibrant culture for showjumping and allows her to develop important and fulfilling new dimensions in her career.

Doesn’t being an SME owner contradict your background in teamwork? Yes, it is contradictory! I’m used to having a team around me. But, my client is my team-maker.

How do you plan to grow your Life and Leadership Coach business? There are three key factors here • Firstly, I will grow the business through applying the powerful lessons of teamwork and dedication. • Then, through understanding how to deliver one’s absolute best every single day. How to have the highest standards as part of your daily routine. • Knowing that the success of the

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business actually mirrors what is going on inside you; and that you and you alone are master of the growth process.

What do you see as the main challenges when you set up on your own? When you do it alone, the constraints are your biggest challenge. You don’t have the resources of a large organisation to buffer your decisions or give you a supportive infrastructure. But the advantage is the control factor: the business is actually what you make of it - no more and no less. Also, during these growth stages, you have the opportunity to set the Quality standards of the business and do things to the highest standards that you would expect of yourself.

What is your definition of success - and what was your greatest success? I believe there isn’t any one overall, universal definition of success. You see, I can’t say what success is for you. I can only say what it is for me. In my case, it’s winning the FA Cup with Tottenham in 1999. I mentioned in the anecdote above how, right from the semi-final, I was completely focused on winning - and I can’t tell you how powerful that experience really was when it came true!

For an online version, please visit: www.smeadvisor.com/2015/05/thepower-of-change/

THE NEXT LEVEL

The â&#x20AC;&#x2DC;Uberâ&#x20AC;&#x2122; effect on SMEs The app-based ridesharing service Uber has become a frontrunner in the global on-demand economy, spearheading innovation, digital disruption and operational excellence. Dr. Ashraf Mahate, Head of Exports Intelligence, Dubai Exports, explores the appeal of the on-demand economy and shares critical lessons that growth-stage SMEs can learn from this start-up phenomenon.

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the next level

The on-demand economy is set to permanently change the manner in which business operations are carried out.

In a short space of time Uber has become a global success story that has changed the manner in which individuals use private hire cars. Essentially Uber is a mobile application that allows consumers to submit a travel request which is then directed to its database of registered drivers working on self-employed basis. The Uber service was launched in 2010 and is now available in over 55 countries and in more than 200 cities. In five years Uber has gone through a growth cycle that many successful companies take several decades to complete. Today, Uber has transitioned from a technology start-up company to a cultural phenomenon. Uber’s success is down to what its CEO Travis Kalanick states as the company’s primary goal: make the service not only more attractive than its competition but the cheapest in the market. Online studies show that Uber is typically 20 per cent cheaper than taxis or private hire cars. It’s not only the price difference that is motivating consumers to use Uber but also the ability for them to write reviews on drivers and to select those that best meet their needs. Uber gives consumers the power to choose the

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type of car and driver they want unlike usual taxi companies. The success of Uber lies in its ability to source a very large number of contract staff that are available at a fairly short notice and are accessible on a smartphone. The Uber model, or on-demand economy as it is more formally known, works because it allows companies to recruit people only when there is work for them. As such it avoids the need to offer full-time jobs with substantial benefits. Instead, companies hire staff as and when they need them either on an hourly or task based method. At the same time the ondemand economy allows individuals to offer their services as and when they wish whether to fit in with their responsibilities at home or to supplement their income. The growth of the on-demand economy has been so large that it is no longer limited to just taxi drivers but covers every aspect of business activity from chasing accounts receivables to delivering packages to customs. The growth of the on-demand economy is assisted by technological advancements that allow consumers, technology platforms such as Uber and suppliers of services to be connected seamlessly. Moreover, there is now considerable interest from investors and it is predicted that between 2015 and 2020 about US$30 billion will be invested in on-demand businesses. Finally, consumers are now more willing to try alternative modes of purchasing their supplies. This is also true for corporates who are under pressure to deliver a high quality service or product at the lowest possible price. Together these factors are totally changing the manner in which transactions are carried out. The on-demand economy is set to permanently change the manner in which business operations are carried out. The ability to share resources implies that a business can have access to a huge talent pool to meet constantly changing business conditions. This gives the business

complete control over how they produce their goods and services with the ability to increase, reduce or even stop production at any point. The business can gain access to specialist skills that it could not otherwise afford. Also, the company only needs to pay for what it needs or uses, thus improving the bottom line. Also, the company can focus on its core activities and outsource the rest. The emphasis of the on-demand economy is not ownership of assets but access them at will. So, what are lessons learnt from the ‘Uber’ model? It is predicted that between 2015 and 2020 US$335 billion will be spent globally through the on-demand channel both by businesses and consumers. With such a huge market potential, SMEs cannot afford to ignore this industry and need to understand how they can capitalise on it in a strategic and effective manner. SMEs need to appreciate that the old mantra of delivering a good or service cheaper, faster or better than its competitors still holds. Therefore, competitiveness of a company comes down to the speed with which they can bring new products onto the market place or the cost-saving improvements they can make. This in turn is dependent on the speed to which they can realise the benefits of an ondemand economy and how it can be converted into products or services to be delivered in the marketplace. This does not necessarily imply that the firm needs to achieve scientific and technological breakthroughs but the ability to generate a financial return from new ways of doing things. With such a large set of advantages the question that arises is why many SMEs do not participate in the ondemand economy? Anecdotal evidence suggests that SMEs are hindered by three key factors when it comes to change. First, change is about realising that a particular opportunity exists which can be exploited. Second, SMEs tend not have the appropriate

THE NEXT LEVEL

information in order to make effective decisions. Third, and perhaps the most important, is that SMEs tend to suffer from change inertia – the reluctance to make change. This is because by and large SMEs tend to be risk averse organisations that do not wish to take a chance on change in the fear that it will be a failure. Not adapting the firm to external factors may itself be the failure of the firm. The on-demand economy is changing the manner in which conventional business is carried out. Businesses failing to adapt risk getting left behind. This is more so the case where companies are exporting their products or services to foreign markets and competing with low cost producers. Therefore, it is important for SMEs to examine their range of operations to identify areas that are perhaps non-core and can be carried out better and cheaper the ondemand economy. Be wary of the risks Although, the on-demand economy may bring about benefits the SME may actually face some risks the most common of which are as follows:

• Security/confidentiality of information By definition, all information is sensitive by nature and needs to be stored and transmitted in a secure manner. This is by far the most important concern that client companies tend to have, especially as any breach may lead to misuse. Associated with this is the aspect of confidentiality. Any SME seeking to outsource any part of its activities needs to have appropriate controls in place to ensure that client confidentiality is maintained along with security. • Quality of work In theory a company specialising in one aspect or activity should have a very high quality of output. However, the reality is not always the same as the theory. Client

companies tend to fear that any error or low quality output will impact on their own reputation. The usual manner is to create an internal quality control system along with regular staff training to ensure that the output meets the requirements of the client company.

