NEW YORK: When US entrepreneur Bharath Rao looked around for the best place to raise money for his crypto-currency derivatives trading business, the US did not make his list. Instead he chose the East African island nation of the Seychelles to sell the trading platform’s tokens.
Rao, a San Diego-based technology veteran who has worked for major Wall Street banks, is not alone.
Confronted with national regulators’ intensifying scrutiny of digital currency fund-raising, known as initial coin offerings, many entrepreneurs are moving businesses to locations more welcoming to crypto-currencies and known for low taxes.
Dozens of start-ups have flocked to Singapore, Switzerland, Eastern Europe and the Caribbean this year, according to interviews with entrepreneurs and company registration data made available to Reuters.
Like bitcoin, the best-known crypto-currency created in 2009, the coins use encryption and a blockchain transaction database enabling fast and anonymous transfer of funds without centralized payment systems.
The numbers compiled by crypto-currency research firm Smith + Crown show how national regulators’ attempts to curb coin sales may just shift business elsewhere.
The US leads with 34 digital currency start-up registrations so far this year, but that reflects Silicon Valley’s role as a technology hub and the depth of US financial markets rather than a welcoming regulatory climate.
Singapore registered 21 entities, up from one in 2016, followed by 19 in Switzerland, up from three last year, according to Smith + Crown. Central Europe saw 14 companies registered this year, compared with one in 2016, and the Caribbean hosted 10, up from two last year.
“The data affirms our sense that Switzerland and Singapore remain go-to locations, but the US could remain for companies raising large amounts of money,” said Matt Chwierut, Smith + Crown’s research director.
Switzerland does not have specific rules on digital coin sales, but some parts of an offer may fall under existing regulations, the Swiss Financial Market Supervisory Authority (FINMA) said in September.
So far, four of the five largest token sales, raising a total of over $600 million, were carried out by firms registered in Zug, a low-tax region south of Zurich known as the “crypto-valley” of the world.
In contrast, China and South Korea banned digital coin sales this year and regulators in the US, Malaysia, Dubai, UK and Germany warned investors that current scant oversight exposed them to risks of fraud, hacking or theft.
Soaring registrations in “friendly” jurisdictions show how hard it is for national watchdogs to regulate digital coin sales. It is a challenge regulators are beginning to recognize.
“We are talking to other regulators, and we know that there are a lot of bilateral discussions taking place,” the Dubai Financial Services Authority told Reuters.
The US Securities Exchange Commission declined to comment about the migration of coin issuers to remote jurisdictions.
The UK’s Financial Conduct Authority and Securities Commission Malaysia reiterated their stance that digital coin sales are high-risk, speculative investments and that retail investors should be aware of that.
A spokesman for Germany’s Federal Financial Supervisory Authority (BaFin) told Reuters “hopping” within the European Union would be “largely futile” since the EU supervisory authority has adopted the same stance as BaFin on the issue.
The Dubai regulator pointed out that seeking out friendly jurisdictions was not unusual, but regulators still needed to warn about the inherent risks in digital coin sales.
Financial regulators from South Korea and China were not immediately available for comment.
In the US, the SEC’s July 25 ruling that digital coins should be regulated as securities had a short-lived chilling effect on the crypto-currency market. Short-lived, because many US startups thought they could avoid such scrutiny by selling “utility tokens,” which gave buyers access to products or services rather than a stake in the company.
Still, concerns that regulators’ views might evolve have made potential US coin issuers consider sales overseas.
“Our lawyers certainly think regulations on utility tokens could change. So for safety, the ICO should be done outside the US,” said Arran Stewart, co-founder of Job.com, an online employment platform which plans a token offering in the Cayman Islands in February.
In fact, out of 15 start-ups interviewed by Reuters, only one, Airfox, sold digital tokens in the US, raising $15 million last month. Others have either carried out a coin sale overseas or are planning one.
Rao, who started Leverj, a decentralized crypto-currency futures trading platform, said he picked the Seychelles for fund-raising because of its openness to crypto-currencies.
“It has not issued anything negative on crypto,” Rao said.
Digital coin sales soared to about $3.6 billion by mid-November, compared with just over $100 million in the whole of 2016, according to Autonomous NEXT, which tracks technology in the financial services industry. Typically, issuers publish a “white paper” describing their business plan and the news of new coin sales spread via online forums and websites tracking new offers. Investors pay for them with bitcoins or ether — two most widely accepted crypto-currencies — via a company’s website.
