Newsletter - March 2010

Transcription

1 STROHAL LEGAL GROUP I NTERN ATION AL LEG AL CO NSU LTANTS UA E / S INGAPORE / VI ENN A Newsletter - March 2010 Iran, swine flu and Al Mabhuh Iran refuses the allowance of overflight rights as long as pilots won t acknowledge the Gulf as the Persian Gulf!?! Hmm What is that all about? Sandbox games, childish aggression, high politics? There is no necessity for judgment - only be astonished by what is happening. So please, let s be astonished together. The end of the game will be finished off with a threat: Either you acknowledge it as the Persian Gulf or we will bring you down. What does this remind us of? Of Gessler s hat in Wilhelm Tell? The Swiss were able to free themselves of the Habsburg regnancy. How can we get rid of warmongers and sandbox players? Now, to (no) further problems: Care for more swine flu? Julphar Pharmaceuticals has swept the board. Their total revenue has tripled in Julphar became the sole provider of the swine flu vaccine. Yes, indeed. Here, people do know how to make money. Well paid by the pharmaceutical industries - let s wait and see which animal the worlds health experts will bring us next time? Leaving crazy cows, SARS, bird flu, swine flu behind How about a camel flu? Or date flu would be something inventive What can we learn from the Mahmud Al-Mabhuh murder? We are being monitored from our arrival in DXB to the restrooms. This may give us an overall feeling of safety but it may also be alarming. We mustn t forget that we are guests in this country. We should thank our hosts that they safeguard us (and themselves) with the latest security measures, including the overall monitoring. And as long we play by the hosts rules, the security system redounds to our advantage. Wishing you a continuous chilly winter Yours, Theodor Strohal

2 UPCOMING EVENTS March, 10 th May, 3 rd Styria/Austria: ICS Internationalization Centre: Theodor Strohal is giving a speech on UAE banking law and legal framework for market entry. Vienna/Austria: ICC International Chamber of Commerce: Theodor Strohal is co-lecturer in a seminar on legal framework of corporate activities. May, 4 th,6 th,7 th Europe: Together with the Ras Al Khaimah Investment Authority Theodor Strohal is holding speeches in Vienna, Budapest and Prag in the course of a road-show. May, 18 th Ras Al Khaimah: XING Networking Ras al Khaimah Rated A by Standard and Poor s for the 3rd time Standard and Poor s Ratings Services has affirmed its A long-term and A-1 short-term sovereign credit ratings, with a stable outlook. The ratings are undermined by the relative wealth and diversification of the emirate s economy, with GDP per capita expected to be $17,454 in RAK s growth prospects appear stable which can be traced back to the overhaul of economic strategy since the appointment of Sheikh Saud bin Saqr al-qasimi as Crown Prince in It results in a substantial rise in investment and diversification of the economic base. VIRTU-ZONE The First Virtual Free Zone Virtu-Zone has been established by the Ruler of Fujairah to facilitate the formation of companies and hence the resulting issuance of UAE employment/residence visas. An office rental is not obligated for a Virtu-Zone license. Business activities are specified, but new business ideas are welcomed. The Virtual office, (web services), Hot desk (Virtu-Zone offices) and meeting/conference rooms can be used in Virtu-Zones in Dubai and Fujairah. The business license can be achieved within 4 days the residence visa will be issued after another 5 days. Also, the costs include the opening of a company bank account. The registration of a Free Zone company within the Virtu-Zone can be completed online. UAE: First Nuclear Power Plant The UAE signed a 20 million dollar power plant contract but not with the expected French manufacturer Areva but with Korean producers. The association, Korea Electric Power Corporation will be responsible for the construction and the unobstructed planning.