• Control Some companies may fear that they do not have control over the outsourced employees. Of course the real concern is that internal staff may work weekends or holidays to meet deadlines but the same level of commitment may not exist for overseas staff. • Additional costs In some cases there may be additional costs involved such as field trips that might add to the overall cost. • Flexibility Accounting work like most sectors, is both seasonal to some extent and definitely cyclical implying that the client company would need considerable flexibility. With technological advancement the on-demand economy can only get larger and incorporate a greater areas of activities. Like most technological innovations it’s difficult to say what the eventual picture of the on-demand economy will be in the future. However, what is certain is that it will disrupt the conventional norms of doing business and the SMEs that don’t change will lose out on a new and perhaps more profitable way of doing business.

Meet the author...

Dr. Mahate received his doctorate from Cass City University Business School in London (UK). He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified Anti-Money Laundering Specialists (ACAMS). He can be reached at ashraf.mahate@ dedc.gov.ae.

For an online version, please visit: www.smeadvisor.com/2015/05/theuber-effect-on-smes/

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NEW FRONTIERS: OMAN

Groundbreaking

success The Dynamics of Entrepreneurship conference makes waves in the Omani SME space Industry leaders and key players gather to witness trailblazing discussions about the future of SMEs.

Highlights from the event...

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NEW FRONTIERS: OMAN

Under the patronage of His Excellency Dr. Rasheed Bin Al Safi Al Huraibi, Chairman of Tender Board of Oman

OMAN CHAPTER

Oman’s biggest ever initiative dedicated to the thriving SME sector – The Dynamics of Entrepreneurship conference, was held in the presence a host of industry leading speakers from the Sultanate’s SME and a vibrant mix of sessions. Held under the patronage of HE Dr. Rasheed Bin Al Safi Al Huraibi, Chairman of Tender Board of Oman, this unique and very informative one-day conference was hosted by the National Bank of Abu Dhabi (NBAD) in association with CPI Media Group, and took place at the prestigious Al Bustan Palace, Ritz Carlton Hotel in Muscat. Aimed at addressing the importance of the SME community in Oman, the thought-provoking presentations and panel discussions brought by private and public sector leaders deliberated the key issues faced by entrepreneurs and SMEs in Oman.

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With over 200 SME players in attendance, The Dynamics of Entrepreneurship featured compelling insights from wellknown figures in the Sultanate’s SME scene such as Sulaiman Al Rashidy from the Tender Board of Oman; Sheikh Shabib Al Maamari, Executive Director of Injaz Oman; Nader Al Rawahy, Director for Accounts Business Development for the Government & Public Sector at EY; Shatha Maskiry, Managing Director at Protiviti Global; and Rym Aoudia, President of Knowledge Oman, among others. Game-changing conclusions During the course of the event, the powerful speeches and discussion reflected three crucial factors affecting the SME community in Oman. First is the issue of job security, which underlined that although honing entrepreneurs

NEW FRONTIERS: OMAN

can significantly develop the SME sectors, the creation of solid and reliable jobs within the SME space is just as important. Second, the emphasis on creating a spirit of open competition. Which entails inspiring businesses to contend with each other and through

this motivate them to build a true local brand that can enable them to compete at a regional and even international scale. Lastly, the fact that although SMEs make up 65 per cent of businesses in Oman, they only contribute 15 percent to the Sultanateâ&#x20AC;&#x2122;s GDP, a

factor that needs to be addressed and changed significantly in the next seven to eight years. However, it has also been raised that at the moment private sector players are still doubtful if they are indeed equipped with the right tools and skills to make this quantum leap.

A landmark partnership The epic day was also the setting for the announcement of the exclusive partnership between CPI Media Group and PWC for the CPI-PWC Insight Series, which entails the collaboration of the two parties in producing world-class reports that will benefit the SME community in the region. Further into this, Harendra Kailath, Director, Family Business Practice at PWC presented the results of the PWC 2015 Family Business Survey, a report that was exclusively released at the conference.

Dominic De Sousa, Chairman, CPI Media Group signs the agreement with Harendra Kailath, Director, Family Business Practice, PWC

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Under the patronage of His Excellency Dr. Ali Bin Masoud Al Sunaidi, Minister of Commerce and Industry

STARS OF BUSINESS OMAN CHAPTER

// AWARDS CEREMONY

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NEW FRONTIERS: OMAN

The prestigious winners

Top achievers acclaimed at Oman’s biggest SME gala

Stars of Business Awards – the iconic awards brand – recognised the exceptional performance of SMEs across 11 key categories.

Under the patronage of His Excellency Dr. Ali Bin Masoud Al Sunaidi, Minister of Commerce and Industry, National Bank of Abu Dhabi (NBAD), in collaboration SME Advisor Middle East – CPI Media Group’s flagship publication, organised the ‘Stars of Business Awards’, which

celebrated and honoured top-notch performers of the Omani SME industry. Held in the stunning setting of Al Bustan Palace, Ritz Carlton Hotel, Muscat, on the evening of April 30, the event was graced with the presence of VIP government

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NEW FRONTIERS: OMAN

dignitaries, senior representatives from the public and private sectors as well as C-suite executives. A night of shining stars The sparkling occasion began with welcome remarks by Mohammed Bin Ali Ba Omar, CCEO of NBAD, who set the tone for the evening with his insightful introduction. This was followed by a keynote welcome by Dominic De Sousa, Chairman and Founder of CPI Media Group. The glittering agenda then moved on to the moment everyone was waiting for â&#x20AC;&#x201C; the announcement of the winners. SMEs were recognised for their exemplary performance across 11 key categories, with the following emerging as the merited winners â&#x20AC;&#x201C;

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NEW FRONTIERS: OMAN

Unveiling the winners Best SME – Tourism Khalid Al Suwaid Enterprises Best Oman New Business Etqan Design Best SME – Healthcare Blessing Healthcare Center Excellence in Trade Sea Pride LLC Oman Star of Transport and Distribution Allied Logistics LLC Best Infrastructure provider/supplier Energy Engineering and Investment LLC Best Public/Private Sector SME partner Abu Yasseen Trading and Marketing LLC NBAD Star of Manufacturing – Gold Abu Yasseen Trading and Marketing LLC NBAD Star of Manufacturing – Silver National Barka Omani Entrepreneur of the Year Mohammed Ambusaidi, Etqan Design Admirable Woman Entrepreneur of the Year Sharifa Al Barami, Al Jazeera Global Services and Investments

Two special awards were also granted for notable contributions towards the Omani SME sector. These were –

Our prestigious partners Stars of Business Awards – Oman was supported by some of the leading players in the SME arena including Presenting Partner NBAD, Technology Partner SAP, Gold Partner Knowledge Oman and Knowledge Partner Protiviti Global.

