contact

Call Us Now

+971 4 276 2233

email

Connect Mail

info@krestonmenon.com
Get in Touch

Get in Touch

We would love to hear from you!

Tags

Recent posts

Five Business Lessons I Didn't Expect to Learn in My First Year of Consulting
Five Business Lessons I Didn't Expect to Learn in My First Year of Consulting
The Speed-Quality Trade-Off in Audit - A Myth
The Speed-Quality Trade-Off in Audit - A Myth
alt
Beyond Size: The True Scope of Transfer Pricing
From Reports to Real Business Insight
UAE Corporate Tax Update | FTA Clarifies the Meaning of “Director” and “Officer”
Dubai Chamber – A Bridge Between India And Dubai
Sameer M Nawani, Chief Representative of Dubai Chamber International Office - India

India and Dubai share historic and strong trade and cultural ties. The non-oil trade between India and Dubai has consistently increased over years from $26 billion in 2017 to $36 billion in 2019, making India the second largest trading partner for Dubai. Indians are the largest investors in Dubai’s real estate sector and make up the largest segment of tourists visiting the emirate. The city also is home to over a million Indian nationals, who account for over 30% of the population of the Emirate.

Since 2015, India and the UAE have exchanged several high-level visits, which strengthened the relationship and led to the signing of the Comprehensive Strategic Partnership, an agreement that aims to expand economic cooperation and boost bilateral trade and investment. Given the role Chambers play in mobilizing businesses and promoting trade and investments, India’s Prime Minister Narendra Modi during his visit to Dubai in February 2018, welcomed the idea of Confederation of Indian Industries (CII) opening an office in Dubai and Dubai Chamber of Commerce & Industry opening an office in India. Dubai Chamber opened its first representative office in Mumbai, India, in June 2018. The main objective of the office in India is to identify bilateral business opportunities that businesses in India and Dubai can capitalize on and benefit from.

The year 2020 has not been an easy one. It has put the healthcare systems of global economies through tremendous strain, disrupted supply chains and brought businesses to a standstill. In such times where the world is pressing a reset, the continued exchange between India and UAE is ensuring a smoother turnaround in economic activities. Both governments have been agile in taking the right measures while enhancing ease of doing business. Businesses on both sides are being extremely pro-active in exploring diversification, finding growth opportunities globally, implementing technology and strengthening their supply chain. We have seen growing interest in a number of high-potential sectors, and you can read on to learn more about these opportunities.

Food security and trade

Ensuring food security is high on the agenda for UAE and the pandemic has underlined its importance. India is first globally in milk production, livestock population and millet production and ranks second in fish, rice, wheat, cereals, fruits & vegetables, and total food production. India has the potential to double its food exports from $30 billion in 2019 to $60 billion in 2022. Lack of storage facility and transportation infrastructure results in 30% food losses in India. The India-UAE Food Corridor project is expected to fill this gap, with an investment of $7 billion from the UAE to develop dedicated logistics infrastructure connecting farm to ports in India. This project has the potential to increase the food trade between India and the UAE from $2.2 billion to $7 billion in next five years.

Dubai has developed specialized infrastructure to facilitate global trade of select products. Jebel Ali Freezone (JAFZA) in Dubai, is home to the world’s largest port-based sugar refinery which has a production capacity of 2 million MT and contributes to 3% of the refined sugar production of the world. JAFZA also has a rice hub which handles the storage, processing, and packaging of rice. Around 66% of the rice imported into Dubai comes from India. There are dedicated storage facilities for grains, pulses and other food products at JAFZA.

Dubai Multi Commodity Centre (DMCC), the free zone focused on commodities trade is home to the Tea Centre and Coffee Centre. The Tea Centre is a purpose-built facility dedicated to storing, blending, and packaging of tea. The centre has 5000 MT of storage capacity. The Coffee Centre is a 15000 square metre state-of-art temperature-controlled facility which can be used to store, clean, roast, package and distribute coffee. It also has a coffee quality centre laboratory, cupping lab, and training campus. DMCC in 2020, introduced an agri trade platform called Agriota, which facilitates trade between Indian farmers and international traders.

