Kreston Menon
April 11, 2024
April 11, 2024
This guide is an overview of the UAE’s Value Added Tax (“VAT”) system, focused on how it affects foreign businesses trading with UAE. It is general in nature and unlikely to cover the specifics of your scenario. It should be read as such and not be construed as advice. For advice as to how your business is affected by UAE VAT, please contact a MMJS UAE VAT specialist.
November 24, 2023
Ravishanker Vengathattil is a seasoned tax expert currently serving as a Senior Manager at Kreston Menon in Dubai since February 2023. With over a decade of experience, he held managerial positions at BSR & Co. LLP in Bengaluru and was previously a Partner at K B Nambiar and Associates for nearly six years. His journey in finance started as an Articled Assistant with K. B. Nambiar and Associates and Tata AIG.
October 20, 2023
Alongside the landmark introduction of corporate tax in the UAE comes the implementation of new transfer pricing rules. These aim to prevent taxpayers from distorting or reducing a business’s profits to avoid tax by placing certain requirements on the transactions made between related parties, or payments made to connected persons.
Broadly speaking, this includes payments to directors, shareholders, owners, key management, and other group companies with common shareholding or control. The UAE transfer pricing rules dictate that any such transaction or payment needs to be made at ‘arm’s length’ or ‘open market’ value. Companies that enter into these transactions must maintain adequate documentation and submit a transfer pricing disclosure form at year-end, alongside their corporate tax return.
We spoke to Ravishanker Vengathattil, Senior Manager of Audit and Taxation at Kreston Menon, to find
out more about the rules and how they are affecting businesses in the UAE.
“This is a major change in the economy,” says Ravishanker. “In an emerging tax environment, transfer pricing comes with its own challenges – especially in a place where there was previously no tax at all.”
The compliance requirements themselves are relatively straightforward, he adds, and may even feel fairly simplistic for multinational companies that already have a mechanism for handling transfer pricing in place. But for businesses based in the UAE, Ravishanker foresees some challenges as they move into a more formally structured business environment.
“We speak to a lot of businesses whose general practices have been quite informal. For instance, sharing
of resources is a common practice among group companies. This arrangement sometimes does not get as much attention or formal documentation as would be required going forward.”
Under the new rules, those businesses must treat each company and each owner as a separate entity – a shift from the current paradigm in the UAE, especially for businesses where audits were not mandated. For example, the VAT regime, which was introduced in 2018, allows for companies to be treated as a single group when filing VAT returns if they have a common shareholder, which is different from the tax grouping mechanism prescribed under corporate tax. Now, businesses must formally recognise the distinctions between different entities and keep proper records regarding any transactions between them.
In terms of corporate tax as a whole, Ravishanker suggests there are two main areas that UAE businesses should focus on: transfer pricing and documentation.
The corporate tax rules, including transfer pricing, apply to financial years starting on or after 1 June 2023. Companies that are not compliant with the rules risk incurring the following general penalties, amongst other specific penalties:
• AED 10,000 (AED 20,000 in each case of repeated violations within 24 months) for each record-keeping violation and other information specified in the law.
• Penalty of 14% per year, levied monthly in case of a tax pending settlement.
• Loss of 0% tax incentive for a free zone company
– this applies not only within the tax year that the company is non-compliant, but for five years altogether.
Over the past six months, Ravishanker has been working with UAE companies to understand the corporate tax rules and identify questions or challenges early on. Where problems arise that are not clearly communicated in the legislation, he encourages clients to use the process of private clarification to present their case to the Federal Tax Authority.
“There’s no need for us to make interpretations or take extreme tax positions when this option is available,” he explains. “It takes time, but when large amounts are at stake, I don’t think we should leave room for any sort of risk.”
The type of support that businesses need to comply with the new rules depends on their size and location. Larger multinationals, which often have in-house teams, need to adapt their existing transfer pricing mechanisms to comply with the UAE rules. UAE-based businesses, meanwhile, essentially need to start from scratch.
“Right now for the larger UAE businesses, what we are trying to do is get the structure in place so that they can hire the right people, establish the right policies, and get documentation, including transfer-pricing agreements, set out. Once the team is trained, the annual compliance will follow.
