March 2022

The next round will be focused on helping SMEs. 

As part of efforts to improve the current employment rate, the Hong Kong government will launch time-limited financial support to employers.

The round will target small-medium sized enterprises and is a continuation of the initial round that was introduced in 2020.

According to Chief Executive Carrie Lam, the main distinction will be on the basis of the industry, with certain business sectors being ineligible due to not being as adversely affected by the pandemic.

Meanwhile, Dr. Law Chi-Kwong, Secretary for Labour and Welfare, also reiterated that the scheme can help revive businesses in Hong Kong.

“As the Chief Executive just mentioned, in the announced figures in February 2021, the unemployment rate was 7.2%. In ten months’ time, it dropped to 3.9%.,” said Dr. Law.

Source: Hong Kong Business

The Financial Secretary proposed to introduce a tax deduction for eligible domestic rental expenses from the year of assessment 2022/23. Taxpayers liable to salaries tax or tax charged under personal assessment who do not own any domestic property can claim deduction for the rent paid by him/her or his/her spouse as the tenant. The annual ceiling of the deduction is $100,000.

Source: Inland Revenue Department

Mumbai, the state's capital is known as the financial capital of India and houses the headquarters of major corporate and financial institutions.

The state of Maharashtra has attracted over $23.43 Bn of Foreign Direct Investments during Oct 2019 – March 2021 and contributes 28% to India's total FDI inflow.

Textile and Garments

Food Processing

Automobile and Auto-Components

Electronic System Design and Manufacturing

Information Technology

Biotechnology and Pharmaceuticals

India has emerged as the 3rd largest ecosystem for startups globally with over 66,359 DPIIT-recognized startups across 642 districts of the country as of 21st March 2022. India ranks #2nd in innovation quality with top positions in the quality of scientific publications and the quality of its universities among middle-income economies. The innovation in India is not just limited to certain sectors. We have recognized startups solving problems in 56 diverse industrial sectors with 13% from IT services, 9% healthcare and life sciences, 7% education, 5% professional and commercial services, 5% agriculture and 5% food & beverages.

Indian Startup Ecosystem has seen exponential growth in past few years (2015-2021):

• 9X increase in the number of investors.
• 7X increase in the total funding of startups.
• 7X increase in the number of incubators

The Indian Unicorns are flourishing in the fast-paced and dynamic economy of today. These startups are not only developing innovative solutions and technologies but are generating large-scale employment. Till FY 2016-17, approximately one unicorn was being added every year. Over the past four years (since FY 2017-18), this number has been increasing exponentially, with a whopping 66% Year-on-Year growth in the number of additional unicorns being added every year.  As of 25th March 2022, India is home to 94 unicorns with a total valuation of $ 319.67 Bn. Out of the total number of unicorns, 44 unicorns with a total valuation of $ 94.77 Bn were born in 2021 and 13 unicorns with a total valuation of $ 25.4 Bn were born in 2022.

Unicorns Of India

As of 25th March 2022, India is home to 94 unicorns with a total valuation of $ 319.67 Bn.

The year 2021, 2020, and 2019 saw the birth of the maximum number of Indian unicorns with 44, 10, and 9 unicorns coming each year, respectively. COVID-19 has caused a great amount of socio-economic suffering globally, but it is during this time when the resilient Indian Entrepreneurs have worked effortlessly to not only contribute to the economy but to also contribute toward COVID-19 relief efforts. In 2020, we witnessed the birth of more than 10 unicorns. ‘Its raining unicorn’ has been the motto of the year 2021 with 44 unicorns pumped in the ecosystem and many soonicorns waiting in line.

Geographically, the center of India's high-tech industry, Bengaluru is India’s unicorn capital with the largest number of unicorns headquarters followed by Delhi (NCR) and Mumbai. While we see unicorns active in Tier I cities, this ecosystem is not restricted and is proliferating across the country till the last district. Traditional sectors such as Fin-tech, E-commerce, Supply Chain & Logistics, Internet Software & Services do dominate the arena but a strong wave of unconventional sectors such as Content, Gaming, Hospitality, Data management & analytics, etc are making their place on the list.

While every startup has its unique journey to becoming a unicorn, the minimum and maximum time taken by a startup to become a unicorn are 6 months and 37 years, respectively. Mensa Brands took only 6 months to become a unicorn in 2021, making it one of fastest unicorns in Asia.

Indian Startups turned Unicorns in 2021

In 2021 itself, India witnessed the birth of 44 unicorns with a total valuation of $ 94.77 Bn. Bengaluru, Delhi NCR, and Mumbai continue to be the top cities preferred as unicorn headquarters in 2021. Unconventional sectors and sub-sectors marked an entry into the unicorn space including, NBFCs, Conversational Messaging, Cryptocurrency Exchanges, D2C, Cloud Kitchens and many others.

Indian unicorns are also exploring the public listing avenues as a next step to realise the growth potential. Some one of big unicorn names that offered an IPO include Zomato, Nykaa, PolicyBazaar, Paytm and Freshworks, while many are already in line such as Delhivery, Mobikwik and CarDekho.

Today, 1 out every 10 unicorns globally have been born in India. Overall, 2021 is experienced an exponential boom when it comes to startups entering the unicorn club. This is a testament to the vibrant startup ecosystem present in India.

Till date, 2022 has witnessed the birth of 13 unicorns with a total valuation of $ 25.4 Bn (as of 25th March 2022).

Unicorn Sector Snaps

Micro-Small and Medium Enterprises (MSMEs) have been playing an increasingly important role in India. They have emerged as a highly vibrant and dynamic sector of the Indian economy over the last few decades. A significant contribution has been made in economic and social development by fostering entrepreneurship and generating large employment opportunities at comparatively lower capital. As MSMEs absorb the surplus agricultural labor, they help reduce the problem of disguised unemployment in rural areas and are complementary to large industries as ancillary units and play a significant role in the whole eco-system of the secondary and tertiary sectors. As on 30th March 2022, Udyam Portal for MSME registration has recorded a total of 79,84,801 businesses in India of which nearly 95 per cent come under micro enterprises. The statistics reported by the Ministry of Micro, Small and Medium Enterprises 2021-22, revealed that out of 633.88 lakh estimated numbers of MSME, 324.88 lakh MSMEs (51.25 per cent) are in rural areas and 309 lakhs (48.75 per cent) in the urban areas of India.

