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”
FDI LAW & CABINET RESOLUTIONS (CR) Commonly Asked Questions
Kreston Menon
This booklet is a compilation of a series of communique aimed to update you on the new FDI Law Update. We encapsulated the provisions of the Law and resolutions in the flyers to give insights on how these changes will cement UAE’s position as the most preferred investment destination in the region. We have compiled some of the major queries from our clients and contacts and attempt here to clarify them.

QUERY

Are the provisions of the new Law update applicable for trading entities?

The positive list released as per the CR does not include trading entities for enhanced foreign ownership. However, Retail Trade (non-specialized stores) with an investment of AED 100 million is permitted.

QUERY

What is the minimum amount of physical investment that has to be evidenced immediately for getting approval for a FDI Company?

As per the guidelines issued by Dubai FDI, 20% of the proposed investment must be evidenced in the form of physical capital.

QUERY

Currently most of the professional/consultancy firms are registered as per the provisions of UAE Civil Code and with unlimited liability on the investors. Does the Cabinet Resolution provide a procedure for converting the civil partnership firm to a Limited Liability Company or PSC to be eligible as a FDI Company?

As per the guidelines on FDI issued by the Ministry of Economy, if the legal form of the existing entity is different from the form specified for the FDI Companies, the change of the legal status to any legal form specified for FDI Companies shall be processed according to the procedures provided for in the UAE Commercial Companies Law -2015.

QUERY

Is the Positive List published as per the CR conclusive?

Foreign Investor may still submit to FDI Committee or the Competent Authority, a request for approval to license a project not listed in the Positive List.

QUERY

Are FDI Companies with agricultural or manufacturing activity allowed freehold ownership of property and land?

As per Article 9 of the FDI Law, the right to benefit from any real estate allocated to the Foreign Direct Investment project may not be cancelled, suspended, or restricted except in the event of a violation of the license conditions. Thus, it ensures non-cancellation, non-cessation or limitation of usufruct right of properties allocated for the FDI Project

QUERY

Does ‘pharmacy’ include the category ‘other human health activities’?

Other human health category includes laboratories, diagnostic and therapeutic centers and the minimum investment requirement is AED 70 million. However, pharmacy has not been included in the list. As per Article 16 of the FDI Law, the activity of Medical retail such as private pharmacies is on the Negative List. 

QUERY

Are construction of buildings and civil contracting eligible?
Permitted only for large-scale infrastructure projects like airports, roads, sports facilities and projects worth more than AED 450 Million

QUERY

What is the percentage of Emiratization applicable for FDI Company?

Membership in ‘Tawteen Partners Club' of the Ministry of Human Resources & Emiratization is mandatory for an FDI Company. More clarity is awaited on the number of UAE Nationals to be employed by FDI Companies.

QUERY

Are the relevant provisions of the Federal Law No: 2 of 2015 on Commercial Companies amended to adjust with the provisions of the Federal Law No. 19 of 2018 on Foreign Direct Investments? 

The legal form of the existing company shall be one of the forms specified for FDI Comp
Read More
FINTECH: Changing the way you think
Raju Menon, Chairman and Managing Partner - Kreston Menon

Mankind has always found solutions to the problems at hand or have invented ways to make their life easier. Be it from the primitive age when fire was invented or rather discovered, or the invention of the wheel which revolutionized the world.

Read More
Changing the Landscape of Internal Audit
Kreston Menon
Background

The inadequacy of system to cater to business needs, issues regarding integrity and robustness of data generation (MIS), the absence of management strategy for monitoring risks, lack of control over the operational process, ambiguity over policy and procedures and issues so galore.

The above situations appear familiar? Indeed, these are common challenges that plague many businesses regionally and globally. Conventional belief laid emphasis on achieving business results and cash inflows, relegating the need to address pressing issues. Mounting challenges of varied nature posed by new economic order have made compelling reasons for businesses to introspect, to improve efficiencies, identify and manage risks, control leakages, rationalize costs etc. With matters of risks, control and governance gaining priority, many businesses are viewing internal audit as an important tool to achieve its dynamic objectives.

This article is an effort to shed light on the new approach used in internal audits that has led to increasing acceptance of internal audit activity as an investment that provides a return to an entity and not just reflect as a cost on the income statement.