Most smaller and medium businesses are looking for a retainer, or maybe quarterly consultancy, to review their transactions regularly. They may not see merit in having an in-house team, and sometimes it’s not warranted.”
Businesses can also benefit from using the right accounting software to collect and process large amounts of data required for transfer pricing analysis. There is even potential for AI to play a role in analysing that data, with solutions in this area developing rapidly.
As we heard in our previous interview with Jadd Shalak at Averyx group, many companies are also reconsidering their structure to reduce their tax and administrative burden as a result of the changes.
“The talk about restructuring is very valid, especially from a transfer pricing perspective,” says Ravishanker. “As I mentioned, a lot of the businesses in UAE are structured very informally. They have one shareholder who holds multiple companies; it’s not a holding-and-subsidiary relationship. Under the corporate tax regime, businesses consisting of multiple companies are subject to separate transfer pricing evaluations for every transaction between those entities.
They also need to maintain separate records and filing. As a result, many businesses are considering establishing a holding company and subsidiary structure, consolidating the entities and effectively removing the need for transfer pricing analysis for transactions within the group.
Each business will need to consider this decision carefully. One major downside of forming a single tax group is that the corporate tax threshold (currently AED 375,000) would apply to the entire group’s profits, rather than to each company individually. On the other hand, it allows for much simpler management and fewer administrative requirements.
As a new law, transfer pricing presents some specific practical challenges to UAE businesses and tax agents. One of those, Ravishanker notes, is the availability of comparable data:
“To compare with my previous experience in India, I always had a database available for comparability. If I was doing a transfer pricing study for, let’s say, an automobile manufacturer, I was able to get very relevant and comparable data from the largest automobile manufacturers in India, because there were service providers who had collated the database. In UAE, or GCC in general, we do not have that yet. Right now, we would have to leverage the data that is available for similar companies in the Asia Pacific, Europe and other parts of the world.”
The Law has not restricted the use of global databases, he explains, but neither has it prescribed it. The OECD also allows for this practice where region-specific comparable data is not available. So far, the UAE has also not prescribed the specific criteria to arrive at an acceptable arm’s length range, such as using the interquartile range or other percentiles.
Similarly, the question of whether companies can use multi-year data or single-year data in transfer pricing studies remains unanswered. In general, though, the UAE government has indicated that companies can follow OECD principles.
Apart from these questions about the specifics of the rules, there are a few areas that differ from the way transfer pricing rules apply in other countries. For instance, while many jurisdictions exclude tax-neutral companies (i.e. where the same tax applies to each) from transfer pricing, this is not the case in the UAE.
There is also no internal threshold on transaction amounts that transfer pricing rules apply to. The only exemption given to smaller businesses is a reduced requirement for documentation, as those with a turnover under AED 200 million and who are not part of a Multinational Enterprise group (a group whose consolidated turnover exceeds AED 3.15 billion) do not have to maintain a master file and local file.
Aside from this, transfer pricing rules and basic documentation requirements apply to small and large businesses alike – but it remains to be seen how this might change in the future.
“Over the past ten months, a lot of things have changed. It’s an evolving law, so there may be more changes going forward,” says Ravishanker. “As it stands now, the rules apply to all businesses. Accordingly, it is important that small businesses, who may not have adequate in-house resources, avail timely assistance to ensure compliance.”
The implications of new transfer pricing regulations are far-reaching and complex, adding layers of compliance and record-keeping to an economy previously unburdened by taxation. For UAE-based businesses, this is a significant departure from their existing working practices, and they’ll need to remain vigilant and adaptable as the law develops. Multinational corporations with experience in dealing with transfer pricing will also have to recalibrate their existing systems to align with the new norms.
With the financial year starting in January 2024 on the horizon, the clock is ticking. Companies must act now to mitigate risks and fully comply with the new transfer pricing regulations to avoid costly penalties and secure their position in the UAE’s rapidly evolving economic landscape.
If you are interested in doing business in the UAE, please get in touch or contact Kreston Menon directly.
