Category: Investing

3 Tips for Understanding Foreign Ownership Structures

As an investor, are you looking to take on a new venture across seas? Tehran-based international legal consultant Shahram Shirkhami knows a few important aspects to consider when undertaking a new foreign investment. His work with many international companies and investors culminates in extensive knowledge of infrastructural investments, primarily in the Middle East region. Here, he shares his insights in making the most of foreign investments.

  1. Know Country-Specific Rules

When undertaking a major infrastructure project, it is crucial to understand the ownership structures of the individual country in question. “Certain Middle Eastern countries, such as Bahrain and the United Arab Emirates, do not place any tax burden on foreign-based investors,” says Shahram Shirkhami. This means that overseas incorporation can be quite the ideal strategy! Just make sure you do your research to understand the tax structure of the country where you’re looking to invest.

  1. Understand the Risks

While some countries offer tax-free investing opportunities, not all Middle Eastern countries operate this way. Some countries, such as Oman, require that foreign ownership be transitioned to a domestic ownership base at some point within the project life cycle. At this point, the shares are offered to the general public and reincorporation takes place. “In this case, the tax benefits of incorporating overseas must be carefully weighed against the hurdles and expenses associated with reincorporation,” says Shahram Shirkhami. In other words, investors should be certain that the long-term benefits can hold up to the risks related to this potential roadblock.

3. International Tax Treaties

When engaging in long-term operational planning, consider the international tax treaty of the country in question. Tax treaties might allow for reduced rates, or even tax exemption, on certain items of received income. Tax treaties can make investing in partner countries much more lucrative.

In summary, it can be truly profitable to invest in foreign ventures, primarily in the Middle East. Certain countries harbor tax laws and treaties than can benefit international investors. However, one must be aware of the risks involved when dealing with countries that require foreign ownership to be reincorporated to the domestic. Even in these situations, the threats might be overshadowed by tax benefits.

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Medical Device Industry Booming in China

China has been an economic powerhouse for years now, and against the backdrop of the country’s current overall economic growth, its medical device industry is doing extremely well. By 2013, the country had become the world’s second-biggest medical device market, spending some RMB 200 billion, an astounding figure given that medical devices are often the second choice of Chinese physicians, who often prefer medication. The industry’s continued growth in China is practically assured. The country’s population is aging, and while the government has only expanded health care expenditures by 20 percent over the last decade, the rapid increase in living standards across the country has driven demand for high-tech medical services.

Despite this astounding growth, China still accounts for only 2 to 3 percent of the international medical device market. The country depends on imports for most of its high-end medical devices, with some 90 percent of MRI and ultrasound machines manufactured abroad. These figures are falling, in part because many medical device manufacturers have begun moving their operations to China. The country remains a very attractive export market for device manufacturers in the United States, Japan, and Germany. This dynamic is changing, due in part to the Chinese government’s recent pledge to spend some RMB 400 billion to digitize its health care systems between 2012 and 2020.

The government’s investment in its health care industry has resulted in exciting new devices that will soon reach the market. One medical device company, FinlTop, has focused its attention on the miniaturization of equipment that was previously only available in hospitals. Its latest product, a handheld electrocardiogram (ECG), eschews the usual electrodes in favor of two thumb sensors on a smartphone-shaped device, providing quick information and simple diagnosis for some $50 a unit. The company also produces a variety of other devices that bring the hospital into the home, such as blood pressure monitors, urine analyzers, and pulse oximeters. Due to the efforts of companies like FinlTop, as well as new government regulations that seek to encourage hospitals to use Chinese-produced devices, the country appears on track to further its growth in the medical devices industry.

3 Tips for Understanding Foreign Ownership Structures  

As an investor, are you looking to take on a new venture across seas? Tehran-based international legal consultant Shahram Shirkhami knows a few important aspects to consider when undertaking a new foreign investment. His work with many international companies and investors culminates in extensive knowledge of infrastructural investments, primarily in the Middle East region. Here, he shares his insights in making the most of foreign investments.

  1. Know Country-Specific Rules

When undertaking a major infrastructure project, it is crucial to understand the ownership structures of the individual country in question. “Certain Middle Eastern countries, such as Bahrain and the United Arab Emirates, do not place any tax burden on foreign-based investors,” says Shahram Shirkhami. This means that overseas incorporation can be quite the ideal strategy! Just make sure you do your research to understand the tax structure of the country where you’re looking to invest.