3 Founded in 1961, three Korean energy suppliers entered a union. Since 1982 Korea Electric Power Corporation is 100% governmental. The start up for the first nuclear reactor is planned in The nuclear power plant will consist of 4 reactors. One reactor will be able to produce 1400 megawatts. No Visa News 36 countries are still excluded from the waiting period of one month for a new visit visa after leaving the UAE. Citizens of nations who need to obtain an entry permit into the country are not eligible to apply for another visa immediately after departure. There is a one-month waiting period that is counted from the day the person leaves the country. People who purchase apartments or villas will continue to be eligible for a 6 months residence permit only with a purchase price of minimum 1 million AED and the property is ready for occupancy. But, Ras Al Khaimah residents who bought their property before 2009 will receive a 3 year extension on their 3 year visa. For those considering a purchase, a company foundation is recommended. A three-year residence permit will be given to shareholders who are holding at least 40% of the capital or directors and employees. We ve heard of businesses that arrange employees visa for a contribution of AED Dubai: Rent Cap Law for 2010 The decree provides that rents for both residential and commercial properties may only be increased when the existing rent is below the guideline of 25%. Then, an increase of 5% is permitted. Dubai s first foreclosure Barclays Plc won the first foreclosure cases in court, clearing the way for lenders holding about $16 billion of Dubai home loans to take action when borrowers don t pay. Tamweel PJSC, the emirate s biggest mortgage bank, has several of its own foreclosure claims pending. It estimates that about 3 percent of its mortgages are in default. The Barclays and Tamweel cases may change that because they show that a 2008 mortgage law setting out rules for default, foreclosure and repossession is working. Lenders must give homeowners a 30-day notice of their intent to pursue a foreclosure. Then courts review the case and can issue a debt judgment that turns the property over to Dubai s Land Department for auction. Within Dubai s shadow Stock markets of the Middle East and Africa are still living a shadowy existence in spite of the reorientation of investors in Asia and Latin America. But Dubai s stocks only make up 7% of the market capitalization in the region. The economic system is therefore not comparable to the remaining economics. The indebtedness rate lies beyond 50% of the GDP, hundreds of billions lie within in the consolidated fund (VAE funds: $676 billion), shares are cheap: ratios of which

4 most industrial countries dream of and money reserves that keep Dubai miles apart from bankruptcy. Within the growth markets, Arabic countries offer the highest return on equity with more than 19%. The low ratings for this region which are currently seen will soon be decreased. Experts suppose with a rise in stock markets - this region is known for late response. An outperformance is estimated for the 2nd quarter. They say trust must be rebuilt. Dubai real estate market: more attractive for tenants but still most expensive location for office space in Middle East Due to a supply-demand mismatch along with falling rentals and increased vacancies, the Dubai office market is becoming increasingly favorable for tenants. Average prices and rentals in the Dubai residential sector are expected to show more stability in 2010 as the rate of decline has slowed in the past few months. The overall market is likely to see a continued decline. Rental adjustments were comparatively less in the Dubai retail market than the office or residential sectors but the market is still moving in favor of tenants in Although Dubai witnessed the largest decline in 2009 with costs falling by 34 percent, it still remains the most expensive location in the Middle East and Africa. $14,520 per workstation ranks Dubai 11th in the global rankings, followed by Abu Dhabi ($14,300), and Doha ($12,520) placed 17th. However, Londons West End market is expected to remain the world s most expensive location along with Hong Kong, Tokyo, Washington D.C. and Paris by Abu Dhabi: Incorporation of Company at Masdar City (MC) The opening of Masdar City Free Zone provides space for international businesses focused on clean technology and renewable energy. The total costs of establishing a company at MC is around AED 301,583 (US$ 82000) and the registration process generally takes 5-7 working days from the date of submitting the file. It must be pointed out that all MC companies are only permitted to conduct business within Masdar City Free Zone and are limited to performing solely those activities specified in their licence(s). Abu Dhabi buys stake in Gatwick airport The Abu Dhabi Investment Authority has purchased a significant stake in London s Gatwick Airport. The stake is estimated to be as large as 15% of the airport s total shares and worth almost US$ 200m.

