dubai business focus issue 4 2010
TRANSCRIPT
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8/8/2019 Dubai Business Focus Issue 4 2010
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Bridging
Gaps at
RamadanSuhoor
The Suhoor Networking event is
renowned for providing excellentne twork i ng oppor tun i t i e s t o
businesses, where they receive the
latest news on the state of the
economy, can cement business
relations and work towards a strong
business community in a vibrant
business environment.
H.E. Eng. Hamad Buamim informed
during his opening speech that Dubai
is one of the first cities in the world to
see economic recovery with inflation
levels down to 4.1% in 2009 as
compared to 11.3% in 2008. As an
important gateway to one of the most
lucrative emerging market blocks,
opportunities seem to have been
grasped successfully. This is
illustrated by the fact that Dubais non
-oil trade increased 18% over the first
half of 2010 with a value of AED
279.2bn as compared to 237.6bn over
the same period last year.
Total direct exports were record high
in the first half of this year with AED
32.8bn in comparison to 23.6billion inthe same period last year. Imports
represented a 13% increase with AED
177.4bn in contrast to 156.6bn last
year. These positive trade figures
were possible, due to strong
leadership and a creative business
community, which provided theflexibility for ongoing diversification.
In the keynote address following the
opening speech, H.E. Eng. Sultan Bin
Saeed Al Mansoori informed that a
number of new laws are currently
under preparation. While the new laws
are believed to comprehensively reflect
new realities, the Chamber was
credited for providing a platform where
businesses are encouraged to seize the
available opportunities for sustainable
growth and progressively flourishing
businesses in the UAE.
Also during this evening, H.E. Abdul
Rahman Saif Al Ghurair applauded the
vital role played by the members of the
technical committee, which consists of
business community representatives,
for bridging gaps between the private
and public sectors by reviewing and
recommending on draft laws.
The UAE has always nurtured
entrepreneurial spirit and rewarded
creative minds and first movers. With
new laws coming up soon andpromising economic indicators, more
opportunities are expected to be
explored by Dubai s business
community, which should lead to an
ongoing and solid growth.
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Volume 2| Issue 4 2010
Dubai Chambers prime annual business networking
suhoor proves to provide an important platform to
bridge gaps for the business community.
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The Importance of Standardised Reporting
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reporting standards within the participants respectivecompanies, participants raised specifically their concernsregarding the challenge and cost of adoption of IFRS.The standards originated in a free market economy with
an applied tax framework where tax systems are keydrivers of reporting. Although a tax system is lacking in
the UAE, the adoption of IFRS should not be morechallenging in the UAE than in other countries. Thespeakers pointed out that transparency, representingone of the biggest challenges in the region, does
however increase the challenge of adoption.In the UAE, companies are required to submit auditedfinancial statements annually, but only listed companiesare required to use IFRS. Unlisted companies areadvised to adopt an internationally recognized financialstandard, but the legislation doesnt specify a particular
reporting framework. The discussion took furthermoreinto consideration that public accountability is currently
still lacking in the UAE and that companies consequentlyuse different standards. Local GAAP is in general being
used by local companies, which implies thatstandardization is deficient. Financial statements mightbe of poor quality as companies can create their ownreporting standards, which furthermore are not always
audited by reputable firms.It isnt surprising therefore that a regulatory framework
and its importance were highlighted significantly. It wasrecognized however that reporting standards will mostlikely improve, when regulations are standardized. Toreach to this point it was emphasized that it is essential
to have legal backing for standard reporting. Astandardized regulatory framework was also seen as a
prerequisite to gain more transparency in reporting. Theparticipants were positive that the new official SMEdefinition, currently being developed by the Ministry ofEconomy, should bring more guidelines, monitoring and
transparency and streamline reporting as such. Also, thenew auditing law is to be released by the end of thisyear, which is believed to improve the professionalenvironment considerably.All in all, there was a general consensus that having
ambitions to be a global player makes adoption of global
rules unavoidable, which includes transparency onfinancial reporting.
