Dubai Business Focus Issue 4 2010

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

[email protected]

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

Documents

Dubai Business Focus Issue 4 2010