In 2021, Dubai Chamber is pushing ahead with new initiatives to facilitate collaboration between businesses to connect the infrastructure of Dubai and the production capacity of India.

Retail Opportunities

Retail in India is highly fragmented but transforming at a tremendous pace. It is expected to become a $1.75 trillion market by 2026. India has the second largest population in the world. With a growing middle-class and increasing urbanization, the household incomes are rising, resulting in increased consumer spending. Driven by these developments, India has seen numerous homegrown brands in retail like Lenskart, Nykaa, Forest Essentials, Belgian Waffles, etc. grow at an enormous speed. The young new India is ambitious and aspirational, making it an ideal destination for International brands and retailers, opening doors for retail businesses from Dubai.

Having one of the busiest airports and being one of the world’s most sought-after tourist destinations, Dubai is a great place for retailers and brands to have high international visibility. Dubai ranks number one globally in international brand penetration. Dubai has been among the most popular destination for Indian businesses since a few decades. It endures as an ideal destination for new and fast-growing Indian brands and retailers to learn the lessons of international operations in a dynamic market which echoes global trends, and yet provides a familiar environment close to home.

Technology and scale-ups

India is the third largest start-up ecosystem in the world whereas Dubai is the preferred hub for start-ups in MENA region. Strong regulations, access to funding, sizeable market, thriving start-up ecosystem and access to talent makes Dubai a lucrative destination for start-ups. Numerous Indian start-ups providing tech solutions have seen their solutions being widely accepted by businesses in Dubai, which has given them a strong footing in MENA region as well as helped expand their operations back home.

The pandemic has accelerated the adoption of digital solutions in banking and healthcare. Telemedicine services saw a spike in demand and hospitals rapidly moved to implementing solutions for contactless delivery of services. Digital transformation in banking is a key enabler in boosting business. The ability to be able to pay anyone, anywhere at the click of a button has been a game changer and has seen new business models evolve across sectors. The payments and the venture capital regulations introduced by the Dubai International Financial Centre (DIFC) in 2020 are changing the financial services and funding ecosystem. The DIFC’s Innovation License Program helps innovative tech companies work in a regulated environment and helps DIFC build supportive systems and regulations.

The Dubai Chamber International Office in India along with Dubai Startup Hub, StartupIndia and Mumbai FinTech Hub organized the Dubai Tech Tour, a virtual delegation in 2020, which was joined by promising fintech and health-tech scale-ups. The scale-ups Advarisk, AIkenist, Anatomiz3D, BestDoc, Cube, ePayLater, Karza Technologies, Lucine Rich Bio, Metanoa, Seragen, Supermoney, Turtlemint, Value3 and vPhrase were shortlisted through a rigorous screening process and introduced to key businesses & investors in Dubai. Some of these scaleups are in advanced stages of negotiating their first commercial deals or currently in the process of setting-up in Dubai.

Riding on this success, in 2021, the India Office of Dubai Chamber will focus on RetailTech and introduce tech solutions from India that address the changing needs of retail and e-commerce.

Dubai Chamber currently has a network of 11 International Offices in Latin America, Africa, and Eurasia, dedicated to exploring promising markets and facilitating trade and investments between these regions and Dubai.


Read More
New Mindset Of Foreign Investments To UAE – Case Studies
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
UAE economy is known to be young, rapid in growth and dynamic, and due to the strategic location between the east and the west, it gained the trust for domestic and international investment. Here came the main role of the authorities who inspire and induce foreign investors to this land of opportunities. The country was always exemplary in introducing investment friendly policies which ensure methodical and consistent growth in economic and industrial realms. UAE’s long-term plan is to diversify the economy with reduced reliance from the oil sector. In order to increase productivity and competitiveness, it is necessary to maintain and continuously improve the business climate and reduce remaining barriers to foreign trade and investment, primarily, bureaucracy, time and costs. Ongoing reforms would be better to run in the areas of human capital development, legal frameworks and clear rules for new entrepreneurs, start-up and SMEs.

