Ras Al Khaimah Free Trade Zone awarded ten excellent companies

Ras Al Khaimah Free Trade Zone awarded ten excellent companies at the First Annual Business Excellence Awards

Ras Al Khaimah Free Trade Zone (RAK FTZ) awarded ten companies during the first Business Excellence Awards Programme for their exhibiting excellence in their Business activities, showing the most growth as well as innovation and corporate social responsibility amongst other business-orientated features. RAK FTZ is home to more than 8000 companies involved in investment business.  More than 120 were included in the free zone’s awards. A judge committee from the International Performance Excellence (IPE) selected the winners.

His Highness Sheikh Ahmad Bin Saqr Al Qasimi, Chairman of RAK FTZ, congratulated the winning businesses for their outstanding business performances and for their contribution to the economic development of the free zone as well as the business sector in which they are involved. The free zone’s government believes that commemorating the most successful business activity and excellence does not only accentuate the awarded businesses but also the free zone itself for providing them with benefits so as to run their businesses more effectively. Some benefits include A-class facilities, top-notch quality business set-up support and lower costs. RAK FTZ is looking forward to helping even more corporations set up their businesses in RAK FTZ during the following years.

The winners of RAK FTZ’s Business Excellence Awards Programme included:

J & R Business Consultancy-which provides business consultancy services as well as training. The company was awarded the ‘Best Small to Medium Size Business Award’ due to its outstanding provision of services.

Burkert-Contromatic AG International Middle East-was awarded the ‘Best Technology Award’ accentuating their efforts for producing new and innovative products and services linked to technology and promoting them into the market.

Eurocap-an organisation that manufactures lids and caps for cosmetic products including perfumes as well as plastic packaging products was awarded the ‘Best Contributor to Ras Al Khaimah Development’ award. The award highlights the important role the business has played in the economic and social progression of the emirate.

Biri Industries-was awarded the ‘Fastest Growing Company’ award, highlighting the immense growth it has shown since its launching. Biri Industries manufactures and supplies hoses and pipes for agriculture, domestic use, oil and gas as well as marine and for other industrial linked sectors.

Utico-was awarded the ‘Best Corporate Social Responsibility’ award for its beneficial business activities towards both the environment and society. The company is the largest private service company throughout the Middle East.

Milly Pack-was awarded the ‘Best Start-Up’ award which highlights the efforts of a corporation that has been running for under three years and has shown innovative business practices. The organisation is involved the packaging and packing of material industry.

RAK FTZ also awarded companies for their successful accomplishments and support towards the emirate and free zone. Several of the companies are outlined below.

Both Zaher Kayyali Trading and TCA International were awarded with the ‘Referral Champion of the Year Award’ for contributing the most referral to RAK FTZ. 

Both Intertrad and RamJet Aviation Support were awarded with the ‘Pioneer Award’ honouring them for conducting their business activities the longest in the free zone. The first company is involved in the import and export business of wool, tiles, synthetic rubber as well as spices, tea and other food products. The latter is involved in the aviation services sector and has run business activities in RAK FTZ since 2007.

The judging committee were part of the International Performance Excellence (IPE) company, a private company that supports business quality throughout the world. Eithad Airways, National Bank of Abu Dhabi, Abu DhabiEducation Council, Abu Dhabi Police as well as the UAE Ministry of Health are several of the IPE’s many clients. 

Dubai Cautions over US dollar

Dubai is apprehensive about the consequences the strengthening of the US Dollar will have on its economy. According to DubaiEconomic Council (DEC) a strengthening US Dollar will negatively influence loans, exports and debts. Due to Dubai being a diversified economy, it will be influenced more by the US dollar than plunging oil prices. The DEC is directly involved in the economic decision procedures of Dubai’s government.

Attention was initially focused on the international drop of oil prices, which fell more than 50% since June 2014.

Last Wednesday, the US Dollar Index traded at 92.7640. The highest it has traded recently is 93.046. Just before oil prices began to decrease during last may, the US Dollar Index was traded at the low index of 79.5.

if the value of US Dollar soars, Dubai’s cost of servicing debt will also simultaneously increase. This will also affect other areas of Dubai’s economy. For instance, the demand for UAE manufactures goods and US re-exports may drop due to the fact their price will rise, therefore will be more expensive for non-US markets to purchase. Plunging oil prices will also influence exports since oil-based economies such as Saudi Arabia, Qatar, Oman and Iran’s income will plunge, which are the UAE’s major export partners.