Dubai Chamber took the opportunity during one of itsroundtables to highlight the International FinanceStandards (IFRS) for SMEs to the business community.This was especially relevant as IFRS are fast becoming
the financial reporting standard worldwide. As such, IFRSfor SMEs hold an excellent opportunity for SMEs to adopt
an accounting framework that might potentially becomethe standard worldwide. Not only will companies adoptuniversally recognized reporting principles that easedecision-making on cross border business deals, but also
access to capital is likely to increase as lenders will haveeasily comparable financial statements. And after all, theUAE business environment that is characterized by fast-paced global interconnectedness requires a degree ofcompliance with international standards.This simplified version of the International Finance
Standards, as its name clearly suggests, catersspecifically to SMEs and was introduced by the
International Standards Accounting Board (IASB) withthe intention to meet the different needs of SMEs. For
many companies, the benefits of the full implementationof IFRS can be somewhat outweighed by theconsiderable cost and difficulty of preparing the requiredinformation. This was recognised by the IASB and hence
IFRS for SMEs was developed and introduced.Company representatives that attended the roundtable
wanted to find out more about this aspect and assessthe relevance to adopt IFRS for SMEs within theircompanies. Questions relating to what IFRS are, who itis intended for, the difference between IFRS and IFRS for
SMEs, the importance of financial reporting standardsand the effect it has on companies were all discussed by
experts from Grant Thornton who gave a presentationand answered questions from the audience. They pointedout that IFRS and IFRS for SMEs are similar from theperspective that both require the same set of financial
statements. The difference lies rather however in thedisclosure of information and the skill needed tocomplete the sheets. The key strength of IFRS for SMEsis its simplification and therefore improved accessibilityfor SMEs.
Many attendees were also very keen to find out more
regarding the difficulty level to adopt IFRS for SMEs.While assessing the relevance to implement the financial
IFRS for SMEs
gives theopportunity toSMEs to meet
halfway withoutcomplicating it too
much.Mr. Hisham Farouk,
Partner, Grant
Thornton
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Setting Up a Commercial CompanySetting up a business is a one-time decision
and starters need to take the right decision at
the right time to assure a successful business
undertaking.
Individuals looking to establish a company require
professional advice and Dubai Chamber caters in various
ways to this need. Its not surprising, being the prime
business advocator in Dubai, that we hear questions
relating to establishing a company often at Dubai
Chamber. Starters come to Dubai Chamber as one of the
first starting points in their quest to find out on the various
rules, regulations, and procedures.
To give better insights to those who are looking to
establish a company in the UAE, Dubai Chambers Legal
Services Department organised a training workshop on
Establishing Commercial Companies in the UAE. During
this workshop various types of commercial companieslaws, regulations on the formation of companies as well as
practical information were provided. The commercial
companies law was analysed in further detail in addition to
specific regulations and requirements to establish Limited
Liability Companies (LLCs), Joint Stock Companies, and
special rules pertaining to setting up a branch or
representative offices of foreign companies. Attendees
consisted of Dubai Chamber members, investors,
entrepreneurs, lawyers, consultants, and SMEs.
This training workshop provided attendees with focused
and essential insights on starting up companies. Dubai
Chamber strives to create a favourable business
environment, to support the development of businesses,
and to promote Dubai as an international business hub. To
this end many other exciting and beneficial initiatives are
undertaken. For more practical information on starting a
business in Dubai, you can obtain a free copy of the
Chambers Dubai Business Advisor Series. The last updates
on our initiatives can be found on our website,
www.dubaichamber.ae.
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The First Rule toSuccess for an SMEA strongly founded business plan that maps all factors of
key importance for a company brings clarity for all
business undertakings in start-up, growing, and
established phases. On July 4th & 5th, companies looking to
realize their full business potential had the opportunity to
attend the two-day training workshop Crafting a Winning
Business Plan at Dubai Chamber. The training workshop
catered for companies that want to stay abreast of the
ever- changing business environment and believe that it is
essential to be outstanding. With this in mind, a varied
group of participants from different age groups and with
diverse professional backgrounds joined the training
workshop last week. With the Winning a Business Plan
Competition attendees were further motivated to put
theory directly into practice. They were encouraged to
draft their own business plan within the following two
weeks on which the trainers provided direct feedback. All
participants also had access to a special interactive follow-
up session online while preparing for their business plan.
