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Category: Risk Mgmt

Jul 26 2013

Recent Changes in UAE Laws Expand Association Business Opportunity

Dubai Assn Centre.All comes together

“Non Profit” Status Now Recognized Eases Rules to Open Independently

Until recently, if you wanted to open your own commercial operation as an association in the Middle East you were treated like any for-profit corporation. You either had to let locals own 51% of your activities and they got a permanent seat on your Board (among other things) or operate through a free zone, which would give you 100% ownership but categorized as a for profit corporation.

For several years, various government organizations including Dubai Chamber of Commerce & Industry, the Dubai World Trade Centre, Dubai Tourism & Commerce Marketing, and MCI Middle East (the MENA region’s leading global association management & consulting company) have been working to gain more favorable recognition of associations by reclassifying their business as “nonprofit” as well as remove the requirement of local ownership in their organizations. The rationale for this treatment presented to local officials were fivefold:

  1. Associations were established in their home markets as nonprofits meaning that any net revenues are reinvested in new programs and services that benefit the members who join their organization;
  2. Associations exist to promote and grow an industry or a profession and offer programs and services that uniquely benefit not only the industry or profession it serves but also society as a whole;
  3. Associations as nonprofit entities do not have owners nor do they offer/sell shares;
  4. Associations have elected volunteer leadership at the global, regional and local levels of management who are not compensated for their efforts to develop new knowledge, programs or services;
  5. Associations are often mission-driven in their desire to serve the public beyond the members.

Local UAE officials began to see they could achieve a stronger position among the world’s association community by lowering barriers to establishing regional HQ nonprofit operations in Dubai to serve the UAE, GCC and MENA.  Such a strategy could position the UAE as a leading business destination for foreign associations in the GCC and MENA.

Toward an Exciting New Reality

Thanks to these efforts the Dubai government has approved laws that would confer nonprofit status for foreign associations as well as remove local ownership requirements so long as they establish their nonprofit business presence in a new facility called the Dubai Association Centre (DAC) located in the heart of Dubai at the Dubai World Trade Centre.

US associations will be able to open their own independent office featuring:

  • A business license operating from the Dubai Association Centre as well as office space
  • Visas for staff
  • Ability to open a bank account
  • A legal framework to offer products and services in the local market
  • An opportunity to be part of the Dubai association and corporate community
  • A gateway to key Dubai Government Stakeholders
  • Usage of World Trade Club facilities – Dubai’s oldest Private Club
  • Monthly Association Networking Events
  • Easy access to the market development business services of MCI if required

Dubai as a Business Hub

A leading global and regional business centre, Dubai has over 140,000 companies located in the local market.  Businesses enjoy

  • Tax free business environment
  • A thriving cosmopolitan centre for business, trade, industry and tourism
  • The commercial capital of the UAE
  • One of the world’s most popular destinations for both business and leisure
  • Modern and growing infrastructure
  • A relaxed and pleasant lifestyle
  • Wide choices of spacious, modern accommodation
  • Low crime, multicultural city where freedom of movement is safe and easy for everyone
  • Unique accessibility with direct flights to over 140 destinations
  • Excellent public transport system

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Attending ASAE in Atlanta?  Stop by MCI’s booth 1216 to Learn More

Register to Attend A Fall Business Tour to Dubai

Interested association executives will have the chance to travel to Dubai this Fall courtesy of the Dubai Association Centre partners.  Complimentary hotel accommodation and airfare provided by Emirates Airlines will provide executives with an opportunity to experience how the Dubai Association Centre can improve market access for you.