The ease with which start-ups can raise millions of dollars with little scrutiny in as little as minutes has alarmed regulators, but without a unified approach they hold little sway over that new funding market.
“It’s very difficult for governments to work together in any organized fashion,” said Lewis Cohen, a partner at Hogan Lovells in New York, which has a team of lawyers specializing in blockchain.
“Different jurisdictions will look at token sales through different lenses and it would be very difficult to get on a completely harmonized place.” Nimble and lightly-regulated crypto-currency companies can straddle borders with ease.
For example, BANKEX, which aims to convert illiquid assets into tokens to be traded on its crypto-currency platform, is registered in Delaware and plans a coin offering in the Cayman Islands this month, said the company’s CEO, Igor Khmel.
Hogan Lovell’s Cohen said that while it would be foolish to shut token sales down, they should be regulated, or self-regulated.
“We may need to have some guard rails,” he said.
“I don’t think it’s really fair for legitimate platforms that are trying to create new and innovative business models to be thrown in with other less scrupulous parties who may see token sales as a way of making a fast buck.”
— REUTERS
Crypto-currency crackdown spreads from Dubai to London
Crypto-currency crackdown spreads from Dubai to London
Oman, India revise deal to avoid double taxation
JEDDAH: Oman and India have finalized an updated protocol to prevent double taxation and curb financial evasion related to income taxes, further bolstering their economic ties.
The agreement was signed in Muscat on Jan. 27 by Nasser bin Khamis Al-Jashmi, Chairman of Oman’s Tax Authority, and Indian Ambassador to Oman Amit Narang, as reported by Oman News Agency.
Al-Jashmi highlighted the importance of the new protocol in strengthening economic relations between the two countries, noting that the agreement is the result of ongoing efforts to enhance bilateral cooperation in the tax sector.
In December, Oman also signed a similar agreement with Tanzania to deepen their strategic partnership.
That deal aimed to foster an attractive investment climate, protect investors from double taxation, and increase transparency in financial transactions.
In October, Al-Jashmi represented Oman in signing a similar agreement with Estonia. The agreement adhered to the standard framework set by the Organization for Economic Co-operation and Development.
According to a statement from Estonia's Ministry of Foreign Affairs, the agreement was designed to provide a stable tax environment for both foreign entrepreneurs investing in Estonia and Estonian businesses expanding internationally.
The ministry emphasized that the primary goal of double taxation avoidance agreements was to foster investment between the signatory countries.
Additionally, the ministry highlighted that foreign investors value the assurance that they will not face a higher tax burden than local businesses operating in the target country.
As of October 2024, India exported $410 million worth of goods to Oman and imported $743 million, resulting in a trade deficit of $334 million, according to the Observatory of Economic Complexity.
India’s top exports to Oman included petroleum products valued at $146 million, processed minerals at $24.4 million, and basmati rice at $15 million. Iron and steel exports totaled $13.9 million, while ships, boats, and floating structures contributed $9.93 million.
On the import side, India’s purchases from Oman were led by fertilizers, totaling $118 million. Petroleum products accounted for $92.5 million, and ships, boats, and floating structures reached $77.5 million. Other commodities amounted to $45.2 million, while crude petroleum was valued at $43.5 million.
Asir region offering further $5.3bn in investment opportunities: top official
RIYADH: Saudi Arabia’s Asir region is working on securing a further SR20 billion ($5.3 billion) in private investments as part of its transformation into a year-round tourism destination, with significant projects already underway.
With 7.8 million visitors recorded in 2024, the region is rapidly approaching its formal target of 9.1 million annual tourists by the end of the decade, revealed a senior official.
In an interview with Arab News at the Real Estate Future Forum in Riyadh, Hashem Al-Dabbagh, CEO of the Asir Region Development Authority, said that private sector investments in the region have already exceeded SR7 billion ($1.87 billion).
“Aside from that SR7 billion of investments from the private sector, we also have another SR20 billion or so that we are working on, and it’s in the pipeline, but it’s not yet realized,” said Al-Dabbagh.
He added: “So hopefully, between the investments that are realized and the ones in the pipeline, we have from the private sector somewhere around SR27 billion that hopefully is going to happen in Asir.”
Al-Dabbagh noted that while some of the projects currently in the pipeline are expected to be finalized this year, others are slated for completion in 2026 or 2027, with certain long-term initiatives extending beyond 2030.
