November 2021

  • United Arab Emirates
    • Dubai ranks first in Arab world on latest Innovation Index

      - Released on the sidelines of the 12th World Chambers Congress in Dubai, the latest Dubai Innovation Index Report analyses innovation output across 39 global cities - Dubai ranked ahead of Beijing, Shanghai and Sao Paulo, as the emirate scores high in the categories of infrastructure, government and society

      Dubai leads the Arab world in the latest edition of the Dubai Innovation Index, maintaining its 20th position globally in 2020, Dubai Chamber announced today as it released the Index at the 12th World Chambers Congress in Dubai.

      The Index report, bearing the theme The Road to Recovery Through Resilience and Innovation, analysed a total of 39 cities. Seven new cities were added to the latest edition of the Index, which was developed by Dubai Chamber in collaboration with PwC.

      HE Hamad  Buamim, President and CEO,  Dubai Chamber, said Dubai’s performance in the latest edition of the Index reflects its ability to deliver innovation-driven development in line with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform the emirate into a global innovation hub. “By providing a supportive environment, a robust regulatory and legislative framework and highly developed infrastructure, and comprehensively addressing various vital enabling drivers, Dubai is on track to achieve its aspirations under the follow-up and guidance of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai  and Chairman of The Executive Council. By embracing new ideas to raise excellence and rapidly implementing dynamic creative solutions, Dubai is raising the performance of sectors across its economy,” he added.

      Under the first pillar of the Index, Agile Government, Dubai ranked 19th, scoring high marks for its e-Government services. Among the specific initiatives highlighted are the Dubai Paperless Strategy, which aims to achieve a paperless government by the end of 2021. As part of the transformation, 41 government entities have already halved their paper consumption and are moving towards 100% digitalisation. Also supporting Dubai’s performance on the Index is the Dubai Blockchain Strategy, which has facilitated the city’s adoption of blockchain records in 24 applications in various industries.

      Under the Infrastructure category, Dubai was recognised for its academic institutions, including universities, boosting innovation by sharing their resources with startups and entrepreneurs. Also mentioned was the city’s attraction of foreign investment into its education sectors, with examples including the University of London’s Bayes Business School and the University of Birmingham setting up Campuses in the emirate. The Index also acknowledged Dubai’s Future District, with its research centre, incubators, accelerators and innovation space for future economy pioneers.

      With regards to funding, Dubai performed well in the area of venture capital (VC), due to government-led incentives and support of global VCs looking to enter the market and those already invested in the market. Incentivisation approaches used include: tax incentives for VC funds, public-sector matching of investments and government support for early and mid-stage startups through additional services

      The report highlighted positive change within Dubai’s funding landscape and a wider availability of funding channels in their ecosystems through ensuring a diversity of offerings that accompany the VC funding opportunities, with its offerings ranging from government-backed guarantee schemes like the Mohammed bin Rashid Innovation Fund to venture capital deals, angel investments, peer-to-peer lending and crowd funding. The Dubai Next platform, launched by the Dubai government in 2021, is expected to further enhance financial access for the city’s innovators.

      Under the Society category, Dubai ranked 16th as the city embraces immigration, with expats drawn to its wealth of opportunities and tolerant cultural and religious environment. Further attracting expatriates to the emirate are its long-term visa schemes, which reward them for their contribution to the city.

      The Index highlights how innovation is part of Dubai’s DNA, with its leadership strongly recognising the pivotal role that it plays in the country’s sustainable development. It also highlights the impact of the National Innovation Strategy launched in 2014 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, which has played a major role in prioritising innovation across all sectors and as a vital pillar of the economy.

      Singapore and Hong Kong maintained their first and second places on the Index respectively, with Stockholm climbing three places to replace London in third position, with the UK capital dropping five places to eighth position this year. Toronto makes the biggest jump of all the 39 cities on the Index, rising seven places to reach 10th place from its 17th position in 2019.

      Examining the state of innovation in cities around the world during a time of unprecedented turmoil and change, the latest edition of the Dubai Innovation Index states that at the start of a new era, the global exchange of knowledge and learning is more important than ever.

      Key takeaways from this year’s Index are that digitalisation underpins the transformation and success of the most innovative cities; governments in top innovative cities do more to promote innovation than just set policies, oversee regulations and provide incentives; and the collaboration that has resulted from the pandemic has accelerated innovation by offering innovators enhanced opportunities for knowledge sharing, market access and funding.

      Another significant finding was that while Europe and North America remained the leading regions for innovative cities, metropolises in other regions - notably Asia-Pacific - have been closing the gap.

      The report also highlights that 2014 saw the launch of the first Dubai Innovation Index, which was the first-of-its-kind city level assessment of innovation which has influenced a raft of new measures, including strategies policies and procedures introduced in areas that include public private partnerships, robotics, blockchain, artificial intelligence, the Internet of Things and 3D printing, all of which have placed Dubai firmly on the innovation map.

      The assessment categories on the Dubai Innovation Index include Agile Government, Infrastructure, Funding, Business Environment, and Society, with Dubai scoring highly across a number of key metrics.

        Media Office - Government of Dubai
    • UAE adopts largest legislative reform in its history

      ABU DHABI, 27th November 2021 (WAM) - His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, has approved a wide-ranging reform of the country’s legal system, which aims to strengthen economic, investment and commercial opportunities, in addition to maximizing social stability, security and ensuring the rights of both individuals and institutions.

      The draft of new laws and legislative amendments came during the "Year of the 50th" and are intended to keep pace with the developmental achievements of the UAE and reflect the country’s future aspirations. Over 40 laws are included in the changes, which together represent the largest legal reform in the young nation’s 50-year history.

      The amendments aim to develop the legislative structure in various sectors, including investment, trade and industry, as well as commercial company, regulation and protection of industrial property, copyright, trademarks, commercial register, electronic transactions, trust services, factoring, and residency, in addition to laws related to society and personal security including as the Crime and Punishment Law, the Online Security Law, and a laws regulating the production, sale and use of narcotics and psychotropic substances.

      The new legislative changes came after intensive coordination at both the local and federal levels, where teams comprising 540 specialists and experts from 50 federal and local authorities have worked together over the past five months in consultation with over 100 private sector organisations in order to reflect global best practice in the new legal provisions.

      Electronic Transactions and Trust Services The amendments to the Law on Electronic Transactions and Trust Services aim to keep pace with technological development and enhance ongoing digital transformation.

      The law gives digital signatures the same weight as a handwritten signature, a step that obviates the need for personal presence in order to seal transactions and supporting the globally-based completion of government transactions such as contracts and agreements using a digital signature, provided that the country where the transaction originates has adopted sophisticated authentication mechanism and trust services similar to the UAE standards.

      The Law of Electronic Transactions and Trust Services facilitates a wide range of civil and commercial transactions, including marriage, personal status, notary and real estate services such as renting, buying, selling and amending contracts.

      Industrial property rights The law aims to protect industrial property and regulate the procedures for its registration, use, exploitation, and assignment, to ensure support for knowledge and innovation and to enhance the UAE’s competitiveness in the field of industrial property rights while adopting best international practices and standards.

      The UAE industrial property rights law is dedicated to patents, industrial designs, integrated circuits, non-disclosure agreements and utility certificates. It applies across the UAE (including free zones). The law is concerned with applications and details surrounding the eligibility for patents and utility certificates and provides details about the conditions for granting patents.

      The law includes sections on compulsory licenses, addressing the rights of the license holder, the multiplicity of compulsory licenses, and the exception to the conditions of compulsory licensing by the court.

      Copyrights and Neighbouring Rights The amendments of the federal law concerning copyrights and neighboring rights maximizes the contribution of creative industries in the UAE economy and provide protection to authors of the works and the holders of the neighboring rights, in case an aggression against their rights occurs.

      The amendments offer special benefits for people of determination in order to enhance their benefit and participation in this vital sector. The law covers all substantive issues pertaining to author’s rights and neighboring rights, including the right to determine first publication of the work, the right of writing the work in his name and the right to protest against alteration of the work if the alteration leads to distortion of the author’s intent.

      Trade Marks The federal law concerning Trade Marks was amended with the aim of expanding the scope of protection. The amendments offer protection to three-dimensional trademarks, holograms, sound trademarks such as musical tones associated with a company and that distinguish its products, and smell trademarks such as creating a distinctive scent for the company or brand.

      The updates also include registering geographical names of trademarks or products whose name is associated with the names of specific geographic regions, countries or cities and are famous for producing this product, in order to enhance the UAE position in promoting its famous products like dates.

      Among the changes is the abolition of the requirement to have a trade license to allow the registration of a trademark, and granting SME owners a temporary protection to protect the trademark of their products during participation in exhibitions.

      Commercial Register The Commercial Register Law has been amended allowing local authorities in each emirate to retain the right to establish and manage their commercial records, including registration, data monitoring and change.

      A clearer scope for applying the law was also defined to include the registration of companies and economic institutions in all forms, whether commercial (companies) or professional, such as law firms, accountants, and others, to ensure the comprehensiveness of the data contained in the commercial registry for all economic establishments in the UAE.

      The commercial register is an official log held by the Ministry of Economy containing details of all businesses operating in the UAE.

      Factoring and Transfer of Civil Accounts Receivable The law is the first federal regulation in the United Arab Emirates dealing specifically with factoring and the assignment of receivables, it provides a new regulatory framework which sets out the legal requirements for assignments and transfers of receivables, validity and perfection requirements, as well as the rules for determining priority amongst competing claims over assigned receivables.

      Factoring, a financing arrangement that enables a business to sell its receivables, aims at further supporting the business environment and SME’s. Factoring is a type of financial transaction in which a business sells its invoices to a factoring company.

      The law organizes factoring legal requirements including the assignment of receivables and perfection. The new law applies broadly to any assignment of receivables made as part of commercial or civil transactions.

      Commercial Companies The law allows investors and entrepreneurs to establish and fully own onshore companies in all sectors, excluding a small number of reserved "strategic activities". The amendment aims at boosting the country’s competitive advantage as a part of a wider UAE government agenda to economic diversification towards an innovation-led and knowledge-based economy.

      The new Commercial Companies Law aims to increase foreign direct investment (FDI) and reaffirms the UAE’s standing as a leading business hub regionally and globally.

      The law was issued to introduce certain amendments concerning Commercial Companies: it specifies the companies that are exempted from the provisions thereof, as well as corporate governance and strategic activities.

      The law further details the approvals and licenses required by companies in order to undertake commercial activities within the UAE; in addition to the company’s name, contract, incorporation procedures, and conditions for increasing and decreasing the capital.