What ’s more, due to the higher interest rate of the US Dollar, cost of borrowing will also increase. The US economy is recovering and recoiling at a faster rate than was anticipated, marking an average groeth rate of 4.8% during the last two financial quarters. Its growth rate and overall economic performance is the strongest it has been during the last ten years. A recoiling US economy could possibly lead to an increase in interest rate conducted by the Federal Reserve. At present, the interest rate is marked at the low percentage of 0.25. in the occasion interest rate increases in the US, the UAE’s interest rate will most probably follow, which is anticipated will not significantly influence the latter because its rate is currently very low.

Although Dubai is cautious, its government does not believe the increase in US Dollar will threaten Dubai’s economy. Decreased oil prices will probably result in increased production levels, and the increased US Dollar will lead to a decline in costs concerning re-exports to non-US countries. Last Thursday, Global benchmark Brent Crude was sold at $48.41 per barrel. When compared to June 2014, the prices of oil more than halved, marking a 57.9% plunge. 

UAE private sector is on a climb

Based on the United Arab Emirates (UAE) Purchasing Manager Index (PMI) the country’s private sector is successfully maintaining its progress even though the price of oil has soared downwards during the last few months.

During the previous month, the PMI results revealed that the UAE’s non-oil based private sector grew in terms of business activity.  The PMI’s data comprises of an amalgamated index on the UAE’s non-oil based economy, which was calculated based on the data gathered from about 400 privately owned companies throughout the emirates.

During December 2014, production growth increased in comparison to the previous month, to a level, which up until now has never been reached before. The production growth was strengthened by the boost in new orders. Simultaneously, job openings continuously opened and workers were employed, marking an increase in employment rate.

Throughout December, the PMI index was well above normal, reaching 58.4, which when compared to November 2014 calculation at 58.3%, not much had changed. However, the slight increase still reveals that the UAE’s private non-oil based sector is steadily improving and growing.

Ever since February 2010, the UAE’s non-oil based private sector production has been steadily growing. The continuous growth was maintained all through December as well, marking a significant increase, which was attributed to the fact new business inflow from the domestic and international markets.

During the last four months, export orders continuously increased, reaching a climax in December. The increase in export orders may possibly be attributed to the fact that demand on an international level has increased because the UAE has succeeded in drawing in new international customers as well as maintaining its healthy market. The PMI data also revealed that consumption soared drastically during December 2014.

According to expert financial advisors, it is anticipated that the decreased oil prices will influence the UAE within 2015, but for the time being demand is maintained at a satisfactory level. The fact that orders and production output are on the increase is a reassuring and supporting sign.

Due to growth in output production and new increased orders, UAE companies hired additional workers to meet demand. In spite of the fact that growth has marked a tiny fall when compared to December, patrol statistics have revealed a sharp increase, which is quite impressive when comparing to past data.

UAE private sector companies have been facing pressure in terms of cost and expenses. Generally, inflation concerning input goods prices rose during December, which was accompanied by a soaring increase in purchasing costs and low-income growth. On the bright side, output costs declined in December due to the declining rate of inflation in contrast to December. 

UAE private sector companies anticipate that during the future their orders, purchases and stocks will mark further increases. The most recent PMI data reveal that the UAE’s non-oil based private sector is strong, showing that declining oil prices will not influence the business operations of the non-oil sector. 

Experts insist that the UAE is completely capable of facing any problems that may arise due to the plunging of oil prices because of its diverse economy and strong buffers. The UAE shines amongst the other GCC countries as it has the potential and tools to manage its economy if prices of oil continue to surge downwards.

The continuous efforts of the UAE government to develop its non-oil sectors has paid off since in 2013 the non-oil sector contributed 61.1% of the nation’s total GDP and continues to grow fundamentally. In 2000, the non-oil sector contributed to 44.7% of the UAE’s total GDP.

