Volume 2| Issue 4 2010
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.
The Suhoor Networking event is
renowned for providing excellent
networking opportunities to
businesses, where they receive the
latest news on the state of the
economy, can cement business
relations and work towards a strong
business community in a vibrant
business environment.
H.E. Eng. Hamad Buamim informed
during his opening speech that Dubai
is one of the first cities in the world to
see economic recovery with inflation
levels down to 4.1% in 2009 as
compared to 11.3% in 2008. As an
important gateway to one of the most
lucrative emerging market blocks,
opportunities seem to have been
gra sp ed suc ce ssf ul l y. T hi s is
illustrated by the fact that Dubai’s non
-oil trade increased 18% over the first
half of 2010 with a value of AED
279.2bn as compared to 237.6bn over
the same period last year.
Total direct exports were record high
in the first half of this year with AED
32.8bn in comparison to 23.6billion in
the same period last year. Imports
represented a 13% increase with AED
177.4bn in contrast to 156.6bn last
year. These positive trade figures
were possible, due to strong
leadership and a creative business
community, which provided the
flexibility for ongoing diversification.
In the keynote address following the
opening speech, H.E. Eng. Sultan Bin
Saeed Al Mansoori informed that a
number of new laws are currently
under preparation. While the new laws
are believed to comprehensively reflect
new realities, the Chamber was
credited for providing a platform where
businesses are encouraged to seize the
available opportunities for sustainable
growth and progressively flourishing
businesses in the UAE.
Also during this evening, H.E. Abdul
Rahman Saif Al Ghurair applauded the
vital role played by the members of the
technical committee, which consists of
business community representatives,
for bridging gaps between the private
and public sectors by reviewing and
recommending on draft laws.
The UAE has always nurtured
entrepreneurial spirit and rewarded
creative minds and first movers. With
new laws coming up soon and
promising economic indicators, more
opportunities are expected to be
explored by Dubai’s business
community, which should lead to an
ongoing and solid growth.
1
The Importance of Standardised Reporting
Dubai Chamber took the opportunity during one of its
roundtables to highlight the International Finance
Standards (IFRS) for SMEs to the business community.
This was especially relevant as IFRS are fast becoming
the financial reporting standard worldwide. As such, IFRS
for SMEs hold an excellent opportunity for SMEs to adopt
an accounting framework that might potentially become
the standard worldwide. Not only will companies adopt
universally recognized reporting principles that ease
decision-making on cross border business deals, but also
access to capital is likely to increase as lenders will have
easily comparable financial statements. And after all, the
UAE business environment that is characterized by fast-
paced global interconnectedness requires a degree of
compliance with international standards.
This simplified version of the International Finance
Standards, as its name clearly suggests, caters
specifically to SMEs and was introduced by the
International Standards Accounting Board (IASB) with
the intention to meet the different needs of SMEs. For
many companies, the benefits of the full implementation
of IFRS can be somewhat outweighed by the
considerable cost and difficulty of preparing the required
information. This was recognised by the IASB and hence
IFRS for SMEs was developed and introduced.
Company representatives that attended the roundtable
wanted to find out more about this aspect and assess
the relevance to adopt IFRS for SMEs within their
companies. Questions relating to what IFRS are, who it
is intended for, the difference between IFRS and IFRS for
SMEs, the importance of financial reporting standards
and the effect it has on companies were all discussed by
experts from Grant Thornton who gave a presentation
and answered questions from the audience. They pointed
out that IFRS and IFRS for SMEs are similar from the
perspective that both require the same set of financial
statements. The difference lies rather however in the
disclosure of information and the skill needed to
complete the sheets. The key strength of IFRS for SMEs
is its simplification and therefore improved accessibility
for SMEs.
Many attendees were also very keen to find out more
regarding the difficulty level to adopt IFRS for SMEs.
While assessing the relevance to implement the financial
“IFRS for SMEs
gives the
opportunity to
SMEs to meet
halfway without
complicating it too
much”.
Mr. Hisham Farouk,
Partner, Grant
Thornton
reporting standards within the participant’s respective
companies, participants raised specifically their concerns
regarding the challenge and cost of adoption of IFRS.
The standards originated in a free market economy with
an applied tax framework where tax systems are key
drivers of reporting. Although a tax system is lacking in
the UAE, the adoption of IFRS should not be more
challenging in the UAE than in other countries. The
speakers pointed out that transparency, representing
one of the biggest challenges in the region, does
however increase the challenge of adoption.
In the UAE, companies are required to submit audited
financial statements annually, but only listed companies
are required to use IFRS. Unlisted companies are
advised to adopt an internationally recognized financial
standard, but the legislation doesn’t specify a particular
reporting framework. The discussion took furthermore
into consideration that public accountability is currently
still lacking in the UAE and that companies consequently
use different standards. Local GAAP is in general being
used by local companies, which implies that
standardization is deficient. Financial statements might
be of poor quality as companies can create their own
reporting standards, which furthermore are not always
audited by reputable firms.
It isn’t surprising therefore that a regulatory framework
and its importance were highlighted significantly. It was
recognized however that reporting standards will most
likely improve, when regulations are standardized. To
reach to this point it was emphasized that it is essential
to have legal backing for standard reporting. A