Due to the country’s strategic vision of economic, social and environmental potentials, the UAE continues to achieve remarkable developments in many fields including trade, investment, telecommunications, information technology, tourism and infrastructure, as well as human and social development.

Latest reforms in the Foreign Direct Investments (FDI) rules gives more flexibility in business ownership, related regulations and at the same time these changes aim to promote and develop the country’s investment environment. It is estimated that the revision in the Law will augment FDI inflows to the country up to 20% inspite of the impact of the aftermath of the pandemic. Enactment of the FDI Law and subsequent amendment to the Commercial Companies Law has boosted FDI flows into the UAE.

The crises through which the world has been undergoing has resulted in uncertainties on economic growth everywhere. However, during such times, UAE has been focusing on finishing its infrastructure and strategic projects which were kept on hold for a long time. Higher investment and public spending are likely to drive growth to a remarkable elevation in the coming years. It is worth to notice infrastructure investment related to the country’s preparation to host the Expo 2020 Dubai will continue to support the outlook, buttressing the construction sector. This is set to contribute momentum to enhance investment in the country.

Kreston Menon was instrumental in assisting some of the top niche Companies to get 100% foreign ownership license in the UAE as per the provisions of new FDI Law and the Cabinet Resolutions released thereafter.

Case Study- 1: Manufacturer of Wellness Products

The client is a multinational company spread across US, Europe, Asia and Oceania; having operation for almost 90 years. The conglomerate engages in manufacture of healthcare products and other ingredients. The Company has been in operation in the country, however, in a limited way by organizing the availability of the products through contract manufacturing by domestic players which contributed its own pathos and limitations.

Our application process started with a formal meeting with the FDI and DED officials who assessed the merits of the proposal. The FDI department thoroughly evaluated the project feasibility and pinpointed the areas which the plan must address as per the FDI department’s expectations and requirements. Initially the application was for a trading license, however, the client changed the overall objective to take the full-fledged advantage being a 100% foreign owned company. Accordingly, discussions were held with Dubai Industrial City and Dubai Investment Park authorities for setting up a plant for manufacturing cosmetic, wellness products and alternative medicines. The project has been capitalized at AED 50 million which helped to process the application in a much faster way though the minimum capital requirements was AED 20 million. The capital outlay was structured in the form of technology transfer, installation of advanced machinery, introduction of robotic technology and artificial intelligence. The Company formulated the entire proposition for availing a national industrial license which offers duty free export to GCC countries and to the Greater Arab Free Trade Area. The Cabinet Resolution No. 16 of March 2020 (CR) granted the status of a ‘national company’ to a 100% foreign owned company, provided there is 40% local value addition in the manufacturing process, use of sophisticated machinery and modern technology despite absence of 51% UAE National ownership.

Case Study-2: Distributor of Single Brand Product

The corporation is a lifestyle company which is listed in the stock exchange in India and mainly manufactures fashion accessories such as watches, jewelry and eyewear. The entity is part of a multinational group, that started operation in 19th century having business interest from pin to plane. Being a publicly listed company, the major restriction of the Company to directly invest in the UAE market was the mandatory 51% UAE National ownership since this is not acceptable to the regulatory authority back home. The application was treated as a special case even though the CR does not expressly permit the trading segment for 100% foreign ownership. The capital commitment and investment made by the company over a period of five years is AED 250 million. The investment is in the form of setting up of various showrooms, distribution kiosks, service centers etc., pan-UAE. The limited liability company was registered with standard minimum capital; however, the client was asked to submit an assurance certificate to the FDI department as proof of investment made so far while renewing the commercial license. Deployment of qualified staffs and commitment to employ UAE Nationals in the managerial role was also a commitment given by the client to obtain the FDI license.

