Professional Documents
Culture Documents
Bridging
Gaps at
Ramadan
Suhoor
Dubai Chamber’s prime annual business networking
suhoor proves to provide an important platform to
bridge gaps for the business community.
Dubai Chamber took the opportunity during one of its reporting standards within the participant’s respective
roundtables to highlight the International Finance companies, participants raised specifically their concerns
Standards (IFRS) for SMEs to the business community. regarding the challenge and cost of adoption of IFRS.
This was especially relevant as IFRS are fast becoming The standards originated in a free market economy with
the financial reporting standard worldwide. As such, IFRS an applied tax framework where tax systems are key
for SMEs hold an excellent opportunity for SMEs to adopt drivers of reporting. Although a tax system is lacking in
an accounting framework that might potentially become the UAE, the adoption of IFRS should not be more
the standard worldwide. Not only will companies adopt challenging in the UAE than in other countries. The
universally recognized reporting principles that ease speakers pointed out that transparency, representing
decision-making on cross border business deals, but also one of the biggest challenges in the region, does
access to capital is likely to increase as lenders will have however increase the challenge of adoption.
easily comparable financial statements. And after all, the In the UAE, companies are required to submit audited
UAE business environment that is characterized by fast- financial statements annually, but only listed companies
paced global interconnectedness requires a degree of are required to use IFRS. Unlisted companies are
compliance with international standards. advised to adopt an internationally recognized financial
This simplified version of the International Finance standard, but the legislation doesn’t specify a particular
Standards, as its name clearly suggests, caters reporting framework. The discussion took furthermore
specifically to SMEs and was introduced by the into consideration that public accountability is currently
International Standards Accounting Board (IASB) with still lacking in the UAE and that companies consequently
the intention to meet the different needs of SMEs. For use different standards. Local GAAP is in general being
many companies, the benefits of the full implementation used by local companies, which implies that
of IFRS can be somewhat outweighed by the standardization is deficient. Financial statements might
considerable cost and difficulty of preparing the required be of poor quality as companies can create their own
information. This was recognised by the IASB and hence reporting standards, which furthermore are not always
IFRS for SMEs was developed and introduced. audited by reputable firms.
Company representatives that attended the roundtable It isn’t surprising therefore that a regulatory framework
wanted to find out more about this aspect and assess and its importance were highlighted significantly. It was
the relevance to adopt IFRS for SMEs within their recognized however that reporting standards will most
companies. Questions relating to what IFRS are, who it likely improve, when regulations are standardized. To
is intended for, the difference between IFRS and IFRS for reach to this point it was emphasized that it is essential
SMEs, the importance of financial reporting standards to have legal backing for standard reporting. A
and the effect it has on companies were all discussed by standardized regulatory framework was also seen as a
experts from Grant Thornton who gave a presentation prerequisite to gain more transparency in reporting. The
and answered questions from the audience. They pointed participants were positive that the new official SME
out that IFRS and IFRS for SMEs are similar from the definition, currently being developed by the Ministry of
perspective that both require the same set of financial Economy, should bring more guidelines, monitoring and
statements. The difference lies rather however in the transparency and streamline reporting as such. Also, the
disclosure of information and the skill needed to new auditing law is to be released by the end of this
complete the sheets. The key strength of IFRS for SMEs year, which is believed to improve the professional
is its simplification and therefore improved accessibility environment considerably.
for SMEs. All in all, there was a general consensus that having
Many attendees were also very keen to find out more ambitions to be a global player makes adoption of global
regarding the difficulty level to adopt IFRS for SMEs. rules unavoidable, which includes transparency on
While assessing the relevance to implement the financial financial reporting.
2
Setting Up a Commercial Company
Setting up a business is a one-time decision
and starters need to take the right decision at
the right time to assure a successful business
Did you know? undertaking.
All businesses, whether industrial, professional,
trading, or providing services, must be licensed to Individuals looking to establish a company require
operate in the UAE. professional advice and Dubai Chamber caters in various
ways to this need. It’s not surprising, being the prime
Each Emirate has its own set of rules and regulations business advocator in Dubai, that we hear questions
regarding the establishment of new businesses. relating to establishing a company often at Dubai
Chamber. Starters come to Dubai Chamber as one of the
first starting points in their quest to find out on the various
The Commercial Companies Law no. 8 (1984) as
rules, regulations, and procedures.
amended (CCL) and the Commercial Agencies Law no.
To give better insights to those who are looking to
18 (1981) as amended are the primary federal
establish a company in the UAE, Dubai Chamber’s Legal
legislative framework that control commercial activity in
Services Department organised a training workshop on
the UAE.
Establishing Commercial Companies in the UAE. During
this workshop various types of commercial companies
laws, regulations on the formation of companies as well as
practical information were provided. The commercial
Types of Licenses companies law was analysed in further detail in addition to
specific regulations and requirements to establish Limited
A Commercial License is for companies that Liability Companies (LLCs), Joint Stock Companies, and
will be engaged in all sorts of trading activity, special rules pertaining to setting up a branch or
such as importing, exporting, selling, representative offices of foreign companies. Attendees
distribution, and storage. consisted of Dubai Chamber members, investors,
entrepreneurs, lawyers, consultants, and SMEs.
This training workshop provided attendees with focused
An Industrial License is intended for
and essential insights on starting up companies. Dubai
companies that will be conducting industrial or
Chamber strives to create a favourable business
manufacturing activities. This includes imports
environment, to support the development of businesses,
of raw materials, manufacturing of certain
and to promote Dubai as an international business hub. To
products, and the export of finished products.
this end many other exciting and beneficial initiatives are
undertaken. For more practical information on starting a
The Professional License covers professions business in Dubai, you can obtain a free copy of the
and the provision of services. Chamber’s Dubai Business Advisor Series. The last updates
on our initiatives can be found on our website,
www.dubaichamber.ae.
3
On Precious Metals and Gems
Dubai Chamber is active in analysing identified industries terms of high airport fees, freight costs, and storage fees
as part of its quest to provide the business community with are persistent and not at par with other countries. For
valuable insights within industries. As part of this effort a support services participants shared that more services
report entitled “Investment Opportunities: Precious Metals could be provided in areas, such as establishment of
and Gems” was developed. Following this report, a additional independent assayers, testing of coloured
roundtable was organised to inform the precious metals stones, and gold financing. Regarding Dubai’s promotion
and gems sector about the existing opportunities in their as a hub for gold and jewellery it was highlighted that
industry. An in-depth discussion enabled participants to some loose cooperation has evolved in recent years, but a
share their views and comment on practicalities and concerted effort is lacking.
challenges at stake. Participants highlighted areas for additional support to help
This Dubai Chamber report encourages bullion traders and/ the further flourishing of the industry. The highlighted
or companies that hold bullion to establish operations or areas included: i) meeting with government entities to
subsidiaries in Dubai. It also promotes further discuss issues and concerns at stake, ii) the introduction of
development of support services within the industry. And, a new authorised document to ease matters related to
lastly, it stimulates local jewellery production, design, and financing, iii) cooperation with Dubai Tourism on trade
marketing, especially in building and promoting brand- shows and exhibitions.
awareness of Dubai-based jewellers. The findings of this Business Support roundtable is
Although participants acknowledged the excellent officially brought forward in a recommendation report to
infrastructure and services to support bullion trade locally the Dubai Chamber Advocacy Committee for further
and within the region, they revealed that challenges in utilisation in its interactions with the Executive Office.