Jadd Shalak, a distinguished Partner at Averyx Group and Advisor at Kreston Awni Farsak, is a seasoned professional in Tax, Accounting, Finance, and Management Consultancy. As a Registered Tax Agent in both Australia and the UAE, and a Certified Fraud Examiner, Jadd brings a wealth of expertise to the table. He’s renowned for championing best practices for clients, both on national and international scales. Jadd’s role as Client Lead Partner further underscores his commitment to delivering unparalleled service and insights.
October 19, 2023
The corporate tax rate in the UAE was introduced in 2023. For decades, the UAE has existed as a low-tax jurisdiction, with limited requirements on companies operating in the region. However, with the recent introduction of a federal corporate tax in June 2023, the landscape for businesses and investors in this area is changing.
The corporate tax is the first of its kind to be adopted in the UAE, applying at a standard rate of 9% to businesses and commercial activities. There are exemptions in certain circumstances, including for those operating in free trade zones.
This transformation follows the introduction of VAT in 2018, another tax milestone for the UAE.
We spoke to Jadd Shalak, partner at Averyx Group and consultant for Kreston Global firm in the region, Kreston Awni Farsakh & Co, whose experience advising on tax in the UAE and multiple other jurisdictions, including Australia and Ireland, offers him a unique perspective on the changes.
“It’s really interesting to see how accounting in the UAE is changing,” says Jadd. “Previously you had a very laissez-faire business environment that was very dynamic, but not very structured.
“Then they introduced VAT, which required companies to have accounting records, follow standards, and report on a quarterly basis. With the introduction of the corporate tax, we’re seeing that companies are increasingly restructuring their operations.”
Where previously, one person might have carried out business through multiple companies, Jadd explains, businesses are now looking to establish an optimal tax and organisational structure that will hold up under the new tax regime.
The corporate tax law also includes new transfer pricing rules, under which businesses must ensure
transactions between related parties or connected persons are made at ‘arm’s length’
or ‘open market’ value. Because of this, Averyx Group has seen increasing numbers of businesses requiring a valuation as part of their corporate restructure.
This, in turn, means an increased demand for advice: and this advice must be accurate, comprehensive and reliable.
“Companies are no longer just looking for the cheapest advice,” says Jadd. “They require a high quality of work. The burden of proof is on the taxpayer, so it’s very important to business owners that they are protected, and that they have enough evidence to show the tax authority that what they are reporting
is correct .”
UAE companies will need to ensure they are operating effectively from a tax perspective while remaining compliant with the law and understanding its scope – including the different taxable entities, exemptions and more.
The implementation of corporate tax for the first time poses another key question: will the UAE remain as attractive to businesses and investors as it has thus far? Where it was previously common for companies to consolidate income from various territories and hold it in Dubai, that money will now be subject to tax. However, as Jadd notes, the 9% rate is still competitive relative to other jurisdictions in Europe:
“We’re finding that people are looking at those impacts. But we’re also noticing a lot of companies that think, ‘Okay, 9% is not that high’. We all see Ireland and Cyprus as places with tax benefits, and the tax rate in those countries is 12.5%.
“So people are accepting it, but accounting for it. It’s still a competitive tax rate, and it’s still very lucrative for companies to move into the UAE because of the lifestyle, and in terms of tax rates and operations .”
The UAE’s new corporate tax rules run alongside global initiatives by The Organization for Economic Cooperation and Development (OECD) to improve tax transparency and address the challenges of a digitalised economy. In 2015, the organisation released base erosion and profit sharing (BEPS) action plans to tackle the double non-taxation of multinational enterprises, which were structuring their organisations to shift profits to low or no-tax locations.
This led to the proposal of a two-pillar solution. Pillar One aims to adapt profit allocation rules for the largest and most profitable multinationals, while Pillar Two is designed to introduce a global minimum tax rate of 15%.
While the technical details of Pillar One are still being finalised, many countries around the world have already published draft legislation or implemented Pillar Two.
In the UAE, however, the rules are still under review and are not expected to be implemented in 2024.
“We envisage that Pillar Two is definitely going to have an impact, but not a drastic one,” says Jadd.
“Furthermore, there are tax credits. If you’re paying tax in a jurisdiction that has a higher tax rate than the UAE, you will obtain a tax credit provided you have a double tax treaty, which the majority of the countries have these days.”