Special Recognition Award Ghada Al Yousef CPI Lifetime Achievement Award Dhofar Global connecting communities with knowledge

The awards ceremony was followed by a sumptuous dinner buffet with networking and light entertainment.

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presents

BUSINESS INTELLIGENCE FOR INTERNATIONAL TRADE www.tradeandexportme.com

Contents

66 ADVISORY BOARD Key personalities sharing their expertise to ensure that we bring you the latest trends and issues in the field of trade. Trade & Growth 68 Grasping opportunities of the Middle East-Latin America Trade Corridor. We present a strategic overview of this commercial highway. Country focus: Oman 72 Driving growth – Omran’s developmental projects. Eng Wael Al Lawati, CEO, Omran assesses the evolving landscape…

Latin American countries are keen to attract capital from the Middle East to fund infrastructure projects to help fuel and expand their trading capabilities. p68

TRADE AND EXPORT MIDDLE EAST

Notable development opportunities with Omran include the landmark Oman Convention and Exhibition Centre (OCEC) which is scheduled for opening in 2017. p72

Legal 76 Legal update: Abu Dhabi Global Market. Experts from Clyde & Co. discuss key issues and highlight critical points. Event preview 80 The ArabNet Digital Summit 2015. Trade and Export ME brings you exclusive insightsâ&#x20AC;Ś Event review 82 The Future of Work Middle East Summit. We explore the recommendations put forward at this landmark event.

TRADE and export middle east

ADVISORY BOARD Trade and Export Middle East presents a dynamic group of industry experts and leaders as part of its Advisory Board. The following key personalities will help add value to our analysis and ensure that we bring you the latest trends and issues in the field of trade.

H.E Saed Al Awadi CEO, Dubai Exports, Department of Economic Development, Dubai

Dr. Adeeb AlAfeefi Director, Foreign Trade & Export Support International Economic Relations Sector, Department of Economic Development, Abu Dhabi

Khalil Saqer Bin Gharib Corporate Communications Director, Dubai Customs

Lakshmanan Sankaran Chairman, Regional Banking Commission (MENA)- ICC Paris

Moin Anwar Trade & Investment Commissioner (Middle East), New South Wales Government, Australia

Ramy Jallad Acting CEO, Ras Al Khaimah Free Trade Zone

For more information, please visit www.tradeandexportme.com

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TRADE & GROWTH

Grasping the opportunities of the Middle East-Latin America trade corridor Economic relations between the Middle East and Latin America have expanded considerably in recent years as both look to diversify their trading partners and leverage the plethora of so-far untapped opportunities. Bana Akkad Azhari and Cristiane Gomes, BNY Mellon Treasury Services’ Heads of Relationship Management for MENA and South America respectively, explore the potential of this new trading corridor...

Key statistic! As the emerging markets continue to expand their share of international trade, the world is witnessing a recalibration of economic influence and the deepening of global economic integration. The phenomenal growth of the developing markets is creating a multitude of new trading corridors – a trend further-propelled by the comparatively lacklustre growth seen in many developed, more “traditional” trading partners (such as Europe and the US) in the wake of the financial crisis.

This is presenting myriad global opportunities to diversify trading and investment partners – and many emerging markets have prioritised the exploration of new inter- and intra-regional trading relationships to further stimulate their growth. While economic supergiant China has captured the lion’s share of global headlines in this respect, there is a notable burgeoning relationship between the Middle East and Latin America (alongside the Caribbean, together known as “LAC”) that must not be overlooked. Certainly, trade between the two regions has surged in recent years, almost tripling from $11 billion to $30 billion between 2008 and 2012. While these figures may appear modest compared with those of both regions’ trade with long-established partners (Middle East exports to Asia totalled over $700 billion in 2013, for example), the strong level of growth illustrates

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TRADE & GROWTH

an increased appreciation and willingness to explore the potential value that such partnerships can present. And with Latin America’s middle class estimated to grow by over 50 per cent in the next decade – accompanied by the Middle East’s rapidly expanding, youthful population and dynamic growth – likely to create a consumer boom, demand and reliance upon this mutually-beneficial relationship is only expected to increase.

Latin American countries are keen to attract capital from the Middle East to fund infrastructure projects to help fuel and expand their trading capabilities.

Complimentary needs Certainly, the Middle East-LAC relationship has plenty to offer in terms of reciprocity. For instance, the Middle East’s arid climate means some countries import up to 90 per cent of their food. In contrast, Brazil’s abundance of sunshine and regular rainfall creates rich, fertile soil that yields crops all year round. With Brazil’s agribusiness industry modern and proficient, with no export

restrictions on commodities, and Latin America actively pursuing engagement with new trading partners, Brazil – and the LAC region as a whole – is catching the Middle East’s attention from both a trading and an investment perspective, as businesses seek to secure access to raw materials and

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food products through exports and direct ownership of agricultural land. Indeed, with its population estimated to grow by a third between 2010 and 2030, the Middle East has a vested interest in investing in foreign agriculture for food security, and Latin America’s untapped potential is fuelling investor appetite. For example, Almarai, the Gulf’s largest dairy company, has acquired Argentinian company Fondomonte, and Qatar’s Al Gharrafa Investment has increased its stake in Adecoagro, a South American agricultural company. In turn, Latin American countries are keen to attract capital from the Middle East to fund infrastructure projects to help fuel and expand their trading capabilities. Brazil in particular has actively sought opportunities to strengthen its relationship with the Middle East. Indeed, through understanding and mindfulness

TRADE & GROWTH

High-level political figures are paying frequent visits to countries across the respective regions to highlight opportunities for growth. Bana Akkad Azhari, Head of Sales & Relationship Management MENA, Treasury Services EMEA, BNY Mellon

