Panel on corporate tax hears of opportunities and red flags
Leading auditing and taxation firm Corporate Group sought to allay concerns over the looming regime of corporate tax in the UAE while highlighting the fact that a significant number of companies face the risk of fines in the absence of timely action.
A packed hall of entrepreneurs, CFOs and accounting heads from big companies attended a panel discussion organised by Corporate Group at the Radisson Blu Waterfront hotel in Business Bay on Tuesday. The audience heard from experts in the VAT, legal and Federal Tax Authority (FTA) domains on how time is running out for businesses to comply with the registration before the June 1 deadline.
“It is understandable that people have all sorts of questions especially when the framework of the law is still being fine-tuned by the government,” said Mohamed Osman, chairman at Corporate Group, who also specialise in audit and VAT services. “While it is true that not all are eligible or bound to pay the corporate tax rate of 9 percent, everyone has to register if they meet certain criteria.”
The UAE’s impending implementation of a 9% corporate tax is a drastic step in the traditionally tax-free country and hence vexing for many. However, some have welcomed the move even from a neutral, larger perspective.
David McCormack, Managing Director of Asset Capital Solutions who has managed more than $200 million of real estate investment for two private equity groups, said: “Countries like the UK or Australia, where I hail from, have high rates of corporate tax while it used to be zero here. However, any dealings that we did, irrespective of the merit, attracted misconceptions by many countries that we were trying to cheat on tax money. Now, that is getting out of the equation.”
Abdul Salim Seyudu, technical manager at an insurance company, said: “It was an informative session on a very relevant topic. With startups and the likes from all parts of the world coming to Dubai, everyone is looking at it with their own lens and needs. I remember VAT has now been here for five years and people are still searching for answers. Similarly for corporate tax, every piece of information is helpful at events like this.”
Questions arose from the packed hall with attendees seeking clarity on how the pending changes impacts their respective organisations or businesses. Many stayed behind much after the session to address more queries to the experts. There was also demand to have more such conferences in the near future.
“Education by way of seminars and such discussions is needed,” said Luca Angiolilli, the CG Tax Director with more than 20 years of experience in various countries. “Before starting the meet, seeing the enthusiastic response, we decided internally to have more such events.”
The presence of 45 free zones and their unique position from a taxation point of view in the economic framework of the UAE has made the introduction of CT more challenging. “The UAE has 45 free zones with some more coming up and in areas criss-crossing each other,” McCormack said.
“Many of the companies have registered where they shouldn’t have. Some free zone companies have slipped into the guise of another activity, which may have gone off the radar until now. And many don’t even have the option to open bank accounts and that is a fundamentally big problem in the current development of implementing corporate tax.”
All panelists agreed unequivocally that the initiative by Corporate Group has set the conversation going in the right direction. Yet, the lack of awareness and lackadaisical approach among business houses, SME and individuals must end soon with barely a couple of months left.
Russian company expanding taxi business in Dubai
Yango – a ride-hailing, delivery and e-grocery company with Russian origins – is gaining popularity and challenging industry majors Uber and Careem in Dubai, Bloomberg reported on Wednesday, citing sources.
Its share of the local ride-hailing market in May amounted to between 4% and 8%, less than a year after the company started operations in the UAE’s most populous city, according to the report.
Yango launched in Dubai in September 2022. It’s operated by Netherlands-based company Ridetech International, formerly Yandex Taxi, a subsidiary of Yandex NV, the Dutch-registered holding company for the Russian IT conglomerate Yandex.
Analysts note that the company’s popularity stems from the influx of Russian businesses and expats, who have been relocating to the UAE over the past year amid anti-Russia sanctions imposed in the West. According to Islam Abdul Karim, Yango’s regional general manager, the number of orders for Yango rides is growing at an average of about 20% every week.
Yango’s main rivals in the region, US-based Uber and Uber-owned local firm Careem, told Bloomberg that they welcome the competition.