The rollout of corporate tax is a landmark change for the UAE, aligning its tax laws with international standards while maintaining its position as a competitive place to do business. It also marks a shift in the globalisation of tax regulation and accounting standards – a shift that companies and professional tax advisors must adapt to. “The world has become a very small place,” says Jadd. “It used to only be
multinationals that needed international tax advice. Now we’re getting SME clients, operating in various jurisdictions, that need the same guidance.
“Businesses already operating or looking to expand into the UAE should ensure they understand global taxation implications and are up to date with evolving regulations. Using a local advisor to provide efficient and effective advice will help them stay ahead of developments .”
If you are interested in doing business in the UAE, please get in touch.
October 13, 2023
Surandar Jesrani is the CEO of MMJS Consulting in Dubai, steering businesses toward successful VAT implementation in the UAE and GCC since 2017. Before MMJS, he managed finance and taxation at a top Private Equity Group and sharpened his international taxation skills at Infosys and General Motors. An alumnus of The Institute of Chartered Accountants of India, Surandar specialises in Accounting, Finance, and International Taxation.
August 10, 2023
Surandar Jesrani of MMJS consulting in Dubai shares his thoughts on the implication of UAE’s corporate tax update with eprivateclient magazine. Read the full article here or the summary below.
The United Arab Emirates (UAE) has long demonstrated its commitment to international tax transparency standards, notably as a member of the Organization of Economic Co-operation and Development (OECD). Here’s a glimpse into the recent evolution in the UAE’s tax scenario.
OECD’s 2015 Base Erosion and Profit Sharing (BEPS) Action Plans aimed at preventing Multi-National Enterprises (MNEs) from employing strategies to lower their tax liabilities across jurisdictions. Nonetheless, as the initial BEPS strategies weren’t wholly suited to the challenges of a digital economy, the OECD introduced an Inclusive Framework (IF) in 2021. This two-pillar model proposed that MNEs should pay a minimum corporate tax of 15% in every jurisdiction.
The UAE, endorsing this global tax framework initiative, joined a consensus with 139 other countries. In alignment with its OECD obligations and its vision of positioning itself as a leading global business hub, the UAE announced a federal corporate tax on business profits in 2022.
UAE’s corporate tax regime adheres to universally acknowledged principles ensuring:
Effective from 1 June 2023, the UAE corporate tax law encompasses 20 chapters and 70 articles detailing the scope, application, and compliance rules. All business and commercial activities, undertaken by individuals or entities, fall under this tax regime, divided into resident and non-resident classifications.
Moreover, all business-active individuals and legal entities will need to register under the UAE corporate tax law.
Certain entities can avail tax exemptions, like the UAE government entities, qualifying public benefit entities, qualifying investment funds, and some specific entities as designated by the Minister.
Depending on the size and type of business, the UAE corporate tax rates vary:
MNCs, until the full adoption of Pillar Two rules by the UAE, will be taxed under these regular corporate tax rates.
Entities are required to file tax returns within nine months post the close of a tax year. While there are provisions for withholding taxes on specific domestic and foreign payments, currently, it stands at zero per cent.
UAE’s introduction of corporate tax is a strategic move in its journey as an OECD IF member, especially concerning the global minimum tax proposed by BEPS Pillar Two. With a 9% tax rate, the UAE remains an attractive proposition when compared to other tax jurisdictions. Furthermore, the UAE tax law’s foundation on internationally practised principles ensures a streamlined transition for businesses accustomed to similar laws elsewhere. As a result, many enterprises may re-evaluate their corporate structures to maximize genuine tax benefits under this new regime.
If you would like to speak to one of our UAE taxation experts, please get in touch.
December 19, 2022
Sector: Finance
Kreston’s Global Indirect Tax Group has welcomed a new regional director. Ankur Jain leads the indirect tax practice at MMJS, part of Kreston Menon, our member firm in the UAE.
In accepting the role Ankur Jain said:
“It is an honour to be appointed as the Middle East regional director of the Global Indirect Tax Group (GITG), particularly when Indirect Tax was introduced in many countries in the Middle East. In this fast and ever-changing tax landscape in the region, this opportunity brings a unique opportunity for me to share knowledge, build partnerships, work on referrals, and ultimately add value to our clients and Global Indirect Tax Group (GITG).”