Cristiane Gomes, Head of Sales & Relationship Management South America Treasury Services, BNY Mellon

of its counterparty’s needs, it has become one of the Middle East’s largest meat providers by supplying beef and poultry slaughtered in accordance with halal requirements. Furthermore, a number of Latin American countries are leveraging this position by opening certification agencies able to provide Arabic labelling. The increasing trade flows between the regions certainly aren’t all one-way. UAE exports to Peru grew by nearly a third in 2011, while its exports to Brazil almost doubled from $309 million to $610 million between 2012 and 2013. In fact, the Middle East region as a whole significantly increased its exports to Brazil to reach a high of nearly $11.4 billion in 2013. These exports were predominantly from Saudi Arabia, Algeria, Morocco and Kuwait (each of which exported over $1 billion of goods to Brazil). It is important to note that while these products largely consisted of oil, mineral fuel and fertilisers, there was a significant increase in plastics, ships and boats (according to the ABCC), indicating a growing level of diversity in Middle Eastern exports. Strengthening bonds With countries across both regions recognising the mutual benefits of this inter-regional partnership, strategic efforts are being made to strengthen relations and bilateral cooperation; including exploring foreign direct investment opportunities, entering free trade agreements (FTAs) and promoting greater awareness of untapped benefits. Turkey entered into its first Americas FTA with Chile in 2011, and is now exploring FTA possibilities with Colombia, Ecuador, Mexico, Peru and various Central American countries. This should help Turkey achieve greater market diversification and reduce

its dependency on the West; a clear demonstration that the country recognises the value of strengthening its relations with Latin America. High-level political figures are paying frequent visits to countries across the respective regions to highlight opportunities for growth. For example, Lebanon’s foreign minister signed an FTA in Argentina with the Mercosur trading bloc (which includes countries such as Argentina, Brazil and Venezuela) in December 2014, before signing an agreement to help drive collaboration between Lebanon and Cuba, and visiting Mexico to promote economic ties. Furthermore, the introduction of new, direct flying routes between some of the regions’ major cities (such as Dubai and Doha to São Paulo, Rio de Janeiro and Buenos Aires) in 2007 has resulted in air traffic increasing by 70 per cent (according to the International Air Transport Association), demonstrating – and fuelling – the growing business activity between the Middle East and LAC. Evolving needs If local businesses across the Middle East and Latin America are to leverage the array of opportunities being presented by this largelyunexplored trade corridor, they must be able to access effective trade processing solutions that give them the confidence to form relationships with new counterparties. Certainly, processing instruments that offer reliable risk mitigation properties are particularly preferable in such circumstances, as unfamiliarity with both trading partners and foreign markets can, of course, increase the element of risk. The Middle East has long been – and remains – a strong advocate for the stalwart letter of credit (LC), which has been relied upon for decades for its unrivalled risk mitigation properties. Indeed, with respectable margins in addition to

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TRADE & GROWTH

Technology, of course, is only one aspect of banks’ offerings, and an equally important element for corporate clients undertaking trade in unfamiliar countries is local market expertise.

providing high levels of security, LCs offer a credible risk/reward balance and remain the trade processing method of choice in this traditionally conservative region. That said, while LCs have long been appreciated for the level of security they provide, technological innovation has fuelled modern demand for speed and convenience, meaning that paper-based LCs are beginning to be viewed by some as less than optimal. Consequently, there is an increasing global trend for open account trade – a growing pattern in LAC countries such as Brazil, Uruguay, Peru and Colombia. As mentioned, however, security is paramount when conducting trade with new counterparties, and with open account alone offering little in the way of risk mitigation, it is still not the ideal method for companies looking to tread the Middle East-LAC trade corridor. Meeting the scope of client needs The most effective trade processing solutions are therefore those that can address the full scope of today’s client needs; combining the strong levels of risk mitigation and reliability found in LCs with the speed and flexibility of open account trade. Yet investment into such capabilities could prove challenging for many local banks – particularly given current compliance pressures that are adding to costs and diverting investment focus away from innovation. But with the budding Middle East-LAC relationship only set to grow, it is vital that local banks have the tools needed to facilitate these opportunities. Collaboration between local banks and specialist global trade services providers (on a non-compete basis) is the answer; marrying advanced technological capabilities and international reach with regionspecific knowledge and in-depth understanding of local client needs. Through such partnerships, local banks can offer solutions to help end-clients thrive in this increasingly

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cross-border, increasingly efficient, world of trade – without the need for significant proprietary investment into product or platform development. One capability such a partnership can offer is automatic electronic datamatching, which receives and verifies original LC documentation online (as well as being able to receive open account documentation and other trade documents). Not only does this form of electronic processing significantly improve efficiency, it also consigns the risks of manual processing to the past, enhances transparency and lowers transaction costs – whilst continuing to providing the all-important security properties of the LC. Technology, of course, is only one aspect of banks’ offerings, and an equally important element for corporate clients undertaking trade in unfamiliar countries is local market expertise – the understanding of country-specific rules and regulatory requirements, and an insight into local nuances. Without such knowhow, effective cross-border trade would not be possible. It is here that local banks cannot be rivalled. It is through the fusion of technology and local knowledge, and the amalgamation of old and new processing requirements, that businesses will have the tools they need to successfully navigate new corridors such as the promising Middle East-LAC trading route.

The views expressed herein are those of the authors only and may not reflect the views of BNY Mellon. This does not constitute treasury services advice, or any other business or legal advice, and it should not be relied upon as such.

For an online version, please visit: www.smeadvisor.com/2015/05/graspingthe-opportunities/

COUNTRY FOCUS: OMAN

DRIVING GROWTH Omran’s

developmental projects Ranked as the world’s 32nd most competitive country by the World Economic Forum’s Global Competitive Report 20122013, Oman has attracted the attention of many multinational corporations. These impressive numbers outline a positive climate of growth in Oman particularly within the tourism sector. What are key factors shaping this sector and how will your business benefit? In the following feature, Eng Wael Al Lawati, CEO, Omran assesses the evolving landscape…

