Dubai 8th in global tourist spend

Ahead of Rome, New York, Barcelona, Vienna etcDubai continues to be a major attraction for tourists worldwide as the emirate moved up in ranking, visitor number and tourist spending in 2012, said the latest report released today.

The emirate saw its ranking improving one notch to eight globally ahead of Frankfurt, Kuala Lumpur, Seoul, Rome, New York, Shanghai, Barcelona, Vienna and many other major cities, according to MasterCard's "Worldwide Index of Global Destination Cities" for 2012.

Similarly, the number of visitors jumped to 8.8 million, an increase of 15.3 per cent; while the spending by tourists will also jump by around 18.5 per cent to $8.8 billion (Dh32.3 billion) this year as compared to $7.4 billion in 2011, MasterCard projected in its report.

The report predicted that visitors from London will top in terms of spending in Dubai this year. They are projected to expend about $1.2 billion followed by visitors from Paris ($297 million) and Munich ($267 million).

In the outbound travel, 182,000 visitors from Dubai to Sydney will be spending around $976 million (Dh2.18 billion) this year - the highest by the Dubai visitors to any city worldwide. Sydney is followed by London where 232,000 visitors will expend approximately $608 million in 2012, according to MasterCard estimates.

Other top cities rated by MasterCard from the Middle East and Africa include Cairo (3.3m visitors), Abu Dhabi (2.7m visitors), Johannesburg (2.5m visitors) Riyadh (1.9m visitors), Amman (1.7m visitors) and Tunis (1.6m visitors). Cairo retained its second place while Abu Dhabi was rated third, up from sixth in 2011, propelled by an impressive 17.9 per cent growth.

The number of visitors to the top 10 destination cities in the Middle East and Africa in 2012 is an increase of 7.2 per cent from 2011, bringing the total to just below 29 million. Total cross-border spending by visitors in these cities shows a more impressive growth of 10.4 per cent, reaching $34.1 billion.

It said the regional outlook for the Middle East and Africa is equally bright, with visitor numbers for the top ten cities set to grow by 7.2 per cent, total international spending predicted to rise by 10.4 per cent and average spend per visit set to grow by three per cent. Visitors will spend the most in Dubai and this is also a fast growing city within the top ten for that region.

Abu Dhabi will be the fastest growing in terms of spend, according to the report, up 20.7 per cent this year. Looking at the full list of cities, Durban will be the fastest growing for the region in terms of visitor numbers and is predicted to be the second fastest growing city in our report. Visitor numbers to Abu Dhabi are set to grow nearly three and a half times faster than New York.

The other cities ranked in the top 10 in 2012 are London, Paris, Bangkok, Singapore, Istanbul, Hong Kong, Madrid, Dubai, Frankfurt and Kuala Lumpur.

MasterCard's "Worldwide Index of Global Destination Cities" predicted that London will see 16.9 million people arrive by air compared with a million less for second place city Paris and miles ahead of New York at 13th place with 7.6 million arrivals.

The Index, which encompasses 132 of the world's most important cities, is being marketed as a new map for understanding global connectivity.

UAE to issue new SME law by year-end

Dubai: A new law on small and medium enterprises (SMEs) that is underway in the UAE, is expected to simplify and streamline bank loans and help regulate this important segment of the UAE’s private sector, a senior government official said.

The new law will be issued by the end of this year as part of an ongoing economic reform aimed at attracting investment and ensuring sustainable growth by strengthening the non-oil sector and reduce the country’s dependence from the volatile oil prices, Mohammad Saleh Shelwah, Assistant Undersecretary for Economic Polices Affairs, told Gulf News.

He remarked that the law will strengthen competitiveness of the UAE economy and boost the SME sector.

SME sector is the biggest employer in the UAE.

“SMEs is the backbone the economic development process and growth, and we should have proper legislations,” he added.

Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, highlighted Dubai’s participation in developing SMEs law which is in the final stage.

He said: “The UAE is already locked in a drive to diversify its economy by attracting investment and encouraging industrial projects, and SMEs has seen as a key factor in diversification given the country limited resources.”

Dubai SME, part of the Department of Economic Development, yesterday launched a SMEs index that said 86 per cent of the SME’s have not sought bank finance - a fact that reflects how it is difficult for this sector to get bank loan.