      The law also clarifies the responsibilities of the board of directors, executive management, the authorities of the general assembly, the prerequisites for issuing bonds and instruments, acquisitions and the administrative penalties imposed on a person deemed to be in breach of its provisions.

      Higher Education Law The law aims to regulate the licensing of higher education institutions in the UAE, it sets the legislative framework to approve curricula, ensure effective governance and management of higher education institutions, improve the quality and competitiveness of higher education in the country, and encourage scientific research in educational institutions.

      Provisions of the law apply to all higher education institutions in the country, with the exception of those operating in free zones, the law covers all levels of higher education, including diploma, higher diploma, bachelor, postgraduate diploma, master degree and doctorate.

      As per the law, the Ministry of Education is tasked with licensing and accreditation of all higher education institutions, in addition to evaluating performance, quality of educational outputs, classification and monitoring.

      Crime and Punishment Law The UAE has ratified a new and updated Federal Crime and Punishment Law, a move intended to further develop and refine the legislative system of the United Arab Emirates. The new legislation offers enhanced protections for women and domestic servants, strengthens public safety and security provisions and eases restrictions on extra-marital relationships and it will be fully enacted starting from January 2nd, 2022.

      The new law includes the amendment and revision of a number of areas of legislation, including new criminal penalties for public disorder offences and the de-criminalization of a number of behaviours.

      The new law also prohibits the consumption of alcoholic beverages in a public place or in unlicensed locations. The law also prohibits the sale, provision or incitement or inducement to consume alcoholic beverages to any person below 21 years of age.

      The new law stipulates life imprisonment for the crime of rape or non-consensual intercourse and if the victim is under the age of 18, disabled or otherwise rendered in a condition unable to offer resistance can be extended to capital punishment.

      The new law also addresses the crime of indecent assault with imprisonment or a fine of no less than ten thousand dirhams regardless of the victim’s gender. If the use of force or threat is employed in the course of the crime, the penalty shall be imprisonment for a period of no less than (5) five years and not exceeding (20) twenty years.

      The penalty will rise to a prison term of no less than (10) ten years and not exceeding (25) twenty-five years if the victim is aged under 18, disabled or otherwise rendered in a condition unable to offer resistance. Also, the more severe penalty applies if the crime takes place in a place of work, study, shelter or care.

      The law also punishes with imprisonment for a period of no less than six months, consensual extra-marital intercourse with a person aged over 18 years, noting that a criminal case for this crime is only instituted on the basis of a complaint from the husband or guardian. In all cases, the husband or guardian has the right to waive the complaint, and the waiver entails the expiration of the criminal case or the suspension of the execution of the penalty, as the case may be.

      The new law effectively decriminalizes consensual relationships out of wedlock, providing that any child conceived as a result of the relationship is acknowledged and will be cared for. Any couple conceiving a child out of wedlock will be required to marry or singly or jointly acknowledge the child and provide identification papers and travel documents in accordance with the laws of the country of which either is a national, considering the applicable laws of that nation. Failing this, a criminal case would introduce a prison term of two years for both correspondents.

      One of the most important provisions newly introduced by the Crime and Punishment Law is that the law be applied to anyone who commits, or participates in, a premeditated murder that occurs against a citizen of the United Arab Emirates even if the crime takes place outside the country.

      Online Security Law The law regarding cyber-crimes and combatting online harassment, bullying and ‘fake news’ will become effective January 2nd, 2022, it is one of the first comprehensive legal frameworks in the region to address concerns raised by online technologies and their applications and abuse.

      The law aims to enhance community protections from online crimes committed through the use of networks and information technology platforms, protecting public sector websites and databases, combatting the spread of rumors and ‘fake news’, safeguarding against electronic fraud and preserving personal privacy and rights.

      The new law addresses online false advertising or promotions, including unlicensed trading in crypto-currencies and medical products and supplements.

      The law contains provisions related to fake news and misleading information, using online tools, networks and platforms to broadcast, publish, republish, circulate or recirculate fake news, including false and misleading information, false reports purporting to originate from official sources or that falsely misrepresent official announcements.

      The law gives courts powers to confiscate devices, software, content or other means used in the pursuit of a crime, in addition to the deletion of such information.

      Data Protection Law The Personal Data Protection Law constitutes an integrated framework to ensure the confidentiality of information and protect the privacy of community members by providing proper governance for optimal data management and protection, in addition to defining the rights and duties of all concerned parties.

      The provisions of the law apply to the processing of personal data, whether all or part of it through electronic systems, inside or outside the country.

      The law prohibits the processing of personal data without the consent of its owner, with the exception of some cases in which the processing is necessary to protect the public interest, or that the processing is related to the personal data that has become available and known to all by an act of the data owner, or that the processing is necessary to carry out any of the legal procedures and rights.

      The law defines the controls for the processing of personal data and the general obligations of companies that have personal data and defines their obligations to secure personal data and maintain its confidentiality and privacy.

      It also defines the rights and cases in which the owner has the right to request correction of inaccurate personal data, restrict or stop the processing of personal data. The law sets out the requirements for the cross-border transfer and sharing of personal data for processing purposes.

      UAE Data Office The law establishing the UAE Data Office aims at ensuring the full protection of personal data.

      The office, which will be affiliated with the Cabinet, is responsible for a wide range of tasks that include proposing and preparing policies and legislations related to data protection, proposing and approving the standards for monitoring the application of federal legislation regulating this field, preparing and approving systems for complaints and grievances, and issuing the necessary guidelines and instructions for the implementation of data protection legislations.

      WAM/Hassan Bashir
    • Dubai launches Five-Year Multi-Entry Visa for employees of multinational companies

      Hamdan bin Mohammed: Dubai will continue to create new opportunities for professionals and talented individuals across the world to grow and thrive

      New Visa is a joint initiative between the General Directorate of Residency and Foreigners Affairs in Dubai and Dubai’s Department of Economy and Tourism Mohammad Al Marri: We are keen to simplify procedures to facilitate the issuance of entry visas to increase the number of international business and leisure travellers Helal Saeed Almarri: The new entry visa will serve as a strong catalyst for business and tourism growth in Dubai  

      As Dubai continues to drive global travel recovery and growth, the General Directorate of Residency and Foreigners Affairs (GDRFA) - Dubai in cooperation with Dubai’s Department of Economy and Tourism (DET) has launched a Five-Year Multi-Entry Visa for employees of multinational companies, to further accelerate momentum across tourism and all other business sectors.

      HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of The Executive Council of Dubai said: “The new Five-Year Multi-Entry Visa is the latest in a series of initiatives launched by Dubai to create new opportunities for professionals and talented individuals across the world to grow and thrive. The city has been steadily rising in status among the world’s biggest metropolises as a hub for travel, business, investment and talent, offering visitors an experience that is not only productive for work and business, but also enriching in terms of lifestyle and culture. Dubai seeks to dynamically adapt to evolving global conditions, embrace change and develop innovative initiatives to deliver future growth and offer new avenues for development and transformation, while remaining one of the world’s safest and most secure cities.”

      In line with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai the best city in the world to live, work and visit, the Five-Year Multi-Entry Visa has been introduced to further simplify visa application procedures, provide ease-of-access to the city and extend the duration of stay of international visitors. The Five-Year Multi-Entry Visa is especially beneficial to employees of foreign-owned firms as it enables them to participate in events, conferences, training courses, exhibitions and similar activities hosted in Dubai by these companies.

      GDRFA-Dubai has now fully activated this visa process and has started issuing it to employees of multinational companies, allowing them to visit and stay in the UAE for 90 days, with the option of extending their stay for another 90 days. The Five-Year Multi-Entry-Visa joins other new categories of visas and programmes launched by Dubai including the Golden Visa for entrepreneurs and property and business investors, as well as the Retire in Dubai and Virtual Working programmes, which provide more flexibility and options for talent looking to work and reside in Dubai. These have led to a significant increase in entry visas issued recently, with visitors looking to take advantage of Dubai’s world-class infrastructure, modern lifestyle, high vaccination rates and commitment to ensuring the highest standards of health and safety for residents and visitors, in line with international practices.

      His Excellency Major General Mohammed Ahmed Al Marri, Director General, GDRFA -Dubai, said: “This new step of providing a Five-Year Multi-Entry-Visa for major companies will bolster Dubai’s reputation as a global business and tourism hub. Dubai is committed to simplifying the procedures for issuing entry visas to all nationalities to help realise the vision and directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai the preferred destination for international visitors.

      “Dubai has always been top-of-mind among international business and leisure travellers and providing these multinational companies the opportunity to obtain five-year multiple entry visas for their employees will contribute towards increasing visitors to Dubai, particularly those who travel in groups, reflecting positively on all economic sectors, including tourism.”

      His Excellency Helal Saeed Almarri, Director General of Dubai’s Department of Economy and Tourism (DET), said: “This significant initiative is a testament to the strategies inspired by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to remain agile in the wake of the global pandemic and to drive business growth and lead the recovery of the tourism sector. From a governmental perspective, we have been focusing on initiatives designed to make the city even more attractive to people around the world and easing barriers to entry for business and leisure travellers. By making Dubai more accessible to employees of global corporations, we will be able to increase visitation and attract new talent, and pave the way for the continued and sustainable diversification of our economy.

      “Dubai is the preferred destination for multinational companies to host their corporate events and activities, conferences and meetings. All this will have a positive impact across many business sectors and provide an additional incentive for travel to Dubai, building on our unique opportunity to drive growth in this landmark year featuring Expo 2020 Dubai and the UAE Golden Jubilee, and beyond. We look forward to hosting more international corporate events, and we will extend our full support to these companies and their employees through the provision of this Five-Year Multi-Entry Visa to allow them to enjoy a quick and hassle-free entry process and a memorable stay.

      “It is imperative for us to further enhance the partnership and high level of cooperation between the public and private sectors to promote Dubai’s extensive and diverse destination proposition to business and leisure travellers and further strengthen Dubai’s international standing as the safe destination of choice for global travellers.”

      The concerted efforts by the tourism authorities, supported by stakeholders and partners, have helped restore momentum in the travel sector; between January and September 2021, Dubai received around 3.85 million international visitors. There are 726 hotel establishments with a total of 123,868 rooms that are open in Dubai, with the overall 61 per cent occupancy being among the highest worldwide.