An analysis of Udyam registration provides that as on 31st December 2021, 68 per cent of the MSMEs have been registered in the service sector while only 32 per cent account for manufacturing sector, out of which, maximum registrations have been done by the states of Maharashtra (nearly 14,00,000 registrations) followed by Gujarat, Uttar Pradesh and Madhya Pradesh. Another striking finding from the government data suggests that 28,684 micro enterprises and 3,679 small businesses registered on the Udyam portal have grown into small and medium-sized businesses respectively from inception till March 22, 2022. These progressive figures indicate progress towards a broad and deep commercial base in India. MSMEs are widening their reach across newer sectors of the economy such as defense and are producing a diverse range of products and services to meet demands of domestic as well as global markets. The Ministry of MSME runs numerous schemes and initiatives targeted at providing credit and financial assistance, skill development training, infrastructural development, marketing assistance, technological and quality upgradation and other services.

Here are some of the flagship schemes and initiatives for this sector:

Mudra Loans: Pradhan Mantri MUDRA (Micro-Units Development and Refinance Agency) Yojana is a scheme launched in 2015 for providing loans up to INR 10 lakh to non-corporate, non-farm small/micro enterprises. Under the aegis of PMMY, MUDRA has created three products: Shishu Loans up to ₹50,000, Kishor Loans up to ₹5,00,000 and Tarun Loans up to ₹10,00,000. A total number of 4,86,39,491 PMMY loans have been sanctioned as on March 25th 2022 amounting to ₹307190.61 crore.

National Small Industry Corporation: It is a government agency that has been facilitating growth of small enterprises since 1955. The objective is to promote the MSME sector by providing integrated support services encompassing marketing, technology and finance. They offer two kinds of financial benefits: raw material assistance and marketing assistance. The former helps to avail economics of purchases via bulk purchasing and procure raw material with credit support for up to 180 days. During the financial year 2021-22, the value of raw material distributed is INR 1436 crore under sale purchases. NSIC has also implemented National SC-ST Hub (NSSH) since 2016 to provide professional support to the SC-ST entrepreneurs.

A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE): It is a scheme for skills development and training that facilitates innovative business solutions and strengthens the competitiveness of MSME sector. It has also set up livelihood business incubators to provide skill training and incubation support to the incubatees through NSIC, KVIC, Coir Board and other institutions. The funds allocated for this scheme in 2021-22 was INR 15 crore of which 4.31 crore have been spent as on 31st December 2021.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI): Scheme of Fund for Regeneration of Traditional Industries aims to organize traditional industries and artisans into clusters to make them competitive and provide support for long term sustainability, enhance marketability and improve skills.

Challenges in the MSME sector 

Despite the MSME sector contributing significantly to the economy, it continues to face several challenges. Major challenges include physical infrastructure bottlenecks, absence of formalization, low credit access, inertia to technological adoption, lack of backward and forward linkages and the perennial problem of delayed payments. Even though the micro enterprises account for 95 per cent of the total MSME sector, their conversion into small and medium enterprise has been very low which suggests that they have not bee able to fully capture the benefits of economies of scale, adoption of technologies and investment into fixed assets. While the government continues to expand policy support and incentives for this major segment, MSMEs on their part also need to shed their inhibitions to adopt new technologies; accept e-payments, focus on product development, marketing strategy and inculcating competitive practices to gradually expand in size and scale and can become core pillars of the world economy.

With the continued implementation of reforms like the GST, (JAM Trinity), rising GeM procurement and a draft policy on MSMEs in the works, MSMEs in the country are poised for a sustained growth trajectory aided by the right government support as well as by the growing economic indicators of the country.

This article is co-authored by Vishakha Bhagwat and Devika Chawla).

Source: Invest India

The Ministry of Finance and the State Taxation Administration released on March 18, 2022 the Announcement on Further Implementing Preferential Income Tax Policies for Small-Micro Profit Enterprises (hereafter SMEs). The Announcement will be retrospectively implemented from January 1, 2022 to December 31, 2024.

For SMEs, we conclude the preferential CIT policies for 2022 are:

Tax declaration system will help to automatically calculate the CIT payable under the new CIT rate when you confirm the status of company as SMEs in the declaration.

SMEs shall mean enterprises engaging in non-restricted and non-prohibited businesses, which satisfy the three criteria simultaneously:

1. taxable income amount does not exceed RMB 3 million;
2. staff headcount does not exceed 300; and
3. the total assets amount does not exceed RMB 50 million.

Once the enterprise cannot satisfy the criteria for being as SME, it has to pay CIT at 25% on full taxable profit.

China will focus on stabilizing its economic fundamentals this year, setting its GDP growth target at around 5.5 percent, Premier Li Keqiang said on Saturday, as the world's second-largest economy beefs up supportive measures to shore up growth against possible strong headwinds.

In the Government Work Report delivered at the opening of the fifth session of the 13th National People's Congress, Li said the nation will strive to create at least 11 million jobs in the urban areas and maintain surveyed urban unemployment rate at below 5.5 percent.

Li said the government has set the deficit-to-GDP ratio for 2022 at around 2.8 percent in a move to boost fiscal sustainability, while the special-purpose bonds for local government will total 3.65 trillion yuan ($1 trillion).

He pledged to step up implementation of the prudent monetary policy, saying the government will expand the scale of new loans and keep the macro leverage level generally stable.

The exchange rate of the yuan will be maintained generally stable at an adaptive, balanced level, he added.

The premier announced a new package of tax refunds and cuts totaling 2.5 trillion yuan this year to support enterprises, including a temporary exemption on value-added tax payments to small taxpayers and an additional measure to halve the cooperate income tax for micro and small businesses with an annual taxable income of 1 million to 3 million yuan.

With over 10 million college graduates expected to enter the job market this year, Li said the government will provide them with stronger policy support and uninterrupted services to ensure that they can find jobs or start businesses.

The investment from the central government budget will reach 640 billion yuan this year, and the government will make improving the people's well-being an investment priority, he said.

Source: China Daily

The Ministry of Finance and the State Taxation Administration released on March 3, 2022 the Announcement on Further Implementing the Policy of Reducing and Waiving the "Six Local Taxes and Two Fees" for Small-Micro Profit Enterprises (hereafter “SMEs”), which would be implemented during the period from January 1, 2022 to December 31, 2024.

It is clarified that people's governments of provinces, autonomous regions, and municipalities directly under the central government may, based on the actual situations of their localities, reduce the “Six local taxes and Two fees” within the tax range of 50% for VAT small-scale taxpayers, SMEs and self-employed households. The “Six local taxes and Two fees” include resources tax, urban maintenance and construction tax, property tax, urban land use tax, stamp tax (excluding stamp tax for securities trading), arable land occupation tax, as well as education surcharge, and local education surcharge. In addition, the tax cuts can be implemented together with other preferential policies.

