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DMCC Becoming The Largest UAE Free Zone

PUBLICATIONS / Newsletters / 2013 / Newsletter September
.DMCC Becoming The Largest UAE Free Zone

In September, Dubai Multi Commodity Centre (DMCC) has become the largest Free Zone in the UAE. The popular and fastest growing UAE free zone (about 200 new companies each month) reported almost 7,500 active company registrations last week.
DMCC’s popularity is expressed also by the 94% retention rate and the loyalty of its customers makes the free zone authority reveal daring plans for the future:
The commercial space area of DMCC, Jumeirah Lakes Towers, will be increased by a 100,000+ square meter business park. Its new dominant will be the world’s tallest commercial tower.
The DMCC authority remains focused: the new target is 10,000 companies by 2015.
The new Silk Route
Since its establishing in 2002, DMCC continues its attempts to position Dubai as the global hub for commodities trade and enterprise. The free zone currently focuses on serving markets along the new Silk Route and facilitating the African producers deliver to Asian, European and American markets.
One third of DMCC registered companies are from South Asia, one third from the Middle East (including the UAE), and one third from Western Europe and North America. Amongst the famous companies represented in DMCC are e.g. De Beers, Phillips, Harley Davidson and Nutricia.
Living and working in JLT
With 65 mixed-use commercial and residential towers and over 220 retail outlets, there are currently more than 75,000 people working and living within Jumeirah Lakes Towers. This area quickly became one of the most popular places in the ‘new’ Dubai.
The heavily discussed green color in the Lakes lead to an idea for yet another project: one of the Lakes will be transformed into a 55,000 square meter community park by the end of this year.
In other words: when doing business in Dubai, DMCC/JLT is a place to be.
Freemont Group has an office in Jumeirah Lakes Towers. Please call or email us for more information on DMCC free zone companies.

Tax Avoidance By Nike: Just Do It!

When 13 years ago Mel Gibson and Helen Hunt in What Women Want introduced the “No games. Just Sports.” line, nobody could have predicted how the world would change in just a decade.
Back in 2000, tax avoidance was the perfectly legal way of using a particular tax regime to one’s advantage. There was nothing wrong about it and various forms of tax avoidance were widely used by all of us.
Now in 2013, it is a different story. Tax planning attempts are being criticised and even criminalised by the international community and the world leaders hide behind them, looking for a scapegoat while defending their weak political and economical moves.
While many multinationals slowly start agreeing to play the new game of “Please tax us, we have nothing to hide!”, Nike has chosen the ‘Just Do It!’ approach.
According to its 2012 Annual Return, the apparel giant has placed a profit of almost USD 7 billion at the bank accounts of dozens of its subsidiaries in Bermuda. And has done it in style: 10 out of 12 offshore companies carry the names of Nike’s shoe models. To name a few:
Air Max Limited, Nike Flight, Nike Pegasus, Nike Tailwind and of course Nike Waffle.
Besides being funny, the reasoning behind the shoe names has to do with the intellectual property that is being moved into the offshore subsidiaries – when structured properly, a perfectly legal way of avoiding US tax.
According to Nike, having foreign subsidiaries for the purpose of minimising tax burden is neither illegal nor immoral. In fact, it is no different from making use of the tax deductible home mortgage interest or charitable deductions. It is just that Nike’s savings are bigger.
Nike. No games. Just sports.

Investing In Wine And Whisky

Wondering what to invest in? Individual stocks, index funds, real estate, precious metals, bonds?
Perhaps you can consider investing in wine and whisky. Investments in wine and whiskey have shown very good average returns over the past 10 years.
The Liv-ex market in London is the main exchange for trading wines. The Liv-ex Fine Wine 100 Index is the industry’s leading benchmark. It represents the price movement of 100 of the most sought-after fine wines on the secondary market. The index has gone up from 100 to 300 in a 10 year period, albeit with large fluctuations, representing a return of 11% annually. Only wine merchants or professional wine traders can trade on Liv-ex.
The main advantage of investing in wine and whisky lies in the fact that the returns are not correlated with other financial markets and thus represent a good diversification in one’s investment portfolio. Economic and demographic factors result in a built-in upward pressure on prices. The supply for old well aged wines and whiskies cannot instantaneously be increased, it takes time, while in the mean time, in BRIC countries with high economic growth figures the middle class is rapidly expanding. Particularly from China there is a strong demand for high end whiskies and wines.
Wine is more “liquid” than whisky, in the sense that the market for wine is bigger and it is quicker to sell. Also there is no exchange for whiskies; mostly these are sold on auctions. But the returns on whisky have been even better than those of wine. According to Whisky Highland an investment portfolio created from the 100 best brands of Scottish whiskey would have returned the owner a 300% profit in the last 4 years. A 30- year old bottle of Macallan whisky purchased in 2008 for GBP 260 would be worth GBP 1550 now.
In these times of money being printed out of thin air, with runaway inflation in our opinion just around the corner, almost anything is better than holding your assets in cash or government bonds. Of course prices can go up and down, which is why diversification is key.
The tax advantage of these alternative investments is that there is no capital gains tax in the source country (i.e. the country where the wines and whiskies are stored and traded) on your profits. There might be tax on the investment gains dependent on your country of residence, although it is of course perfectly possible to hold these investments confidentially through a holding company in a tax free jurisdiction.
We have teamed up with a firm specialised in investing in wines and whiskies which serves 700 clients and holds client assets (bottles) worth more than 70 million Euros. They visit the vineyards in France and distilleries in Scotland, meet the managers, the experts, connoisseurs, and opinion makers and have booked very good returns for their clients indeed.
They provide ready made packages with a selection of wines or whiskies, starting from as low as 5000 Euros. Drop us an email if you want to get in touch with them.

Polish Government Confiscates Private Pensions. Nothing To See Here!

While the world focused on the war drums that were pounded in the Mediterranean, interesting business news came from Poland.
There, a desperate and hopeless government confiscated private pension funds in order to polish up their balance sheet.
More precisely, all bonds from private funds within the (mandatory) state-guaranteed system will be transferred to a state pension vehicle. The private funds will maintain their equity holdings.
Now what would drive the desire to go against the constitution and trample private owner ship like that? It is a daring move.
As always, it is not because the government has a planned out solid strategy with a current investment that will yield so high that will benefit generations to come. No.
By confiscating assets from private funds, the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend.
Finance Minister Jacek Rostowski said the changes will reduce public debt by about eight percent of GDP.
No reforms that secure future prosperity. Just more of the same to keep the party going. Just a little bit longer. Until the vodka runs dry…
And it is not yet sure what will happen. Maybe more confiscation when the times get tough again?
The fact that a government can fund its policy with wealth for which citizens have worked half of their lives, should worry individuals in other countries with fiscal problems (which currently is the vast majority of the developed world). We have heard politicians already say the word blue print.
These individuals would have been better off, would they have had part of their wealth in a different jurisdiction. One friendlier to private property.
There is a lesson to be learned here.
You better have a plan to keep what is yours!
Please read our Asset Protection page for suggestions.

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