      In September, the World Bank awarded Dubai a certificate for the quality of services that it provides to investors, and described it as a world-class logistics hub. The bank said in a report titled "At Your Service? The Promise of Service-Led Development" that Dubai is one of the most prominent models in the world for service centres, especially for logistics and financial services. Dubai also ranked first regionally and 11th globally among 25 global cities in the "Best Business Cities in Granting Residency Visas to Investors" index maintained by the British company Henley & Partners, which specialises in residency and citizenship advice.

      Media Office - Government of Dubai

  • China
    • China to see green investment boom: report

      Further green investment is in sight for China as the country gradually shifts toward a more institutionalized phase of decarbonization, according to a research report by Morgan Stanley.

      "We expect policymakers to step up support for green investments from 2022 -- such as renewables, smart grid, power storage equipment, and manufacturing equipment upgrades," said Robin Xing, Morgan Stanley's chief China economist, in the co-authored report.

      The green push is expected to inject new impetus into the Chinese economy. The investment bank forecast a recovery in infrastructure driven by green investment, saying it expects infrastructure investment growth to rebound to 4 percent next year.

      Manufacturing investment demand is also predicted to rise as manufacturers upgrade their equipment to improve energy efficiency, according to the report.

      The projections came amid China's continuous efforts to decarbonize to fight for blue skies and mitigate the impact of climate change.

      China in October unveiled an overarching guideline to achieve its carbon peak and carbon neutrality goals, as well as an action plan to peak carbon dioxide emissions before 2030. The guideline and action plan constitute the top-level policy design for decarbonization, and specify targets and measures for the coming decades.

      The People's Bank of China, the country's central bank, also rolled out a new lending tool for carbon reduction earlier this month, which aims to provide low-cost loans for financial institutions so as to strengthen financial support for the reduction of carbon emissions.

      The high-level carbon peak guidance has called for the leveraging of a combination of tax policies, green financing and carbon pricing to foster development in green industries, the report noted.

      Further policy support for green industries is expected next year in tax and fee cuts and the wider allocation of local government special bond quotas for green investment, it said.

      Source: XINHUANET

    • China to strengthen IPR support in new fields, business forms

      China will inject more efforts in the intellectual property rights (IPR) sector to better serve the growth of new fields and new business forms during the 14th Five-Year Plan period (2021-2025), said the IPR authorities.

      According to the plan, the National Intellectual Property Administration (NIPA) will carry out in-depth study and practice in the Internet, big data, artificial intelligence (AI) and other new fields and new business forms.

      China will put diverse efforts on patent examination, data IPR protection, Internet-related IPR protection and IPR international cooperation in the 14th Five-Year Plan period.

      The NIPA will give full play to the bidirectional promotion function of patent examination in promoting innovation and application. It will improve the examination rules in the emerging fields to boost breakthroughs in core technologies and their industrial application.

      It will promote the implementation of the data IPR protection project, push forward the legislative research and establish rules in the sector, targeting to effectively protect and use data to ensure personal privacy and national security.

      The Chinese IPR authorities will also strengthen the IPR protection in the Internet field and facilitate the sector's online and offline integrated development to meet the new challenges from the information era.

      According to the NIPA, China will also promote international IPR cooperation in new fields and business forms, as well as international rulemaking in big data, AI and other emerging new fields.

      Source: XINHUANET

    • China Deepens Industry-Finance Cooperation to Promote Green Industrial Development

      Four authorities led by the Ministry of Industry and Information Technology and the People's Bank of China have jointly released the Guiding Opinions on Strengthening the Industry-Finance Cooperation to Promote Green Industrial Development, requiring establishing and improving the standard system for carbon accounting and green finance, improving the information sharing mechanism for green industrial development, and increasing the support for green financing.

      In terms of innovative green financial products and services, the document supports testing of real estate investment trusts in the field of infrastructure (infrastructure REITs) in green and low-carbon parks in a prudent and steadily manner. It encourages financial institutions to develop climate-friendly financial products, supporting the Guangzhou Futures Exchange to build a carbon futures market for the standardized development of carbon financial services.

        Source: Ministry of Industry and Information Technology of the People’s Republic of China
    • STA and MOF Clarify Matters on Deferred Payment of Taxes by Micro, Small and Medium-sized Firms in Manufacturing

      The State Taxation Administration and the Ministry of Finance jointly released on October 29, 2021 the Announcement on Matters concerning Deferred Payment of Some Fourth Quarter Taxes by Micro, Small and Medium-sized Firms in Manufacturing, to be implemented from November 1, 2021.

      According to the document, the said enterprises may defer payment of part of their taxes and fees for the fourth quarter of 2021, including enterprise income tax, personal income tax (excluding withholding), domestic value-added tax, domestic consumption tax and additional urban construction tax, education fee and local education surcharge. Specifically, a medium-sized manufacturing enterprise, which is defined as having annual sales between 20 million yuan and 400 million yuan, can defer payment of 50% of all its taxes and fees, while a micro or small enterprise, which is defined as having annual sales of below 20 million yuan, can defer payment of all its taxes and fees.

      For the purpose of this Announcement, the annual sales of micro, small and medium-sized manufacturing enterprises shall be determined according to the following methods:

      For enterprises that have been established for one year or more by September 30, 2021, the annual sales shall be determined based on the sales for the period from October 2020 to September 2021;

      For enterprises that have been established for less than one year by September 30, 2021, the annual sales shall be determined based on the sales for the period until September 30, 2021/actual months of operation × 12 months' sales;

      For enterprises established on or after October 1, 2021, the annual sales shall be determined based on the sales for the first filing period/actual months of operation × 12 months' sales.

    • Answers to questions on anti-tax avoidance during Covid-19 period

      1. The epidemic has had a great impact on the production and operation of enterprises and related transactions within the group. In this case, how to carry out transfer pricing investigation by tax authorities?

      STA: The impact of the epidemic on enterprises in different industries varies greatly, bringing great impact to some enterprises in different industries and new development opportunities to others. When conducting transfer pricing investigations, tax authorities will follow the principle of independent transactions and, on this basis, consider the impact of the epidemic on related transactions of enterprises, on a case-by-case basis.

      1. How should tax authorities consider losses caused by the epidemic in their transfer pricing investigations?

      STA: Tax authorities will take into account the impact of the epidemic on enterprises in the transfer pricing investigation, taking into account such factors as enterprise functional risk, related party transaction characteristics, industry characteristics and comparable enterprise conditions. For enterprises' additional expenditures due to epidemic prevention and control or increased operating expenses due to the impact of the epidemic, tax authorities will adjust the differences as appropriate in the comparability analysis based on full consideration of the distribution of related costs and expenses among independent third parties. It is suggested that enterprises clearly divide and quantify relevant costs and expenses, and keep relevant evidence for future reference.

      1. What should an enterprise pay attention to when preparing local documents for the same period if the profit level in 2020 changes significantly due to the epidemic?

      STA: According to the state administration of taxation on perfecting the same period and related personal data management related matters of announcement no. 42 (2016) the first item (4) of article 14 of the relevant provisions of enterprise in local document preparation, shall specify outbreak the specific impact of related party transactions, the value chain, the comparable analysis, comparable object data for the same year, region, industry, product and functional risks can be focused to reflect the impact of the epidemic on industry profit levels.

      1. Does the government's assistance policy affecting the price adjustment of related party transactions?

      STA: During the epidemic, the Chinese government has introduced a series of assistance policies in areas such as rent, taxes and financing. The influence of government aid policies on transfer pricing arrangements may be mainly reflected in comparability analysis. If enterprises believe that government assistance has an impact on transfer pricing arrangements, they should provide relevant information in their transfer pricing documentation to support transfer pricing analysis. Tax authorities will follow the principle of independent transactions to identify comparable factors and ensure the fairness and consistency of comparable analysis results.

      1. How to implement signed reservation pricing arrangements if they are affected by COVID-19?

      STA: If it is true that the epidemic has affected the implementation of the reservation pricing arrangement, the enterprise may report to the competent tax authority in written form, explaining in detail the impact of the epidemic on the implementation of the reservation pricing arrangement, and attach relevant materials.

      Competent tax authorities should analyze and assess the extent to which material changes brought about by the epidemic will affect reservation pricing arrangements. For unilateral reservation pricing arrangement, negotiate with the enterprise to revise or terminate the reservation pricing arrangement; The arrangement of double-sided (multi-sided) reservation pricing shall be reported to the State Administration of Taxation for coordination at different levels and shall be settled by the State Administration of Taxation and the competent tax authorities of the other contracting party through negotiation.

    • Shanghai Pilots Preferential CIT Policy on Corporate VCE in Pudong New Area

      The Ministry of Finance, the State Taxation Administration, the National Development and Reform Commission and the China Securities Regulatory Commission have jointly released the Circular on Piloting Corporate Income Tax Policy on Corporate Venture Capital Enterprises in Specific Area of Shanghai Pudong New Area, with retroactively effect from January 1, 2021.

      According to the circular, for a corporate venture capital enterprise in specific area of Shanghai Pudong New Area, if its income from transfer of shares held for over three years represents more than 50% of its total income from the annual share transfer, its corporate income tax for the current year shall be levied by halving the shareholding of individual shareholders at the end of the year; and If its income from transfer of shares held for more than five years represents more than 50% of its total annual income from the annual share transfer, its corporate income tax for the current year shall be exempted by the shareholding of individual shareholders at the end of the year. It also specifies that individual shareholders shall pay personal income tax for their dividends derived from a corporate venture capital enterprise.

    • STA Clarifies Matters on Evaluation and Repair of Tax-pay Credit

      The State Taxation Administration recently released the Announcement of the State Taxation Administration on the Evaluation and Repair of Tax-pay Credit (STA Announcement (2021) No. 31), to be implemented from January 1, 2022.

      According to the document, there are five circumstances under which a taxpayer with serious dishonest behavior or undergoing bankrupt reorganization may apply with the competent tax authorities for the repair of its tax-pay credit after it corrected the dishonest behavior, performed the tax legal liability, is waived from the release of its major tax violating information, and recorded no dishonest tax-pay behavior for six or 12 months. After completing the repair, the taxpayer would not be subject to the restriction of being rated as D for two years if its rating is no longer D, and it would apply the corresponding tax policies and management services based on the repaired tax credit, with the previous policies and services not subject to retroactive adjustment.

  • Switzerland
    • Job Market in Switzerland

      Switzerland is attractive to employers, as it has some of the most liberal labor legislation in the world.

      The labor market is very flexible due to Switzerland’s liberal legislation, making it easy for companies to employ or dismiss staff at short notice in accordance with their financial requirements. The incidental wage costs are low compared with other countries and strikes have been far more infrequent in Switzerland than in any other European country over the last ten years.