For the purposes of this Announcement, SMEs refer to enterprises engaging in industries which are not restricted or prohibited by the State and satisfying three conditions, namely, the annual taxable income amount does not exceed CNY3 million, the staff headcount does not exceed 300 and the total amount of assets does not exceed CNY50 million.

The determination of a SME shall be based on the outcome of annual final settlement of corporate income tax. Where a newly-established enterprise registered as a general VAT payer engages in an industry which is not restricted or prohibited, and satisfies two criteria, namely, the staff headcount does not exceed 300 as at end of the preceding month for declaration period and the total assets do not exceed CNY50 million, it may, prior to its first completion of final settlement formalities, enjoy the incentives for SMEs stipulated in hereof.

The validity period of this Announcement is from 1 January 2022 to 31 December 2024.

Though China recorded surges of COVID-19 cases in several regions during the past weeks, its impact on economy is not as bad as some feared, US media outlet CNBC has reported.

Though the recent COVID-19 case hikes across China have hit record high since the initial phase of the pandemic, the infection data are still well below that of other major countries, said the report on Thursday.

Analysis from Bank of America Securities earlier this week found a muted impact from COVID-19 on supply chains, including autos and semiconductors, it said.

"The supply chain shocks are relatively light so far, but the primary economic impact is on consumer spending and the services industry," Bruce Pang, head of macro and strategy research at China Renaissance, was quoted as saying.

Besides an impact on services industries that rely on in-person and social gatherings, especially catering, the recent spread of the coronavirus suppresses people's confidence and expectations for spending, Pang said.

According to economic indicators released Tuesday by Chinese National Bureau of Statistics, retail sales for the first two months this year grew by 6.7 percent year-on-year.

The data, the CNBC said, is "a significant pickup from December and beating analysts' expectations."

China will adopt the tariff rates it has pledged under the Regional Comprehensive Economic Partnership (RCEP) agreement on part of imports from Malaysia from March 18, the Customs Tariff Commission of the State Council has said.

The new tariff rates will take effect on the same day as the world's largest deal comes into force for Malaysia, which has recently deposited its instrument of approval with the Secretary-General of the Association of Southeast Asian Nations (ASEAN).

The RCEP deal, which entered into force on Jan. 1 initially in 10 countries, will then be effective for 12 of its 15 signing members.

According to the commission's statement, the first-year RCEP tariff rates applicable to ASEAN members will be adopted on imports from Malaysia. The annual rates for subsequent years will be implemented from Jan. 1 of the respective years.

The agreement was signed on Nov. 15, 2020, by 15 Asia-Pacific countries -- 10 ASEAN members and China, Japan, the Republic of Korea, Australia and New Zealand -- after eight years of negotiations that started in 2012.

Within this trade bloc that covers nearly a third of the world's population and accounts for about 30 percent of the global GDP, more than 90 percent of merchandise trade will eventually be subject to zero tariffs.

The Chinese mainland has further expanded market access for Taiwan residents, allowing them to start individually-owned businesses in 122 sectors including cereal crop farming, fruit planting and beverage manufacturing, compared with the previous 24.

The move is the latest effort to help Taiwan residents seek employment and enjoy the development opportunities on the mainland, Zhu Fenglian, a spokesperson for the State Council Taiwan Affairs Office, told a press conference on Wednesday.

Taiwan residents are welcome to run businesses in 27 pilot areas for innovative development of service trade across the mainland, including Beijing, Tianjin, Shanghai, Chongqing, Hainan, Dalian, Xiamen, Qingdao and Shenzhen, stated a guideline released by the Taiwan affairs office, the Ministry of Commerce, and the State Administration for Market Regulation.

They will benefit from the favorable business environment in the pilot regions, and pursue better development while seizing the market opportunities on the mainland, Zhu noted.

Prior to this new policy, three documents had been unveiled in 2007, 2011 and 2015 to encourage Taiwan residents to seek self-employment on the Chinese mainland.

By the end of 2021, Taiwan residents had registered more than 10,000 self-employed businesses on the mainland.

Source: XINHUANET

The Ministry of Finance and the State Taxation Administration released on March 4, 2022 the Announcement of the Policy on Pre-tax Deduction of Taxable Corporate Income on Micro, Small and Medium-sized Enterprises for Purchase of Equipment, which clarified the specific deduction rules.

I.  Micro, small and medium-sized enterprises may voluntarily opt for pre-tax deduction at a certain percentage of the unit value of equipment and appliances that are newly purchased during the period from 1 January 2022 to 31 December 2022 with a unit value of CNY5 million or above for corporate income tax purpose. Specifically, for equipment and appliances with a minimum depreciation period of three years as stipulated in the Implementation Regulations for the Corporate Income Tax Law, 100% of the unit value of such equipment and appliances may be deducted pre-tax on a one-off basis for the current year; and for equipment and appliances with a minimum depreciation period of four, five or ten years, 50% of the unit value of such equipment and appliances may be deducted pre-tax on a one-off basis for the current year, and the remaining 50% may be depreciated in the remaining years pursuant to the provisions for pre-tax deduction.

Losses incurred by an enterprise due to shortfall for deduction in the current year where the aforesaid policy applies may be carried forward to the next five tax years; enterprises which enjoy other policies to extend the carry-forward period for losses may do so pursuant to the prevailing provisions.

II.  Micro, small and medium-sized enterprises referred to herein shall mean enterprises engaging in industries not restricted or prohibited by the State and satisfying the following criteria:

(I) the number of employees shall be not more than 2,000, or the business revenue shall be not more than CNY1 billion or the amount of total assets shall be not more than CNY1.2 billion for enterprises in the information transmission industry, construction industry, leasing and commercial service industry;

(II): the business revenue shall be not more than CNY2 billion or the amount of total assets shall be not more than CNY100 million for enterprises in real estate development; and

(III) the number of employees shall be not more 1,000 or business revenue shall be not more than CNY400 million for enterprises in other industries.

III.  For the purpose of this Announcement, the term "equipment and appliances" shall mean fixed assets other than houses and buildings; the term "number of employees of an enterprise" shall include the number of employees who have established employment relationship with the enterprise and the number of secondment workers accepted by the enterprise.

