Arbitration & Transnational Litigation
Often the worst-case scenario, but sometimes unavoidable. In general, international arbitration is preferable, because arbitration awards can be enforced as opposed to foreign judgments, with some exceptions where jurisdictions are not members of the New York Convention of 1958 or other such instruments. However, cases can also be won before local courts and judgments enforced in most MENA court systems.
Company Set-Ups, both Onshore and Offshore (Free Zones)
Representative Offices are only a temporary solution in some countries. Most jurisdictions offer attractive incentives for setting up new companies. The inconvenient 51% local participation rule for foreign investors has not totally been abolished in the region.
Commercial Agencies & Distributorships
Sometimes the best alternative or a necessary complement to setting up an own entity since local agents and distributors have an edge on their home turf. But an equally contentious topic due to the great variety of regulations and customary practices throughout the region. Post-contractual privileges for agents and distributors may be difficult to get rid of even when a contract has been duly terminated.
Regulatory and Corporate Compliance, Internal Investigations, White Collar Crime
A lack of legal certainty in some countries of the region is often mistaken as a free ticket not to comply. In fact, the opposite is recommended: Compliance rules should be observed with special scrutiny in order to avoid getting exposed to administrative whim.
Customs
An obstacle to free trade which, unfortunately, is on the rise again. Highly technical regulations, subject to frequent changes. Some jurisdictions, however, provide a variety of tax and customs incentives, especially to attract manufacturing and export companies.
Employment
A field which requires not only a specialized knowledge of the often employee-friendly regulations, but also empathy towards the company’s workforce and diplomacy when dealing with unions and local authorities. Self-employment and temporary employment agencies are seldom a viable choice or simply non-existent.
Engineering, Construction and Turnkey Projects
Let’s face it: There is no water-proof contract to cover all eventualities and – especially – smart tactics of large contracting authorities. Things get more complicated if the government or the armed forces tender foreign works and services as part of large-scale infrastructure projects. All the more, legal and technical expertise combined with an in-depth knowledge of local customs should be tapped to avoid unpleasant surprises.
Energy & Utilities (O&M), Renewable Energy, E&P contracts
Same as Engineering, Construction and Turnkey Projects (see above). In times of climate change and energy transition these areas harbor great risks and opportunities alike. The Covid-19 pandemic may, moreover, turn transitions into revolutions. European players are welcome partners to share their technological know-how and regulatory best-practices. They also bear a multilateral responsibility to provide the required political momentum.
Foreign Direct Investments
Virtually all countries like this. But not all render the repatriation of capital and dividends equally smooth as the influx of hard currency. In the heat of seizing opportunities, it is, therefore, recommended to take a moment and make sure regulatory requirements are met. This is also a classic field where looking out for governmental incentives may be worthwhile.
Joint Ventures, Cross Border Transactions
Joint Ventures in the Middle East do have certain nuanced differences to those in other parts of the world. Local foreign ownership restrictions often play a big part in dictating the terms of JV agreements in this region. Those agreements often contain long and complicated exit provisions that deal with the situation where one party wants to exit and sell its interest to a third party.
International Tax Law (Double Taxation Treaties)
A world apart. Again, incentives to attract foreign investment may offer value added, withholding and corporate tax exemptions or reductions that could be decisive. Often densely regulated and adapted annually, it is predictable but also highly dynamic field. As in your home jurisdiction, it is advisable to be compliant in the MENA region as well to avoid unnecessary attention by the authorities and hefty fines.
International Trade
Mainly an issue of adequately distributing the risks involved. The INCOTERMS 2020 provide an excellent set of standards, the United Nations Convention on Contracts for the International Sale of Goods (CISG) must be excluded if the Parties do not want to apply it. Consensus on payment terms is difficult to reach, but essential. And the establishment of the applicable law and jurisdiction is too often forgotten.
License Agreements
While most MENA countries now have sufficient laws in place governing the protection and enforcement of IP rights, in practice enforcement of such laws can still be complex and it is best to plan agency and distribution relationships in the region carefully to minimise the potential for disputes arising in the future. This includes applying for all necessary trade mark and other relevant registrable IP rights in advance of entering into a market through such arrangements.
Mediation
In the MENA region there is a rich tradition of parties to amicably settle differences by seeking a compromise and finding a mechanism to settle matters with minimal adversarial feeling. Similarly, there is no “loss of face” if in the early stages of a dispute, parties come together to settle issues to maintain good relations and keep a project on schedule.
Mergers & Acquisitions
Often in M&A it’s the things you pay least attention to that trip you up. Understanding the motives, interests and culture of Arab counterparts is key to a successful M&A in the region.
Procurement
Procurement laws set out methods of procurement such as public tenders, bids, competition, limited tenders or direct agreements. Some requirements may seem unusual to international bidders. Tenders are normally open for foreign investors; successful tenderers may need to establish a local “branch” for the purpose of carrying out the contract.
Public International Law
Despite the current skepticism towards multilateral solutions, luckily, the acquis of international treaties that has been arduously negotiated throughout the past decades cannot be torn down with the swipe of a nationalist, isolationist or autocratic hand. Multilateralism enables international peace, trade, prosperity and environmental sustainability. Directly or indirectly, it frames and affects almost all aspects of international entrepreneurship.
Technology Transfer (Trademarks, Know-How, Technical Assistance)
The region seeks to own more technology and know-how from the industrialized countries to become more independent. Transfer of technology and know-how can be managed by smart contracts, but contracts alone cannot prevent from infringements of rights where local legislation is weak.