Ganesh has extensive experience of more than 30 years in providing specialist tax services, particularly to large privately owned groups, with particular strengths in the property, retail, healthcare and hospitality industries. He has supported various entities with specialist advice on tax-effective structures and restructures, cross-border transactions on account of outbound and inbound India investments, mergers, acquisitions and divestments. Ganesh has also worked with stakeholders across businesses to deliver solutions such as tax due diligence, tax consolidation and restructuring of large family businesses in the Middle East, Asia, and Singapore.
Surandar Jesrani is the CEO and Managing Partner at MMJS Consulting. A chartered accountant by qualification and entrepreneur by nature, Surandar prior to founding MMJS was in key positions at HSBC Private Equity, Infosys, L&T and GM.
Surandar is a thought leader and the leading newspapers in the region frequently seek his views. Surandar is a speaker at various International forums and was recognized as ‘Corporate Icon of the Year’ for three consecutive years.
December 5, 2022
The Accountant Magazine recently highlighted the impact of the OECD two-pillar solution to control impact of BEPS on GCC (Gulf Co-operation Council) countries. Two tax experts from Kreston Global, Ganesh Ramaswamy, Partner at K Rangamani and Associates LLP in India and Surandar Jesrani of Kreston Menon shared their thoughts with The Accountant on the region’s readiness to adopt the new framework.
As the global economy becomes increasingly more digitalized, the OECD made the decision to update the framework on base erosion and profit sharing. Pillar one impacts the multi-national enterprise (MNE) with a turnover of more than 20 billion and profits before tax of over 10%. Pillar two is seeking a global tax rate of at least 15%.
Parts of the region have been in a position to be able to adopt the pillar two framework with relative ease. Multiple countries within the GCC are already positioned to be able to adopt the 15% tax rate, with Oman already in that position. A 15% corporate tax rate exists for non-GCC companies in Kuwait with Saudi Arabia already exceeding the expectations at 20%. Bahrain and UAE currently have no corporate tax structure and are considering how to implement it.
UAE will meet obligations by introducing corporate tax in June 2023. This is a step-change for the country, however, guidance is yet to be issued with details of how that might affect businesses in the country. Bahrain has not yet made a full announcement, but is expected to follow the UAE in its adoption of pillar two principles.
Saudi is seeking to make changes, considering the removal of the Zakat tax, with Qatar and Kuwait adopting corporate tax for GCC and non-GCC entities. In order to control BEPs within the GCC region, five of the six countries within the region will be adopting the OECD’s BEPs 2021 framework update. Kuwait is yet to confirm participation.
June 1, 2022
Sector: Finance
Surandar Jesrani of UAE member firm Kreston Menon (MMJS Consulting) writes about international regulator moves to crack down on digital art assets in Accounting and Business news. Read the full article here.
February 2, 2022
Sector: Energy, Leisure & Hospitality, Life Sciences & Healthcare, Manufacturing & Automotive, Promotional products, Real Estate & Construction, Retail, Technology, Media & Telecom
Dubai-based member firm, Kreston Menon, has launched the seventh and latest edition of ‘Doing Business in Dubai’, a guide to investment in Dubai, UAE.
The publication was recently launched by His Highness Sheikh Ahmed Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, Chairman of Dubai Airports, Chairman and Chief Executive of Emirates Airline and Group, and Kreston Menon partners, Raju Menon, Chairman and Managing Partner, Kreston Menon and Sudhir Kumar, Senior Partner and Head of Corporate Communications. The handbook is approved by the Business Registration and Licensing Department of the Dubai economy.
The publication has been celebrated in the press for raising the profile of Dubai, its free zones and offers a comprehensive understanding of the setting up process of Dubai International Financial Centre (DIFC) and on Nasdaq Dubai which allows companies to benefit from a unique investor pool that combines regional and international wealth. The guide is a great resource for start-up businesses, looking to benefit from the various support and incubation programmes provided by Dubai.
‘Doing Business in Dubai’ highlights the competitive start-up ecosystem of Dubai and acts as a guide for the innovative and enterprising youth from all over the world, as the book emphasizes on the various Startup Support initiatives and Business Incubation and Acceleration facilities provided by Dubai.
