|
News |
DUBAI INTRODUCES IMPORTANT NEW FINANCIAL LAWS |
|
A number of significant laws have been issued in Dubai in a bid to improve controls on public spending, increase transparency, provide a framework for arbitration and boost exports.
On 17 December 2009, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai, issued a significant new law in a bid to improve control of public spending and transparency. The new law, Number 35 of 2009, replaces Law Number 18 of 2006 and requires government departments which enjoy fiscal independence as well as government-related companies to funnel their surplus revenues to Dubai’s Treasury as public revenues. The law also intends to set strict criteria to rein in public spending and requires all government entities to provide the government with their annual budget, which must be approved by the Supreme Fiscal Committee. Companies can re-invest profits and surpluses before transferring them to the public treasury, but only with the approval of the Supreme Fiscal Committee, in consultation with the Investment Corporation of Dubai which oversees the emirate’s investment portfolio.
Sheikh Mohammed also issued Decree No. 58 of 2009 approving the statute of Dubai International Arbitration Centre which replaces the current statute, approved by Law No. 10 of 2004. The Decree provides a legal framework for the resolution of issues pertaining to the debt-restructuring process currently being undertaken by Dubai’s flagship conglomerate, Dubai World.
Dubai will continue its debt restructuring process after Abu Dhabi agreed, on 15 December 2009, to provide USD10 billion to settle some of Dubai’s obligations. The loan is expected to meet Dubai World’s interest payment and working capital obligations until April 2010, contingent in a successful debt standstill with creditors. The new law aims to ensure the restructuring process is consistent with international standards of transparency and creditor protection. The impact of the new law is significant, the Ruler of Dubai has devolved all decision-making powers relating to the dispute to a tribunal of three to five internationally recognised judges, empowered to supervise the financial restructuring of Dubai World and preside over any disputes which may arise. It provides a legal system of arbitration through which lenders could seek recourse in the event that a deal with creditors cannot be reached. Although the new law is set up specifically to deal with problems at Dubai World, it could also provide a framework for other similar matters.
Finally, as part of the Dubai government’s plans to strengthen its status as a global economic export and re-export hub and to develop its legislation to cope with recent developments and to comply with international practices, it has issued a new law setting up the Dubai Export Development Corporation. Law No. 34 of 2009 which replaces Law No. 10 of 2006 is designed to enhance Dubai’s export capabilities, develop relevant programmes, increase exports, open up new foreign markets and strengthen existing markets. |
|
News |
QATAR SLASHES CORPORATE TAX |
|
The Qatari government, in an attempt to attract foreign investment to the region, has become the latest Gulf state to slash the tax rate applied to foreign companies to a flat rate of 10%, effective from early 2010.
Qatar, the biggest producer of liquefied natural gas, currently has seven corporate tax strata, ranging from 0% for companies with annual incomes of QR100,000 (USD137,000) to 35% for companies generating in excess of QR5 million. According to the Qatar News Agency, Sheikh Hamad Bin Khalifa Al Thani projected a growth in the economy of 9% this year and 16% the following year.
Competition to attract foreign investment is rife in the Gulf region and Qatar is the latest state to introduce a corporate tax reduction. Saudi Arabia slashed corporate taxes from 45% to 20% five years ago, Kuwait announced a reduction from 55% to 15% in late 2007 and a new unified rate of 12% will be effective in Oman from 1 January 2010.
Qatar, the emirate which has the highest standard of living in the world according to the International Monetary Fund data faces stiff competition from the United Arab Emirates and Bahrain where 0% corporate tax rates operate. |
| |
News |
JAMAICA FORGES AHEAD WITH PLANS TO ESTABLISH INTERNATIONAL FINANCIAL CENTRE |
Despite the pressure existing International Financial Centres have recently been subject to from bodies such as the OECD and G20, Jamaica galvanises its plans to establish an international financial centre by allocating JD22.2 million to hire consultants to oversee the implementation of the IFC.
A total budget of JD106.2 million has been allocated for the promulgation of the IFC and so far the cabinet has approved the establishment of a statutory company to oversee the development of the Jamaica International Financial Services Centre, with the next steps to include the immediate drafting of appropriate legislation and the refinement of the list of products and services that will be offered in the jurisdiction.
It is anticipated that Jamaica will enter the international services centre industry as a mid-value competitor with specific niche markets such as sports and entertainment. |
| |
News |
NEW ZEALAND OMNIBUS TAX BILL PASSED |
|
New Zealand has passed a new tax bill which includes measures on withholding and investment taxes and provides greater certainty and clarity. The Taxation (Consequential Rate Alignment and Remedial Matters) Bill is technical in nature and has introduced some important measures to fine-tune earlier changes to the country’s tax rules.