The indicators for the number of employees and total assets shall be determined based on the enterprise's quarterly average value for the year. The computation formula is as follows:

• • • Quarterly average value = (value at beginning of a quarter + value at end of a quarter) ÷ 2
    • Quarterly average value for the year = sum of each quarterly average value for the year ÷ 4

Where an enterprise commences or terminates business operation in the middle of a year, the actual business period shall be deemed as a tax year for determination of the aforesaid indicators.

IV.  Micro, small and medium-sized enterprises may enjoy the aforesaid policies at the time of declaration for prepayment on a quarterly (monthly) basis. For equipment and appliances purchased by enterprises in 2022 prior to the promulgation of this Announcement, the said enterprises may be entitled to such policies at the time of prepayment declaration and annual final settlement after the promulgation of this Announcement.

V.  Micro, small and medium-sized enterprises may opt to enjoy the aforesaid policies in light of their production and business accounting needs. In the case of not opting to enjoy the policies in the current year, they shall not change to enjoy the policies in the subsequent years.

L’introduzione del trust di diritto svizzero sta proseguendo la “lunga marcia” iniziata alcuni anni fa; il 12.01.2022 è la data che riporta il rapporto esplicativo per l’avvio della procedura di consultazione con la proposta di modifica del Codice delle Obbligazioni e di numerose altre leggi.

L’obiettivo è, da un lato, di offrire ai residenti e alle imprese in Svizzera uno strumento giuridico flessibile, affidabile e appropriato per la detenzione del proprio patrimonio e, dall’altro, di creare nuove opportunità di affari per la piazza finanziaria.

A tutt’oggi la Svizzera non dispone di un diritto dei trust mentre i trust stranieri sono invece largamente diffusi e pienamente riconosciuti in Svizzera dall’entrata in vigore, nel 2007, della Convenzione dell’Aia sui trust.

Nella stesura dell’ avamprogetto, l’Amministrazione è stata ispirata dalla necessità di prevedere uno strumento pratico di pianificazione patrimoniale. Il trust svizzero permetterebbe di soddisfare tale necessità, creando così nuove opportunità di affari e aprendo ulteriori possibilità alla piazza economica.

Lo strumento proposto presenta le caratteristiche essenziali di un trust di diritto anglosassone e corrisponde alla definizione della Convenzione dell’Aia.

Il trust di diritto svizzero rappresenterà quindi un’alternativa concreta e valida per le persone, fisiche e giuridiche, che non vogliono, o non possono, ricorrere a un istituto giuridico straniero o a un altro istituto del diritto svizzero.

Importante è sottolineare che la proposta non è ricalcata sul modello di un diritto straniero, ma si fonda su regole e principi già noti nel diritto svizzero, il che garantisce un alto livello di certezza del diritto.

Entrando un po’ in dettaglio, il trust:

- rispetterà le restrizioni del diritto di disporre previste dal vigente diritto matrimoniale e successorio nonché da altre disposizioni;

- garantirà che il disponente non possa cedere i suoi beni a discapito di terzi;

- sarà flessibile al punto di permettere il suo impiego per diversi fini e in vari contesti: in un contesto privato o commerciale, per fini di pianificazione patrimoniale, successoria, a scopo di garanzia, di detenzione di attivi, ecc.

L’avamprogetto esclude esplicitamente solo la costituzione di trust per finalità benefiche e di altri purpose trust (trust di scopo) per non fare concorrenza alla fondazione.

L’avamprogetto fissa la durata massima del trust a 100 anni.

Poiché il trust svizzero potrà essere impiegato anche all’estero, è importante che sia compatibile con le regole in materia di trasparenza degli standard internazionali. La proposta tiene pertanto conto anche degli impegni della Svizzera sia in materia di lotta al riciclaggio di denaro e di finanziamento del terrorismo sia in ambito di trasparenza fiscale.

L’avamprogetto prevede una serie di disposizioni che garantiscono la totale conformità con i requisiti del GAFI, il Gruppo d'Azione Finanziaria Internazionale, e del Forum globale (forum sulla trasparenza e sullo scambio di informazioni in questioni fiscali) riguardanti principalmente gli obblighi del trustee di identificare e verificare gli aventi economicamente diritto.

L’introduzione del trust nel diritto svizzero offre l’opportunità di disciplinare esplicitamente i nuovi rapporti giuridici anche nelle leggi fiscali. Attualmente l’imposizione dei rapporti di trust si basa sui principi generali del diritto fiscale e su due circolari. Le norme di diritto fiscale proposte mantengono la prassi vigente che consiste nell’attribuire i redditi da trust al disponente nel caso di un trust revocabile, e ai beneficiari aventi diritto a prestazioni in caso di trust irrevocabili (Irrevocable Fixed Interest Trusts).

Il trust svizzero aprirebbe nuove opportunità di affari per l’industria del trust e avrebbe inoltre un effetto positivo sull’attrattività della piazza finanziaria svizzera mettendo a disposizione di quest’ultima uno strumento che le consentirebbe di rimanere competitiva. Ciò è indispensabile se la Svizzera vuole continuare ad attirare la clientela internazionale verso i suoi centri d’affari ed evitare che residenti in Svizzera attualmente privi di uno strumento di pianificazione successoria e patrimoniale corrispondente alle loro necessità si trasferiscano all’estero.

Diacron Suisse

Bulgaria has promulgated amendments to the Corporate Income Tax (CIT) Act, which provide that the tax on expenses related to personal use of business assets is decreased from 10% to 3%. The new tax rate is applied retroactively as of 1 January 2022.

The Greater Zurich Area attracted 125 new companies to its nine cantons in 2021. They are planning to create more than 1,800 new jobs in sectors such as life sciences and ICT. The comeback of the USA is most impressive.

The number of companies being established is on the rise again following the coronavirus-related decline. As the investment promotion agency of nine cantons, the Greater Zurich Area AG (GZA) helped 125 companies establish themselves in 2021, an increase of 36 on 2020, the first year of the coronavirus crisis. According to a press release from the GZA, 42 of these companies were from the USA (+20), 19 from Germany (+4), ten from Italy (+5) and five each from China (-6), the United Kingdom and Singapore.

The newly established companies already created 582 new jobs in the reporting year, 11 percent more than in the previous year. They are planning to create 1,843 new jobs over the next five years.

The frontrunners are information and communication technologies, with 42 companies, followed by 25 life sciences companies, 18 engineering companies and 13 financial services companies. The most important “job creators” were the life sciences companies, with 235 new jobs, followed by ICT companies with 154.