The UAE does not solely depend on oil-based businesses for revenues as its non-oil based economy has marked continuous growth over the years, which is especially evident in its increased inflow of investments as well as a significant growth in non-oil related goods and services export activity. 

Estimated Dh14bn by 2020 generated from Timeshare in Dubai

It is anticipated that by 2020 Dubai’s timeshare market will contribute Dh14 billion to the emirates economy, as it is considered the most rapidly growing timeshare market internationally. Dubai’s timeshare market is on a rise due to a major boost in tourism, hotel rates and real estate property prices, which are forecasted, will carry on for the next 10 years according to the results of a new study.

Dubai is one of the top tourist destinations of our times as well as being a business hub. Due to this numerous visitors, either tourists travelling for leisure or businesspeople visiting for business matters, frequently visit the Emirati city. The number of people travelling to Dubai is higher than the majority of other hot tourist destinations in the world. Thus, Dubai has become a great jurisdiction to invest in the timeshare market.

Dubai’s prices concerning real estate property have been increasing fast. Thus, many cannot afford to invest in a second property in Dubai, either to use as a holiday or second home. Financially speaking, investing in the timeshare market is ideal for those who travel to Dubai regularly and usually stay at a Dubai hotel.

Based on the AFH report named Demand Outstripping Supply, Dubai’s timeshare sector experienced a 15%-20% increase during 2013 and grew an additional 30% during 2014.

The results of the report revealed that the boost in Dubai’s timeshare market is encouraged by the fact that international economies are on the recovery path as well as the UAE’s vigorous growth, which is especially evident by its growth in tourism and hospitality industries and its real estate property that is on the increase.

Dubai’s timeshare sector experienced a significant enhancement during 2014 due to international markets maintained recovery and boost in hotel and property prices in many tourist hubs. 

High Demand-Low Supply

The report also reveals that demand for timeshares within the UAE is significantly more than the supply. Therefore, those interested to invest in the timeshare industry look elsewhere.

The timeshare industry in the UAE has been rapidly increasing yearly at about 80%-90%, while the amount of timeshare properties available are significantly less, thus demand and supply do not balance.

The most apparent reason construction companies and developers have not been able to increase the supply of timeshare properties is that the legislation concerning the timeshare sector has not been finalized. 

Hong Kong and United Arab Emirates enter into Tax Agreement

Hong Kong (HKSAR) and the United Arab Emirates (UAE) entered into a bilateral tax agreement on December 11, 2014 concerning the avoidance of double taxation. John C. Tsang and Obaid Humaid Al Tayer, the Financial Secretary of HKSAR and the Minister of State and Financial Affairs of the UAE respectively signed the agreement.

The agreement made, the Comprehensive Agreement for the Avoidance of Double Taxation (CDTA) is the 32^nd in sequence that Hong Kong made with its trading partners. The CDTA analytically outlines the taxation rights amongst the two parties, therefore aiding potential investors review their possible liabilities concerning taxes when engaged in foreign economic activities.

The purpose of the bilateral double tax avoidance agreement is to strengthen both the economic and trade relations between the jurisdictions as well as to further motivate companies based in the UAE to invest or engage in business activities in Hong Kong and for companies based in Hong Kong to further invest and conduct business activities in the UAE.

Without the CDTA, UAE and Hong Kong residents would have been imposed Income Tax in both countries.

According to the CDTA, tax paid in Hong Kong will be permissible as a credit against payable taxation within the UAE. Additionally, without the introduction of the CDTA, the profits generated from companies in Hong Kong, which are engaged in business via a permanent establishment in the UAE, would have been imposed taxation in both jurisdictions if the profits generated derived from Hong Kong. Therefore, with the introduction of the CDTA, double taxation will be stopped since any taxation paid in the UAE by corporations will be permissible as a credit against the payable taxation in Hong Kong according to Hong Kong’s tax legislation.

The Hong Kong-UAE CDTA also includes an article regarding exchange of information between the parties. This provision will aid Hong Kong to realize its obligation on promoting tax transparency as well as diminishing tax evasion.

The Hong Kong-UAE CDTA will come into effect once both nations finalize their approval of the agreement procedure.

Hong Kong is keen on forming more CDTAs with its investment and trading partners in an attempt to further expand its CDTA network.