5 RAK: UAE s highest road project UAE s highest point, the Jobel Jais Peak at 1950m, will soon be accessible by road, opening enormous possibilities for tourism development in this area. Sheikh Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, inspected the ongoing work and was briefed about the progress by the officials of the RAK Public Works and Service Department. The road starts from the Wadi Al Beah area near the foot of the mountain cluster and winds its way up to the top of Jebel Jais in a 36 km long stretch. In January 2009 there was snowfall of up to 10cm in the Jebel Jais region. The project is part of the development master plan, which seeks to develop and connect the emirate's natural assets and explore the untapped tourism potential of the Jebel Jais Mountains. An Austrian group is interested in building up a Mountain Adventure Park including a toboggan run (which Austria is also very well known for by Emiratis), fixed rope routes, cave tours, etc. Also, an Austrian Alpine Village project is planned, including typical Austrian houses and Austrian cuisine where visitors can enjoy Apple strudel and other delicious specialties. Whoever might be interested in these projects may contact our office. We coordinate the whole venture. Payroll Update: The Wages Protection System (WPS) (provided by Julian Dietz, uae@tmf-group.com oder ) Due to the payroll regulation required by the UAE Ministry of Labour and Central Bank on 20th July 2009, all institutions and businesses that are registered with the Ministry of Labour are obligated to pay salaries via the newly launched Wages Protections System (WPS). This decree applies to all jobholders regardless of nationality, position or salary. Transparency and stability will be increased and employment rights protected. Due to the new system all companies must register all employees at the Ministry. Salary payments will be made via Banks, Bureau De Change and other authorized institutions. Therefore, banks must be informed about the employee s name, ID, wage, etc. The data will then be forwarded to the WPS system and after approval the money will be transferred to the employee s account. Banks or bureaus won t be liable for false data. Depending on the number of employees companies must comply with a deadline for the WPS adjustment. Number of employees Deadline > th November to 99 28th February 2010 < 15 31st May 2010 If these deadlines are not adhered to, companies will be punished. False statements or violation will be followed with charges, stop or hold up for residence and working permits. TMF employs 3,300 employees worldwide and offers as an independent supplier accounting, payroll accounting and further administrative outsourcing services. For further questions on WPS in the UAE: uae@tmf-group.com or

6 Switzerland: Court forbids disclosure of account details The Swiss court ruled that Swiss authorities may not disclose the account details of a wealthy American who used UBS s private bank to evade American taxes. In previous newsletters we reported on the settlement between Switzerland s UBS and the American tax authorities, in which Switzerland was instructed to disclose the names of over 4000 American UBS clients. Alright, then. What is UBS supposed to do now? "Trend": Vienna is turning into financial centre of Abu Dhabi The Emirate wants to strengthen investment-activities for Vienna as EU-hub The Austrian business magazine Trend reports on Abu Dhabi s plans to enhance investment activities in Austria. Falcon Europe applied for the required license at the Austrian Financial Market Authority. Falcon Europe is a 100% subsidiary company of Falcon Private Bank and in possession of Aabar wealth funds. Overall, the Emirate s four wealth funds manage approximately one billion dollars and rank among the largest worldwide. Institutional businesses within Europe are planned to have their base in Vienna. Falcon wants to develop and manage customized products for large-scale investors. The target group is companies or institutions with contacts in the Middle East and North Africa (also called MENA- Region). Marius Dorfmeister, 39, born in Burgenland (Austria) is the CEO of the new company. He is a former employee of Merill Lynch and also worked with American International Group. The Danube metropolis Vienna has an excellent image in the Arab region. Not only are Vienna s OPEC and UN headquarters a big plus. Also, there is good private contact to Khadem Al Qubaisi, the CEO of the directorate of Aabar, who regularly comes to Austria for vacation and also recently purchased a villa in Salzkammergut. Still no double tax agreement between Germany and UAE The talks on an extension/revision of the former tax agreement between Germany and the UAE seem like a never-ending story, especially for the German companies that are on the losing end. The former double tax agreement-orders were dropped on the 31 st of December, At present, German tax residents must pay taxes on all UAE revenues, but there are legal ways around this. We specialize on international tax law here at Strohal Legal Group. ***If you don t require any further STROHAL LEGAL GROUP Newsletters, please send an to: office@slg-strohallegalgroup.com Contact: STROHAL LEGAL GROUP International Legal Consultants Phone: Fax:

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