standardized regulatory framework was also seen as a
prerequisite to gain more transparency in reporting. The
participants were positive that the new official SME
definition, currently being developed by the Ministry of
Economy, should bring more guidelines, monitoring and
transparency and streamline reporting as such. Also, the
new auditing law is to be released by the end of this
year, which is believed to improve the professional
environment considerably.
All in all, there was a general consensus that having
ambitions to be a global player makes adoption of global
rules unavoidable, which includes transparency on
financial reporting.
2
Setting Up a Commercial Company
Did you know?
All businesses, whether industrial, professional,
trading, or providing services, must be licensed to
operate in the UAE.
Each Emirate has its own set of rules and regulations
regarding the establishment of new businesses.
The Commercial Companies Law no. 8 (1984) as
amended (CCL) and the Commercial Agencies Law no.
18 (1981) as amended are the primary federal
legislative framework that control commercial activity in
the UAE.
Types of Licenses
A Commercial License is for companies that
will be engaged in all sorts of trading activity,
such as importing, exporting, selling,
distribution, and storage.
An Industrial License is intended for
companies that will be conducting industrial or
manufacturing activities. This includes imports
of raw materials, manufacturing of certain
products, and the export of finished products.
The Professional License covers professions
and the provision of services.
The First Rule to
Success for an SME
A strongly founded business plan that maps all factors of
key importance for a company brings clarity for all
business undertakings in start-up, growing, and
established phases. On July 4th & 5th, companies looking to
realize their full business potential had the opportunity to
attend the two-day training workshop “Crafting a Winning
Business Plan” at Dubai Chamber. The training workshop
catered for companies that want to stay abreast of the
ever- changing business environment and believe that it is
essential to be outstanding. With this in mind, a varied
group of participants from different age groups and with
diverse professional backgrounds joined the training
workshop last week. With the “Winning a Business Plan
Competition” attendees were further motivated to put
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
undertaking.
Individuals looking to establish a company require
professional advice and Dubai Chamber caters in various
ways to this need. It’s not surprising, being the prime
business advocator in Dubai, that we hear questions
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
rules, regulations, and procedures.
To give better insights to those who are looking to
establish a company in the UAE, Dubai Chamber’s Legal
Services Department organised a training workshop on
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
companies law was analysed in further detail in addition to
specific regulations and requirements to establish Limited
Liability Companies (LLCs), Joint Stock Companies, and
special rules pertaining to setting up a branch or
representative offices of foreign companies. Attendees
consisted of Dubai Chamber members, investors,
entrepreneurs, lawyers, consultants, and SMEs.
This training workshop provided attendees with focused
and essential insights on starting up companies. Dubai
Chamber strives to create a favourable business
environment, to support the development of businesses,
and to promote Dubai as an international business hub. To
this end many other exciting and beneficial initiatives are
undertaken. For more practical information on starting a
business in Dubai, you can obtain a free copy of the
Chamber’s Dubai Business Advisor Series. The last updates
on our initiatives can be found on our website,
www.dubaichamber.ae.
theory directly into practice. They were encouraged to
draft their own business plan within the following two
weeks on which the trainers provided direct feedback. All
participants also had access to a special interactive follow-
up session online while preparing for their business plan.
3
On Precious Metals and Gems
Dubai Chamber is active in analysing identified industries
as part of its quest to provide the business community with
valuable insights within industries. As part of this effort a
report entitled “Investment Opportunities: Precious Metals
and Gems” was developed. Following this report, a
roundtable was organised to inform the precious metals
and gems sector about the existing opportunities in their
industry. An in-depth discussion enabled participants to
share their views and comment on practicalities and
challenges at stake.
This Dubai Chamber report encourages bullion traders and/
or companies that hold bullion to establish operations or
subsidiaries in Dubai. It also promotes further
development of support services within the industry. And,
lastly, it stimulates local jewellery production, design, and
marketing, especially in building and promoting brand-
awareness of Dubai-based jewellers.
Although participants acknowledged the excellent
infrastructure and services to support bullion trade locally
and within the region, they revealed that challenges in
terms of high airport fees, freight costs, and storage fees
are persistent and not at par with other countries. For
support services participants shared that more services
could be provided in areas, such as establishment of
additional independent assayers, testing of coloured
stones, and gold financing. Regarding Dubai’s promotion
as a hub for gold and jewellery it was highlighted that
some loose cooperation has evolved in recent years, but a
concerted effort is lacking.
Participants highlighted areas for additional support to help
the further flourishing of the industry. The highlighted
areas included: i) meeting with government entities to
discuss issues and concerns at stake, ii) the introduction of
a new authorised document to ease matters related to
financing, iii) cooperation with Dubai Tourism on trade
shows and exhibitions.
The findings of this Business Support roundtable is
officially brought forward in a recommendation report to
the Dubai Chamber Advocacy Committee for further
utilisation in its interactions with the Executive Office.

