Setting up a business in the Middle East
Wednesday 29 March 2017
John Martin St.Valery, Founder and CEO of Links Group, a Middle East-based commercial facilitation and advisory provider, talks about helping businesses relocate to the Middle East and why the area is becoming more attractive as a jurisdiction.
In September 2016 Links Group became part of Equiom Group following the formation of a strategic partnership. Links Group was founded in 2002 and since then we have been enabling foreign companies to operate in the United Arab Emirates (UAE) and State of Qatar by working with them to provide a structured board as their local partner. By tapping into business acumen and legal expertise, Links Group makes the otherwise difficult task of setting up a foreign company a smooth process. The end result is the client becoming a fully-owned corporate entity, with safeguarded assets in compliance with UAE Companies Law.
Without a doubt there are a variety of reasons why foreign companies would choose to expand into the Middle East or indeed decide to base themselves here. The logistics of setting up a business in the UAE or Qatar can be challenging owing to the number of regulations that are in place around foreign companies relocating to the region. One of the requirements is that the foreign company must appoint a local Emirati or Qatari partner who will hold 51% of the total shares in the company.
Doing business in the Middle East
At Links Group, we’ve pioneered the ‘corporate nominee model’, a legally robust structure ensuring the foreign party shareholder has 100% control of their business. We vest the foreign party with beneficial ownership of their company in the UAE and Qatar so that they maintain financial, operational and management control, thus mitigating risk and safeguarding the foreign company’s assets. Our organisation has passed extensive due diligence and compliance reviews conducted by a Securities and Exchange Commission (SEC)-regulated and international firm to act as their corporate nominee partner.
A large number of existing businesses and family groups in the UAE utilise the Links Group corporate nominee model in order to restructure their companies to enable consolidation of ownership.
While our core business is the corporate nominee model, we offer a number of additional services including visa processing for employees, families and domestic assistance. More recently we have become involved with establishing Special Purpose Companies (SPCs), structures that can be established in the Dubai International Financial Centre (DIFC), a free zone with its own financial regulator and English Common Law court system. SPCs have become more popular in recent years as a vehicle for cross-border transactions in the Middle East, Asia and parts of Africa. In the past year we have also seen a rise in the number of enquiries from companies that are restructuring their current UAE entity or acquiring an existing company.
Another complementary service essential to all foreign businesses establishing themselves here is legal translation. We have an in-house team of UAE Ministry of Justice Certified legal translators who translate client documents from English to Arabic and vice versa for recognition by the UAE courts, while also ensuring compliance with local regulations.
It is an interesting and prosperous time to be based in the Middle East. The UAE has developed in a short space of time from a regional trading hub to one of the largest economies in the Gulf. Furthermore, the 2016 Agility Emerging Markets Logistics Index ranked the UAE as having the best business conditions found in the world’s emerging markets, placing it well ahead of its regional peers, Bahrain, Kuwait and Saudi Arabia. This growth is likely to continue given its success in diversifying the economy, evidenced by the reported AED 269.5 billion direct non-oil trade totals during Q1 of 2016.
Our two home regions of the UAE and Qatar are experiencing a period of tremendous growth. Dubai has long been the focal point of the UAE, known for its iconic architecture with sights such as the Burj Khalifa and Palm Jumeirah, alongside winning the bid to host Expo 2020. Qatar is currently undergoing a construction boom in preparation for the 2022 FIFA World Cup and its economic focus remains on diversification into new revenue-generating areas. Abu Dhabi continues to thrive as the wealthiest of the seven Emirates, accounting for two-thirds of the UAE economy, and is home to the federal government and the country’s financial centre.
The region’s continued growth due to economic diversification, coupled with improved efficiency of the country’s legislative environment, is likely to attract more foreign investment over the next few years. A number of provisions have been made recently by the UAE Government to help adhere to international standards, one of which is the introduction of Federal Law No2 2015 on Commercial Companies.
The Qatar Ministry of Finance has also taken steps to improve efficiency and corporate governance standards by introducing a website for all future government tenders. Its new website, launched in 2016, allows businesses who partake in the procurement process to tender projects out to companies who can then make bids for the business online. This new website has provided further transparency and stability for businesses and for the Ministry of Finance, which can monitor the public procurement process and police any offences such as bid rigging and bribery.
In short, the Middle East is a great location in which to consider establishing your business. Economies are going from strength to strength as governments continue to invest in the region’s infrastructure and more foreign investors seek to take advantage of the pro-business environments in the UAE and Qatar. I look forward to working together with Equiom in this prosperous time to help support foreign direct investment into the Middle East. This partnership will help provide a more robust service offering and improve the overall performance of the business. The synergies between the two Groups lie in the expertise and professionalism of our people and the solid relationships we have fostered with our clients, intermediaries and government departments. Together, we are well placed to provide a professional company registration or restructuring service.
For further information about setting up a business in the Middle East, please contact John Martin St.Valery.