      Switzerland is also ideal for highly qualified employees, as the quality of life is very high and salaries are substantial. This also applies to skilled international workers and executives. Switzerland remains one of the most popular expat destinations, and frequently received top marks in various rankings. The attractive and moderate income tax rate for natural persons also plays a part in the attraction and is something that skilled foreign workers also benefit from.

      You can down the publication prepared by S-GE on the Swiss Job Market here

      Source: Switzerland - Global Enterprise

    • Social Security Coordination Agreement Between Switzerland and United Kingdom Applies Provisionally

      According to a press release of 1 November 2021, published by the Swiss Federal Social Insurance Office, the Switzerland - United Kingdom Social Security Coordination Agreement (2021) applies provisionally from 1 November 2021. The agreement will enter into force after all necessary domestic ratification procedures for the entry into force have been met in both contracting states. For more information on the provisional application, see article 73 of the Switzerland - United Kingdom Social Security Coordination Agreement (2021).

      The new agreement coordinates the social security systems of the two states as the European Union - Switzerland Free Movement of Persons Agreement (1999) is no longer applicable in relations between Switzerland and the United Kingdom following Brexit.

    • Federal Council Enacts New Legal Framework on Implementation of International Tax Agreements

      The Federal Council has enacted the Federal Act on the Implementation of International Tax Agreements (ITAIA) and the associated Ordinance with effect from 1 January 2022 in order to align the existing legal framework with developments in international tax law.

      Before, domestic legislation on certain issues regarding the implementation and application of tax treaties was governed by the Federal Act of 22 June 1951 on the Implementation of International Federal Conventions on the Avoidance of Double Taxation and the ordinances based thereon. The ITAIA supplements the existing legal provisions as necessary and introduces new areas of regulation. The revision of the law also stipulates how mutual agreement procedures are to be carried out at domestic level, provided the applicable agreement does not contain any deviating provisions. Moreover, it contains the key points for withholding tax relief based on international agreements, as well as criminal provisions in connection with relief from withholding taxes on investment income.

      The entry into force of the ITAIA requires certain existing ordinances to be amended. Further, 2 ordinances and a federal decree will be repealed, as they will be superseded with the entry into force of the ITAIA. The Federal Council enacted the ITAIA in its meeting on 10 November 2021.

  • United Kingdom
    • DIT removes 20% more trade barriers to unlock major markets for British business

      The United Kingdom has broken down hundreds of trade barriers around the world in the year to April, opening up new opportunities for British businesses, according to new data published   The United Kingdom has broken down hundreds of trade barriers around the world in the year to April, opening up new opportunities for British businesses, according to new data published today [Thursday 25 November]. The Department for International Trade has published statistics showing a total of 217 trade barriers across 74 countries were removed over the 20-21 financial year, representing an increase of almost 20% on the previous 12 months. Trade barriers are regulatory, legislative and administrative measures imposed by other countries that restrict the flow of goods and services. Getting rid of them makes it easier for businesses to trade around the world as we build back better and boost exports. As well as securing new trade agreements, DIT is using its expertise to remove individual barriers wherever British businesses face them and in sectors that matter most to our economy, supporting SMEs and securing access to new and exciting markets. Some of the barriers addressed over this period include:
      • Working with the Jordanian government to open up British food exports worth £32 million, by changing labelling rules that will help our producers to increase sales to a country that imports £2.5bn worth of food annually
      • Unlocking access to finance in Hong Kong to enable UK education providers to build new schools there from early next year
      • Cooperating with Indian counterparts to enable more investment in India’s £4bn insurance market- 74% foreign ownership now allowed, up from 49% - a sector in which the UK has world-class strengths
      • In Colombia, helping British asset managers enter a green investment market worth £835m per year
      • In Bulgaria, supporting UK business to access products to develop cutting-edge technology that will extend the life of vaccines, helping overcome logistical and distribution challenges from the pandemic.

      International Trade Secretary Anne-Marie Trevelyan said:

      “As an independent trading nation – the UK is opening up brand new opportunities in major economies around the world. Each and every one of these 217 trade wins are fantastic news for our UK businesses who sell their products abroad – and we will continue to open doors for the many more that will export more in future.

      Minister for International Trade Ranil Jayawardena said:

      “In the last year, we have been tearing down even more trading barriers than the year before – 20% more, in spite of Covid-19 – which is proof that Global Britain is delivering for our dedicated exporters, supporting local jobs and boosting the economy. “This is just the beginning. We want businesses in every corner of the country to tell us about the barriers they want us to tackle next, so they can focus on what they do best – making world-class products and selling them to the world.” . As part of this continuing work, more recent successes have seen poultry exports allowed into Japan following a series of complex negotiations. Industry estimates predict this will boost the sector by up to £65 million over five years, which is in addition to the 99% tariff-free trade secured when the UK-Japan Comprehensive Economic Partnership Agreement (CEPA) came into force in October 2020. Pork can also now be exported to Mexico for the first time which means a potential increase in sales of £50 million over the first five years of trade. Businesses facing market access issues can also report barriers online using our first-class digital system and find out information on barriers that are relevant to them. This includes the recently launched Export Support Service to make it easier for British businesses to find help with practical questions about exporting to Europe.   Source: DIT
    • Finance Bill 2021-22 published

      The Finance Bill 2021-22 was published today (4 November 2021), legislating for tax changes announced by the Chancellor at last week’s Budget

      • The Finance Bill 2021-22 was published today legislating for tax changes announced at the Budget
      • The Bill supports the Budget which will deliver a stronger economy for the British people through driving growth, securing public finances and levelling up employment opportunities
      • Changes taking effect also crack down on tax avoidance and deliver a simpler tax system

      It will extend tax reliefs for museums, galleries, theatres and orchestras, implement the new residential property developer tax, and introduce reforms to tonnage tax, among other changes.

      Many changes will come into effect for the next tax year starting in April 2022.

      Financial Secretary to the Treasury Lucy Frazer said:

      This year’s Finance Bill will help us to continue on our mission to deliver a stronger economy for the British people – through stronger growth, jobs and public finances.

      The Finance Bill 2021-22 brings forward a number of tax measures from last week’s Budget. The Bill helps support a stronger economy for the British people by helping to deliver stronger public finances, tackling tax avoidance and evasion, and contributing towards a simpler and more sustainable tax system.

      It does this through:

      • Reforming the UK’s Tonnage Tax regime to bring more shipping firms to the UK
      • Extending tax reliefs for museums, galleries, theatres and orchestras to 31 March 2024
      • Extending the £1 million Annual Investment Allowance cap by a further 15 months to 31 March 2023, to bring forward investment
      • Implementing the 4% Residential Property Developer Tax on the largest most-profitable residential developers to support building safety remediation
      • Simplifying Basis Period Rules to make it easier for the self-employed and small businesses to claim tax reliefs they are entitled to but often do not take advantage of due to confusing current rules. This, as the OBR concludes, has no effect on the amount of profits taxed.
      • Clamping down on promoters of tax avoidance by reducing the scope for promoters to market tax avoidance schemes, disrupting their activities and supporting people more to steer clear of and leave tax avoidance arrangements
      • Increasing the Normal Minimum Pension Age from 55 to 57, effective from 6 April 2028

      The Overview of Tax Legislation and Rates (OOTLAR) document, published at Autumn Budget 2021, confirmed the measures going forward in the Bill.

      The Finance Bill 2021-22 had its First Reading in Parliament on Tuesday 2 November and will now follow the normal passage through Parliament.

      Further information

      Source: HM Treasury
    • COVID-19 Pandemic: United Kingdom Updates Policy Towards Supporting Affected Taxpayers and the Economy

      On 9 November 2021, HM Revenue and Customs (HMRC) updated its tax policy to reflect its latest position on support schemes and policy changes as a response to the COVID-19 pandemic, as well as its principles on tax collection, benefits payments, compliance checks and debt activity. Further details are summarized below.

      Firstly, in its attempt to guarantee that funds from support schemes, including the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, reach those in need, while abuse, fraudulent behaviour and mistakes are minimized, HMRC plans to commit more than 1,200 people to recovering money paid out to incorrect and fraudulent claims. Existing measures and practices will be reviewed and will either be retained or removed. Also, HMRC will open more than 30,000 one-to-one enquiries into COVID-19 support scheme claims. These actions are expected to allow the Taxpayer Protection Taskforce to recover GBP 1 billion over the next 2 years.

      Secondly, HMRC will strive to make sure taxpayers are supported, while the tax system is protected. This will include recognizing the needs and challenges that businesses and individuals face, providing certainty, interacting with fairness and professionalism with the customers and using administrative arrangements to deliver long-term sustainable solutions.

      Thirdly, HMRC will continue to conduct compliance checks informed by taxpayers' individual circumstances, particularly if they are still severely affected by the COVID-19 pandemic. This means that people will not be penalized for any delay as a result of the COVID-19 pandemic, although interest will still apply on any unpaid tax. In addition, taxpayers should prepare now to meet their future tax obligations.

      Lastly, HMRC will continue to provide support to taxpayers with tax debts and those who are concerned about their ability to meet their tax obligations, by offering them affordable and sustainable payment plans called time-to-pay arrangements. Nevertheless, HMRC is restarting its debt collection work, including insolvency actions against companies, which are now permitted after the moratorium on company winding-up petitions has been partly lifted.

  • United States
    • Biden Signs Bipartisan Infrastructure Legislation

      US President Joe Biden signed into law the Infrastructure Investment and Jobs Act (H.R.3684) (the Act) on 15 November 2021. The Act, also known as the Bipartisan Infrastructure Legislation, will allow for a new federal investment of USD 550 billion in US infrastructure.

      The White House issued a Statement, dated 15 November 2021, to announce the signing of the Act. The White House also issued related Remarks by President Biden.

      The Act aims to finance the infrastructure investment by, among other measures, strengthening tax enforcement related to cryptocurrency. Specifically, the Act will require a party facilitating the transfer of cryptocurrency to file an information return as a broker with the US Internal Revenue Service (IRS). Brokers (mainly exchanges) will have to send IRS Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) to both the IRS and their customer to report their sale and basis.

      The Act will also require businesses that receive cryptocurrency worth more than USD 10,000 in a single transaction to report the transaction to the IRS. For this purpose, any person engaging in a trade or business that receives more than USD 10,000 in cryptocurrency will be required to file IRS Form 8300 (Report of Cash Payments Over $10,000 Received In a Trade or Business).

      The provisions related to cryptocurrency reporting will go into effect after 31 December 2023. The Joint Committee on Taxation (JCT) estimates that the information reporting requirements will raise USD 28 billion over 10 years.