However, the benefit these companies bring to the region goes far beyond jobs. “We specifically target those companies that can achieve high added value and strengthen the existing ecosystem," explained Sonja Wollkopf Walt, the GZA’s Managing Director, at a digital press conference.

The new companies include Benchling, for example. The U.S. provider of life sciences cloud solutions intends to create up to 150 jobs in the Circle at Zurich Airport. The Chinese pharma company Hengrui already has European headquarters in Basel and is now adding a research and development site in Zurich.

The German RegTech company targens will be marketing its compliance software solutions to banks in Switzerland and Liechtenstein from Schwanden in the canton of Glarus. Ruedi Becker, Chief Business Development at targens Suisse SA, was supported by GZA in convincing his managers of the benefits of Glarus.

This pleases Christian Zehnder, Director Economic Promotion for Glarus. Glarus has tended to be strong in manufacturing and food production. “We want to move away from our traditional image,” he said. “In attracting new companies, we rely on our partner GZA, which can promote the region on an international level.”

Sonja Wollkopf Walt takes a similar view: The arrival of targens strengthens the ecosystem as a whole and demonstrates that the region extends beyond Zurich and Zug. “Every company can find the perfect location for them in the Greater Zurich Area.”

The Greater Zurich Area includes the cantons of Glarus, Graubünden, Schaffhausen, Schwyz, Solothurn, Ticino, Uri, Zug and Zurich.

The Swiss Federal Council has launched a consultation on a constitutional amendment to implement the OECD Corporate Minimum Tax. The proposal contains a general provision on the amendment of the Swiss Federal Constitution and a temporary arrangement that will ensure that the minimum tax rate comes into force on 1 January 2024. Said temporary arrangement will be replaced by a bill released by the parliament. The core provisions to ensure the minimum tax rate of 15% for multinational companies with a turnover of more than EUR 750 million contain:

• a new article 129a of the Swiss Constitution that empowers the Confederation to release particular regulations on the taxation of multinational companies, including deviations from:
  • the principles of universality and uniformity of taxation and taxation based on the economic performance;
  • the maximum tax rates defined in article 128(1) of the Swiss Constitution;
  • the general execution rules and the share of the cantons in the collection of federal direct taxes; and
  • the obligation to harmonize tax laws on cantonal and federal level; and
• a transitory provision for article 129a, which contains principles of a supplementary tax for multinational companies, including:
  • a definition of a multinational company;
  • a definition of the minimum tax;
  • the method of calculating of profits subject to minimum tax;
  • the method of calculating the supplementary tax; and
  • the competent canton to assess the supplementary tax.

The Federal Council launched the consultation on 11 March 2022. The cantons and interested parties are invited to submit their feedback on the proposal by 20 April 2022. The change of the Constitution requires a people's referendum, and such referendum will take place in June 2023 at the latest.

On 18 March 2022, the Swiss Parliament approved the new Italy - Switzerland Tax Agreement (Frontier Workers) (2020), signed on 23 December 2020, under the Italy - Switzerland Income and Capital Tax Treaty (1976), as amended by the 1978 and 2015 protocols. Once in force and effective, the new agreement will replace the agreement on taxation of frontier workers between Italy and Switzerland, signed on 3 October 1974. Further developments will be reported as they occur.

The Chancellor made his annual Spring Statement speech today where he set out the Government’s tax plan to support the UK economy, businesses and families in both the short and the medium term. 

Key measures the Chancellor announced as part of the plan include: 

• an increase to the National Insurance Primary Threshold for Class 1 NICs and the Lower Profits Limit for Class 4 NICs from 6 July 2022, aligning it with the equivalent income tax personal allowance which is set at £12,570 per annum.  
• from April 2022, self-employed individuals with profits between the Small Profits Threshold (SPT) and the Lower Profit Limit will not pay Class 2 NICs, while allowing individuals to be able to continue to build National Insurance credits. 
• The Employment Allowance will be increased by £1,000 from 6 April 2022 to £5,000, which will benefit around 495,000 businesses.
• an immediate reduction in duty on diesel and petrol from 6pm on 23 March 2022, by 5 pence per litre, for 12 months. 

The full detail on all the measures, some of which are subject to parliamentary approval, can be found on GOV.UK. 

The Economic Crime (Transparency and Enforcement) Bill 2022 received Royal Assent on 14 March 2022. The Bill now becomes the Economic Crime (Transparency and Enforcement) Act 2022. The Act establishes a register of overseas entities and their beneficial owners and requires overseas entities that own UK land to register in certain circumstances.

The text of the Act can be accessed here.

The explanatory notes can be accessed here (as a PDF).

US Trade Representative (USTR) Katherine Tai and US Secretary of Commerce Gina Raimondo issued a 22 March 2022 statement announcing a novel tariff agreement with the United Kingdom, which will allow an increased volume of UK steel and aluminium products to enter the US market without having the section 232 steel tariffs applied to them (see Note).

The agreement is also designed to counter unfair Chinese trade practices. Additionally, the deal will lift tariffs on over USD 500 million in US exports to the United Kingdom including but not limited to consumer goods, distilled spirits and agricultural products.

USTR Tai and UK Secretary of State for International Trade Anne-Marie Trevelyan issued a joint statement, also on 22 March 2022, on their shared commitments, including:

• increasing dialogue between small and medium enterprises (SMEs) in the United States and the United Kingdom;
• building on the new G7 Digital Trade Principles during the United Kingdom's presidency of that organization;
• establishing more durable supply chains;
• supporting environmental protection and creating incentives to decarbonize the economy;
• protecting labor rights and combatting forced labor globally; and
• addressing third party market distorting practices.

US Senate Finance Committee Chair Ron Wyden (D-OR) also issued a 22 March 2022 statement commending the announcement, stating that "[r]esolving the steel and aluminum tariffs with the U.K. will strengthen America's hand against China and Russia and help ensure American workers are competing on a level playing field."

Note: Former US President Donald Trump imposed a 25% tariff on steel imported to the United States, with exemptions for Canada and Mexico, under section 232 of the Trade Expansion Act of 1962.