Internal Audit
Internal Audit as a concept is exhaustive, but broadly refers to an activity carried out by independent professionals to assess whether an entity’s process and controls are adequately designed and are operating effectively, business risks are effectively identified and managed, whether resources are efficiently utilized etc. Based on the observations and findings, solutions and suggestions for improvements are provided in the form of a report to the team entrusted with governance.

The process areas covered under internal audit activity can be extensive but generally includes inter-alia, review of operational and financial functions of an entity (Operations, Procurement, Finance and Accounts, Human Resources, Information Technology etc.). Depending on the size of the entity, complexity of operations and the objectives to be achieved, approach to internal audit could assume the form of review, by covering different functions over a period. Alternatively, it may involve review of the design of all the functions at a time, backed by follow-up reviews. Dividing the scope into various functions, covered over a period, facilitates specialized focus on the department’s efficiency in achieving functional objectives as well as entity’s objectives.

Evolving Internal Audit Approach

There has been a paradigm shift in the expectations of businesses from the internal audit activity. Growing business competition, disruptions caused by advancement in technology and the desire and vision to be the industry leader by clients have brought to the fore, key questions regarding value creation, effectiveness and relevance of internal audit. This entailed an objective response by the internal audit fraternity, transforming the activity from a typical checklist-based conventional approach to a more sophisticated, comprehensive and risk-based audit.

Erstwhile Approach

Traditional internal audit approach involved an overall review of process and controls for compliance to established procedures from financial accounting/ treatment perspective. Also, the earlier approaches had greater focus on transactional accuracy and compliance with approved procedures.

This, to a large degree, ignored any significant impact of risks arising from operational, market and regulatory factors of the business. As a result, the traditional approach educed the internal audit to a mere fault-finding activity drawing lesser participation from the client management.

New Approach to Internal Audit

With the advent of the renowned concept of Enterprise Risk Management (ERM) Framework, a model developed by Committee of Sponsoring Organization of the Treadway Commission (COSO) for evaluating the risk management practice of an entity, coverage under internal audit has evolved into a more holistic and objective-based approach.

One of the components of ERM framework calls for risk assessment at all levels of the business organization setup including Entity Level, Division, Operating Unit and Function. Risk Assessment is a process of identifying and appropriately managing any adverse event (risk) that may impede or pose a challenge to an entity in achieving its goals or objectives (long term or short term).

The relevance and importance of timely risk assessment were greatly felt by corporates across the globe when market leaders faced an overnight catastrophe or near business closure event. Famous examples are Yahoo not assessing risk related to consumer preferences and eventually losing out on user experience and search engine business (market risk), BlackBerry losing out its relevance as they did not focus on bigger touchscreen displays (product technology obsolescence risk). More recent example is when Imagination Technologies Group suffered a major setback when Apple, its single largest customer (customer concentration risk), discontinued using their product. This concept of risk assessment was adopted by internal auditors to develop a risk-based audit approach to help businesses achieve operational, reporting and compliance objectives by becoming agile, transparent and resource efficient.

A risk-based audit approach requires a complete understanding of the entity’s business, industry, market segments, customers, suppliers, operations and expectations of the stakeholders. This understanding is transformed into objective statements at all organizational levels of the entity and risks (events having an adverse impact) impeding achievement of such objectives are identified, assessed for their risk levels and mitigation strategy is implemented.

Outcome/Benefits of Risk Based Audit Approach

Some of the major benefits arising from risk-based internal audit approach are listed below:



Conclusion

The above internal audit approach and outcomes/benefits derived in recent times, has made internal audit activity pivotal to corporates looking to unlock their potential and be prepared to face any adversity.

Further, the advancement in data analytics has led the internal auditors to employ advanced technologies to effectively orrelate the performance of the controls over risk, which an organization might encounter.

Kreston M E Consulting (formerly Morison (UAE) Consulting) has been providing internal audit accounting services Dubai including, systems review, business process review, drafting of policy and procedure manuals etc., for many years creating considerable value to its clients from varied industries.
Read More
Business & Business Regulations-Update
Kreston Menon
The Freelancers permit launched by Dubai Internet City strives to give freelancers an affordable and secure option to work in Dubai, while also providing a feasible and attractive package of affordability and talent for businesses. The permit which was launched last year, helps freelancers to work in Dubai at a fee of AED 7,500 per year. With this permit, freelancers have the opportunity to freelance their skills and also have access to the TECOM Business Center along with a visa.