      The Act also eliminates the employee retention credit (ERC) for the fourth quarter of 2021.

      In addition, the Act renews the excise taxes on 42 chemicals under section 4661(c) of the US Internal Revenue Code, with modified tax amounts, from 1 July 2022 through 31 December 2031.

      Further, the Act extends various highway-related excise taxes (under IRC sections 4041405140714081 and 4481), together with related exemptions (under IRC sections 4221 and 4483), for 6 years.

    • Congressional Research Service Explains Tax Benefits for Small Businesses

      The Congressional Research Service (CRS) of the US Library of Congress has issued a report with an overview of the main federal tax benefits for small firms.

      The CRS report is entitled "Small Business Tax Benefits: Current Law" (RL32254-Version 22, 10 November 2021).

      The CRS report summarizes tax preferences available only to small firms in a wide range of industries. As such, the CRS report does not include tax benefits targeted at small firms in specific industries. Nor does the CRS report address tax benefits that are available to firms of all sizes.

      The small business tax benefits examined in the CRS report include:

      • expensing allowance for machinery and equipment under section 179 of the US Internal Revenue Code (IRC);
      • cash-basis accounting under IRC section 446;
      • tax credit for the start-up costs incurred by small firms in establishing qualified employee retirement plans under IRC section 45E;
      • tax credit for employers who offer or start a 401(k) plan or a Savings Incentive Match Plan for Employees (SIMPLE) that add automatic enrolment under IRC section 45T;
      • tax credit for the costs incurred by small firms in complying with the Americans with Disabilities Act under IRC section 44;
      • full exclusion from the capital gains tax on the sale or exchange of qualified small business stock under IRC section 1202;
      • exemption from the limitation on the deduction for business interest expenses under IRC section 163;
      • tax credit for small firms that offer qualified health insurance coverage to employees under IRC section 45R;
      • simplified dollar-value last-in-first-out accounting under IRC section 474;
      • deduction and amortization of business start-up expenses under IRC section 195;
      • ordinary income treatment of losses on the sale of eligible small business stock under IRC section 1244;
      • ordinary loss treatment for losses on the sale of Small Business Investment Company stock under IRC section 1242;
      • exemption from the uniform capitalization rule under IRC section 263A; and
      • use of excess research tax credit to reduce the payroll tax liability of qualified small firms under IRC section 41.

      Note: The CRS is an agency within the US Library of Congress and serves the US Congress throughout the legislative process by providing legislative research and analysis for an informed national legislature.

    • US Interest Rates on Tax Overpayments and Underpayments Remain Unchanged for Q1/2022

      US Interest rates on tax overpayments (i.e. tax refunds) and tax underpayments (i.e. tax assessments and late tax payments) will remain the same for the first calendar quarter of 2022 (i.e. 1 January 2021 through 31 March 2022).

      The US Internal Revenue Service (IRS) issued Revenue Ruling 2021-24 to announce the interest rates for the new quarter, together with an accompanying News Release (IR-2021-234), dated 23 November 2021.

      The interest rates for the first quarter of 2022 are as follows:

      • 3% for non-corporate overpayments;
      • 2% for corporate overpayments up to USD 10,000;
      • 0.5% for the portion of corporate overpayments in excess of USD 10,000;
      • 3% for non-corporate and corporate underpayments (other than large corporate underpayments); and
      • 5% for large corporate underpayments (i.e. underpayments in excess of USD 100,000).

      Revenue Ruling 2021-24 also includes:

      • interest factors for daily compound interest for an annual rate of 0.5% (Appendix A); and
      • tables including overpayment and underpayment interest rates for prior periods.

      Revenue Ruling 2021-24 will be included in the Internal Revenue Bulletin (IRB) 2021-50, dated 13 December 2021.

    • United States and India Reach Transition Agreement on Digital Services Tax

      On 24 November 2021, the United States and India reached an agreement on the treatment of India's digital services tax (DST) during the interim period prior to full implementation of Pillar One of the OECD-G20 agreement.

      The US Treasury Department issued a related Press Release dated 24 November 2021. The Office of the US Trade Representative (USTR) also issued a related Press Release of the same date.

      The US-India agreement applies the same terms of the agreements that the United States reached with Austria, France, Italy, Spain and the United Kingdom on 21 October 2021 and with Turkey on 22 November 2021.

      Accordingly, in defined circumstances, the liability from India's equalization levy on e-commerce supply of services that US companies accrue in India during the interim period will be creditable against future taxes accrued under Pillar One. The period during which the credit accrues will, however, be from 1 April 2022 until either the implementation of Pillar One or 31 March 2024 (whichever is earlier).

      In return, the United States will terminate the currently suspended additional tariffs on goods of India that had been adopted in response to India's equalization levy.

      In January 2021, the USTR issued a report concluding that India's equalization levy is unreasonable or discriminatory and burdens or restricts US commerce. On 2 June 2021, based on the findings, the USTR determined to impose additional tariffs on certain goods of India, while suspending the implementation of the tariffs for 180 days (ending on 29 November 2021).

      With this agreement with India, the United States has now reached agreement regarding the treatment of DSTs during the interim period with all seven jurisdictions that the USTR concluded had adopted unreasonable or discriminatory DSTs (i.e. Austria, France, India, Italy, Spain, Turkey and the United Kingdom).

  • Bulgaria
    • Bulgaria Announces 2022 Intrastat Thresholds

      Bulgaria has announced the new Intrastat thresholds for the year 2022. The thresholds for Intrastat reporting purposes are summarized as follows:

      • for dispatches: BGN 780,000 (currently, BGN 270,000); and
      • for arrivals: BGN 520,000 (currently, BGN 430,000).

      The thresholds for declaring statistical value are as follows:

      • for dispatches: BGN 18,600,000 (currently, BGN 14,700,000); and
      • for arrivals: BGN 8,400,000 (currently, BGN 7,300,000).

      The threshold for simplified reporting of single low-value transactions will remain unchanged, i.e. BGN 390.

      The full text of the announcement, gazetted on 29 October 2021, is available here (in Bulgarian only).

    • Bulgaria: Natural Gas Price could Rise by about 3% in December

      Natural gas may rise by about 3% in December, according to Bulgargaz's calculations at the moment.

      However, these levels may change, as our gas company will submit its final application to the energy regulator (EWRC) in about three weeks.

      The company also announced its January forecast, which envisages the sale of fuel at prices that are close to those at the moment - a little over BGN 93 per megawatt-hour without fees and charges.

      Source: Novinite

    • 67% of Bulgarians have taken an Average of One and a Half Loans in 2021

      38% use a loan to cover household expenses, 30% - for home repairs, and 14% - for car supplies

      46% of Bulgarians have applied for a loan online in 2021. This shows that taking loans online is still the more preferred approach. The data is from a recent online credit market survey prepared by a marketing agency and fully funded by the leading non-bank consumer credit company Cash Credit. A large circle of people from urban areas participated in the survey.

      The study also shows that in 2021 the preferred loan amount is BGN 1,000 with a repayment period of 6 months. The most common reasons for withdrawing it are: household consumables (38%), home repairs (30%), car costs (14%) and medical expenses (12%). Although 72% of people plan to cut their spending if there is another lockdown, there are often costs that are difficult to avoid and are listed above.

      The data also show that 48% of Bulgarians pay the most attention to the terms of the loan when it comes time to choose the company they can trust. They are interested and make comparisons where the conditions are most favorable to their financial profile and on this basis form their choice. For 30% of consumers, the leading factor is promotions, and 29% are influenced by the recognizability of the company. More than half of the participants in the survey would take a loan from the same credit institution they trusted the previous time, which is not a sure indication of loyalty. The reason is rather their caution and doubts that another company can offer a loan with "hidden fees", which inevitably increases the risks.

      Relying on the survey, another conclusion is formed: for 37% of Bulgarians the main reason to change the company they initially trusted is the better interest rates. 23% of consumers will prefer a competitive company if they find better credit terms, and 21% would be repelled by poor service and unfair treatment of employees.

      "Two of our core values ​​in the company, trust and transparency, serve as a compass to guide us in the direction we need to go when building our relationships with customers. The study once again showed us how important it is for our customers to know that they can rely on a reliable partner who offers them maximum comfort in service and transparent conditions. We are increasingly striving for the idea of ​​building trust with our customers and listening to their needs and requirements," said Stanislava Stratieva, Marketing Manager of Cash Credit.

      The survey also shows that 2/3 of the respondents prefer to repay their loan in equal monthly installments, which indicates the client's demand for security and predictability - something completely understandable, given the 2-year life in a pandemic.

      A curious fact is that compared to previous years, there is now a slight increase in interest in standard office services when taking a loan. 33% of people want to have real contact with an employee of the company, which is explained by the purely human sense of greater trust and transparency that the client seeks during a pandemic. Novinite/M3 Communications Group

  • Hong Kong
    • RCEP: Free Trade Opportunities in the Post-pandemic Era

      RCEP brings new development to businesses in the region.