Al Janahi said: “This shows the big gap between the government directives and the banks’ policies. Bank financing is usually their only option, and is the predominant source of external financing for most SMEs. However, banks consider SMEs to be relatively high risk as most of their businesses are service activities, which on the one hand impedes their ability to obtain funding, and on the other leads to the charging of higher interest rates,” he said

He remarked that most of the commercial banks are keen on funding the working capital needs of businesses, but less on funding SME start-ups. Thus, there is a need for dedicated banks, working on commercial principles but devoted to financing of the of SMEs start-ups. Currently, not only the UAE but the entire GCC lack institutions which specialise in funding SMEs.”

The ‘SME Friendliness Index’ has been created by the DED to give banks access 230,000 SMEs in the UAE and realise the Dh6 billion SME financing revenue opportunity.

The index is a signalling tool that gives constructive feedback to banks about how 230,000 SMEs are actually working in the UAE, the DED said in a statement.

Of every 100 companies that approach banks only 50 get finance as only 14 per cent of the SMEs used bank finance for their growth, according to the study. The study enumerates the different challenges of the banks in serving the SME sector including quality of financial reporting, lack of credit history, inadequacy of collateral, informal management, short term planning horizon, and weak cash flow management.

Given the challenges and opportunities of the SME sector, the index outlined the strategies of the different banks - in terms of the sizes of customers they serve, the quality of financial reports they accept, and the informal/formal nature of the SME management. The findings also indicate that despite the structural challenges, innovation is widespread in the banking community.

Why you should choose LexBiz Consulting for Company Formation?

LexBiz Consulting DMCC is a Business Advisory, delivering comprehensive advise to clients on business planning,feasibility studies,financial planning, incorporation, corporate finance, mergers and acquisitions. We are Specialists in Company Formation and have dedicated teams with extensive expertise in the mainland UAE. Our expert consultants are fully versed with the commercial law to competently establish your firm in UAE.

Here are some Services that we provide to our valuable customers:

* Feasibility Study
* Business Planning
* Finding Suitable Local Sponsorships
* Mainland License Incorporation
* Freezone License Incorporation
* Offshore Company Formation

For more details, please contact: m.farook@lexbizco.com

Visit us at :www.lexbizco.com

It's official: Tenancy contract must for visa renewal across UAE

The UAE on Tuesday ended confusion surrounding new residence visa requirements and confirmed that expatriate applicants must produce a tenancy contract for the renewal of their visas.

The Ministry of Interior, reacting to a flood of queries from the public, said the new rule has been enforced in Abu Dhabi and would also be implemented in all other emirates. It said applicants could either submit a tenancy contract in their name or sponsor or a utility bill for their apartment.

"This decision affects all expatriates in the country....it has been enforced in Abu Dhabi and will be enforced in all other emirates....applicants for a visa renewal must now produce a tenancy contract or a water or electricity bill showing their address," said Major General Nassir Al Minhali, the Ministry's assistant undersecretary for naturalization and residence.

"Those working at companies which provide them with collective accommodation must present a proof of their residence, an address and a letter from the employer showing where he resides."

In a statement sent to Emirates 24/7, Minhali said the new rule is intended to allow authorities to locate their residence as "addresses given in previous applications are not clear or accurate."

He said those sharing accommodation must also present proof of their residence by submitting a tenancy contract or utility bill in their names.

"The decision is primarily aimed at verifying residence of all expatriates living in the UAE for security and procedural reasons...it is a security, administrative and service decision taken by the immigration and foreign affairs departments in the country," he said.

"The decision is not targetting any party or property group but it will serve those departments seeking accurate data about foreigners' residences...this measure is not exclusive for the UAE as it is enforced in all advanced countries."

DNRD Clarifies

Earlier on Tuesday a Dubai Naturalisation and Residency Department (DNRD) official clarified that an attested copy of the tenancy contract and utility bill in the name of the sponsor is still needed in Dubai and the northern emirates for residence visa renewal.

He was clarifying a Tuesday morning Abu Dhabi newspaper reoport that said such documents were not needed in emirate of Abu Dhabi for visa renewal.

The DNRD and Immigration Departments in the northen emirates received from the UAE Ministry of Interior a notice dated 15 May 2012 confirming the current procedure.

Until Tuesday afternoon, no further communication had been received amending the 15th May notice.

After receiving the 15th May communication, Dubai set up a section to verify the house contract and utility bills. The section is working smoothly and checks the number of rooms in the sponsor's house with the number of dependents listed in the immigration department, said the official.

The 2-point notice dealt with renewal residence visas for expatriates and stated that they have to bring Rent or Tenancy Contract and the last bill from the electricity and water supplier from the emirate where they stay.

These have to be in the name of the sponsor.