He expressed optimism about the progress of investments in Asir, noting that the region has been “moving full speed ahead” in this area.
Al-Dabbagh emphasized that the ongoing projects in Asir are primarily driven by private sector investments, while also highlighting significant initiatives led by the Public Investment Fund.
Among these, he pointed to the Alwadi project, a SR14 billion waterway development located in the heart of Abha.
The project will include commercial, cultural, residential, and agricultural spaces on both banks, all designed with pedestrians in mind and catering to both locals and visitors.
“I claim that with that investment, Abha is going to be the most livable and beautiful city in the Arab world as a whole,” Al-Dabbagh added.
He also highlighted the Al Soudah Development Project, another mega initiative with an investment of SR14 billion.
“This is in the forest-covered mountains of Asir, where there’s going to be, again, development of hotels and residences, high-end for the most part, in six different areas within Al Soudah,” he said.
Both projects are expected to remain under development through 2030.
Al-Dabbagh noted that smaller-scale projects are also in the pipeline which some slated for completion by 2025.
He further discussed the role of the Asir Investment Co. in spearheading mega developments across the region.
“AIC has a number of iconic projects in a number of areas, not just within Abha, but in other regions on the coast, in the north, on the mountain ridge, and of course, in Abha as well,” he said, adding that these projects “are going to be announced formally in the next months, in 2025.”
Al-Dabbagh highlighted that the region’s strategy is focused on transforming Asir into a year-round destination for visitors.
“The formal target for Asir is 9.1 million annual visitors by the year 2030. I expect this target to be raised,” he said, explaining that the unofficial number of visitors to Asir in 2024 already neared 7.8 million.
Additionally, he pointed to the broader national tourism target for Saudi Arabia, which was recently increased from 100 million to 150 million visitors, suggesting that regional goals, including Asir’s, are likely to be adjusted upward.
“Without a doubt, this is going to have an impact on the economic development in the region and on the number of jobs,” Al-Dabbagh added.
He noted that Asir has traditionally been an exporter of workforce to other parts of Saudi Arabia, such as Riyadh, Jeddah, and Eastern Province, due to limited job opportunities in the region.
However, he emphasized that the tide is turning. “Now with everything that is happening in Asir, we find that there is a reverse migration, if you like,” he said.
Al-Dabbagh added that he has observed this shift firsthand within the Asir Development Authority and through reports from larger investment projects, as more local residents are choosing to return to Asir to work on the new developments.
He noted that Saudi Arabia only opened its doors to international tourism a few years ago, meaning that due to the country’s prior restrictions, “the vast, vast majority” of tourists in Asir were domestic visitors, along with some travelers from Gulf countries, he said.
Al-Dabbagh added that, while the majority of tourists to Asir are expected to be from Saudi and the Gulf region, the proportion of international visitors is anticipated to grow significantly — from around 1 percent to approximately 10 percent, even as the total number continues to rise.
Closing Bell: Saudi main index sheds, Nomu gains
RIYADH: Saudi Arabia’s Tadawul All Share Index dropped on Monday, losing by 13.27 points, or 0.11 percent, to close at 12,372.89.
The total trading turnover of the benchmark index was SR7.1 billion ($1.9 billion), as 91 of the listed stocks advanced, while 147 retreated.
The MSCI Tadawul Index also dropped by 6.80 points, or 0.44 percent, to close at 1,538.59.
The Kingdom’s parallel market Nomu increased, gaining 118 points, or 0.38 percent, to close at 31,014.29. This comes as 40 of the listed stocks advanced while 45 retreated.
Jabal Omar Development Co. was the best-performing stock of the day, with its share price surging by 10 percent to SR25.85.
Other top performers included Knowledge Economic City, which saw its share price rise by 9.89 percent to SR16.66, and Makkah Construction and Development Co., which saw a 9.84 percent increase to SR106.
Taiba Investments Co. and Jadwa REIT Al Haramain Fund also saw a positive change, with their share prices surging by 9.81 percent and 5.78 percent to SR51.50 and SR6.59, respectively.
Raoom Trading Co. saw the steepest decline of the day, with its share price easing 5.18 percent to close at SR183.
Nice One Beauty Digital Marketing Co. and Al-Baha Investment and Development Co. recorded declines, with their shares slipping 4.92 percent and 4.26 percent to SR56 and SR0.45, respectively.