The Sultanate of Oman witnessed a 23.8 per cent growth in visitor numbers over the last five years, reaching 1.9 million visitors in 2013. During the same period, the number of new hotels in the Sultanate rose at a steady rate, with room numbers forecast to further increase by 23 per cent from 2014 to 2017. Tourism has a real power to change the world by providing opportunities for a better future for everyone it touches. Rapid growth in travel and tourism industry in Oman is even more significant given the impressive performance of the sector during the last few years, as well as the positive growth forecast for Oman by the World Travel & Tourism Council (WTTC). Building connections: Omran Omran’s role is to drive the investment, growth and development of the rapidly growing tourism sector. The establishment is the master developer of major tourism, heritage, urban and

mixed-use projects in Oman, delivering some of the nation’s most prestigious projects. Omran was established by a government mandate in 2005 as a state owned enterprise, in line with the vision to strengthen and diversify the economy, and we achieve this by growing the capacity, scope and potential of the tourism sector in Oman. Omran develops profitable, sustainable and distinctive assets and destinations that contribute to the economic growth of the Sultanate, and works closely with stakeholders and partners to develop sustainable projects that enable

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COUNTRY FOCUS: OMAN

Notable development opportunities with Omran include the landmark Oman Convention and Exhibition Centre (OCEC) which is scheduled for opening in 2017.

economic diversification. Oman’s cultural diversity, heritage, racial harmony and political stability make it an attractive tourist and investment destination. Omran identifies the country’s long-term investment appeal, especially with some of Oman’s most iconic and premiere developments in the pipeline. Notable development opportunities with Omran include the landmark Oman Convention and Exhibition Centre (OCEC) which is scheduled for opening in 2017. The mega-project aims to establish the Sultanate as a major regional venue of choice for regional and international events, trade shows

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and conferences. The OCEC complex will include four hotels, a business park, retail shopping areas and residential districts, surrounded by a nature reserve which will be a haven for Oman’s exotic birdlife. Parklands and Wadi (valley) parks are also part of this picturesque precinct. The construction of the OCEC project has been designed to ensure compliance to sustainability guidelines and LEED certification by the U.S. Green Building Council. Meanwhile, the newly announced Hay Al Irfan urban centre promises to be the largest urban development witnessed in Oman till date. Located in Muscat, the mixed-

use development will provide an exciting addition to the capital’s new lifestyle offering. The new urban centre will encompass business and residential zones, retail centres, hotels, tourist attractions and recreation and cultural facilities as well as schools and hospitals, while being conveniently located on a site extending over 7.4 million square metres with strategic links to the nearby Muscat International Airport and the Oman Exhibition and Convention Centre. The Master plan aspires to create a truly modern ‘future-proofed’ urban centre to cater for population growth and increased urbanisation trends. Launched to global acclaim in 2014, Alila Jabal Akhdar is the first luxury resort development in the stunning mountainous Jabal Akhdar region of Oman, set 2,000 metres above sea level and only two hours’ drive from Muscat. Overlooking a dramatic gorge and

COUNTRY FOCUS: OMAN

Encompassing numerous wildlife and marine preserves and observation zones, Ras Al-Hadd will be developed over four construction phases, and will ultimately include four premium hotels, nearly 900 residential villas, a market souq and a heritage village. Eng Wael Al Lawati, CEO, Omran

with views of the Hajar mountains, Alila Jabal Akhdar is perfectly positioned to explore the region’s renowned rugged landscapes; a haven for adventure travellers, nature lovers and those seeking an escape from the desert heat. Also during 2014, Omran proudly launched the Atana hospitality brand, representing quintessential Omani hospitality and generosity. Managed by Omran’s subsidiary, the National Omani Hospitality Company LLC, Atana operates two hotels in the northern tip of the Musandam peninsula; Atana Musandam and Atana Khasab. Omran directly owns ten hospitality properties within its Asset Management portfolio, as well as five joint ventures on additional developments. These joint ventures include the Jebel Sifah Integrated Tourism Complex (ITC), located 45 km south of Muscat and comprise 950 homes, four hotels including the Sifawy Boutique Hotel. The Salalah Beach ITC comprises 1150 high end luxury freehold apartments and villas, its own shopping and retail outlets and four hotels, while the Al Baleed Resort is set to become a key attraction of Al Baleed, the cradle of culture and trade in the Dhofar region of Oman. Meanwhile, Duqm Frontier Town is now in Phase Two of development and comprises residential units, shops and many other facilities in the fast developing Duqm Port town. In late 2014, a development agreement was signed with Qatari Diar which gave the go-ahead for development to commence on the eco-themed Ras Al-Hadd tourism project, located in South Al Sharqiyah Governorate of Oman, and covering a land area of approximately 1.848 million square metres. Encompassing numerous wildlife and marine preserves and observation zones, Ras Al-Hadd will be developed over four construction phases, and will ultimately include four premium hotels, nearly 900

residential villas, a market souq and a heritage village. Meanwhile, the crowning showpiece in ITC developments, the under construction Saraya - Bandar Jissah ITC located in Muscat- will offer luxurious residential villas, townhouses, and duplexes, as well as premiere hotels combined with unique features such as an archaeological heritage village and premium spa zone. With the first phase of residences and the operation of the hotels due to be handed over in 2017, the development includes two five star hotels operated by Jumeirah Group as well as 92 Townhouses, 84 Duplexes, 180 Villas and 84 Duplex Apartments. Omran has formed strategic partnerships with some of the world’s most renowned brands, and its investment team facilitates and adds value to the delivery of quality-driven projects to benefit its partners and the future growth of Oman. Omran develops partnerships and relationships that create solid foundations for the future economic diversification and prosperity of Oman, as well as providing outstanding longterm investment opportunities for private and public sector companies. The above article provided courtesy of Majlis, the official publication of the German Emirati Joint Council for Industry and Commerce (AHK)

For an online version, please visit: www.smeadvisor.com/2015/05/drivinggrowth-omrans-projects/

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Heartiest Congratulations! To the winners of the Asia Pacific Entrepreneurship Awards 2015, we applaud your excellence in responsible entrepreneurship emulating strong commitment, advocacy, integrity and leadership in the United Arab Emirates. Not only have you come to rise through your sheer entrepreneurial qualities, but also help raise others around you with your strong leadership backbones throughout your journey. Congratulations on being part of an elite group in the UAE to receive Asiaâ&#x20AC;&#x2122;s Most Prestigious Awards for Entrepreneurs.