Case Study-3: Healthcare Service Provider

The applicant is a publicly traded healthcare provider founded almost 35 years back and operates hospitals, diagnostic centers, medical centers and pharmacies in India and Middle East. As per the CR, this activity is subject to approval of competent entities depending on the economic need considering the number of hospitals and health centers in a specific area. However, being an existing group having presence in every nook and corner of the UAE, the merit of the application was undisputable. The business plan provided the long-term objectives of the founders and the value addition they could create in the UAE economy. The most favorable impact that the FDI regulations brought to the client’s business strategy was the comfort they could offer to institutional investors who always preferred lien-free ownership in the group. 51% ownership in the name of a UAE National was always a hindrance in many entities of the founders to attract international investors.

Upon evaluating the entire process of registering the above entities, it is evident that each application for FDI license was treated purely on merit basis and ensuring how the UAE economy would benefit with such an action. The timeframe to complete the above applications took us around 45 to 60 days. The application process was expedited in many cases and turned out to be positive outcome given our experience in this market and well-established business relationships with the authorities.

Presence of the finest entities referred in the above case studies shows that the country has now gained international confidence and the latest amendments to the Commercial Companies Law steadfast the commitments by the regulatory authorities such as Abu Dhabi Investment Office, Dubai Investment Development Office, Sharjah Investment and Development Authority etc. Foreign Direct Investments help the UAE’s economy to boost rapidly, creating new jobs, productivity and consumption. Foreign Direct Investments will continue to grow in UAE, considering there is no direct taxation on corporations or individuals. At the same time, good-quality business climate and longterm political stability promote confidence to all possible foreign investors.
Read More
Message from Kreston’s Global Chief Executive
Liza Robbins, Chief Executive - Kreston Global
2021 marks the 50th year of Kreston. Today, Kreston has grown to one of the largest accounting networks with close to 200 firms in over 110 countries that is home to more than 23,000 dedicated professionals. Kreston gives you access to top-quality advice and exceptional service wherever in the world you happen to do business.

As new markets develop and technology evolves, your business operates on an increasingly global scale. And when you are branching out into the unknown, you cannot beat a bit of local knowledge. Kreston Menon with 27 years of experience in the UAE, is the right partner for your business in the region.

You can trust Kreston Menon for the right advice because they are a team of talented, innovative professionals who offer the best assurance and advisory services not only in the UAE, but across the globe leveraging Kreston’s global resource pool.

Our monitoring and inspection system ensures that our member firms hold themselves to the highest international standards of quality, ethics and working practices.

I am glad to see that Kreston Menon’s values are reflected in their deliberate inclusion efforts amongst their diverse workforce, which in turn enhances Kreston’s global image as a champion in Diversity & Inclusion (D&I).

Our member firms work side by side with clients to understand their ambitions and tackle their challenges. As a network, we have got the connections to bring the right knowledge to the table, whatever the challenge.
Read More
Unified ICV Program Changing the Socio-Economic Landscape in UAE
Kreston Menon

For past many years, the GCC countries have been initiating localization drives, particularly in the oil and gas industry. The major localization initiatives in the region started with Oman Oils In-Country Value (ICV) program followed by Saudi ARAMCO’s IKtVa and Abu Dhabi National Oil Company (ADNOC) ICV program.

Read More
Gearing up for the Next Normal
Raju Menon, Chairman and Managing Partner - Kreston Menon

Every business was looking optimistic for a great 2020 at the beginning of the year, but now are facing a completely different scenario. The COVID-19 pandemic has severely affected businesses across every industry and geographical region. The norms of businesses have changed, be it remote working, changed customer preferences and priorities or radically transformed operational networks.

Read More
ABRAHAM ACCORD: The Game Changer in Middle East
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services

The world woke up to the unexpected and astounding news of the peace treaty between the UAE and Israel, making UAE just the third Arab state, after Egypt and Jordan to establish formal ties with Israel. UAE scrapped an economic boycott against Israel which was in place for decades, allowing trade and financial agreements between the countries.

Read More
whatsapp