UAE

Abu Dhabi proposes 50 year zero tax zone?

A report in the Khaleej Times from 1st July on proposed regulation for the Abu Dhabi Global Market hides an interesting nugget, way down in paragraph six.

A palace overlooks Abu Dhabi Yacht Club - a high roller's playground?  Image: wavejourney.com

A palace overlooks Abu Dhabi Yacht Club – a high roller’s playground? Image: wavejourney.com

“Abu Dhabi financial zone will offer a zero-tax environment for 50 years. In the launch phase, the financial hub will benefit from Abu Dhabi’s natural strength, ie private banking, wealth management and asset management and will grow according to market demand to eventually become a broad based financial hub.”

Great news for private and corporate clients who want to take a break from paying taxes, but how does this sit with the rest of the world’s focus on tax crimes? Will parking funds in the ADGM and avoiding coughing up your dues in the place you make your money be OK? Time will tell.

Abu Dhabi is a part of the United Arab Emirates, a member of the Financial Action Task Force’s regional body – MENAFATF.

 

 

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Planned changes to UAE regulations

The days of transactional financial advice with a one-size-fits-all approach will soon be consigned to history

James Thomas, ACUMA — Independent Financial Advice

Regulation — hardly the most emotive word, but one that should be FCA - UAE tea pot housewelcomed with open arms as it thankfully increases its presence in the finance world here in the UAE. Whether you are a client, an adviser or just believe in fairness, transparency and accountability for all, there are imminent regulatory enhancements to the financial services industry in the UAE looming large on the horizon.

Previously there has been a number of separate regulatory bodies working independently of each other, but this situation is about to change, with new rules, vastly increased capital adequacy levels, and new requirements for minimum qualification levels.

Appropriate, tailored, transparent and easy-to-understand financial advice is of paramount importance to everyone. With this in mind, the fast-approaching regulatory changes and enhancements will be a massive step towards ensuring that you sleep comfortably at night knowing the financial security you crave for you and your loved ones is in safe, professional and supervised hands.

My simple view is that if I ever required some form of surgical procedure, I would ensure that the person operating on me was fully qualified and had the resources to do so effectively. I see no difference in the requirements for ensuring the appropriate and effective management of someone’s personal finances.

As this country continues to grow, emerge and increasingly embrace a pivotal role in the financial services industry, the days of transactional financial advice with a one-size-fits-all approach will soon be consigned to history.

Bank guarantee

As part of this process, the UAE insurance authority notified financial advisory firms late last year that to remain in business in the UAE they would need a paid-up capital of Dh3 million instead of Dh1 million by November, and they would also need to have a further Dh3 million lodged as a bank guarantee. An additional Dh1 million must also be put down for every additional branch they have, while the company that your financial consultant represents will have to adhere to strict regulatory requirements, as well as a robust internal infrastructure via independent, qualified and non-income-generating employees.

The good news for you, the reader and investor, is that no longer will you be just another individual who was promised the earth but found out all too soon that congruency is a rare commodity. Within months rather than years, regular reviews, transparency of remuneration, compulsory licences and qualifications across the board will be essential.

Much like other regulated jurisdictions such as the USA and the UK, the UAE has realised that it needs to update its regulatory framework to offer better levels of consumer protection. However, a word of warning: even with this change of regulation, you should not forget about your own due diligence when choosing a company or financial adviser.

Proof of qualifications

You still need be on your toes when it comes to deciding who will help you achieve the financial independence and security that you desire. Ask for proof of qualifications, testimonials from current clients, number of years in the industry, details of licences; and whether the person sitting opposite you works for an independent company that will work on your behalf to find the most appropriate solution, or is a tied agent and can offer only limited and potentially restricted advice.

While none of these changes will necessarily guarantee that clients get better advice, it should work towards a much more professional environment with a lot less unregulated, unqualified sales people offering poor ill-thought out advice, with their interests first rather than that of the client. Going forwards clients should receive advice from a qualified advisor, who works for a regulated company, with due recourse should this be necessary. A huge step forward, I’m sure you would agree.

 

 

Source: gulfnews

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