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Speak First: Ilse van Gasteren

I became a lawyer not at all on purpose. At university in the Netherlands, I studied law as a way to fulfill the general studies requirement before moving on to my intended focus of international organizations and politics. But I liked the law and decided to stay with it.

As a junior lawyer, the idea of approaching clients, even to make small talk, was intimidating. It helped me to start thinking of clients just as people. I started building relationships at a personal level first, which made it more comfortable to discuss business and generate work. I used to think that I had to impress the most senior person, but now I encourage my junior colleagues to make contacts among their peers; they will grow with you and become the important decision-makers in due time.

Gender equality issues are very important to me. One thing I would say to women in particular is to make sure your voice is heard. It’s stereotypical, but I struggled with this for years. During meetings, I would “wait my turn” and invariably regret it because someone else would speak up first and make my point. I learned strategies during leadership training, such as how to present myself effectively, and picked up some nice tips, such as agreeing with the partner in advance of a meeting that I would take a certain slot.

I love my work, but the absolute positive in my career is the combination of being a lawyer and being part of my firm. I joined in 2001, based partly on the recommendation of a friend who was already working here. I wasn’t out as an LGBT+ lawyer at the time, and I worried that it might become a problem if, as it happened, I decided to come out later on. Then I learned that there were a number of openly gay partners in our Amsterdam office. That’s honestly the reason I chose my firm.

I have gotten a lot of support from the senior partners in my group. As a counsel, I worked part-time for about five years. By then, my wife and I were sharing the responsibility of taking care of our young children. I had to be very strict about my arrangements with the firm, which wasn’t easy, but I was also very lucky to be working with a partner who really got it. He understood that Mondays were my day off and fully supported me in pushing assignments to Tuesdays, wherever possible.

Like so many women in our profession, I struggled with the decision to leave my comfort zone and take the next step to partnership. I also remember telling my daughter, who by then was six years old, that anything is possible if you want it – that you just need to grab opportunities because it’s not a problem if you fail. It was a real eye-opener to discover that I was not following my own advice!

So here’s my advice, nothing new but very important: dare to take risks.

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Commentary | Law Offices of Naoum Farah

Law Offices of Naoum Farah (“LONF”) was founded in 1975 and has grown dynamically. It is an independent and well-established law firm in Beirut serving a niche of clients by offering a wide range of customized legal services. LONF is reputed for its professionalism and excellence in the quality of its service topped with a timely follow-up, highest dedication, insight and expertise in addressing complex legal issues. It is considered as one of the leading multidisciplinary law firms in Lebanon.

LONF has developed worldwide distinguished relationships with key firms in all of the major jurisdictions. Its close collaboration with firms established in the Middle East enables it to provide widespread and bespoke legal services for local and international clients throughout the region.

LONF is ranked by the Legal 500 “editorial and ranking” among the first leading firms in dispute resolution and Commercial, Corporate and M&A fields.

LONF’s notable professional and long-standing relationships with prominent law firms in the Arab countries especially in Syria, Iraq, Jordan and the Gulf qualifies it significantly to represent and advise the most important international enterprises that will be shortly involved in the reconstruction venture of Syria and Iraq. Thanks to its geographical position, Lebanon has always been a gate to the hinterland. This makes of Beirut, its capital, an ideal and strategic hub through which the future reconstruction projects will start and transit. In this endeavor, Lebanon’s privileged location is solidly backed up by his advantageous taxation system and his solid and resilient banking system – and banking secrecy – which has survived all the political and security turmoil and surrounding blows.

MEMBERS

Naoum Farah, Founder and Managing Partner: He was the adviser of the late President Elect of Lebanon Mr. Bashir Gemayel and the former President Amine Gemayel; he was the former Secretary General of the Association for the Constitution and Liberty in Lebanon, and he is the President and co-founder of “Memoria” association (collects and archives documents referencing the Lebanese contemporary war). He is a member of the International Arbitration Institute (Paris)- IAI and the International Bar Association (IBA). He acted repeatedly as member of arbitral ad hoc tribunals in domestic arbitration and counseled on ad hoc arbitrations.

LONF groups (10) members, all of whom provide legal services in Arabic, English and French. They have extensive experience in dispute resolution, corporate and commercial and are well versed in drafting contracts and providing diversified legal opinions.