This tour will include:

  1. Meetings with government officials
  2. Private business meetings
  3. Tour of the Dubai Association Centre
  4. Detailed briefing on legislation and regulations governing associations

To learn more about DAC

Contact:  Peter Turner 571.275.1516 or peter.turner@mci-group.com

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Jul 25 2012

Grow Globally: Finding Ways to Reach New Customers and Members

 

 

 

 

 

 

Avinash Chandarana and Nikki Walker from MCI facilitated the annual CESSE Management Institute at the CESSE Annual Meeting this week in Louisville.  Based on results from a pre-conference survey, the full day session was designed to address professional society global growth challenges and opportunities.  The program design included an interactive discussion on Becoming Cross Culturally Competent as well as advise on various topics such as:  finding the right partners, leading into markets with products versus membership, and selling products in new markets, among others. 

Four virtual presentations were integrated into the meeting program as a LIVE hybrid meeting feature from as far away as Beijing, Dubai, Mumbai, and Rio de Janeiro.  These virtual presenters shared a unique knowledge and perspective concerning mission critical global growth strategy for becoming more locally relevant to customers and members in emerging markets.

The remote presenters featured LIVE two way video and slide presentation thanks to the sponsorship and support from Blue Sky’s virtual presentation system.  MCI and Blue Sky have partnered to offer global content dissemination services to help associations create new digital content channels that can add new revenue, expanded marketing and sales capacity, or creating new products from existing conference or education content globally.   Global Content Dissemination Strategy was featured in an archived webinar presented by Peter Turner of MCI and Phil Forte, President of Blue Sky as well as this case study.

Look out for a future post where we shall feature the actual archived presentations from the senior consultants below.

 

Special Thanks to Blue Sky

 

 

 

 

 

Locally Relevant Marketing & Communication to Build Your Brand & Enhance Customer Value

Florence Chua, Beijing

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View Video Presentation of Florence here.

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Essential Operations to Drive Local Business

Tarnbir Kaur, CAE, Dubai & Mumbai

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View Video Presentation of Tarnbir here.

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Reaching Out To Global Markets Through Meetings & Events

Ajay Bhojwani, Dubai

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View Video Presentation of Ajay here.

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Co-Creation Partner Strategies to Build Local Brand Awareness

Gina van Dijk, Rio do Janeiro

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View Video Presentation of Gina here.

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Join Us At ASAE

Next month MCI will be appearing at the ASAE Annual meeting in Dallas.   Join us for another education session led by Nikki Walker of MCI and Greta Kotler of ASAE as they share the results of ASAE’s first global market analysis which MCI developed in 2011.  The session is titled ‘Mastering the Puzzle of Global Association Management Communities’,  and will take place on Monday, August 13, 2012, from 3:15 PM – 4:30 PM in room: D172.

We welcome you to the MCI booth #840 on Sunday and Monday of the exposition. 

Contact us to make an appointment.

Peter Turner

peter.turner@mci-group.com

Theresa DeConinck

theresa.deconinck@mci-group.com

 

 

Mar 01 2011

Be Aware of Recent VAT Tax Changes in Europe

Just about anyone that has traveled outside the United States is aware of the Value Added Tax (VAT) imposed by other countries. Like our sales tax varies from state to state, VAT varies a little from country to country. However, the overall system is a little more complicated as anyone doing business in Europe would know, but the European Union (EU) has tried to make it less so in recent years.

Starting in January of 2011, some additional changes were made. Associations do fall under different criteria so it is really important that anyone planning meetings in Europe is very much aware of the rules and regulations. VAT can amount to some large sums which must be accounted for in the meeting budget and knowing what countries are owed the taxes is extremely important.

In order to help everyone understand the latest VAT changes, I have included the article below that Anne-Sophie Snyers, Director Finances, in our MCI Brussels Office wrote. This article first appeared in the current issue of Headquarters magazine, a UK based publication.

The VAT Package 2010-2011: Review of services and treatments within the EU

Good or bad news for the Associations?

By Anne-Sophie Snyers, Director Finances, MCI Brussels Office

The VAT Package has been delivered a year ago already, after almost 10 years of discussions between the 27 European Union Member States.  But what is the VAT package exactly about and how does it impact associations and Professional Congress Organisers?

The VAT Package: General Rules and Exceptions

In the past, there were many discrepancies between the places of supply rules across the European Union, leading to double taxation risk for companies and associations. This was especially the case for management services.