The main features of the bill include an alignment of resident withholding tax rates on interest with earlier changes to personal income tax rates and the 30% corporate tax rate. Portfolio investment entities (PIEs) tax rates have also been aligned with personal tax rates of 12.5%, 21% and 30% and the income thresholds at which these rates apply have been adjusted to ensure that investors in PIEs are not disadvantaged relative to direct investors. Supplementary dividend rules have been amended to allow newly signed tax treaties with Australia, Singapore and the US to come into force and those who receive New Zealand superannuation and the veteran’s pension will remain subject to New Zealand tax while overseas, unless they decide to live overseas. The new measures also introduce a standard 12.5% goods and services tax rate on facilitation services for tour packages for overseas visitors.
Revenue Minister, Peter Dunne has welcomed the passage of the new bill and highlights its importance in tying up a number of loose ends and anomalies. |
| |
News |
DEADLINE LOOMS FOR NEW BEARER SHARE REGIME IN THE BRITISH VIRGIN ISLANDS |
|
A new bearer share regime comes into effect in the British Virgin Islands at the end of 2010 and bearer shares which are not deposited with an authorised custodian by 31 December 2009 will be disabled, freezing all of the owner’s rights including the right to vote, to receive dividends and to share in the assets of a company.
To avoid disablement, bearer shares should either be exchanged for registered shares or deposited with an authorised custodian.
Many companies incorporated since 1 January 2005 already have bearer shares deposited with a custodian, however, the changes will effect a significant number of companies, particularly those incorporated prior to 2005 and shareholders should take the necessary steps to ensure a smooth transition into the new regime and avoid their shares being disabled.
Problems may arise where bearer shares have been pledged, mortgaged or charged or where share certificates have been lost or are difficult to obtain. |
| |
News |
INDIA BUYS HALF OF ALL GOLD ON SALE BY THE IMF |
|
| On 3 November 2009 it was revealed that India has bought half of the gold put up for sale by the International Monetary Fund. India agreed to pay USD6.7 billion for the 200 million ton haul which is the equivalent to about 8% of total annual global mining production. 6.7% of India’s foreign exchange reserve is now invested in gold. |
| |
News |
AMENDMENTS TO CHINA’S PATENT LAW ENTER INTO FORCE |
|
Substantial amendments have been made to China’s patent law that should help transform China’s reputation with innovators and brand owners across the globe.
China has, in the past, been regarded as a high-risk country in terms of intellectual property and the new law will help reposition China as a well-governed marketplace.
The changes generally aim to ensure better protection for the intellectual property rights of patent holders, encourage innovation, speed up the introduction of patent technology and significantly, to harmonise Chinese patent law with international patent treaties.
The old patent regime only required demonstration of ‘local novelty’ and allowed inventions and designs developed in other jurisdictions to be copied and protected in China. The new law introduces the concept of ‘absolute novelty’.
The level of statutory damages for infringing patents, trademarks and designs has been doubled to CNY1 million (USD150,000).
The new law is better aligned with the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) which determines minimum standards for national intellectual property regimes. |
| |
News |
GRAND COURT OF CAYMAN OPENS FINANCIAL SERVICES DIVISION |
|
The Grand Court of the Cayman Islands has opened a Financial Services Division (FSD) in order to more efficiently handle high profile, complex and document heavy commercial disputes.
Proceedings of the FSD are governed by the Grand Court (Amendment) Rules 2009.
The rules specify various categories of proceedings that will be deemed “financial services proceedings” including:
- mutual funds;
- an exempted insurer;
- claims for CID1 million (USD1,219,512 million) or more arising from breach of a contract of insurance;
- certain financial services regulatory laws;
certain applications under the Trust Law and claims for breach of trust or fiduciary duty where the trust fund is CID1 million (USD1,219,512 million) or more;
- winding up of companies and other company law matters;
- applications for dissolution of a mutual fund formed as a partnership;
- certain breaches of contract or breach of duty proceedings by or against a professional service provider;
- applications for evidence pursuant to a letter of request issued by a foreign court;
- applications concerning local and international bankruptcies;
- enforcement of a foreign judgment or arbitral award.
Cases pending in the Grand Court may be transferred to the FSD and the Registrar may invite parties to apply for a transfer or in certain circumstances may transfer a case without reference to the parties.
There are fixed fees of up to CID15,000 (USD18,293) for commencing proceedings in the FSD which applies even where the matter is settled out of court. This fee credits the parties with 20 days of court hearings in the case for which a daily fee of CID750 is otherwise payable.
The FSD aims to facilitate the delivery of a more expeditious and cost effective judicial system managed by specific judges. |
|
