Business

Yacht sellers seeking a profitable berth at Yas

Major yacht retailers are keen to have outlets at Yas Marina after a high-profile launch at the Abu Dhabi Grand Prix.

Rebecca Bundhun

November 28, 2009

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  • Arabic

Major yacht retailers are keen to have outlets at Yas Marina after a high-profile launch at the Abu Dhabi Grand Prix. The marina, which is part of the US$40 billion (Dh146.92bn) Yas Island development by Aldar Properties, attracted yachts from as far afield as Australia for the Formula One event. "We are looking to open an office in Yas Island," said Francesco Pitea, the general manager of Sunseeker Middle East, the regional representative for the UK luxury yacht maker.

Mr Pitea pointed out that Sunseeker did not yet have a presence in Abu Dhabi and would now focus its efforts on the emirate. "Still, we have to understand the future plans of Yas Island," he said, adding that the F1 race was held only once a year. The regional Sunseeker unit, which is based in Dubai, has experienced greater demand from Abu Dhabi than Dubai, receiving between two and three inquiries a day from the capital, Mr Pitea said.

Yacht sales in Dubai had fallen by 75 per cent as of September from what they had been 18 months before, said Michael Derrett, who runs a consultancy specialising in market research and business planning for the marine leisure industry. But Jyrki Jaamaa, the general manager of the retailer Western Marine, which is part of ETA Ascon Star, said major yacht retailers were looking into opportunities at the marina. "We expect another camp for retail players in Yas Marina," Mr Jaamaa said. "Yas Marina will be the world-class location for dealers." Sunseeker and Western Marine both have sales offices in Dubai Marina.

Sales had been "severely hit" by the global economic downturn, Mr Jaamaa said, and he expected next year to remain "challenging". Once the availability of financing and general economic conditions improved, he said, he expected Western Marine to return to its core market of 55-foot to 85-foot yachts, which cost between ?1 million (Dh5.5m) and ?5m. The longer-term local outlook was positive given that the UAE yachting sector was still relatively new, with large stretches of coastline that could be developed, he said. Aldar Marinas plans to build 3,500 yacht berths in 14 marinas in Abu Dhabi.

"If you look at the scope of the next five years, it still looks very promising compared to other parts of the world," Mr Jaamaa said. @Email:rbundhun@thenational.ae

Maestro
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THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

Red flags
  • Promises of high, fixed or 'guaranteed' returns.
  • Unregulated structured products or complex investments often used to bypass traditional safeguards.
  • Lack of clear information, vague language, no access to audited financials.
  • Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
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Courtesy: Carol Glynn, founder of Conscious Finance Coaching

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4pm: Gulf Cup presented by Longines Prestige (PA) Dh150,000 (D) 1,700m
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4.30pm: Handicap (TB) Dh40,000 (D) 1,200m
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Director: Shazia Iqbal

Starring: Siddhant Chaturvedi, Triptii Dimri 

Rating: 1/5

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THE BIO

Born: Mukalla, Yemen, 1979

Education: UAE University, Al Ain

Family: Married with two daughters: Asayel, 7, and Sara, 6

Favourite piece of music: Horse Dance by Naseer Shamma

Favourite book: Science and geology

Favourite place to travel to: Washington DC

Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

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6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”

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This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”

This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.

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