ARTEX Industrial Investment Co. also faced a loss in today’s session, with its share price dipping 4.06 percent to SR16.08 while Lumi Rental Co. saw a 4.01 percent drop to settle at SR76.60.
On Nomu, International Human Resources Co. saw the highest gain, with a 10.95 percent increase, reaching SR5.98.
Knowledge Tower Trading Co. followed with a 9.28 percent increase to SR17.42, while Enma AlRawabi Co. reached SR24.44 — a 6.26 percent growth.
National Building and Marketing Co. and AME Co. for Medical Supplies were also among the top performers, with 5.44 percent and 5.14 percent increases to reach SR189.80 and SR122.80, respectively.
Mulkia Investment Co. was Nomu’s worst performer of the day, witnessing a 9.86 percent decline to settle at SR33.35.
Albattal Factory for Chemical Industries Co. and Arabian Food and Dairy Factories Co. also saw declines of 6.25 and 5.91 percent to settle at SR60 and SR94, respectively.
Academy of Learning Co. and Leaf Global Environmental Services Co. saw drops of 5.71 and 5.08 percent to settle at SR9.58 and SR112.
Qatar official calls for GCC real estate boom to drive sustainable growth beyond oil
RIYADH: Oil-dependent countries in the Gulf Cooperation Council should focus on strengthening sectors such as real estate and tourism to ensure sustainable development, according to a Qatari official.
Speaking at the Real Estate Future Forum in Riyadh on Jan.27, the president of the Real Estate Regulatory Authority-Aqarat, Khaled Al-Obaidli, said that Saudi Arabia’s success in the property sector exemplifies the growth of the entire GCC region in developing a thriving market.
These comments regarding the Kingdom’s expanding property sector come just days after the nation reported a 3.6 percent year-on-year increase in its real estate price index.
Saudi Arabia’s Real Estate General Authority expects the country’s property market to reach $101.62 billion by 2029, with an expected compound annual growth rate of 8 percent from 2024.
“The success of Saudi Arabia in the real estate sector is the success of all GCC countries because we see them as one,” said Al-Obaidli.
He added: “Most of our countries are oil-based economies. It is very important to diversify the resources across sectors like real estate and tourism. We (Qatar) are not just a country that depends only on oil, we are now trying to affirm our presence in sports, and tourism, and we are also developing high-level universities.”
Aligned with its Vision 2030 program, Qatar established the Real Estate Regulatory Authority-Aqarat in 2023 to enhance transparency and clarity of information as well as encourage investment in the country’s property sector.
“The Real Estate Authority in Qatar was created to enhance the sector and we also try to make it more attractive to generate more investments,” said Al-Obaidli.
Regarding the Real Estate Strategy launched by the authority in December, Al-Obaidli said that the initiative has five pillars, with the first one being developing a comprehensive national real estate plan and introducing policies that promote sustainable development.
The second focuses on strengthening Qatar’s regulatory frameworks to support the sector, while the third aims to improve industry standards by enhancing real estate valuation governance.
The fourth pillar focuses on driving digital transformation in the industry, while the fifth aims to boost real estate investment and position Qatar as a global destination for family living.
“Technology is one of the most important tools to develop the real estate sector. Technologies like artificial intelligence and virtual reality can be used to enhance the customer experience. The experience of customers should be easy and seamless,“ said Al-Obaidli.
He added: “In our countries, most of our doors are open. People get inside here without feeling uneasy. This is part of the real estate. If you want to retire, so, you have the regulations, health systems, and service products.”
The Qatari official added that the country now hosts nearly all major international universities, allowing students to pursue higher education without traveling to Western countries.
Al-Obaidli also hinted at the plans to establish an institute of real estate in close cooperation with national universities.
“We are about to establish an institute for real estate in close cooperation with the private sector and some universities. So, it gives you the ability to get engaged in the sector, and you will also get a license specialized in this,” said Al-Obaidli.
He added that people who receive real estate licenses from the institute can pursue part-time jobs in the property sector after completing their day jobs, which could boost the market.
Al-Obaidli further said that both citizens from the GCC nations and foreign countries have sufficient opportunities to own residencies in Qatar.
“The GCC citizens have privileges such as they can own a piece of land up to 3,000 sq. meters for residential and housing purposes in Qatar. Also, they can own their own land for their own entities or establishments for other businesses or factories. There are some regulations where we can increase these privileges for GCC citizens,” said the Qatari official.