Opportunities: Aluminium Business

Dubai has a strong domestic aluminium industry with an established
Award
reputation as a leading smelter of aluminium, a producer of secondary
Applications are currently
goods, and a trading hub for aluminium products. This is illustrated by
being assessed for the fifth
total exports in this industry totalling AED 2.4bn in 2009 out of which AED
cycle of the Mohammed Bin
1.3bn were direct exports.
Rashid Al Maktoum Business
Award. The winning
Dubai Chamber research indicates that Dubai’s global competitiveness in
companies will be awarded
this sector is high with a revealed competitive advantage of 208. With such
during the prestigious award
a high outcome, Dubai Chamber has decided to promote opportunities in
ceremony on October 31st
the Dubai aluminium sector in a special issue of the recurring investment
2010.
opportunities analysis. In this special report an attempt is undertaken to
leverage the already existing global competitive position of Dubai in this
industry by highlighting the various opportunities for investors in Dubai’s
existing production facilities, the already present strong network of
companies, and the dynamic international trade flows of Dubai’s aluminium
sector. Kindly email bsdpublications@dubaichamber.ae for more
information.

Upcoming Event Take your Benefit from our Events!

We host a wide variety of value-added and price–competitive events throughout the
Digital Marketing year. These events consist of knowledge-based seminars, specific training
workshops, or industry-specific roundtables and cater to the needs of the Dubai-
Seminar Series based business community. Topics cover a wide range of areas of interest and are
demand-driven. Please visit our website – www.dubaichamber.ae – on a regular
October 5th 2010 basis to remain informed on all our events.

For more information, please visit

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For more information, please email 800 CHAMBER (800 2426237)
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