The book provides a complete overview of the incorporation process in the Mainland and Free Zones of Dubai, and helps the investor have clear understanding of the costs, impacts and benefits of each jurisdiction on his business. It also offers guidance on setting up in the Dubai International Finance Centre, and on NASDAQ Dubai, giving access to a unique investor pool.
The handbook gives insight into the decisive economic measures and new amendments to the residency and investment legislation initiated by the leadership of UAE which has stimulated the flow of foreign investments into the country. 30, 000 copies have been distributed around the region, including banks and high profile business events, such as the 2020 Expo in Dubai.
Download your copy of the handbook here.
November 17, 2021
The latest newsletter from member firm Kreston Menon brings us their perspective on the much anticipated Expo 2020 Dubai. Kreston Menon also hosted their own auspicious event, the UAE-Israel Business Meet 2021 – A Hybrid Event. 26 delegates from the Israel Director’s Union joined the Kreston Menon team to share insights on the Israeli-UAE alliance. Read these stories and more about the UAE tax landscape in their newsletter here.
November 16, 2021
September 30, 2021
August 5, 2021
Right now, the world is changing at a dizzying pace.
Even within the past couple of years, we’ve significantly changed the way we socialise… shop… work… and even use money. (I haven’t seen a chequebook in quite a while, and many people no longer carry cash.)
But all this pales in comparison to the changes we’ve been through over the past 50 years.
Back when I started work – not 50 years ago! – there were 10 people in my team and only one computer.
It’s hard to imagine today!
It’s something I’ve been thinking about a lot, thanks to Kreston’s 50th anniversary. What are the biggest changes we’ve seen in our working lives – and in our industry?
And intriguingly – what are the biggest changes we might expect over the next 50 years, by the time Kreston turns 100?
I’ve jotted down some of my best guesses below. And I’ve also included a condensed version of the thoughts of some of our ‘Purpose Champions’, who have been helping us articulate Kreston Global’s purpose and the difference we make in the world.
I hope you enjoy reading them!
Now for a look at the past 50 years… and a bit of futurology:
>> LIZA ROBBINS:
What is the most significant change to the accounting profession during your work-life?
First, internationalisation. When networks like Kreston were established many people were probably cynical, and dismissed their goals to serve international clients as a pipe dream and/or an unrealistic hobby-horse of the founders.
Most clients did not need international services and if they did that was the domain of the Big 4 (or Big 8 back then!).
Now the world is a global village and most organisations have some aspect of international in their work.
Then, there’s people. The hierarchies (not just in professional services) are breaking down and the old pyramid “command and control” systems are becoming obsolete.
There is a fight for talent – 50 years ago people paid to do articles with a firm in some countries. Now firms are fighting for talent, and fighting against a greater pool of competing employers. The balance of power is changing.
What do you think the most significant change is likely to be over the next 50 years?
We will see new client sectors – perhaps clients operating in the value chain of space travel?
If the global balance of power continues to move toward individuals, will might need representatives in organisations (e.g. The Elon Musk organisation) as opposed to just looking at countries. The implications of individuals becoming more powerful than countries is interesting! Would organisations like Kreston need to pay to have a representative in a business to ensure we stay in that organisation’s value chain radar?
>> SUDHIR KUMAR, Senior Partner, Kreston Menon (UAE)
What is the most significant change to the accounting profession during your work-life?
The move towards outsourcing accounting-related jobs. We’ve seen some large organisations in the UAE reduce the number of accountants in their Finance Department by as much as 90% as a result. The cost saving is phenomenal. The redundant accountants, when this first happened, had to survive by pivoting towards new businesses in the SME industry and start-ups.
What do you think the most significant change is likely to be over the next 50 years?
Cloud Accounting will become the norm. To draw a parallel in the Food & Beverage industry, Dark Kitchens or Cloud kitchens (which specialise only in deliveries – they have no storefront) are predicted to be the future. It’s predicted that leading F&B brands operating virtually out of Cloud stores/Dark stores will outnumber physical stores in 5 years…
Accountants will need to do a 100% transformation and reskilling to be part of the future – like any other professionals.