He added: “For foreigners, if you have $1 million, you can have a permanent residence and it will also have some features. This can be done through the Real Estate Authority.”
According to the Aqarat website, permanent residency benefits are available for properties valued at $1 million or more, covering areas such as health, education, and investment.
Al-Obaidli further said that Qatar is not just trying to promote its own real estate sector, but it is also trying to accelerate the growth of the industry in other GCC nations.
“We want our countries to be the best, as one of the good destinations for real estate development. Our ambition is to come to a stage that is very much high. We are promoting GCC countries, not just Qatar. We want to be integrated, where opportunities will be ample,” concluded Al-Obaidli.
In November, a report released by Statista projected that the real estate sector in Qatar is expected to grow at a compound annual growth rate of 1.96 percent from 2024 to 2029, reaching a market value of $492.10 billion.
Earlier this month, another report released by Qatar’s Ministry of Justice revealed that the country’s real estate sector recorded sale contracts worth $284.6 million in December.
The ministry data added that 283 real estate transactions were recorded during December, with the number of properties sold recording an increase of 12 percent compared to November.
Saudi Arabia’s National Housing Co. sees robust sales in 2025 amid lower interest rates
RIYADH: The CEO of National Housing Co. stated that lower interest rates in 2025 are expected to help the company exceed its 2024 achievements, with the reduced rates likely to boost sales.
During a session titled “Enhancing Quality of Life: The Role of Real Estate in Community Development” on the opening day of the Real Estate Future Forum in Riyadh, Mohammad Al-Buty highlighted that despite the challenges posed by higher interest rates in 2024, NHC successfully delivered high-quality products to meet market demand.
This achievement aligns with NHC’s ambition to become the leading real estate developer in the region, positioning itself at the forefront of the industry. It also supports the company’s commitment to delivering 300,000 housing units by 2025 and 600,000 by 2030, addressing the diverse needs of all societal segments.
“We’ve doubled our sales in 2024, and with the expected lower interest rates in 2025, we anticipate an even greater positive impact on the real estate market,” Al-Buty said. “Our goal now is to surpass what we achieved in 2024. We expect the reduction in interest rates to further boost sales."
“In 2023-2024, interest rates had an impact on mortgage demand for us,” he explained. “While 2024 saw the highest interest rates, it also recorded the highest sales. We were able to navigate these challenges by offering high-quality products that could effectively accommodate the higher rates.”
The CEO further emphasized that NHC does not focus on developing units for specific segments, but instead designs for entire communities, catering to all classes and segments.
“We develop based on market needs, using data to identify the desires and demands of our customers. We conduct thorough market studies,” Al-Buty explained.
He also highlighted: “Our pricing is highly competitive compared to neighboring countries for housing units.”
During a separate panel discussion titled “New Frontiers: Balance and Innovation in the Real Estate Landscape,” Qatar’s Municipality Minister Abdullah Al-Attiya highlighted that the World Cup was already integrated into the country’s Vision 2030, long before it was announced or hosted.
“The World Cup accelerated the execution of our plans, driving progress and resource allocation toward developing world-class infrastructure, ultimately positioning us as a global leader in infrastructure,” Al-Attiya explained.
Also participating in the panel, Maldives Minister of Construction, Housing, and Infrastructure Abdulla Muththalib addressed the significant challenges his country faces, noting that tackling environmental issues and providing essential services to the population come at a considerable cost.
“We need to build safer islands to address the environmental challenges we're facing, which will involve relocating people— an expensive process for us,” Muththalib said.
“Given that our GDP is under $10 billion per year, it requires a significant investment for a country like ours to protect the islands and build homes for those who need to relocate,” he added.
The minister went on to explain that the government has launched an ambitious plan to reclaim a nearby lagoon near the capital city, covering an area of 1,100 hectares.
“We plan to build a city for over 200,000 people, focusing on relocating residents from smaller islands. We must do this because, with climate change, we know we can’t sustain all these islands in the long term,” Muththalib said.
Ahmed Dangiwa, minister for housing and urban development of Nigeria, who was also part of the panel, discussed the National Social Housing Fund currently being developed in Nigeria. The fund aims to ensure that vulnerable populations, those with no income, and the underprivileged can access affordable housing.
“When the fund is complete, Nigerians will be able to access funding for housing, with some homes priced low enough for even low-income individuals to afford,” Dangiwa explained.
He further emphasized: “Building materials will be sourced locally, reducing the need to import them, making the houses more affordable for the population.”