RECIPIENTS OF THE ASIA PACIFIC ENTREPRENEURSHIP AWARDS 2015, UNITED ARAB EMIRATES

SPECIAL ACHIEVEMENT AWARD

OUTSTANDING CATEGORY (BY ALPHABETICAL ORDER OF COMPANY NAME)

Rizwan Sajan Danube Group

Nicole Rodrigues, Diva Group of Companies

Faisal Memon, Illusions Online

MOST PROMISING CATEGORY

Ved Chhabra, Inter Ocean Ship Repairs LLC

(BY ALPHABETICAL ORDER OF COMPANY NAME)

Nazeer Ahmad Zakaria, Naz Fashions LLC

Meera Kaul, Optimus Computer Trading LLC

Dr Sundar Menon, Sun Group International

Mahesh Shahdadpuri, TASC Outsourcing

Ramesh S. Ramakrishnan, Transworld Group

Nisreen Shocair, Virgin Megastore

Hemant Kambli, Dhofar Global Tr. Co. LLC

Khalid Basaeed, FEATHERS UAE

Mona Ataya, Mumzworld.com

Vishaal Shah, Panache International FZ LLC

Fatima Al Shirawi, The Gracious F

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LEGAL

Legal update: Abu Dhabi Global Market In January this year, the Board of Directors of the Abu Dhabi Global Market (ADGM) published initial drafts of various key regulations as part of a formal public consultation. Clyde & Co engaged with ADGM to discuss these regulations and submitted detailed comments on the regulations to the Board. In this article, we examine the draft companiesâ&#x20AC;&#x2122; regulations.

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LEGAL

The Regulations are largely based on the UK Companies Act 2006 (UK Act) and replicate many of its provisions. There are, however, several significant departures from the UK Act, which aim to remove various historic peculiarities of the UK Act, better cater to local and regional markets and business objectives and enhance flexibility. Overall, this approach provides a sensible framework. In particular, the absence of foreign ownership restrictions within ADGM should encourage business in and from ADGM on both a regional and global level. However, the interaction between the ADGM company law regime and the UAE onshore legal regime does need to be carefully analysed. For example, the ADGM does not have authority to create criminal laws and breach of the Regulations will instead result in fines – but what impact will an ADGM regulatory decision or fine have in relation to UAE federal criminal laws which may apply to the same conduct? Similarly, the Regulations include provisions on the ostensible authority of directors based on the UK Act – a concept that does not exist under UAE law. In practice, how will ADGM companies interact with entities onshore and will notaries be willing to notarise powers of attorney from ADGM companies for use in relation to certain onshore activities such as opening bank accounts and setting up LLCs and establishments? These issues will need to be addressed for ADGM to function seamlessly alongside the onshore regime. Comparison with DIFC Although similar in many respects to the Dubai International Financial Centre (DIFC), the proposed legal system in ADGM differs in several significant respects. In particular, the ADGM plans to adopt English common law directly rather than to take the relevant principles and codify them in the form of specific regulations as the DIFC has done

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In particular, the absence of foreign ownership restrictions within ADGM should encourage business in and from ADGM on both a regional and global level. Ross Barfoot, Partner at Clyde & Co

(eg DIFC Law 6 of 2004, Contract Law). In comparison with the DIFC Companies Law, the Regulations are much lengthier and more detailed. Some specific differences are highlighted below. The UK Act had not been implemented at the time that the DIFC Companies Law was written and the latter instead follows any of the principles set out in the now repealed UK Companies Act 1985. The DIFC therefore retains some concepts and concerns that were abolished or clarified in the UK in 2006. For example: • The prohibition on ‘financial assistance’ by both public and private companies remains in the DIFC. This was abolished in respect of private companies in the UK and the ADGM has taken the same approach • Following the English case of Aveling Barford v Perion (1989), there had been concerns and

LEGAL

Cell companies were initially designed for use in the captive insurance industry but are now used more widely, in particular in the investment funds business and also recently as vehicles to structure a series of distinct private equity or real estate transactions.

conflicting legal opinions in the UK as to whether a company could sell an asset to a fellow group company at a book value which was less than market value if the transferring company did not have distributable reserves equivalent to the difference. Section 845 of the UK Act (mirrored in section 773 of the Regulations) removed the doubts created by that case by clarifying how the amount of a distribution in kind is to be calculated Restricted Scope Companies In perhaps the most significant departure from the UK Act, the Regulations introduce a new class of private limited company, the ‘restricted scope company’ (RSC), subject to a reduced level of regulation and enhanced confidentiality. As currently drafted, an RSC must be a subsidiary of a group which publicly files accounts or of a company formed by Emiri decree. The Board proposes that RSCs will be used predominantly as ‘holding companies for professional investors’. It may encourage greater use of ADGM in this context if RSCs are not required to constitute subsidiaries, provided that the shareholders (whether individual or corporate) meet certain minimum net worth criteria and suitable safeguards against money laundering are in place. The Board is considering whether to extend the RSC regime to include the single family office (SFO) concept, a move which could provide useful flexibility in the region. Although the DIFC has an SFO regime, it does not have a general private holding company concept such as the RSC. The ability to establish such holding companies in ADGM may increase its attractiveness as a place through which to conduct business whether in the UAE or elsewhere.

Cell companies The Regulations provide for protected cell companies and incorporated cell companies. A cell company is a single legal entity, within which there are a series of pools of assets and liabilities (cells). The cells are legally segregated from each other and also from the company itself. Claims by those transacting with a particular cell can be brought only against that cell. In an ‘incorporated’ cell company each cell has a separate legal identity, which can provide better protection against ‘non-cellular’ claims. Cell companies were initially designed for use in the captive insurance industry but are now used more widely, in particular in the investment funds business and also recently as vehicles to structure a series of distinct private equity or real estate transactions. Cell companies are often established in ‘offshore’ jurisdictions such as Bermuda, Cayman and the BVI. The UK Act does not contain provisions for cell companies (although the concept is recognised in legislation relating to UK openended investment companies). The provisions in the Regulations are based on relevant Jersey law. The DIFC Companies Regulations contain provisions for protected cell companies but not incorporated cell companies. These provisions create a convenient framework for structuring investment products. However, as drafted, a cell company cannot also be an RSC. A cell company structure is potentially a useful format for an SFO i.e. one cell per portfolio company to segregate the potential liabilities arising from a series of family businesses. If the RSC concept is extended to cover SFOs it may therefore be helpful to permit an SFO to establish itself as a cell company subject to the RSC regime. Share capital In contrast to shares of UK companies, shares of ADGM companies will have no nominal/par