>> CHARITA CHAVLEISHVILI, HR Manager, Kreston Georgia
What is the most significant change to the accounting profession during your work-life?
There are many more young people coming into this profession.
What do you think the most significant change is likely to be over the next 50 years?
Accounting software programs will replace entry-level employees.
And analytical skills or the ability to see the big picture will be more valuable than knowing the tax code.
>> MEERA RAJAH, Partner, James Cowper Kreston (UK):
What is the most significant change to the accounting profession during your work-life?
A lot has changed during my work-life… The modern accountant is highly skilled in business management. Accounting is much more about driving commercial improvement, commercial finance and the world of targets.
Another big change is the dress code. For decades, a business suit has been required attire for professionals in finance. Indeed, some say that the thin stripes on a pinstripe suit were originally meant to represent the lines on an accounting ledger. The suit reflected seriousness and practicality. It then changed to business casual and now the policy is mostly for staff to wear what is appropriate for the job that day.
Finally, the accounting profession has been traditionally male-dominated but now the presence of women in the accounting profession is overwhelming.
What do you think the most significant change is likely to be over the next 50 years?
Perhaps new forms of regulation and continued globalisation of reporting or disclosure standards. Social and environment considerations are increasing in importance alongside economic concerns in organisations.
>> EDUARDO SOLANA, Project Manager, Transfer Pricing, Kreston BSG (Mexico):
What is the most significant change to the accounting profession during your work-life?
The ability to use technology to build closer relationships and to work more efficiently with clients and colleagues. The pandemic accelerated this process, and it has allowed us to have productive conversations with people on the other side of the world, and to produce better quality work.
What do you think the most significant change is likely to be over the next 50 years?
We’ll see an economy based on cryptocurrencies and the use of the cloud will give us a large database that will give companies better business insights. We’ll see tax authorities taking advantage of these technologies to be able to carry out better planned audits that will help combat, in real time, risky tax strategies.
And how about you? What are your thoughts on the biggest changes we’ve seen – and the ones yet to come?
July 10, 2021
Sector: Life Sciences & Healthcare
Wockhardt Bio AG, a global pharmaceutical company, deals with the development, manufacture and marketing of pharmaceutical and biopharmaceutical formulations. To further expand its global reach in the pharmaceutical sector, Wockhardt was considering building a facility in Dubai for the production and packaging of its medical products.
Wockhardt approached Kreston Global’s UAE member firm, Kreston Menon, for this strategically important task in 2011. Kreston Menon Corporate Services is a market leader in the company setup service sector and has guided more than 7,000 major investors to incorporate their businesses in the UAE over the past 27 years.
The Corporate Services team developed a business setup solution beginning with the selection of a suitable location for the facility. They proposed two prime free zones in Dubai, namely Dubai Health Care City and Jebel Ali Free Zone (JAFZA). After a detailed analysis, Kreston Menon advised registering a branch company with Dubai Science Park under the Dubai Development Authority and to obtain a commercial license with the activities ‘import/export, marketing and sales promotion and support services’ belonging to Therapeutics segment.
Ongoing post incorporation support services were provided by Kreston Menon, which included obtaining external approvals, visa processing for the workforce, license renewals, approvals for office fitouts and all the required compliances for the entity to function.
In 2015, Wockhardt decided to set up its medicines (antibiotics) manufacturing and packaging facility in JAFZA and was again guided by Kreston Menon. It was a strategic move as JAFZA is home to 306 healthcare and pharmaceutical companies from 54 countries.
Currently, the facility is equipped with fully automated manufacturing equipment spread over 10,000 sq. meters of space, self-sufficient for handling manufacturing operations, warehousing, product stability and testing. UAE’s pharmaceutical and healthcare market is expected to increase by an additional Dh12.45 billion ($3.4 billion) from 2019 to 2021.
Murtaza Khorakiwala, Managing Director of Wockhardt said “Kreston Menon have been important business advisers for Wockhardt as we set up our UAE operation which has been a major success. From initial on- the- ground advice, to ongoing expansion support, they guided us through local requirements and helped us to take advantage of real estate and regulatory opportunities.”
July 8, 2021