Uber and Yandex have already faced off in the Russian ride-hailing market. Their rivalry ended in 2017, when the companies merged their Russian businesses to form a joint venture with Yandex as the leading partner. Last month, however, Yandex bought out Uber’s share in the company for $702.5 million, becoming the sole owner.
Esports company seeks to ride wave two years after IPO pop
Investment opportunities in eSports and virtual gaming are on the rise, especially in Southeast Asia and Middle East and North Africa market regions, and companies such as Esports Technologies are looking to ride the wave.
Esports Technologies made the biggest splash of the IPO market for the year 2021 on the NASDAQ (EBET) when it made its debut with a jump in share value of 507% and eventually soared up to 700%.
According to a new market research report titled ‘Southeast Asian Gaming Market – (2023-2028)’ and released in March this year by Mordor Intelligence, the market is expected to register a Compound Annual Growth Rate of 16.2% with the onset of 5G technology. It marks a reverse trend after a little flat 2022 when revenues dipped slightly. Only the MENA and Latin America regions showed positive growth, according to a NewZoo report.
The rising popularity of various sports and investments in internet infrastructure are the primary factors driving the market’s enormous growth potential. Buying E-sports stocks online and their subsequent performance are the rage among America and South Asian investors with an incredible surge in both demand and price.
Since the IPO of Esports Technologies, it has been confirmed on the books as well above average opening. According to data from Jay Ritter, the average IPO pop from 1980 through 2020 was 18.4% in one day. In 2021, the average first day gain after an IPO was 16%. Using all common stock IPOs between 2000 and 2020, the positive average first-day IPO returns was 21.11 percent in one day.
While getting a direct exposure to the eSports theme is fairly limited, investors can target companies that generate significant revenue from video games and e-sports.
Competitive gaming events, conducted virtually at a professional level, are becoming big business. With its roots being in South Korea, Asia has led global eSports trends and growth for over the past 20 years.
Dubai company proves microcosm of World Cultural Diversity
The UAE is a melting pot of cultures and the World Day for Cultural Diversity for Dialogue and Development fell on Sunday 21. Many organisations celebrated the occasion in the poster city of Dubai over the weekend while some opted to beat the Monday blues with the right excuse.
Data Direct Group, a leading business group in Dubai since 2002, chose to start early with lot of fun activities at their Deira headquarters. DDG’s core arm is digitally driven Business Process Outsourcing. With 26 nationalities working on ensuring good customer experiences, unity in diversity and cultural amalgamation comes naturally at the organisation.
“May 21 is a very important day for us,” said Rajiv Dalmia, the group founder and chairman. “Diversity of cultures is an extended requirement of the business, but it is also very vital to our ethos if we have to remain true to our values to enhance customer experience.” DD is also an equal opportunity employer to more than 580 employees with around 290 of them as females.
According to the Ministry of Foreign Affairs, there are more than 200 nationalities living in the UAE, with 10% Emiratis and an eclectic mix of expatriates. That is more than the member states registered with the United Nations at 195.
As a leading group handling the customers of many government and private companies, the DDG roster is an ideal microcosm of the varied and colourful mix of religions, race, ethnicity, caste or creed. “Many call centres in the UAE try to cater to the top nationalities by numbers among the population by keeping a dedicated option for customers to converse in the language of preference,” said Dalmia.
“We also keep evolving and try to incorporate inclusion to the best extent possible, even if there is only so much you can do.”
Girish Ojha, the chief human resource officer, agrees. “While language can be a barrier at times, our instructions to the staff is to be understanding and try to reach out to them in all means possible. On a daily basis, with each call that tries to reach out to our clients through us, our employees are duty bound to make data available through any source of contact possible.”
One of the key members of Data Direct, on condition of anonymity, said: “I am a global citizen when I am here in the UAE. The charm of working in this country and at this workplace is that you get to learn so much about the world without travelling anywhere.”