      The signing of the RCEP agreement, witnessed by the leaders of participating countries China, 10 ASEAN member states, South Korea, Japan, Australia and New Zealand via video link on 15 November 2020, marked the creation of the largest free trade bloc in the world in terms of economic power and population. Its huge market potential has attracted the immediate interest of global business. The signatories to the RCEP agreement represent 2.2 billion people, almost 30% of world population. Their combined GDPs total US$ 26.2 trillion or some 30% of the global economy, and they account for nearly 28% of global trade [1]. The enhanced market access to the 15 signatory states made possible by the agreement will create vast market opportunities for businesses in the region and beyond. This is particularly significant at a time when lockdowns caused by the Covid-19 continue to disrupt global markets and supply chains. Yet effective pandemic prevention and control work in some countries and regions, such as China and certain ASEAN members, has resulted in a gradual recovery of many economic activities, so that industrial production is increasingly robust and demand from the consumer market is growing. Foreign direct investment (FDI) flows to developing countries in Asia, which accounted for more than half of global inward and outward FDI flows, continued to increase in 2020 despite global FDI contraction, according to a recent report released by the United Nations Conference on Trade and Development (UNCTAD). UNCTAD also pointed out that FDI prospects for Asia will remain resilient in 2021, as the Asian region could be further strengthened by the signing of the RCEP agreement [2]. Many companies are reviewing their development strategies to address the revived demand in Asia and beyond. Business operations worldwide have pursued digitalisation at an unprecedented pace to deal with the devastating effects of the pandemic. Digital platforms and cross-border e-commerce activities have become more prominent than ever. As supply chains especially in Asia gear up for production, companies are challenged to ride the momentum of recovery and reposition themselves digitally to revive business, to achieve sustainable development and move towards a post-pandemic era. In the circumstances, the RCEP is expected to further the advancement and integration of regional supply chains, as well as encourage the specialisation of production. Asia has already developed the world’s largest co-operative manufacturing base, boosted by transfers from the West to low-cost Asian locations in the last few decades. Integration will be enhanced by RCEP provisions like tariff elimination on most finished products, intermediate goods and raw materials, easier customs procedures, promotion of e-commerce, protection of intellectual property rights and simplified cross-border investment. The agreement, which should be implemented by as soon as January 2022 [3], will have far-reaching impacts on supply chains and production relationships in the region. Hong Kong, as a city in the GBA, will be an important business hub to help enterprises in the region handle their production, trading and related investment businesses. Further integration of supply chains will elicit more business opportunities for consultants and service providers in the city. GDP of RCEP countries in 2020 (in USD billion)
      Chart: GDP of RCEP countries in 2020 (in USD billion)

      Per capita GDP of RCEP countries in 2020 (USD)
      Chart: https://img.hktdc.com/eyJidWNrZXQiOiJjbXMtaW1nbGliLXByZCIsImtleSI6IlJNSVAvMjAyMTExMTkvODRjcDc4Y2YtWTJoaGNuUXlYMlZ1LmpwZWciLCJyZWdpb24iOiJhcC1zb3V0aGVhc3QtMSIsImZvcm1hdCI6ImpwZWciLCJxdWFsaXR5IjoxMDAsImVkaXRzIjp7fX0=

      Brace for challenges The RCEP agreement offers a wide range of tools to tap into the opportunities offered by its 15 member countries and the synergies that can be found between their markets and the growth of the GBA. However, even as companies look to benefit from these synergies and opportunities, challenges remain. One immediate problem is the limited local knowledge among companies looking to expand into new markets. Insufficient understanding of local politics, culture, legal and regulatory regimes can present many hurdles. These challenges are exacerbated by the reality that many of RCEP’s emerging markets are less transparent than might be expected, making it difficult to ensure projects comply with local requirements. The lack of transparency can also make it difficult to assess the medium and long-term benefits and risks of any investments. To further complicate matters, the RCEP agreement is a technical document that can be difficult to understand. Taking tariff concessions as an example, members promise to eliminate import tariffs on most goods traded in the region, but this may take as long as 20 years to complete. Some members will adopt a single tariff reduction schedule for imports from all members, while others will put forward country-specific schedules with separate reduction timetables for the different members. Traders and companies will therefore need to consider the RCEP offers carefully if they want to capitalise on the tariff preferences appropriately. A lack of in-house understanding can exacerbate issues created by weak talent or underdeveloped infrastructure in the region targeted for expansion. Expert input and advice will help them understand the benefits that the agreement can provide while minimising the business risks. Capitalising on RCEP opportunities via the Hong Kong platform For Hong Kong, there are significant opportunities in promoting the development of RCEP and the success of the agreement. Hong Kong is an important trading hub for the 15 RCEP members as well as between mainland China and the rest of the world. This is particularly true for companies in the GBA that can use Hong Kong as a super-connector to go global. Hong Kong as an important trading hub in the region A strengthened supply chain relationship between RCEP members not only helps their external trade but also benefits Hong Kong as a key trading hub. Although Hong Kong is not a RCEP member at the moment, it will continue to play a defining role in promoting RCEP trade, in particular the intra-regional trade between mainland China and other RCEP members. Hong Kong exported US$359.6 billion worth of products to the RCEP in 2020, which accounted for 71% of the city’s total exports, while some 75% of its imports (US$408.1 billion) also came from the RCEP. The exports to the RCEP are largely re-exports (98.9% of total exports in 2020), and the products mainly originate from RCEP members. The mainland and ASEAN are the two major sources of these exports, accounting for 43.6% and 12.0% of the origins of Hong Kong’s exports to the RCEP respectively in 2020. Hong Kong will continue to be an important trading platform for promoting the intra-regional trade of RCEP members with its huge commercial network, comprehensive transportation infrastructure and efficient logistics services. Hong Kong's Trade with RCEP
      Chart: Hong Kong's Trade with RCEP

      Many of the Hong Kong exports to production bases in the mainland and ASEAN countries are industrial products such as machinery and electronic parts and components for manufacturing and assembly processes. This is because Hong Kong is not only an international trading hub in Asia, but also an important window for the mainland to import industrial inputs and export manufactured products. With the further integration of the supply chains of RCEP members, Hong Kong can expect to handle more intra-regional trade between the members, especially trade in electronic products and other industrial items. Origin of Hong Kong's Exports to RCEP
      Chart: Origin of Hong Kong's Exports to RCEP

      GBA turbo-charges Hong Kong to facilitate enterprises "going global" in RCEP region On the other hand, more and more companies in the region and beyond are seeking to take advantage of the emerging opportunities brought about by the RCEP agreement. On the mainland, although China-US trade friction and the Covid-19 pandemic have continued to bring uncertainty to the global economy, many companies in the GBA continue to "go global", hoping to enter new markets and to develop international businesses in order to diversify business risks. They also bring in external partners and resources to optimise their business portfolio and sustainable development capabilities. The implementation of the RCEP agreement will become a new driving force for such mainland enterprises to go global. However, in order to develop their international business, most mainland companies need extensive professional service support. According to a survey conducted by the HKTDC on mainland enterprises in the GBA, almost all companies that were interested in "going out" said that they needed several professional services. Among them, 49% were interested in joining marketing activities tailored for overseas and Belt and Road Initiative (BRI) markets, while 47% were looking to marketing strategies for developing new business and new markets. Other professional services needed included product development and design (31%), banking, financing and project valuation (30%), brand design and marketing strategies (30%), and related legal and accounting services (30%). Professional Services of Most Interest or Most Sought-After for Tapping Overseas Opportunities
      Chart: Professional Services of Most Interest or Most Sought-After for Tapping Overseas Opportunities

      The 15 RCEP participating countries are not only very different in their economic and population structures, but also in their labour markets, wage levels, stages of economic development, investment policies and incentives. There are substantial differences in the actual production environment and conditions among individual countries and regions. These include, for example, plant locations, conditions of the local supply chains, the standards of logistics facilities and services in peripheral areas, the efficiency of inland and international transportation, environmental requirements, the skilled and unskilled labour supply, local skills and management training, etc. All these issues will affect the capability and competitiveness of a company’s global strategy. Investment planning, location selection and due diligence When carrying out investment planning and selecting a location, an investor must properly evaluate the country, region and policies to ensure that the development of the overseas business will align with the local medium to long term development plan. This will minimise any hidden risks such as the investment project is not in line with the government incentives, or that policy incentives and other support have to be negotiated with the local government. There is therefore a need to seek professional services support. Hong Kong’s service providers are familiar with the legal and investment regimes of advanced countries and can also use their international networks to carry out effective risk assessments for mainland enterprises seeking to invest in emerging markets or RCEP member countries. They can also offer strategic recommendations on the feasibility of an investment project and conduct surveys on key issues such as the environmental policies and tax incentives of an investment location. This can help investors control risks and ensure the sustainable development of a project after an investment has been made. Financial services Hong Kong is one the world’s major international financial centres, and funds are available from various sources and a wide range of financing products. As such, Hong Kong is in a position to match and accommodate funds and meet the insurance needs of different maturation, exchange rates and asset risks. Furthermore, Hong Kong’s services platform can offer different investment options to mainland enterprises, including the use of private-equity investment funds. Legal, accounting and other professional services Hong Kong’s advantages as a business platform in the Asia Pacific include a sound legal system, free flow of capital and information, and a full complement of professional services in law, accounting, etc. When investing in RCEP countries, mainland enterprises can make use of Hong Kong’s professional project evaluation and sustainability assessment services to bring in external funds to finance their overseas investment projects and other business ventures. They can also set up a regional office in Hong Kong and capitalise on Hong Kong’s efficient business environment to co-ordinate investment projects on the mainland or in ASEAN and RCEP countries to enhance overall operational efficiency. Local partner searching and matching As a way to diversify risks, mainland investors can use Hong Kong’s international network to identify offshore partners to carry out equity joint investment and other joint-stock cooperations. Mainland enterprises can also use their investment partners’ strengths to overcome their own limitations. By generating synergy between their partner’s and their own knowledge and expertise, they can expand the business scope of their RCEP investments. The experienced industry and market specialists based in Hong Kong, using data and insights from their long-standing experience in helping enterprises go global, have established matching services to help enterprises identify and screen potential business partners in the RCEP region. Hong Kong innovative products and services tailored to the specific needs of GBA enterprises When looking for professional services, 56% of the surveyed GBA enterprises said they would first try to source them locally. Enterprises would also seek support outside the mainland. In this regard, Hong Kong was the preferred destination for the largest number of enterprises, taking up 50% of the surveyed enterprises considering “going out”. Other preferred destinations included the US (23%), Singapore (21%) and Japan (14%). All Enterprises Considering 'Going Out'
      Chart: All Enterprises Considering 'Going Out'

      In May 2021, ACCA produced the report “Market Demand for Professional Accountancy Services in the Asia-Pacific FY 2021-2024". The findings of the study were drawn from a survey of 841 senior executives and professionals. Not surprisingly, Hong Kong, as the global accountancy hub in the Asia Pacific area, was ranked top. The report suggested that the major criteria for selecting accountancy services were cost and ease of doing business; quality of public service and competence level; excellent accounting, tax, and financial services infrastructure; health, safety, and public security; and high mobility of international capital. Hong Kong’s strengths as a trading hub and its ability to facilitate the global expansion of companies in the GBA give it a unique significance, particularly within the context of the RCEP agreement. The deep pool of professional expertise that exists in Hong Kong can facilitate investment planning, the selection of appropriate locations for expansion and due diligence. Hong Kong is also home to the financial, legal, accounting and other professional services that are necessary for companies to tap into the RCEP. There are also few better places to search for and match with local partners. With the necessary infrastructure and talent pool, Hong Kong is a well-regarded financial centre and is home to many of the world’s major financial institutions. The city is China’s first modern and diversified free trade port and international financial centre. It not only ranks highly globally in its overall competitiveness and business environment but has also long played a key role in the Greater Bay Area’s development. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, promulgated in February 2019, has already set out the principles for GBA development, driven by innovation, co-ordinated development, opening up, co-operation and adherence to “one country, two systems”. The GBA is positioned to leverage the advantages of Hong Kong and Macao as free and open economies and of Guangdong as the pioneer of reform and opening up. There are measures to support Guangdong, Hong Kong and Macao in strengthening co-operation to jointly participate in the BRI. GBA enterprises are encouraged to collaborate in “going out”, and to lead the co-operation in international production. The GBA, along with other coastal provinces and cities, has long been a bridgehead in the mainland’s development of foreign trade and economic co-operation. The GBA is also in close proximity to BRI markets, such as ASEAN. As the RCEP brings new development to businesses in the region, Hong Kong will become an even more important service platform to help enterprises in the GBA seize these emerging opportunities. This article forms part of a joint study conducted by HKTDC Research and ACCA : “Tapping the RCEP Opportunities: Hong Kong to Maximise GBA’s Unique Edge as a Business Platform”