A report issued by the Business Registration and Licensing (BRL) sector in the Department of Economy and Tourism (DET) states that Dubai now has 615 companies engaged in the trading of coffee, one of the most consumed beverages in the world. This reinforces the reputation of Dubai as a global trading hub for the commodity, with businesses involved in manufacturing, wholesale and retail, import and re-export, as well as the retail of hot coffee in cafes and restaurants, ready-to-drink coffee in grocery stores and retail outlets. According to Research and Marketing’s coffee market report 2021, the size of the global coffee market in 2021 is estimated at $108 billion, and anticipated to reach $144.68 billion in 2025. The momentum to retail sales powered by e-commerce, the increased preference for instant coffee, and the demand for specialty coffee led to the growth in the number of companies engaged in the coffee business. According to the BRL sector report, Bur Dubai accounted for the largest share of the companies engaged in the trading of coffee with 368 licences followed by Deira (243) and Hatta (4 licences), while the top sub-regions are based in Burj Khalifa, Al Ras, Al Barsha 1, Dubai Investments Park 1, Al Marar, Hor Al Anz East, Al Quoz 3, Al Karama, Trade Centre 1, and Port Saeed. Limited Liability companies accounted for 64% of the total, followed by Sole Establishments at 20%, and One-Person Limited Liability Companies at 13%. The rest of the legal forms included; Branches of companies based in other Emirates, Branches of Free Zone Companies and Civil companies. The report showed that the total number of licences issued during 2021 increased by 148% compared to 2020, when 69 licences were issued, compared to 171 licenses in 2021. Emiratis top the list of investors in the trading of coffee at 31% of the total followed by other nationalities such as British, Italian, Turkish, French, Egyptian, Jordanian, and Kuwaiti. Several Emirati companies in the trading of coffee have expanded to global markets from Dubai as well opening their branches in several countries through the services provided by Dubai Industries and Exports, an agency of DET, in a short period of time. The UAE-origin Coffee Plant, for example, has expanded to more than 20 countries around the world. This company is an example of the vital role played by Dubai Industries and Exports, in driving the sustainability and expansion of local factories at the international level, and the diverse channels offered to enter the products into global markets. The increase in population, the growth in the number of visitors from all over the world, in addition to the increase in income and the multiplicity of options in coffee types, and the increase the number of cafes and retail outlets, were among the reasons behind the high consumption of coffee in Dubai. The market has become more competitive with the increase in the number of companies operating in the field of coffee and the introduction of high-quality coffee to fulfil the needs of consumers.

New report, developed by Dubai Chamber of Digital Economy, in collaboration with Mind the Bridge and Crunchbase, examines key trends reshaping the maturing entrepreneurial ecosystem in MENA.

Dubai is home to 39% of scaleups in MENA and a majority of the region’s tech giants.

Scaleups in UAE have raised $5.4 billion as of December 2021, accounting for over 59% of total funding within the region.

Dubai accounts for 57% of scaleup funding in the Middle East and North Africa, while the emirate is home to 39% of the region’s scaleups, according to a new report developed by Dubai Chamber of Digital Economy in cooperation with Mind the Bridge and Crunchbase.

The report, titled UAE Venture Outlook, examined key trends reshaping the maturing entrepreneurial ecosystem in the region, and highlighted the leading roles of the UAE and Dubai in attracting promising scaleups and tech giants.

The number of scaleups in MENA saw exponential growth in 2021, compared to 2020, as 587 scaleups were accounted for in the region by December 2021, compared to 139 in the previous year.

MENA scaleups have collectively attracted $9.1 billion, representing 0.12% of the region’s GDP. Data shows that a few countries are driving the effort of the MENA region to compete with the top global tech ecosystems.

On a country level, the UAE accounted for the largest number of scaleups (251) which attracted the majority of funding in the region, or 59%, having raised $5.4 billion. Meanwhile, Dubai alone accounted for 57% of funding, as the emirate is home to a major of the region’s tech giants. Saudi Arabia came second as the kingdom is home to 106 scaleups (18.1% of total) that raised a total of $1.2 billion of growth funds. Egypt ranks third, accounting for 84 scaleups and $1.4B raised.

The report revealed that 26 MENA scaleups (4.4% of total) relocated their headquarters inside the region to boost their growth. The UAE was the preferred destination for relocation with 8 scaleups setting up in the country, followed by Saudi Arabia with 7, and Egypt (4). Additionally, a total of 41 scaleups opted to expand their footprint beyond MENA, primarily to the US (13), the UK (5), France (5), India (3), and Canada (2).

H.E. Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications and Chairman of Dubai Chamber of Digital Economy said the findings of the report reflect ongoing efforts to advance Dubai’s digital economy and create a conducive environment in the emirate for scaleups to thrive and grow.

He noted that the report’s results indicate that Dubai is achieving considerable headway in achieving the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, position Dubai as a global leader in digital economy. He also said the Dubai Chamber of Digital Economy last year, along with the market research conducted by the Chamber would support the sector’s growth and development.

“Despite its vast competitive advantages, the UAE continues to add more incentives for businesses and startups. The introduction of golden visas, green visas, freelancer and entrepreneur visas are all bold and positive steps the country has taken to boost its value proposition,” said H.E. Hamad Buamim, President & CEO of Dubai Chambers.

“Venture capital is a crucial element needed to nurture thriving entrepreneurial ecosystems and advance digital economies. We will continue to work closely with public and private sector stakeholders to ensure a conducive environment for VC firms and investors, as well as entrepreneurs from around the world,” H.E. Buamim added.

To view the full report, please click here.

Source: Dubai Chamber

Rwanda plans to introduce value added tax (VAT) on the supply of digital services and products to Rwandan residents by non-resident suppliers such as Netflix and Amazon. According to the Rwanda Revenue Authority (RRA), levying VAT on the cross-border supply of digital services and products is in line with the destination principle of VAT, dictating that VAT must be paid in the country where consumption of the service or product takes place.

The RRA has since engaged the African Tax Administration Forum (ATAF) and other international organizations to undertake an impact assessment of the proposed tax on revenue and the digital services sector.

This information was shared by the Deputy Commissioner General (DCG) of the RRA, Jean Louis Kaliningondo, in his interview on 11 March 2022 with the local daily, The New Times.

The South African Revenue Service (SARS) has issued a guide for employers in respect of allowances. The purpose of this guide is to assist employers in understanding their obligations relating to allowances paid or payable to their employees. The guide explains the methods to be applied by the employers in respect of allowances paid or payable to employees and includes the legislative requirements as well as examples.

The guide deals, amongst others, with the following:

• subsistence allowance;
• amounts deemed to be expended;
• employer borne expenses;
• employees' tax;
• travel allowance;
• vehicle let to the employer;
• travel allowance reimbursement;
• allowances to a holder of a public office; and
• portion of salary deemed to be a public office allowance.

