General and Legal News from the UAE – October 2021 №2

A senior representative of Emirates has stated that airline passengers are facing at least two more years of wearing face masks during flights. Zack Zainal Abidin, Senior VP of Emirates Group Security was quoted at the aviation security conference in Dubai saying “Covid is here to stay, and it won’t change until it’s regarded as endemic rather than a pandemic. It used to be the case that the flu was regarded as a dangerous disease until it became part and parcel of life, and it is going to take some time before Covid-19 reaches that stage.” Therefore, people should not expect to travel without an obligation to wear the mask anytime soon.

 
Furthermore, he mentioned that the requirements of social distancing and checks going contactless as well as cybersecurity threats placed further challenges on the aviation security sector. It was urged that “Top-quality airport checks are absolutely vital.”
 

From 17th October 2021 effective facial masks and social distancing measures are no longer required in the outdoors. Furthermore, fully vaccinated worshippers will be granted entry to the Two Holy Mosques at their full capacity.

 
Full capacity operation with fully vaccinated guest also applies to wedding halls, restaurants as well as means of transportation; no physical distance measures are required. Masks, however, are still to be worn indoors.
These changes are under periodic review with evaluating local as well as international developments related to the Coronavirus pandemic.
  

According to local media reports, MP Osama Al-Menawar, introduced a legislation bill to impose 5 percent tax on remittances by foreign workers. The suggested legislation mandates financial institutions as wells as banks to collect a 5 percent tax on transfers.

 
In his suggestion he proposed that the Ministry of Finance should identify a tax percentage not lower than 5 percent to be imposed on transfers exceeding 50 percent of the annual income of expatriate workers. A similar proposed legislation to introduce a tax on remittances by non-citizens had been rejected in 2018 by the Kuwaiti government.

 
According to data from the Central Bank of Kuwait outward personal remittances from Kuwait had dropped to $4.3 billion during Q1 of 2021. MP Al Menawar suggested in his proposal “The tax amount will be calculated by the end of every year and the collected tax will be added to the public treasury. Expatriates whose salaries are less than 350 dinars per month are exempted from this provision.”

  
KSA biggest IPO since Aramco: Saudi Exchange Tadawul is said close to IPO at $4 Billion Value

Saudi Arabia’s stock exchange Tadawul could become the biggest IPO on record with an estimated value at $4 billion since the largest IPO on record of Saudi Aramco. The Saudi stock exchange’s initial public offering has long been awaited and details of Tadawul’s IPO may be published before the end of this month, however no clear timeframe or a final decision has been publicly announced. Representatives of Tadawul have declined to comment.
  
An IPO of Tadawul has been in the talks since 2016 and heated up again in April of this year when the company has changed its corporate structure, creating subsidiaries for its exchange, clearing, depository, and technology-services businesses followed by Tadawul hiring financial advisers from NBC Capital Co., Citigroup Inc., and from JPMorgan Chase & Co.

 
Riyadh has been the most promising and interesting market for IPOs in the Gulf region in the past years, with new offerings oversubscribed, mostly by local retail and institutional investors. In 2019 the $29 billion offering of Saudi Aramco – the world’s biggest oil producer took place in Riyadh with shares being sold mainly to local investors seeking guaranteed dividends. Many more trading debuts in the city are in the pipeline; amongst others the IPO of chemical manufacturing company Saudi Basic Industries Corp.’s and the IPO of the cargo company Saudi Arabian Logistics Co.
   

Saudi Arabia’s startup Venture Capital ecosystem grew record 65 percent y-on—y in H1 2021

The upcoming tech event LEAP is a unique collaboration between the private sector and the government showcasing inspiring technology across all major sectors including amongst others Energy, Finance, Health, Transport, Artificial Intelligence, Digital Entertainment, Smart Cities, Robotics, and Education. Such events let to the kingdoms VC ecosystem growing a record 65 percent year on year in H1 2021 as in this backdrop startups and platforms are given the chance to present their ideas and innovations and allows them to secure investments.

 
In the first half of 2021 startups from the MENA region have attracted funding worth $1.2 billion, despite the Covid-19 pandemic; that shows a growth of 64 percent y-on-y and an increase of 12 percent over FY 2020. Saudi Arabia has reached its highest H1 year funding amount with the Kingdom, the UAE and Egypt regionally being the recipients of the highest funding amounts amounting to a net of 71 percent of all invested capital funding during the first half of this year: The UAE have received 26 percent, Egypt 24 percent, Saudi Arabia 21 percent, Qatar 4 percent, and Oman 2 percent of the capital deployed.

 
Companies and Start-up receiving such funding are namely e-commerce start up Sary (received $31m), Red Sea Farms (received $10m from Saudi Aramco) and the technology startup Foodics (received $20m) amongst others.
  

The UAE have announced their ‘net-zero emissions by 2050’ strategy, which marks a bold and necessary statement. As one of the largest Middle East’s economies, the UAE will play a pivotal role in promoting a future powered by clean energy going in with full confidence that noting is impossible.
  
The UAE will inclusively work together with the international community namely Saudi Arabia, the US, the UK, the EU, China, Japan, and South Korea who have all committed to reach the net-zero emissions target by 2050-2060 in order to combat climate change and defining future energy landscapes. The UAE’s government puts decarbonization as a top priority with Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister and Vice President of the UAE and Ruler of Dubai, announcing an investment of more than $160 billion in clean and renewable energy projects by 2050. This announcement supported by the net-zero emissions strategy encourages carbon intense industries to a more innovative approach adapting cleaner methods of production as well as benefitting from green growth opportunities.

 
The net-zero initiative builds on other initiatives by the UAE government that prepares the economy for such changes such as the Operation 300bn, which promotes a cleaner and more globally competitive industrial sector by the adoption of the Fourth Industrial Revolution solutions and advanced technologies and by this reducing the UAE’s carbon footprint.