Read More
Dubai Science Park
Marwan Abdulaziz, Janahi

A STATE OF THE ART GLOBAL BUSINESS HUB

About DSP

Founded in 2005, Dubai Science Park (DSP) is a vibrant, holistic, science-focused community, dedicated to supporting entrepreneurs, SMEs and MNEs. Since its inception, the community has grown to more than 350 companies, employing over 3,600 professionals in the sciences, energy and environmental sectors. Designed specifically for the needs of businesses and professionals who work in sciences, DSP fosters an ecosystem that supports scientific research, creativity and innovation. It strives to be Dubai’s most innovative and vibrant community for all segments of the science sector and a place where corporates and residents can work, live and flourish.

Its collaborative environment engages leaders in science, research, academia, and business to understand and set industry trends which tackle relevant and current societal and economic issues. With a prime location in Dubai, the science park provides businesses with easy access to key transportation networks.

Supporting Local Growth

Dubai Science Park aims to play a significant role in Dubai’s Vision 2021 by facilitating a more sustainable and self-sufficient future that maximises the use of local resources and talent. DSP will achieve this by supporting innovation in the sciences by helping companies utilise cutting-edge technology and information to foster growth and change in the areas of human science, plant science, material science, environmental science and energy science.

In 2018, DSP made significant progress towards delivering its mission, which seeks to grow the local science sector by enhancing the ease of doing business within its community. DSP welcomed new business partners, with key inaugurations including BASF, a German construction chemicals firm and the largest chemical producer in the world; Biocad, a leading Russian biotechnology company; and inui Health, an American digital tech company based in Silicon Valley. Most recently, Pharmax Pharmaceuticals, a GMP-licensed international manufacturer and distributor of medications, became the first pharmaceutical manufacturing company to join DSP’s growing community.

DSP nurtures entrepreneurs in the science fields through a fast and easy setup model that allows them to kick-start their projects and innovate. It also helps bridge the gap between academia and businesses, supporting career development within the field of science for students in the UAE. DSP raises awareness about the science industry within the society to increase its appeal and attractiveness among youth and talent.

Enhancing the Ease of Doing Business

DSP is the region’s first science focused community that caters to the pharmaceuticals, food and agriculture, diagnostics and analysis, as well as energy and environment sectors (among others). It is evolving as a hub for companies in the field of human science, plant science, material science, environmental science and energy science.

With nearly 90 per cent of pharmaceuticals in the UAE being imported, Dubai Science Park’s 360-degree approach to enhancing the ease of doing business aims to both attract key organisations from abroad looking to access business opportunities across the region as well as foster local enterprise growth. Ultimately, by developing the local market, DSP looks to create an environment that enables the emirate to reduce its dependency on imports.

The science park is designed specifically for the needs of businesses and professionals in the science sector. Its robust infrastructure combines office space, laboratories and warehousing facilities for businesses to flourish and features a state-of-the-art, plug and play, Laboratory Complex, that meets the highest international environmental standards.

DSP also hosts strategic networking events where business partners and stakeholders were given the unique opportunity to meet with experts and analysts from across the science sectors. This facilitates synergies within the community through connecting businesses operating in the science sector.

Positioning Dubai as a Hub

DSP is strengthening the position of Dubai as a destination for science companies, R&D, manufacturing and prototyping activities in a conducive environment that facilitates business growth.

DSP plays an integral role in actualising Dubai Industrial Strategy 2030 and developing the UAE’s innovation-led economy through the development of a thriving business hub in which scientific companies can innovate, thrive and grow.

Read More
Reinventing business in the digital era
Saju Augustine

Digital technologies are leading to many of the wellentrenched businesses losing their market share rapidly  to new and nimble players emerging with innovative business models. The threat from new digital startups will continue to grow as digital technology keeps evolving.  Digital technologies also, however, provide the incumbent  businesses endless opportunity to expand the scope of  their business, come with newer operating models and  provides them to leverage existing platform or build a new  business platform for themselves, their clients and even their  competitors.

Read More
whatsapp