$40 million Five-year fund launched by PepsiCo in South Africa to boost job opportunities and increase local procurement through shared value solutions that will enhance sustainable food system. (Food Business Africa) 51% Stake in Jubilee General Insurance's Burundi subsidiary acquired by global insurer Allianz SE. The sale is part of the Kenyan parent firm's  agreement to sell majority stakes in its general insurance subsidiaries across five markets. (Business Daily) 558 Tour operators in Tanzania voted No to a proposal to build a cable car on Mount Kilimanjaro, citing environmental, economic and employment concerns over the project, which is still at a conceptual stage. (The Citizen)

$200 million Credit approved by the World Bank from the International Development Association to boost Cameroon’s agricultural production. This new project seeks to strengthen irrigation services in the country. (Food Business Africa) 120 MWp Solar photovoltaic plant to be constructed in Gabon by Solen Energy to help solve the problem of load shedding. The facility will be commissioned in two phases for the public power company (Africa Energy Portal) 95 New buses expected in Tanzania this year to help reduce passenger congestion at the BRT terminals. This brings the number of buses operating in the first phase of BRT project to 305. (The Citizen)

$2.5 billion Dangote fertiliser plant commissioned in Nigeria to help boost production of agricultural products. The plant is projected to produce 3 million metric tonnes per year and shield the West African country from food shortages that may arise from the Russian-Ukraine war. (The Guardian) 87 MW Independent power producer located in Kenya has been acquired by A.P. Moller Capital to enable the fund manager to participate in the country’s energy transition efforts. This will be the second power plant owned by the company, resulting in a combined capacity of 140 MW. (CEO Business Africa) 8 Additional African startups added to the Y Combinator W22 Batch, bringing the total number to 23. This is the largest cohort of African participants, up from 15 in the S21 group, which was itself a record. (Tech Build Africa)

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The US Internal Revenue Service (IRS) has released its annual report for 2021 on advance pricing agreements (APAs) and the advance pricing and mutual agreement (APMA) program for transfer pricing transactions.

The IRS issued the report in the form of IRS Announcement 2022-7, dated 22 March 2022.

Part I of the report summarizes the structure, composition, and operation of the APMA program. Part I of the report notes that, on 31 August 2015, the IRS issued revised procedures for requesting competent authority assistance and revised procedures for APA applications.

Part II of the report presents the statistical data related to the APMA program results, both in table and graphical format. According to Part II of the report, 124 APAs were executed in 2021, comprised of 25 unilateral APAs, 98 bilateral APAs and 1 multilateral APA. In addition, 78 APAs were renewed in 2021, consisting of 19 unilateral APAs, 59 bilateral APAs and 0 multilateral APA. There were 145 new APA applications filed in 2021, consisting of 16 unilateral applications, 121 bilateral applications and 8 multilateral applications. The number of APA requests pending at the end of 2021 was 185, including both new requests and requests for renewals. Part II also includes the statistical results of the APMA program by reference to countries and industry sectors.

Part III of the report provides general descriptions of various elements of the APAs executed in 2021, including types of tested parties, covered transactions, functions, and risks, as well as transfer pricing methods used, critical assumptions, and the amount of time taken to complete APA requests during 2021.

With regard to the length of time needed to complete an APA request during 2021, Part III of the report indicates an average time of 39.2 months and a median time of 35.1 months taking into account both new requests and requests for renewal. Timing data was also provided separately for unilateral and bilateral requests.

The report includes the texts of two Model APAs as Appendix 1 and Appendix 2.

The report is set to appear in the Internal Revenue Bulletin (IRB) 2022-15, dated 11 April 2022.

Note: The APMA program, as the successor to the APA program, continues the procedure whereby taxpayers and the IRS can enter into a binding agreement under which the IRS accepts the transfer pricing methodology (TPM) used by the taxpayer, and agrees not to seek a transfer pricing adjustment under section 482 of the US Internal Revenue Code (IRC) if the taxpayer files its tax returns consistent with the agreed TPM. The APMA program is intended to resolve potential transfer pricing disputes between taxpayers and the IRS prior to the tax return auditing process.

The US Senate approved the Consolidated Appropriations Act, 2022 (HR 2471), a USD 1.5 trillion spending bill, in an 8 March 2022 vote, and the US House of Representatives is expected to do the same on 9 March 2022.

The 2,741-page measure provides USD 782 billion for defense spending and USD 730 billion for non-defense discretionary spending. Included in those figures is USD 13.6 billion for emergency Ukraine-related defense spending, as well as USD 4 billion to the US State Department to provide assistance to refugees, economic assistance and foreign military assistance and USD 2.8 billion to bolster the US Agency for International Development's (USAID's) immediate humanitarian disaster relief efforts.

The bill's sweeping provisions cover a broad variety of US policies, including language designed to ease the transition of contracts and loans away from the LIBOR benchmark. Its passage comes alongside a shift in focus away from US President Joe Biden's larger economic agenda, which would increase taxes in order to fund initiatives providing healthcare and childcare and combatting climate change.

The US Tax Court has ruled that the US Internal Revenue Service's (IRS's) disallowance of deductions for excess compensation was justifiable. The Tax Court, however, granted the taxpayer compensation deductions greater than the IRS had permitted.

The Tax Court stated that, while corporations may deduct reasonable allowances for salaries or other compensation, the determination of what constitutes reasonableness is a question to be determined from all the facts and circumstances of each particular case (see Martens v. Commissioner, 934 F.2d 319).

The Tax Court also cited US Treasury Regulations section 1.162-7(b)(3), which provides that reasonable and true compensation is an amount "as would ordinarily be paid for like services by like enterprises under like circumstances."

In determining an appropriate compensation, the Tax Court used the multifactor approach (MFA) that the US Court of Appeals for the Fourth Circuit, to which an appeal of the present case would lie, utilizes.

The MFA requires an analysis of the following factors:

• the employee's qualifications;
• the nature, extent and scope of the employee's work;
• the size and complexities of the business;
• a comparison of salaries paid with gross income and net income;
• the prevailing general economic conditions;
• comparison of salaries with distributions to stockholders;
• the prevailing rates of compensation for comparable positions in comparable concerns; and
• the salary policy of the taxpayer as to all employees.

In rendering its opinion, the Tax Court pointed out that no single factor was decisive but instead weighed the totality of the facts and circumstances. In this particular case, the most dominant factors were:

• the comparable pay by comparable concerns;
• the distribution history;
• the process used in setting the compensation in the years at issue; and
• the involvement by the employee at issue (i.e. the taxpayer's chief executive officer (CEO) and shareholder) in the taxpayer's business.