  1. Understand the Risks

While some countries offer tax-free investing opportunities, not all Middle Eastern countries operate this way. Some countries, such as Oman, require that foreign ownership be transitioned to a domestic ownership base at some point within the project life cycle. At this point, the shares are offered to the general public and reincorporation takes place. “In this case, the tax benefits of incorporating overseas must be carefully weighed against the hurdles and expenses associated with reincorporation,” says Shahram Shirkhami. In other words, investors should be certain that the long-term benefits can hold up to the risks related to this potential roadblock.

3. International Tax Treaties

When engaging in long-term operational planning, consider the international tax treaty of the country in question. Tax treaties might allow for reduced rates, or even tax exemption, on certain items of received income. Tax treaties can make investing in partner countries much more lucrative.

In summary, it can be truly profitable to invest in foreign ventures, primarily in the Middle East. Certain countries harbor tax laws and treaties than can benefit international investors. However, one must be aware of the risks involved when dealing with countries that require foreign ownership to be reincorporated to the domestic. Even in these situations, the threats might be overshadowed by tax benefits.

Drug Companies Increasingly Investing in Treatments for Rare Diseases

The global pharmaceutical industry has traditionally taken a mass-market approach to investing in the treatment of disease. Mass-market drugs have generally been the most profitable for pharmaceutical companies, particularly those that treat common issues like heart disease or high cholesterol. However, as patents expire, drug companies have ramped up their efforts in the treatment of rare diseases. A rare disease is defined as an ailment that affects less than 200,000 people.

Physicians have uncovered roughly 7,000 rare diseases, and estimates show that 1 in 10 Americans has a rare disease. Diagnosis is often a challenge, and treatment may be impossible. However, this is changing. Pharmaceutical companies have found that the treatment of rare diseases can be highly profitable and require far less in terms of research and development costs. Drugs targeting rare diseases can cost $100,000 or more per year of treatment, face little competition in the market, and can be used to burnish a company’s image via financial aid for patients who otherwise cannot afford high drug prices. One estimate of the growth of the rare drug market suggests that these treatments will account for more than $1 billion of the pharmaceutical industry’s annual sales by 2019.

In addition to reduced research costs, government incentives, and easy routes to approval, pharmaceutical companies have stalwart allies in their efforts: patient advocacy groups and the “venture philanthropy” paradigm. Charities such as the ALS Association, the Cystic Fibrosis Foundation, and the Cure Sanfilippo Foundation have all had success in raising funds for drug research that have led to major advances in medicine. The Cystic Fibrosis Foundation, in particular, has been highly successful, raising millions of dollars that have gone toward drugs like Kalydeco. Moreover, the foundation’s pharmaceutical partner, Vertex Pharmaceuticals, hopes to create treatments that will target some 90 percent of cystic fibrosis patients by 2020.

Arab Health 2015 Expo Highlights World’s Medical Tech

Earlier this year, Dubai, United Arab Emirates, hosted The Arab Health 2015 Exhibition & Congress, second-largest medical technology and service trade show in the world. The event took place at the Dubai International Convention & Exhibition Centre from January 26-29

Medical professionals and health industry representatives flocked from all over the world to participate in the four-day conference, which included forums and training workshops on a wide variety of medical specialties, from anesthesiology to urology. The congress also held meetings on broader issues such as public health, big data in medicine, and quality management.

The 2015 show attracted well over 4,000 exhibitors from 40 different countries, including, for the first time, visitors from Thailand, Indonesia, and Bahrain. China and Germany were especially well represented this year, with delegations from 579 and 461 companies, respectively. UAE itself sent representatives from more than 250 corporations.

The trade show allowed countless companies to showcase their most innovative medical technologies and services. While a number of ultra-high-profile industry names like GE Healthcare and Siemens attended, the expo also spotlighted many lesser-known names. One such company is GBUK Ltd, a British medical device manufacturer specializing in medical tubing and connectors. Prior to Arab Health 2015, the company had played a key role in establishing global design standards for such technologies. By attending the January conference, GBUK aimed to boost brand awareness among health care professionals around the world, and to cement partnerships with international distributors.

Celebrating its 40th anniversary this year, the Arab Health Exhibition & Congress looks set to gain in prominence in the future as both public- and private-sector health interests confront increasingly complex issues. Worldwide trends such as aging populations, the rise of non-communicable diseases, and shortages of healthcare workers necessitate meetings like Arab Health 2015 to bring together the innovative medical minds and businesses that can create and distribute state-of-the-art technologies to the people who need them.