      [1] (i) 2019 figures; (ii) Source: Joint Leaders’ Statement on the Regional Comprehensive Economic Partnership (RCEP), 15 November 2020

      [2] “World Investment Report 2021: Investing in Sustainable Recovery”, UNCTAD

      [3] China’s Ministry of Commerce revealed on 22 March 2021 that all member states of the RCEP had stated they would approve the RCEP agreement before end-2021 in order to take it into effect on 1 January 2022. According to the RCEP provisions, the Agreement will enter into force for those signatory States that have deposited their instrument of ratification, acceptance, or approval, 60 days after the date on which at least six signatory States which are Member States of ASEAN and three signatory States other than Member States of ASEAN have deposited their instrument of ratification, acceptance, or approval with the Secretary-General of ASEAN, who has been designated as the Depositary for the RCEP Agreement. Singapore and China in April 2021, and Japan in June 2021, reportedly had deposited their instruments of ratification with the Secretary-General of ASEAN. For further information, please refer to: RCEP to Take Effect in January 2022

    • Hong Kong to revive bill bolstering copyright law as minister warns satire, parodies must toe national security line

      Push to change existing legislation comes after government failed twice before

      High time city catches up with rest of world in updating its copyright regime, minister says

      Hong Kong is resurrecting a bill expanding intellectual property protections that opposition lawmakers have blocked twice before, with officials saying it is high time the city catches up with the rest of the world in updating its copyright regime.

      The government on Wednesday launched a three-month public consultation on the proposal to update the Copyright Ordinance, which is expected to be submitted to a newly elected Legislative Council in 2022.

      Secretary for Commerce and Economic Development Edward Yau Tang-wah noted that three rounds of major consultations on strengthening copyright protections had been carried out since 2006, and previous efforts to pass the bill were met with filibustering by opposition lawmakers.

      “It is most unfortunate that Hong Kong’s copyright regime is over a decade behind international developments,” he said. “We believe that it is high time to revive the copyright review exercise.”

      Updating the copyright regime would help transform the city into a hub for intellectual property trading as outlined by the chief executive in her policy address and the central government in its latest five-year plan for the nation, Yau added.

      The government’s proposal, based on the Copyright (Amendment) Bill 2014, is again offering exemptions to the education sector, libraries, museums and archives to use protected materials for the purposes of learning.

      It also allows the use of protected content for the creation of parody, satire, caricature, pastiche, commenting on current events, and quotation of copyrighted work. It also permits the reproduction of audio recordings in different formats.

      “We aim to strike a proper balance between the legitimate interests of copyright owners and users, and serve the best interests of Hong Kong,” Yau said.
      “The 2014 version of amendments was a reasonable starting point. It came after rounds of deliberations and went through its second reading at Legco, but couldn’t proceed because of filibustering.”

      The government was forced to drop the bill in 2016 after the fierce opposition by pan-democrats in Legco and internet users who mistrusted the aim of the amendments and potential implications for freedom of speech.

      But the political landscape has since been dramatically reshaped by Beijing’s overhaul of the electoral system aimed at ensuring only “patriots” held power and which led to the traditional opposition block withdrawing from the coming December 19 Legco election.

      Chung Kim-wah, deputy CEO of the Hong Kong Public Opinion Research Institute, said if the proposed bill were largely identical to the 2014 version, the government was confident it would be passed by Legco.

      Director of Intellectual Property David Wong said there was no clear-cut definition of what would constitute a work of parody or satire, adding it would be judged by “common sense”.

      “It is common for other jurisdictions such as the United Kingdom not to define these types of work,” he said.

      Chung added while the new bill would allow people to comment on current events and quote copyrighted works, the lack of clear examples of what constituted an exemption would create ambiguity and fuel the pressure to self-censorship.

      Wong stressed that the court would decide whether a copyright law infringement would be treated as a criminal offence by determining the extent of the breach, the economic losses suffered by the rights holders and other factors.

      To encourage online service providers to cooperate with copyright owners in combating online privacy, the government will offer a so-called safe harbour provision which will limit the liability of the operators over any rights infringement carried out on their platforms by subscribers.

      Lento Yip Yuk-fai, chairman of the Hong Kong Internet Service Providers Association that counts about 30 members, said the industry generally supported the protection from liability when copyright disputes arose between content makers and online audiences.

      “Internet service providers have been very cooperative with law enforcement and various parties in combating online piracy and we’ve been doing that for many years,” he said.

      “But there are many things we can’t do. For example, there were times when internet service providers could not take down content already online because of technology limitations.”

      Kelvin Sin Cheuk-nam, spokesman for the Democratic Party’s information technology and broadcasting policy unit, said he was concerned that works of imitation such as cosplaying and fan fiction were left out of the consultation document.

      Under the existing Copyright Ordinance, a person can be jailed for up to four years and fined as much as HK$50,000 (US$6,415) for making, importing, exporting or selling works without the licence of the rights holder.

      Anyone who makes, imports, exports, sells or has possession of an item specifically adapted or designed to make copies of an original work can be jailed for up to eight years and fined a maximum of HK$500,000.

      Source: SCMP

  • India
    • Green Hydrogen- India’s Sunrise Sector

      “The thing that is going to help India with a quantum leap in terms of climate is the field of green hydrogen,” – Prime Minister Narendra Modi

      Hydrogen has been an upcoming sector across the globe with huge industrial applications. Increasing number of companies across the globe are now exploring the green hydrogen. Green hydrogen has been labelled as one of the cleanest forms of energy in the world. It is being looked at as the ultimate solution to achieve net zero emissions. Through the process of electrolysis, all that is needed to produce hydrogen is water, a big electrolyser and electricity. The electric current then splits the water into its two components- hydrogen and oxygen. This means no release of greenhouse emissions since oxygen is the only by product of this process. Additionally, if the electricity used comes from renewable sources, it makes the process completely emission free.

      In line with India’s ambitious green commitments, Prime Minister Narendra Modi aims to transform India into an energy independent nation by 2047 where green hydrogen will play an active role as an alternate fuel to petroleum/ fossil-based products.

      To keep pace with global companies, National Hydrogen Mission was announced in Budget Speech of FY 2021-22 to produce the hydrogen from green energy sources. The scheme was announced putting Green Hydrogen at the heart of India’s energy security and climate change.

      According to a report by TERI, in 2020, India’s hydrogen demand stood at 6 million Tons (MT) per year. However, studies have shown a tremendous opportunity for growth in this area. It is estimated that by 2030, the hydrogen costs will be down by 50 per cent. The demand for hydrogen is expected to see a 5-fold jump to 28 MT by 2050 where 80 per cent of the demand is expected to be green in nature. Many Indian companies have already started announcing their plans to dip their toes in the green energy sub-sector.

      Recently, India’s largest oil and gas sector company, Reliance Industries Ltd (RIL) has announced its plans to go green. The company has recently announced its plans to become a net zero carbon firm by 2035. RIL has plans to invest in INR 600 billion to build a 5000-acre green energy complex in Jamnagar, Gujarat. The complex will house an electrolyser plant to produce green hydrogen.

      GAIL (India), a Public Sector Undertaking (PSU) has floated a recent tender to procure an electrolyser. They are looking at locations to finalise a 10 MW plant, one of the biggest plants announced so far. GAIL has taken a step forward and has already started mixing hydrogen in natural gas on a trial basis in one of the cities. Similarly, NTPC has also shown interest to produce green hydrogen on a commercial scale. They have expressed their plans to do the same from its 4.75 GW park at the Rann of Kutch and have announced a 5 MW plant. Presently, the company is running a pilot in their Vindhyanchal unit. Further the company also has plans to set up green hydrogen fuelling station in Leh, Ladakh and will start with plying 5 hydrogen buses. They have invited Expression of Interests (EOIs) for 10 hydrogen fuel cell buses and cars.

      Indian Oil Corporation Limited (IOCL) is another PSU that has announced its plans to explore the green hydrogen opportunity. They recently announced their plans to setup a green hydrogen plant at its Mathura refinery in Uttar Pradesh with a capacity of around 160,000 barrels per day. Acting firmly on their target to convert at least 10 per cent of its hydrogen consumption at the refineries to green hydrogen, they plan to convert 10 percent of the usage in their Mathura location to green sources by the year 2024. IOCL also has plans to setup a hydrogen manufacturing unit in Kochi, which is targeted to draw energy from the solar facility at the Kochi international airport. Additionally, IOCL floated a tender for 15 hydrogen PEM fuel cell electric buses.

      Larsen and Tourbo (L&T) is another Indian entity looking to venture into the green hydrogen sector. According to their latest report, they have set an aim to achieve net zero emissions by 2040 and plan to spend INR 10-15 Bn on its green initiatives. In addition to exploring the possibility of manufacturing electrolysers, they are setting up a green hydrogen plant at their Hazira complex, which is scheduled to be completed withing this financial year.

      Both Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) are planning to use hydrogen for its refineries. Furthermore, Solar Energy Corporation Limited (SECI), is looking to invite bids to build green hydrogen plants using renewable energy sources. The corporation recently released a Notice Inviting Tenders (NIT) for setting up a Green Hydrogen based pilot project at SNM hospital in Leh, Ladakh.

      Establishing India as a global hub for green hydrogen generation, Ohmium International through its subsidiary in India has shipped its first ever unit of electrolyser to the United States. The electrolyser was manufactured in Ohmium’s Bengaluru facility which is India’s first green hydrogen electrolyser Gigafactory.

      India’s journey into the green hydrogen space has been path breaking. As of now, the industry faces high cost of production but owing to increased demand, technology upgradation and strong government support, the industry will soon establish economies of scale, driving down the cost. In line with India’s Make in India initiative and its net zero emission targets, the sector provides tremendous scope for growth and investments.