OVERVIEW: LEBANON

The business and economic environment in Lebanon became more challenging in 2019. Factors such as the armed conflict in Syria, continued turmoil in the region, mass influx of Syrian refugees to Lebanon, high fiscal deficit and high level of public debt have heavily affected the Lebanese economy, its infrastructure and social services. Unprecedented cross-sectarian demonstrations have gripped Lebanon since 17 October 2019, demanding a complete overhaul of a political system deemed incompetent and corrupt. The anti-government protests that have paralysed the country for more than three weeks and have led to the resignation of the cabinet, a key demand of the protesters requesting the formation of a new cabinet of technocrats, anticipated parliamentary elections and the recovery of looted state funds.

The government is more than ever facing many challenges on various levels, predominantly political, economic and social, which are urging Lebanon to implement and apply a tangible policy of dissociation from regional conflicts. Reforms have to be introduced as a pre-requisite for Lebanon to be able to benefit from the offerings of an ‘international conference in support of Lebanon Development and Reforms’ (CEDRE) hosted in Paris in 2018. Nearly 50 states and international organizations participated in CEDRE, as well as representatives from the private sector and civil society. The objective of CEDRE was to support the development and the strengthening of the Lebanese economy as part of a comprehensive plan for reform and infrastructure investments. In particular, targeting national debt is of primary concern: Lebanon is one of the world’s most indebted countries, with public debt estimated at 141% of GDP in 2018, according to credit ratings agency Moody’s.

In parallel, in October 2017, the government had requested for McKinsey to conduct a study of a future for Lebanon’s Economy under the title Lebanon Economic Vision.

In order to meet the commitments made at CEDRE and in line with the McKinsey plan to stimulate Lebanon’s stagnant economy, the House of Deputies ratified the 2019 state budget, which contains a string of austerity measures, including cuts to public spending and tax hikes designed to slash the deficit, a key demand of the international community and donors.

The Budget Law adopted a range of measures aiming to fight tax evasion by establishing a new exhaustive definition of tax evasion (article 57) which was introduced among the definitions of the Code of Tax Procedures (Law Nº 44/2008) and instituting an obligation upon Municipalities to conduct field surveys of businesses and professionals in order to compile tax information and transmit it to the Ministry of Finances.

Under international pressure and popular demands backed by academics and intellectuals, Lebanon is urged to enact radical and adequate reforms by adopting key economic, social financial, fiscal and administrative reforms to bolster its weak economy and to fight corruption. Such reforms are deemed a prerequisite to unlocking over $11bn in grants and soft loans pledged by international donors at CEDRE, including the World Bank, which pledged $4bn in soft loans to Lebanon, making it the biggest single donor at the conference.

The government is also urged to continue on working to implement the two major CEDRE commitments it has made: the fiscal and the energy sector reforms.

Lebanon has indeed promised to reduce its deficit-to-GDP ratio by at least 1 percentage point per year for five years, and to make structural reforms in the government and sectors including electricity. In this respect, the government committed to forming the National Electricity Regulatory Authority. The body mandated by Law 462/2002 was never formed.

On the other hand, the House of Deputies enacted three Laws to create an ecosystem where companies and startups can prosper, develop and attract foreign investments:

    1. Law Nº 81/2018 on electronic transactions and personal data, covering, among others, the legal requirements on electronic documents and evidence and the electronic commerce.

 

2. A legislative effort was also carried out to modernize the corporate law, which has led to the enactment of:

 

      • Law Nº 85/2018 which updated the Decree N. 46/83 on off shore companies: this law has ratified the establishment of a single shareholder off-shore company, being either an individual person or a legal entity. The single shareholder manages the company or appoints one or more directors.

 

      • Law Nº 126/2019, the main innovation that came into force on 1/7/2019, reformed and amended a large portion of the Lebanese code of commerce as follows:

 

        • Some formalities were reformed, including electronic means for the registration of a company. Such electronic formalities will be mandatory two years after the entry into force of law (1/7/2019).

 

        • Several amendments for joint stock companies (SAL) were enacted, including decreasing the minimum number of Lebanese members in the board of directors to one third instead of the majority. The law also allowed splitting the role of the chairperson and the general manager, while allowing the appointment of directors from outside the pool of shareholders.

 

        • The law adopted regulations pertaining to preferred shares and Global Depositary Receipts (GDR) in addition to detailed regulations concerning mergers and demergers.

 

      • In addition, the Law Nº 126/2019 requires the declaration to the commercial register of beneficial owners of the companies.
    • Furthermore, the Law Nº 126/2019 introduced the ability for an individual person to establish a single partner limited liability company.