Since 2010, apart from the exceptions listed below, services provided to other businesses (B2B*) such as management fees, memberships to companies are taxed in a uniform way in the country where the customer is established.

At the same time, these services are covered by a reverse charge provision, obliging business customers to report the VAT due if the service provider is not established in their Member State, through a European Declaration of Services (EDS).

On the opposite, services provided to non-business clients (B2C*) such as membership for individuals are located where the service provided is established or where the establishment is based from where the services are provided.

GENERAL RULE AS FROM 2010

B2B-  place of supply of service = CUSTOMER place (reverse charge system)

B2C-  place of supply of service = SUPPLIER place

The Exceptions

On these two general rules for locating services, a limited list of clearly defined exceptions still applies.

  • Hiring of vehicle:
  1. Short term (< 30 days): taxed where the vehicle is put at the disposal of the customer
  2. Long term (> 30 days): taxed where the customer is established
  • Transport of good: The B2B rule applies in any case.
  • Fairs and exhibitions:

Until the end of 2010, all services linked to fairs and exhibitions were taxable where the services were physically carried out.
As from 2011, more distinctions need to be made:

  1. Services in respect to admission to fair and exhibitions (registrations fees) will be located where the event actually takes place
  2. Other services relating to fairs and exhibitions (audio visual location, translation services, etc…) will be located where the customer is established if the customer is a taxable person/where the activities actually take place for non-taxable person
  • Passenger transport, supply for cultural, artistic, sporting, scientific, educational, entertainment and similar services, restaurant and catering services

All these services are taxable where the services are physically carried out.

The Impact of the VAT Package on the Organisation of Congresses

The two last bullet points have a clear impact on the organisation of congresses, fair, and training courses undertaken by Associations, and a clear study needs to be done when building up the budget of any event.

Although the goal of the VAT package is deemed to facilitate the future, it though leaves rooms for interpretation and adaptations that could feed this new regulation in the years to come.

Indeed, the fees paid by delegates could actually not be seen as “admission fees” for all participants– and therefore subject to local VAT – as it involves much more than the mere admission to an event. The participation fees to a congress are linked to the access to documents, website, networking, etc.… Hence, the B2B rule (and reverse charge) could be applicable to the companies registering its employees; the B2C for individuals should still apply. This would though complicate the role of the association and the Professional Congress Organiser (PCO) organising an event.

Furthermore, the wording: “other services relating to fairs and exhibitions…” could lead to misinterpretations. Some EU States might translate differently with a limited or broader approach.

However since this new rule must apply, here is what it means for an association that wants to organise a congress or an event:

  1. The local VAT registration is still mandatory for any event organised by an Association and registrations will be submitted to the local VAT
  2. Most of the charges linked to the organisation of the event (Food & Beverage, transfers, cultural activities, social programmes…) will still be charged with the VAT of the country where the event takes place – see section about exceptions
  3. Some other charges will now be exempted from the local VAT and the reversed charge will apply (for example audio visual and translation costs). This relates to any service linked to the organisation and not mentioned in the exceptions
  4. Exhibitions: the general B2B rule applies. However, some exceptions remain in EU countries which should be checked on a case by case basis
  5. Sponsorship: the local VAT is applicable depending on the nationality and if the sponsor is a company/association or a private.

The new VAT Package is a vast topic and there is much more to say about its impact on the associations’ live, such as the functioning of the EDS, local reclamation for foreign VAT paid outside a congress via the Electronic Refund platform.

However, and despite the many seminars and courses offered on the topic, associations should ensure they get the best advices on the matter, and by professionals to prevent from unpleasant consequences.

*B2B (Business to Business) = any company/association being VAT registered

B2C (Business to Customer) = any individual/company/association not being VAT registered

No question understanding the VAT tax and accounting for it when planning your international events is very important to the success of your meetings. Hopefully, this article will help you be prepared in advance for your next European meeting.