The second point said dealt with sponsors family and dependents in the first degree such as wife, children, borther, parents, sister etc and housemaids.

Their details such as passport number, place and date of issue and expiry have to be included in the application form.

The official believes that the news reports are incorrect which say tenancy contract requirement has been cancelled in Abu Dhabi.

He said any decision taken by the ministry is taken after studies and research as the issue deals with 203 nationalities, their cultures and way of life.

He said the 15th May decision is logical. "If anyone wants to bring in their father, mother or sisters and brothers, they must have enough rooms to live in. There is no logic to sposor a housemaid if there is no room in your house. It is also not logical or safe to bring in sisters or wives if the accommodation is being shared with other men," he pointed out.

Documents Required

The residence visa renewal requires photocopies of the passports of the sponsor and the person; salary certificate; tenancy contract, utility bill.

the tenancy contract mnust explain how many rooms the house has. Both the rent/tenancy contracta nd utility bill has to be attested by the respective municipality and utility service provider of the emirate where the sponsor lives.

In humanitarian cases, for those who workin Dubai Government, the salary has to be not less than Dh9,000 plus accommodation. They also have to have bank statement of 3 recent months; the house must have at least 2 rooms, utility bill plus a gurantee deposit of Dh5,000.

If the person is not related in first degree such as an uncle or aunt, a certificate proving the relationship must be provided.

DED says June 30 last date to make use of discounted fines on business establishments

Dubai, 9 June 2012: The Department of Economic Development (DED) in Dubai has reminded businesses and companies in Dubai that 30th of June 2012 will be the last date to make use of the reductions on fines, granted under a decree by His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai.

According to the decree, fines payable from January 1, 2012, until February 29, 2012, are to be reduced by 40 per cent. A 30 per cent reduction will be applicable to fines payable between March 1, 2012, and April 30, 2012 while fines payable between May 1, 2012, and June 29, 2012 will be reduced by 20 per cent.

The decree underlines Sheikh Mohammed's continuous support to businesses and companies in Dubai, and to finding out the actual number of active establishments, which would help in the preparation of essential data and studies on economic activities and licenses.

"The first months after the decree saw overwhelming response from the owners of commercial licenses and at least 3,050 fines being paid. Businesses are taking advantage of this opportunity as it facilitates fee payment and provides them additional funds. The fines can be paid in a number of outlets including the main building of DED in the Business Village and its branch offices in Dubai, Central Post Office and various local and international banks across the UAE," said Mohammad Al Shehhi, Director of Finance Division at DED .

Al Shehhi added: "We expect a 25 per cent increase in fine payments during the last few days up to June 30. Businessmen and owners of business licenses in Dubai should come forward to pay the fines and make use of the 20 per cent reduction as applicable now."

About Department of Economic Development ( DED ):The Department of Economic Development (DED) is the government body entrusted to set and drive the economic agenda of the emirate of Dubai, UAE. DED supports the structural transformation of Dubai into a diversified, innovative service-based economy that aims to improve the business environment and accelerate productivity growth.

DED and its agencies develop economic plans and policies, identify and support the growth of strategic sectors, and provide services to domestic and international investors and businesses.

Confidence in GCC business grows: Survey

Gulf business leaders are more confident of growth than their global peers and this is reflected in their rise in investment, according to the result of a survey conducted by Full Circle Investments (FCI), an independent and dynamic strategy consulting and corporate finance advisory firm based in Dubai.

The results of this timely study were issued this morning, underscoring indicators of the return to economic and corporate growth.

Cited as the most comprehensive survey conducted in the region and based on in-depth interviews with CEOs and captains of industry representing over 150 companies of high net value, it has been designed specifically to assess their confidence in global and regional economic growth and examine the challenges they face.

The survey showed that 67 per cent of the GCC's business leaders are in agreement that things are now much brighter and moving speedily in the right direction. The measure of the interest in investing is reaffirmed by the fact that they are confident of growth in the global economy versus an average of just 40 per cent of global corporate leaders. This attitude is further strengthened by the data in which as high as 90 per cent are convinced that the GCC economies will grow exponentially in the next 12 months. The optimism is echoed in their belief that where corporate growth is concerned, 86 per cent stressed that they are 'very confident' or 'confident' of their own company's growth in the next 12 months.

"We are privileged and honoured to have had access to the highest level of corporate leaders in the region at a critical time of decision-making and strategizing amidst global economic and political uncertainty. Our survey has highlighted that a healthy amount of decoupling exists in the GCC region which is poised to enter into a renewed period of growth that has the potential, this time round, to catapult certain regional companies on to the global stage," said Ghassan Medawar, founding partner of FCI.