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LEGAL

value, thereby rendering the concept of ‘share premium’ redundant. The par value of a share bears no relation to its market value and the concept is somewhat archaic. The capital maintenance rules, aimed at creditor protection, have always applied to the total consideration payable on shares issued and not just the nominal price received. There therefore seems little point in retaining the concept. Nevertheless, the removal of a feature so long embedded in UK company law will undoubtedly have repercussions, both for the drafting of ADGM legislation and also for practitioners when drafting corporate documents. So, for example, preference share dividend rights are often drafted as a fixed rate per cent of the nominal value; any such rights in relation to an ADGM company would need to be framed instead as a fixed amount or as a percentage of the issue price. Shares in DIFC companies can be denominated in either par or no par value. Accounts and Audit AGDM companies must typically prepare their accounts in accordance with international accounting standards. Independent regulatory oversight and guidance, such as that provided by the Financial Reporting Council (FRC) in the UK, is a critical element in the reliable implementation of any accounting standards. The Board will in due course decide whether it wishes to establish a similar body in the ADGM. In the interim, it may be helpful if ADGM companies and their advisers are permitted to rely on FRC guidelines and practice statements. Certain private companies including ‘small companies’ benefit from exemptions in connection with the accounting and reporting requirements. Notably, RSCs are permitted to adopt the small companies’ regime regardless of their size and are not required to file accounts with the registrar. They are likewise exempt from audit. The audit

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exemption may not be appropriate to the extent the RSC regime is extended beyond subsidiaries consolidated into audited group accounts, eg to SFOs. Derivative claims In the UK, a shareholder holding just a single share has standing to bring a statutory derivative action (i.e. an action on behalf of the company against a director for e.g. breach of duty). Concerns about shareholder activism prompted an amendment to the equivalent provisions of the Regulations, such that only a member holding ‘five per cent or more of the share capital of the company’ may bring such a claim. This is a reasonable approach, although the drafting needs to be clarified to explain how (e.g. by reference to voting rights?) and at what stage(s) this percentage threshold is calculated. The DIFC Companies Law does not contain an equivalent provision permitting statutory derivative claims, although an action for ‘unfair prejudice’ is available to shareholders in similar terms to the provisions of both the UK Act and the Regulations. Corporate transactions Although not part of the UK Act, the Regulations include provisions for ‘continuance’ to allow companies to re-domicile both in and from ADGM. These are based on Jersey law. The DIFC also allows companies to transfer their incorporation both to and from the DIFC. Provisions from the UK Act on schemes of arrangement, mergers and divisions have been adopted, with the following key differences: • Schemes of ADGM companies require the approval of 75 per cent of voting rights but not a majority in number of shareholders. The majority in number requirement in the UK enables activist shareholders to split their holdings between affiliates to help block the requisite shareholder resolution. • Mergers will be available to private and not just public companies

• Mergers will not involve the transfer of assets and liabilities or the ‘dissolution’ of one or more of the merging companies. Instead, a ‘universal succession’ concept is adopted, under which the ‘merged company’ is absorbed or consolidated with another company into a successor or surviving company. This is in line with a number of other jurisdictions including Jersey and the BVI There are no provisions for schemes of arrangement or statutory mergers in the DIFC Companies Law. The Regulations do not contain the statutory ‘squeeze-out’ provisions in Part 28 of the UK Act which allow and require a bidder holding 90 per cent or more of the shares to acquire the remaining shares. The DIFC Companies Law contains similar provisions in Part 7 of Chapter 10. It is envisaged that separate Takeover Regulations will be issued by the Board in due course.

Further information If you would like further information on any issue raised in this update please contact: Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. www.clydeco.com

For an online version, please visit: www.smeadvisor.com/2015/05/legalupdate-adgm/

EVENT PREVIEW

The ArabNet Digital Summit 2015

The third edition of the much-awaited conference for digital start-ups and growthstage businesses is all set to take place from May 27- 28, 2015 at Atlantis the Palm, Dubai. The tech-focused event will convene in the presence of start-ups, business gurus, entrepreneurs, investors and key government officials. SME Advisor presents an exclusive preview…

ArabNet is the hub for Arab digital professionals and entrepreneurs, creating online and offline platforms for them to connect and learn. ArabNet’s vision is to grow the web and mobile sector in the Arab region; through its activities, it also aims to build business bridges across the MENA, stimulate the growth of the Arab knowledge economy and support the creation of new businesses and job opportunities for youth. Omar Christidis, CEO of ArabNet, said: “Today more than $400 million is available for startups in MENA, highlighting the increased availability and rising interest of Venture Capitalists (VCs) and Angel Investors in the capabilities and potential of local and regional businesses. As a result, digital businesses now have access to the much needed funding that will enable them to rapidly scale up, meet consumer demand and capitalise on the high potential of growing regional economies.” Christidis highlighted key trends in the opening up of funding for young businesses, stating that the region’s leading corporate ventures have increased their presence and involvement in start-ups over the past five years. “The most striking example is of Careem, a car booking service in the region, which recently received an investment of $10 million from the Al Tayyar Travel Group. Majid Al Futtaim Ventures also recently announced a landmark investment in Beam Wallet, a mobile commerce and rewards platform developed and launched in the UAE in 2012. What these investments show us is that the large scale organisations are willing to fund innovative startups that match their investment portfolio.” “VC funds, accelerators and other initiatives are springing all over the region, marking the rise of Corporate Venture Capital funds. This can specifically be witnessed

ArabNet attracts digital start-ups and tech entrepreneurs

in the telecommunications sector where well-established corporations are increasingly investing in high-potential start-ups,” added Christidis. Governments are also becoming increasingly involved in the field by putting forward large funds. The Kuwaiti government has dedicated $7 billion to the National Fund for SME development and more recently, in Lebanon, the Central Bank backed an initiative of Circular 331 to unlock $200 million for investments dedicated to entrepreneurship in 2015. Christidis concluded: “The market for start-ups is extremely competitive. Not only are we seeing

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EVENT PREVIEW

On the sidelines:

ArabNet partners with Smart Dubai

regional players take interest but there is now also increased attention from global VCs who are looking to invest in the region as they believe there is large untapped potential. This trend will be one of the highlights at the third UAE edition of The ArabNet Digital Summit, which will be hosting, among others, Silicon Valley’s 500 Startups – one of the leading VCs and accelerator in the world. Partner at 500 Startups Mathew G. Johnson and distribution hacker in residence Tammy Camp, will run a full workshop track during the Summit – an exciting opportunity for budding digital entrepreneurs and investors alike.”

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The ArabNet Digital Summit will attract more than 1000 participants, 70 exhibitors and 100 other speakers, featuring the Start Up Track, the Match-up, the Digital Showcase, 500Startup track, the NEXT track, Ad+Tech Academy and a plethora of global and regional industry leaders. For more information, please visit: www.arabnet.me/conference.