Furthermore, the Tax Court also gave greater weight to the testimony of the IRS' valuation expert than those of the taxpayer who utilized the independent investor test.

Note: The independent investor test is another standard that certain courts utilized. This test considers what an inactive, independent investor would be willing to compensate the employee.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $89.7 billion in January, up $7.7 billion from $82.0 billion in December, revised.

Exports, Imports, and Balance (exhibit 1)

January exports were $224.4 billion, $3.9 billion less than December exports. January imports were $314.1 billion, $3.8 billion more than December imports.

The January increase in the goods and services deficit reflected an increase in the goods deficit of $7.1 billion to $108.9 billion and a decrease in the services surplus of $0.6 billion to $19.2 billion.

Year-over-year, the goods and services deficit increased $24.6 billion, or 37.7 percent, from January 2021. Exports increased $29.9 billion or 15.4 percent. Imports increased $54.4 billion or 21.0 percent.

COVID-19 Impact on International Trade in Goods and Services

The global pandemic and the economic recovery continued to impact international trade in January 2022. The full economic effects of the pandemic cannot be quantified in the statistics because the impacts are generally embedded in source data and cannot be separately identified.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit increased $7.6 billion to $83.9 billion for the three months ending in January.

• Average exports decreased $0.1 billion to $225.9 billion in January.
• Average imports increased $7.5 billion to $309.8 billion in January.

Year-over-year, the average goods and services deficit increased $17.8 billion from the three months ending in January 2021.

• Average exports increased $35.7 billion from January 2021.
• Average imports increased $53.6 billion from January 2021.

Exports (exhibits 3, 6, and 7)

Exports of goods decreased $2.3 billion to $155.9 billion in January.

Exports of goods on a Census basis decreased $2.3 billion.

• Consumer goods decreased $3.0 billion.
  • Pharmaceutical preparations decreased $3.2 billion.
• Capital goods increased $1.1 billion.
  • Civilian aircraft increased $0.4 billion.
  • Telecommunications equipment increased $0.2 billion.

Net balance of payments adjustments decreased less than $0.1 billion.

Exports of services decreased $1.6 billion to $68.5 billion in January.

• Travel decreased $1.8 billion.
• Transport decreased $0.5 billion.
• Other business services increased $0.3 billion.
• Financial services increased $0.2 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods increased $4.8 billion to $264.8 billion in January.

Imports of goods on a Census basis increased $4.6 billion.

• Automotive vehicles, parts, and engines increased $1.6 billion.
  • Passenger cars increased $0.8 billion.
  • Other automotive parts and accessories increased $0.5 billion.
• Industrial supplies and materials increased $1.5 billion.
  • Crude oil increased $0.9 billion.
  • Natural gas increased $0.6 billion.
  • Copper increased $0.6 billion.
• Foods, feeds, and beverages increased $1.4 billion.
  • Other foods increased $0.5 billion.
  • Meat products increased $0.2 billion.
• Capital goods increased $1.1 billion.
  • Telecommunications equipment increased $0.3 billion.
  • Other industrial machinery increased $0.3 billion.
  • Semiconductors decreased $0.6 billion.
• Other goods decreased $1.6 billion.

Net balance of payments adjustments increased $0.2 billion.

Imports of services decreased $1.0 billion to $49.3 billion in January.

• Transport decreased $0.8 billion.
• Travel decreased $0.5 billion.
• Other business services increased $0.1 billion.

Real Goods in 2012 Dollars – Census Basis (exhibit 11)

The real goods deficit increased $6.4 billion to $118.1 billion in January.

• Real exports of goods decreased $6.0 billion to $147.2 billion.
• Real imports of goods increased $0.4 billion to $265.3 billion.

Revisions

Exports and imports of goods and services were revised for July through December 2021 to incorporate more comprehensive and updated quarterly and monthly data. In addition to these revisions, seasonally adjusted data for all months of 2021 were revised so that the totals of the seasonally adjusted months equal the annual totals.

Revisions to December exports

• Exports of goods were revised down $0.1 billion.
• Exports of services were revised up $0.3 billion.

Revisions to December imports

• Imports of goods were revised up $0.3 billion.
• Imports of services were revised up $1.2 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis (exhibit 19)

The January figures show surpluses, in billions of dollars, with South and Central America ($4.4), Hong Kong ($2.0), Singapore ($1.3), Brazil ($1.1), and United Kingdom ($1.0). Deficits were recorded, in billions of dollars, with China ($33.3), European Union ($18.0), Mexico ($12.5), Japan ($7.1), Canada ($6.8), Germany ($5.4), Taiwan ($3.9), Italy ($3.2), South Korea ($3.0), India ($2.4), Saudi Arabia ($0.8), and France ($0.8).

• The deficit with Canada increased $2.6 billion to $6.8 billion in January. Exports decreased $1.2 billion to $27.7 billion and imports increased $1.4 billion to $34.5 billion.
• The deficit with Japan increased $2.1 billion to $7.1 billion in January. Exports increased $0.1 billion to $6.2 billion and imports increased $2.2 billion to $13.4 billion.
• The deficit with India decreased $1.5 billion to $2.4 billion in January. Exports increased $0.6 billion to $4.3 billion and imports decreased $0.9 billion to $6.7 billion.

Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis

Statistics on trade in goods and services by country and area are only available quarterly, with a one-month lag. With this release, fourth-quarter figures are now available.

The fourth-quarter figures show surpluses, in billions of dollars, with South and Central America ($22.1), Hong Kong ($6.7), Brazil ($6.4), Singapore ($5.1), United Kingdom ($5.0), and Saudi Arabia ($0.7). Deficits were recorded, in billions of dollars, with China ($87.9), European Union ($39.4), Mexico ($33.5), Germany ($18.4), India ($13.8), Taiwan ($11.9), Japan ($11.4), Italy ($10.5), Canada ($8.5), South Korea ($6.7), and France ($4.6).

• The deficit with China increased $8.4 billion to $87.9 billion in the fourth quarter. Exports increased $2.8 billion to $48.0 billion and imports increased $11.2 billion to $136.0 billion.
• The deficit with Mexico increased $8.3 billion to $33.5 billion in the fourth quarter. Exports increased $1.8 billion to $79.5 billion and imports increased $10.1 billion to $113.0 billion.
• The deficit with Japan decreased $4.5 billion to $11.4 billion in the fourth quarter. Exports increased $1.6 billion to $28.9 billion and imports decreased $2.8 billion to $40.4 billion.

Full article: BEA