      This is authored by Kanika Verma, Invest India

    • Govt sets up committee for determination of RoDTEP rates for exports from SEZs, EOUs

      The government in August announced the rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products, such as marine goods, yarn and dairy items. It has set aside Rs 12,454 crore for refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for the current fiscal.

      The government has constituted a committee for the determination of RoDTEP rates for exports from special economic zones (SEZs) and export-oriented units (EOUs), as these sectors were left out in the earlier exercise, according to the DGFT. The government in August announced the rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products, such as marine goods, yarn and dairy items. It has set aside Rs 12,454 crore for refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for the current fiscal.

      SEZs and EOUs were kept out of the scheme in the list notified in August. The industry was demanding to include them in the scheme.

      The Directorate General of Foreign Trade (DGFT) in a trade notice has said, "The government has constituted a committee for determination of RoDTEP rates for AA (advance authorisation)/ EOU/ SEZ exports; and to give supplementary report/ recommendations on issues relating to errors or anomalies, with respect to the RoDTEP schedule of rates notified."

      It said members of trade and industry may submit their representations through the export promotion councils, industry associations, to the RoDTEP committee directly.

      Under the RoDTEP, various central and state duties, taxes, and levies imposed on input products, among others, will be refunded to exporters. The three-member committee is chaired by former secretary G K Pillai, former CBEC member Y G Parande and former customs member Gautam Ray. It will submit its report within eight months.

        Source: Economic Times
    • India Issues Statement on Transitional Approach with United States on Equalization Levy

      India and the United States have agreed to apply the same terms under the Joint Statement issued by the United States, Austria, France, Italy, Spain and the United Kingdom to India's equalization levy and the corresponding trade action taken by the United States.

      In a press release issued by India's Ministry of Finance, India noted that the interim period will be from 1 April 2022 until the implementation of Pillar 1 or 31 March 2024, whichever is earlier. India will remain in close contact with the United States to ensure that there is a common understanding of their commitments and that both countries will endeavour to resolve differences through constructive dialogue. The press release also noted that the final terms of the agreement will be finalized by 1 February 2022.

    • United States and India Reach Transition Agreement on Digital Services Tax

      On 24 November 2021, the United States and India reached an agreement on the treatment of India's digital services tax (DST) during the interim period prior to full implementation of Pillar One of the OECD-G20 agreement.

      The US Treasury Department issued a related Press Release dated 24 November 2021. The Office of the US Trade Representative (USTR) also issued a related Press Release of the same date.

      The US-India agreement applies the same terms of the agreements that the United States reached with Austria, France, Italy, Spain and the United Kingdom on 21 October 2021 and with Turkey on 22 November 2021.

      Accordingly, in defined circumstances, the liability from India's equalization levy on e-commerce supply of services that US companies accrue in India during the interim period will be creditable against future taxes accrued under Pillar One. The period during which the credit accrues will, however, be from 1 April 2022 until either the implementation of Pillar One or 31 March 2024 (whichever is earlier).

      In return, the United States will terminate the currently suspended additional tariffs on goods of India that had been adopted in response to India's equalization levy.

      In January 2021, the USTR issued a report concluding that India's equalization levy is unreasonable or discriminatory and burdens or restricts US commerce. On 2 June 2021, based on the findings, the USTR determined to impose additional tariffs on certain goods of India, while suspending the implementation of the tariffs for 180 days (ending on 29 November 2021).

      With this agreement with India, the United States has now reached agreement regarding the treatment of DSTs during the interim period with all seven jurisdictions that the USTR concluded had adopted unreasonable or discriminatory DSTs (i.e. Austria, France, India, Italy, Spain, Turkey and the United Kingdom).

  • Focus Africa
    • Africa in Review by the Numbers (November 2021)

      60

      Outlets are set to be opened in Kenya and Uganda by US pizza chain Papa John’s in 2022. These new outlets will be the pizza chain’s first entry into the sub-Saharan African market as it seeks to reinforce its global momentum as a brand. (Business Daily)

        $1.1 million
      Secured by Senegal’s Fleeti startup, which specialises in the administration of vehicle fleets in Africa. This financing, led by early-stage investor Newfund, will go into expanding the firm's reach into new markets and speed up technological developments of its solutions. (Tech Build Africa)
        328%
      Jump in profit after tax recorded by Absa Bank for the period ending in September 2021. Despite the negative effects experienced due to the ongoing pandemic, Absa’s business units remained profitable and registered growth in key lines. (CEO Business Africa)
       

      $150 million

      Funding secured by ETC Group Limited from Africa Development Bank Group to address the company’s working capital requirements and boost its food production expansion plans across 10 countries in Africa and support smallholder farmers. (East African Business Week)

      2200 tonnes
      Daily crushing capacity by Salima Sugar company in Malawi on the back of newly procured equipment. The figure represents a doubling of output by the company to help meet domestic demand. (Business Malawi)
        3000
      New public primary and secondary schools the Zimbabwean government is planning to build by 2025. These new schools will be constructed in a span of four years and this will help prevent children walking long distances to attend class. (New Zimbabwe)
       

      $4 billion

      Equity Bank, in collaboration with 37 partners that include UN agencies and development finance institutions, has developed a plan to accelerate post-COVID-19 economic recovery in the East and Central African region through a private sector-driven $4.68 billion stimulus package. (The East African)

      34.6%
      Africa's growth in international freight cargo volumes in September, the highest rate compared to any other region in the world, as airlines continue to recover from the impact of COVID-19, according to data from the International Air Transport Association (IATA). (Business Daily)
        1 Gbps
      Capacity of Ivorian telecommunications operator VIPNET after an upgrade from MainOne raised it from 155 Mbps. The Nigerian IT firm partnered with VIPNET as its first local ISP partner in Cote d'Ivoire last year. (Proshare)
       

      51%

      Female business owners on the Jumia platform in Kenya, according to the firm's Africa E-commerce Index 2021. Women represent the same proportion of sellers in Nigeria, another of Africa's leading e-commerce markets. Jumia's CEO cited online retail as being 'inherently female-entrepreneur friendly'. (CapitalFm)

      $300 million
      Investment planned by Orange, the French multinational telecommunications company, in Egypt in 2022. This was announced during a meeting between several Egyptian emissaries including Prime Minister Mostafa Madbouly and representatives of a group of the largest French companies held on Monday in Paris. (Egypt Today)
        4,000 tonnes
      Annual capacity of Sierra Leone's first cocoa processing plant. The facility, launched by Capitol Foods, one of the country's leading agribusinesses will produce cocoa paste for export, sourcing beans from a network of over 2,800 farmers. (Food Business Africa)

      Review by Kili Partners . Powered by Asoko Insight

    • Nigeria Revenue Service Issues New Guidelines on Simplified Compliance Regime for VAT for Non-Resident Suppliers

      The Federal Inland Revenue Service (FIRS) has issued new guidelines on the simplified compliance regime for value added tax (VAT) for non-resident suppliers (NRS). The guidelines amend, update or replace the contents of any other guidelines, circulars, notices or other publications previously issued by the FIRS. They were issued pursuant to the FIRS' powers under section 10 of the Value Added Tax (VAT) Act Cap. V1, LFN 2004 (as amended) and will take effect from 1 January 2022 with respect to the supply of services and intangibles, and from 1 January 2024 for goods.

      Accordingly, the guidelines apply to supplies, through digital means, of goods, services, intangibles and other digital products made by persons not physically present, located or represented in Nigeria to businesses (business to business, B2B) or consumers (business to consumers, B2C) in Nigeria. They also apply to supplies made by natural persons, trusts, partnerships, corporations, companies and any other persons.

      The guidelines further appoint NRS (that can be direct suppliers or intermediaries as the case may be) to collect VAT and remit this to the FIRS. The NRS and any intermediaries are also required to register for VAT on their behalf, issue VAT invoices, and collect and remit VAT due. In addition, resident consumers to whom supplies of taxable goods or services are made in Nigeria are expected to communicate with the NRS on the collection of VAT. However, the NRS will first be required to collect VAT.

      To qualify for registration, the NRS is required if, within 12 consecutive months immediately before the coming into effect of the guidelines or any 12 consecutive months thereafter, it has made or expects to make a single supply or series of supplies to Nigeria which (in aggregate value) amount to USD 25,000 (or its equivalent in other currencies) and meet any of the following conditions:

      • the supplies are made by the NRS, through digital means, to a person in Nigeria from a location outside Nigeria; and
      • the supplies are delivered to, consumed or otherwise utilized in Nigeria.

      Upon registration, an NRS will be required to file monthly VAT returns, even for months in which no taxable supply has been made to Nigeria, no later than 21 days after the end of the month in which the supplies were made.

      The services covered under the guidelines include (but are not limited to):

      • streaming, downloading or obtaining/providing?? access to digital content, including films, music, e-books, magazines, news, applications, games, library services or similar services;
      • online gaming;
      • online ticketing, excluding international air travels and freight charges;
      • online betting services;
      • online intermediation platform services, including online marketplaces, payment platforms, ride hailing platforms, travel and accommodation booking, rental services or similar services;
      • online advertising services;
      • subscription-based social media platforms, including video conferencing applications, instant messaging, chats, dating, image/video sharing or similar services;
      • standardized online education services such as e-learning, webinars or similar services;
      • cloud computing services, including cloud storage services;
      • auction services;
      • automated online professional and consultancy services;
      • online stores; and
      • e-library services.

      If the NRS has failed to account for or remit VAT or comply with the guidelines, the FIRS will take all necessary steps to recover the amount due and obtain restitution. Also, the FIRS may use the mutual administrative assistance in tax collection instrument, as appropriate, to collect the tax and do all such things as may be necessary for it to enforce the tax laws and collect the taxes due.

      The guidelines were issued on 11 October 2021.

    • Rwanda to Reduce Low-Income Employees’ Tax Burden

      In line with the new developments relating to the recently launched Kigali International Financial Centre (KIFC) and the ease of doing business in general, the Rwandan parliament adopted the draft law amending the income tax law that has been in force since 2018. The adopted law aims to raise the employment income taxable base threshold from a monthly income of RWF 30,000 to RWF 60,000 and also introduces, among other changes:

      • taxation of digital services;
      • taxation of partnerships' income;
      • extension of definition of permanent establishment; and
      • removal of unrealized foreign exchange losses from deductible expenses and capping realized foreign exchange losses arising from related party loan transactions at 4 times of the borrower's paid-up equity.

      The amendment law was adopted on 10 November 2021 and will enter into force upon its promulgation by the President of the Republic and publication in the Official Gazette.