For an online version, please visit: www.smeadvisor.com/2015/05/thearabnet-digital-summit/

The Smart Dubai initiative is founded with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, to make Dubai the happiest city on earth by embracing technology innovation. Collaborating with private sector and government partners, Smart Dubai will deliver impact across six dimensions of Smart Economy, Smart Living, Smart Mobility, Smart Government, Smart Environment and Smart People to accomplish its strategic objectives - to promote efficient, seamless, safe and impactful city experiences for all residents and visitors. “We’re excited to partner with Smart Dubai, with whom we have a shared vision to promote innovation and to highlight the corporates and entrepreneurs who are leading this drive towards innovation,” commented Omar Christidis. “This partnership between Smart Dubai and ArabNet will bring to the fore the government’s vision and commitment to build Dubai into a global innovation hub and a world-class smart city, not only in infrastructure and governmental services, but also in efficiency, economic opportunity and the free flow of people and ideas.”

EVENT REVIEW

The Future of Work Middle East Summit On April 29th, the Future of Work Middle East Summit was held in Dubai. Taking place in the UAE’s Year of Innovation, the successful event assembled primary stakeholders for high-level discussion around diversification, innovation and the role of the worker in an era of change.

The Economist Events’ Future of Work ME Summit explored the opportunities and challenges ahead for regional governments as they work towards establishing more diversified economies and developing a highly skilled local workforce to support strategic growth. Policymakers are finding themselves juggling the dual strands of promoting innovation and entrepreneurship with the aim of becoming a technological centre and manufacturing hub, along with building a local workforce to sustain new knowledge-based industries to drive the region’s competitiveness in the global market. Governments across the MENA region continue to invest heavily in diversification, local talent, innovation and entrepreneurship initiatives, however the challenges cannot be understated. MENA is experiencing a ‘youth bulge’ with more than 30 per cent of the population currently between the ages of 15 and 29, and youth unemployment averages hovering around 25 per cent. Women in the region still lag far behind their international counterparts, with fewer than 20 per cent of adult women in paid employment. Up to 90

per cent of government jobs in some GCC countries are held by nationals, with a staggering 10 per cent of GDP being spent on the annual government wage bill and IMF and World Bank reports have stated that there is a significant ‘skills mismatch’ in MENA countries, with education systems not meeting the requirements of the market. Overall, these statistics paint a concerning picture. However, there are many positive indicators that hint at a future full of promise and potential. The region’s focus on new technology, innovation, diversification and education paired with the active move towards becoming a knowledge economy underpins what many hope will be a whole new chapter in the region’s history. The Summit explored these issues and, through shared experiences and productive discourse, consolidated best practice and put forward recommendations for meeting the ambitious goals of this dynamic region.

For an online version, please visit: www.smeadvisor.com/2015/05/the-future of-work-me-summit/

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TECH TRENDS

Hot apps of the month , Rushika Bhatia s view...

Smart Document Scanner Smart Document Scanner is a multi-purpose office productivity mobile app that enables you to digitise and manage any sort of document. It lets you scan, enhance, and convert to PDF and enables OCR (or Optical Character Recognition, allowing scanned PDFs and images to be converted into editable text formats). You can also capture information from receipts, invoices, meeting minutes, contracts, bank statements and whiteboards. Whatâ&#x20AC;&#x2122;s particularly useful is that the app not only syncs the information but organises it too!

Available on: Android Cost: Free

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TECH TRENDS

MobileDay If you are frequently on conference calls, this app is very handy. It syncs with your calendar and automatically detects your calls and online meetings. It then allows you to dial in using a simple tap. So, no more hassle of passwords, codes and so on. An extremely useful feature that this app offers is its ability to send a pre-customised message to other members when you are running late â&#x20AC;&#x201C; via text and e-mail.

Available on: iOS and Android Cost: Free

Kaspersky QR scanner This app, as its name suggests, scans QR codes using a three step approach: scan, check and open. An added feature of the app is that it ensures that the landing page is secure before opening it. In case the code is linked to a phishing or malicious site, the app generates a warning notification. The app is quite basic within minimum features, but it surely gets the job done!

Available on: iOS and Android Cost: Free

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TECH TRENDS

Gadgets of the Month!

Galaxy S6 and Galaxy S6 edge Key features: • The F1.9 lenses and high resolution sensors on both front (5MP) and rear (16MP) cameras provide the most superior image quality in a smartphone, even in the dark. Auto Real-time High Dynamic Range (HDR), Smart Optical Image Stabilization (OIS) and IR Detect White Balance provide advanced light sensitivities and crisp camera solutions. • The devices work with any wireless pad available in the market that supports WPC and PMA standards. They also sport incredibly fast wired charging. • The Galaxy S6 and Galaxy S6 edge are built on the upgraded Samsung KNOX, end-to-end secure mobile platform, offering defense-grade features for real-time protection from potential malicious attacks. Both of these new devices are also ready for immediate enterprise adoption, with market leading MDMs and KNOX enhancements enabled at launch to simplify and improve mobile device management. • The Find My Mobile feature secures lost devices and protects personal information through a number of services, including the all new remotely controlled “Reactivation lock.” With an enhanced touch-type fingerprint scanner, it also provides quick authentication and saves encrypted data in secure device storage.

For an online version, please visit: www.smeadvisor.com/2015/04/hot-appsof the-month/

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TECH TRENDS

THE POWERFUL AND THRIFTY OFFICE ALL-ROUNDERS.

The new ECOSYS M3560idn series will astound you. With their print speeds of up to 60 pages per minute, they are among the most productive A4 b/w multifunctionals on the market. We nevertheless managed to keep their ecological footprint and total cost of ownership impressively low by using our well-known ECOSYS technology and equipping the devices with our renowned long-life components. The result? Not only less waste and lower maintenance costs, but also less hassle for you and all your colleagues. You will also greatly appreciate the many customisation possibilities of the devices equipped with KYOCERAâ&#x20AC;&#x2122;s open solution platform HyPASâ&#x201E;˘, as it allows you to tailor the device to your needs. So yes, we are proud of our new range of MFPs and can hardly wait to share their numerous benefits with you!

For more information please contact:

KYOCERA Document Solutions Middle East | P.B. Box 500817, Dubai, U.A.E | Tel: +9714 4330 412 | Fax : +9714 4231 944 KYOCERA Document Solutions Europe B.V. - www.kyoceradocumentsolutions.eu

KYOCERA Document Solutions Inc. - www.kyoceradocumentsolutions.com