Abhijit Shahane will be speaking at the How to do Business in UAE seminar during The Big 5 in November. Abhijit is the Managing Director of Xpert Advisory, he will be on the panel discussion of "Process of Registering a Company in UAE and Getting the Right License"
How disruptive has the introduction of VAT been on UAE construction market?
Since implementation of VAT over 10 months back, there has been an impact on business as a result, but this has been limited. Due to various lee ways by the government it had a minimal impact on the construction industry.
A detailed guide and implementation process and lead time for initiation led to most construction companies having enough time to put in stops and checks for VAT.
Many training workshops and seminars were conducted in this regard to provide knowledge and help adapt VAT policy both by FTA as well as by varied private companies.
The challenge which the construction industry faces are related to projects which require longer timeline, complex supply chains, cash flow and phased payment programmes.
With VAT at the rate of 5% has a minuscule impact, the rate set is adaptable when compared to other countries where VAT is charged from 15 up to 50%
The factors which affect the construction industry the most is the uncertain fluctuating cost of materials which go into the project, such as steep erratic shift in steel, cement price, delayed payments.
How big is the role of SME’s in the current construction market?
The importance of the small independent companies to the UAE economy cannot be overstated.Small and medium-sized enterprises (SMEs) are an important element to help drive better performance in the construction industry, providing niche capabilities, innovative ideas, and lean method of working.In my view they are more like a change catalysts which always question mainstream processes. SMEs play a key part in providing a broader party of cost choice for clients and thus are an important part of the supply chain system.
Between mainland and free zone business routes which is the most popular for new businesses in the UAE?
It is very difficult to differentiate as to which route is popular as it depends on a variety of factors for your business.
1. Nature and activity
2. Office requirements and visas
3. Area of operation
4. Nearness of target client & supply chain
Most cases, Free zone company incorporations are opted, as it is quick with simplistic documentation.
Procedure and relatively low initial cost. This is ideal, especially for new to region players and entrepreneurs, wish to explore the market prior to making any large investment into the region.
The main limitations to a free zone entity is that it is allowed to operate only within the free zone of registration, with other free zone on approval or outside the UAE. The main hinderance is that they are not permitted to work on the main land.
This is a very high level comparison and we always advise a more detailed meeting to understand the requirements before selecting a set up.
What steps have been taken to encourage foreign business growth in the UAE?
Growth is not only about attracting new entities or investor but also encouraging existing players to thrive. With a dynamic vision that sets apart UAE the constant efforts towards making UAE being the best and to set a benchmark globally.
Dubai pulled in Dh17.76 billion by way of foreign direct investments in the first six months of the year enough to place it in 10th spot in the global rankings in value terms. Total FDI flows were Dh27.3 billion in 2017, 7 per cent up compared to 2016.
Recently new initiatives have been approved by the FNC in order to further boost FDI in this region. Few of them are as below:
1. Dual license initiative by Abu Dhabi (DED)
2. 10 years residency visa for professionals and investors
3. 100 per cent foreign ownership in mainland companies
4. 5 years residence visa for senior expats
5. A Decision to abolish mandatory bank guarantee for labor recruitment and being replaced with a low-cost insurance system to free up liquidity.
How common is it for new construction businesses to be incorrectly licensed?
Large multinational construction entities always come with their own legal counsel as well as use expert advise regionally so the chances of going wrong in terms of set up is very slim.
A very few small and medium size construction companies are able to take on legal support and take matters in their own hand which often leads to mistake of choosing the appropriate zone for formation. A mainland company, construction can be carried out in the free zone as well as on mainland; whereas this might be a restriction for a free zone company. Freezones would have to set up a branch on the mainland.
There are also restrictions to the number of visas allocation when in free zone.
U.A.E is made up of seven emirates, and each operates independently on an operations level but is governed together at a federal level. This means that the construction company cannot operate with the same license in another emirate, even though it holds a mainland status.
So this is another aspect where in companies overlook while set up.
About Abhijit Shahane -
A seasoned trading professional with over 10 years’ experience in commodities, energy and manufacturing, Abhijit Uday Shahane comes with a wealth of knowledge in Business Development, Sales & Marketing. Prior to starting Xpert Advisory a Bespoke Corporate Advisory and Company Formation entity, he worked with Dubai Multi Commodities Centre Authority (the regions fastest growing free zone) and other renowned commodities trading company where he managed the business development operations for the MENASA region.
He has detailed know how through hands on experience on all gamut’s of developing and growing business streams across a range of different industries and varied products and segments.
For the past 5 years he was Manager Business Development for DMCC, where he played an instrumental role in bringing renowned commodities companies to the free zone, which further contributed to DMCC’s position as the region’s leading commodities trading hub. He held a leading position in the organization and was one of the key players for their meteoric success and for attracting over 7,000 companies into the UAE. He achieved this by combining business development and sales techniques with CRM management and data base generation.
He designed, developed and implemented the Key Accounts Department for the DMCC and was responsible for ensuring that the free zone remains an attractive proposition for key clients through introducing new initiatives, products and services.
Abhijit’s dynamic, focused personality has led him to develop a new business and strategy which basically offers companies a fully integrated advisor, company formation and back office solution and is convinced that with perseverance, dedication, attention to detail and customer focus, growth and success is assured and well deserved.
Abhijit holds an MSc in Engineering from the University of Liverpool in UK.
You can hear more from Abhijit Shahane on "Process of Registering a Company in UAE and Getting the Right License" at the How to do Business in UAE seminar on 28th November, 16:00 - 16:40.