Did you know?All businesses, whether industrial, professional,trading, or providing services, must be licensed to
operate in the UAE.
Each Emirate has its own set of rules and regulations
regarding the establishment of new businesses.
The Commercial Companies Law no. 8 (1984) as
amended (CCL) and the Commercial Agencies Law no.
18 (1981) as amended are the primary federal
legislative framework that control commercial activity in
the UAE.
Types of Licenses
A Commercial License is for companies that
will be engaged in all sorts of trading activity,
such as importing, exporting, selling,
distribution, and storage.
An Industrial License is intended for
companies that will be conducting industrial or
manufacturing activities. This includes importsof raw materials, manufacturing of certain
products, and the export of finished products.
The Professional License covers professions
and the provision of services.
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BusinessAward
Applications are currently
being assessed for the fifthcycle of the Mohammed BinRashid Al Maktoum Business
Award . The w inn ingcompanies will be awardedduring the prestigious award
ceremony on October 31st2010.
Upcoming EventDigital MarketingSeminar Series
October 5th 2010
For more information, please visit
www.dubaichamber.ae/digitalmarketing
We host a wide variety of value-added and pricecompetitive events throughout theyear. These events consist of knowledge-based seminars, specific trainingworkshops, or industry-specific roundtables and cater to the needs of the Dubai-based business community. Topics cover a wide range of areas of interest and aredemand-driven. Please visit our website www.dubaichamber.ae on a regularbasis to remain informed on all our events.
Take your Benefit from our Events!
2010 Dubai Chamber
For more information, please email
4
P.O Box 1457, Dubai, UAE
800 CHAMBER (800 2426237)
www.dubaichamber.ae
terms of high airport fees, freight costs, and storage feesare persistent and not at par with other countries. Forsupport services participants shared that more servicescould be provided in areas, such as establishment ofadditional independent assayers, testing of colouredstones, and gold financing. Regarding Dubais promotion
as a hub for gold and jewellery it was highlighted thatsome loose cooperation has evolved in recent years, but aconcerted effort is lacking.Participants highlighted areas for additional support to helpthe further flourishing of the industry. The highlightedareas included: i) meeting with government entities to
discuss issues and concerns at stake, ii) the introduction ofa new authorised document to ease matters related tofinancing, iii) cooperation with Dubai Tourism on tradeshows and exhibitions.
The findings of this Business Support roundtable isofficially brought forward in a recommendation report to
the Dubai Chamber Advocacy Committee for further
utilisation in its interactions with the Executive Office.
Opportunities: Aluminium
Dubai has a strong domestic aluminium industry with an establishedreputation as a leading smelter of aluminium, a producer of secondary
goods, and a trading hub for aluminium products. This is illustrated bytotal exports in this industry totalling AED 2.4bn in 2009 out of which AED
1.3bn were direct exports.
Dubai Chamber research indicates that Dubais global competitiveness inthis sector is high with a revealed competitive advantage of 208. With sucha high outcome, Dubai Chamber has decided to promote opportunities inthe Dubai aluminium sector in a special issue of the recurring investment
opportunities analysis. In this special report an attempt is undertaken toleverage the already existing global competitive position of Dubai in thisindustry by highlighting the various opportunities for investors in Dubais
existing production facilities, the already present strong network of
companies, and the dynamic international trade flows of Dubais aluminiumsector. Kindly email [email protected] for moreinformation.
Dubai Chamber is active in analysing identified industriesas part of its quest to provide the business community withvaluable insights within industries. As part of this effort areport entitled Investment Opportunities: Precious Metalsand Gems was developed. Following this report, aroundtable was organised to inform the precious metals
and gems sector about the existing opportunities in theirindustry. An in-depth discussion enabled participants toshare their views and comment on practicalities andchallenges at stake.This Dubai Chamber report encourages bullion traders and/or companies that hold bullion to establish operations or
subsidiaries in Dubai. It also promotes furtherdevelopment of support services within the industry. And,lastly, it stimulates local jewellery production, design, andmarketing, especially in building and promoting brand-
awareness of Dubai-based jewellers.Although participants acknowledged the excellent
infrastructure and services to support bullion trade locally
and within the region, they revealed that challenges in
On Precious Metals and Gems