"The result of our survey is heartening and highlights the growing optimism in the region. The common sentiment is that this region will do well. It has the requisite geographic location, the oil, the population growth and stable and able governments, all of which make it an attractive proposition," he added.

This confidence is predicated on the premise that "oil is paramount," with 70 per cent of respondents ranking high oil prices as the most important driver for GCC economic growth.

Political uncertainty in the wider region does currently serve to maintain high oil prices. This situation, in turn, has prompted unprecedented government spending and economic reforms, the benefits of which are now expected to flow through the region. In brief, the GCC will benefit from political uncertainty with stronger fiscal and current account balances and a higher GDP growth.

Most of the decision makers clearly believe that companies are emphasising smarter, more considered growth in the short and long term scenarios.

Although this is not the first time the GCC is experiencing a strong economic growth outlook underpinned by government spending there are both qualitative and quantitative differences this time around. Market dynamics have changed, competition has increased and funding is less readily available.

Companies are looking inwards and increasingly focusing on their own resources for funding growth (72 per cent). As a result, they are also primarily relying on organic growth in the next 12 months (81 per cent).

While 14 per cent view M&A as the primary growth driver as high as 73 per cent expect to close an M&A transaction in the next 12 month period.

The growth, however, is not without its own set of challenges. These include constraints on obtaining the right talent and addressing "organization health issues."

Forward looking companies are of the opinion that as more opportunities become available, those businesses that are flexible and can navigate these issues and strengthen their corporate fabric will be in a strong position to capture unprecedented growth in their markets. These corporations are destined to be the fresh spearhead of the industrial push but also become globally competitive.

India sets up Gulf unit to track NRI tax evaders

Dubai: India’s efforts to track down tax evaders could soon see officials monitoring the funding flows of nationals living in Gulf countries, a senior revenue service official said.

“Some of the leading Gulf cities such as Dubai, Abu Dhabi, Bahrain [Manama] and Doha are major financial centres that are increasingly attracting Indian money that is leaving Swiss banks,” said the Indian Revenue Service official on condition of anonymity.

“In many cases these funds reach Gulf cities in the form of seemingly-legitimate investments.”

Officials said the Indian government has drawn up a plan to track the suspicious financial dealings of non-resident Indians in close cooperation with respective foreign governments.

The government has already posted eight senior IRS officers in newly-created income tax overseas units in countries like the US, the UK and the UAE as part of efforts to trace illegal funds hidden away by Indians abroad.

These tax officials will function from the Indian missions in Washington, London, Berlin, Paris, The Hague, Abu Dhabi, Cyprus and Japan.

Last month Finance Minister Pranab Mukherjee tabled a white paper on black money in parliament which did not disclose names or estimate the amount of money NRIs have stashed away.

“The expansion of information exchange network at the international level will help in curbing cross-border flow of illicit wealth,” he said while presenting the white paper.

Sceptics say the government’s efforts may have only symbolic value. “It has been almost two years after the first list of India Swiss bank account holders was leaked to the media,” said Asha Kothari, a tax specialist.

“It’s a long enough time for most to cover their tracks and move money to safer destinations.”

Although there are no official figures on the illicit funds, estimates by various sources say the total amount could be in the range of $1.5 to $2 trillion (Dh5.5 to Dh7.4 trillion). A significant portion of this money is believed to be in Switzerland.

Despite the new tax treaty India signed with Switzerland, analysts say it is unlikely that the Swiss banks will give away any details of the coded accounts that existed prior to January 1, 2012 when the treaty came into effect.

“Swiss banks may be under attack, but they are unlikely to violate the code of silence and share details on old accounts that have ceased to exist,” said Ramanujam Krishnan, a tax consultant.

Analysts say India’s war on black money is likely to be a damp squib as many of the cross border fund movements are within the existing regulations.

A typical transaction to move money from Switzerland involves buying a shell company in a tax haven. Under the liberalised remittance schemes Indians can make investments up to $200,000 a year per person. This allows the Indian resident to hold shares of a paper company while having an account with a bank abroad.

Then the illicit money in coded accounts can be transferred to these companies in the form of trading income or earnings from consultancy services. The money can eventually flow back to India in the form of a legitimate foreign direct investment or portfolio investment.

With hundreds of thousands of NRI-owned businesses in the Gulf and Far East, tax evaders could use these businesses as conduits to escape the prying eyes of the taxman.