National Bank of Fujairah highlights impact of changing legislation and market challenges facing UAE companies in inaugural Knowledge Series
500 senior representatives from local business community discuss topical issues, from impact of VAT and the new commercial law to cybercrime and risk management
- Non-compliance by companies to UAE’s new commercial law could potentially lead to dissolution
- Companies need to develop a high-level plan to assess and respond to the business impact of the impending introduction of VAT
- Establishing policies and processes to manage risks from cyber fraud to currency and commodity price fluctuations is paramount in this market environment
Businesses need to update their Memorandums and Articles of Association to reflect the UAE’s new Commercial Companies Law of 2015, or risk dissolution, companies learned at the National Bank of Fujairah’s Knowledge Series 2016, an inaugural networking event seeking to apprise the bank’s clients with the latest market developments.
Failure to comply with this requirement by the stipulated deadline of 30 June of this year may result in penalties ranging from daily fines of AED 2,000 per day until the documents are amended, or in a harsher scenario, a dissolution of the company. And whilst the new law was introduced to make doing business in the UAE more flexible, it remains to be seen how the letter of the law will be applied. Companies in the UAE that have not updated these documents are therefore strongly advised to do so because an extension to the deadline has so far not been planned by the authorities, said industry experts at the NBF event.
The NBF Knowledge Series brought together UAE business leaders and analysts to a series of one-day networking sessions in Fujairah, Abu Dhabi and Dubai to identify and discuss trends, opportunities and challenges affecting companies in the UAE.
Experts speaking at the NBF Knowledge Series come from PricewaterhouseCoopers, the International Chamber of Commerce Banking Commission, cyber security firm Forcepoint, part of USA’s Raytheon, and Treasury Tutor, a financial markets consultancy.
They emphasised the importance of preparing against key issues most likely to affect companies in the UAE. These include an evolving legal landscape, such as the anticipated introduction of value-added-tax (VAT), to challenges such as the rise of cyber fraud worldwide and increased volatility in global trade.
Advice was given to the 500 NBF clients in attendance on how to manage these changes; for instance, companies should start making comprehensive preparations to comply with VAT, even though it will not be implemented before 2018, so as to avoid owing massive payments and penalties.
Finally, the knowledge series highlighted the importance of analysing, understanding and mitigating the growing incidences of risk to companies, from cyber hacking attacks to currency and commodity market volatility. Putting the policies and processes in place and investing in the appropriate systems and staff training to manage change and risk are paramount. NBF customers were also advised on how to protect their businesses by hedging against currency risks in a volatile global economy.
Vikram Pradhan, Head of NBF’s corporate & institutional banking division, said that the event aims to encourage greater dialogue between the bank and its clients: “This is not the first time we’ve tried to add value by arming our clients with insights and knowledge useful for their businesses. Over the years, NBF has held trade finance workshops for clients. Last year, we worked with Fitch Learning on a leadership programme for children of various corporate clients.
“The NBF Knowledge Series is therefore an extension of our partnership-focused approach, and is especially relevant in this market environment, where closer cooperation and communication between lenders and businesses are crucial for deepening the trust required for sailing through these challenging times together. We look forward to growing the NBF knowledge series annually not just to flag up topical issues that are pertinent to the business community, but to use it to better enable our clients to overcome challenges and turn them into opportunities.”
About National Bank of Fujairah PJSC:
Incorporated in 1982, National Bank of Fujairah PJSC (NBF) is a full services corporate bank with strong corporate and commercial banking, treasury and trade finance expertise as well as an expanding suite of personal banking options and Shariah compliant services. Leveraging its deep banking experience and market insight within Fujairah and the UAE, NBF is well-positioned to build lasting relationships with its clients and help them achieve their business goals.
NBF’s key shareholders include the Government of Fujairah, Easa Saleh Al Gurg LLC and Investment Corporation of Dubai. Rated Baa1 / Prime-2 for deposits and A3 for counterparty risk assessment by Moody’s and BBB+ / A-2 by Standard & Poor’s, both with a stable outlook, the bank is listed on the Abu Dhabi Securities Exchange under the symbol “NBF”. It has a branch network of 15 across the UAE.