5 November 2019

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Lorenzo Bruttomesso, Oman LNG LLC

I am a multi-discipline corporate, commercial, projects (including financing), compliance, and oil and gas lawyer and I strive to be a trusted partner, guardian and team member to the organisation, management team and board of directors for legal and compliance support. My role is head of legal at Oman LNG LLC, thus leading, managing and developing an effective legal team to cater for the needs of the company.

Our challenges are including, but not limited to:

  • the implementation of robust compliance procedures to ensure that we are dealing and transacting with third parties who do not pose risk to Oman LNG and our stakeholders from a sanctions, bribery and corruption perspective;
  • adherence to the latest business practices and ISO standards, including ISO 45001;
  • keeping abreast of and complying with international laws and regulatory frameworks applicable to our international transactions, including retaining international legal counsel who have branches or offices within the jurisdictions where our trading partners conduct business, including anti-competition regulations;
  • the legal department being an integral part of the decision-making process.

Leading, managing and developing a small but effective legal team necessitates interacting and collaborating with external counsel, especially in matters of complex international finance transactions, multi-package plant construction projects, international acquisitions and mergers, and complex litigation and international arbitrations. External counsel also serve as the first port of call in relation to any legal and regulatory changes impacting the industry or jurisdictions where the company’s business is conducted, such counsel being local and international, depending on the needs.

Having been a practising attorney, notary and conveyancer for two decades prior to moving in-house has been very beneficial in my in-house roles, and is reflected in my relationship with and how I interact with various external legal counsel.

Having worked in South Africa previously, the essential difference, from a legal practice perspective, is that South Africa is a common law jurisdiction whilst Oman is a civil law jurisdiction. In addition, there is no doctrine of judicial precedent in Oman. Agreements concluded between Omani and international entities are thus governed by, predominantly, English law with dispute resolution by arbitration, usually to be held in London, Paris or Singapore.

Situated outside the Persian Gulf, Muscat is a business- and family-oriented city, with associated amenities. The Sultanate is home to diverse environments and topography, namely mountains, valleys, deserts and coasts, and flora and fauna unique to the Arabian Peninsula. The diversity and uniqueness of these environments are important with respect to sustainable growth and development, and they attract visitors, tourists, working professionals and families alike. Oman is often referred to as the Switzerland of the Middle East due to the fostering of neighbourly and peaceful relations. n

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Maya Hardini Abboud, Banque Libano-Française

I started my career as a lawyer with diversified experience, before moving to Banque Libano-Française (BLF) in 2007 to start my in-house career as a legal consultant. BLF is a top-tier bank that is well reputed for its strict compliance with laws and regulations. It also owns a financial institution, Libano-Française Finance, which operates on the financial markets. In 2013, I was named head of legal compliance division and given a different set of responsibilities and tasks. My role now is to ensure Banque Libano-Française Group’s compliance with all applicable laws and regulations, whether Lebanese, foreign or international. This means, inter alia, making sure all applicable laws and regulations are duly observed, identifying any non-compliance and remediating it, as well as watching out for new laws and regulations, analysing them, interpreting them, disseminating them to all relevant parties and following up on their implementation.

The banking and financial sectors are very heavily regulated. The central bank of Lebanon requires banks and financial institutions to have a compliance department comprising of a legal compliance division – independent from the legal department.

We are continuously witnessing changes at a very fast pace in the legal and regulatory environment. Therefore, the biggest challenge is to keep up to date with all relevant laws and regulations, including any amendments that occur, not only at the local level but also internationally. Our bank has subsidiaries in other countries, so we have to stay abreast of any changes in the legal environment in these other countries as well, including case law, as well as the latest regulatory trends. We need to think ahead of such trends and prepare ourselves for the implementation of new regulations.

Another challenge is interpreting international law or foreign laws and regulations and finding ways to comply therewith where necessary, without breaching local laws.

To overcome those challenges, as a legal compliance division, it is essential to have the broadest possible spectrum of knowledge in laws – not only specifically in our field, but also in those that might have an impact on the general business environment. We also need to raise awareness within all levels of the institution as to the importance of compliance and as to non-compliance risks.

It is also very important, as part of the business practice of any legal compliance specialist, to maintain good communication with regulators, one that is based on trust and on dialogue.

We sometimes resort to external counsellors, especially on special issues or for questions related to foreign laws.

With the continuing evolution of regulatory environments in the last years, and the expected evolution in the coming years, the need for qualified legal compliance professionals who are able to properly interpret laws and regulations and to instruct institutions on how to implement them will continue to grow. n

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State of Qatar

The State of Qatar is an independent emirate located along the western coast of the Arabian Gulf. Among its vast shale and crude oil stockpiles, the country is known to have the third largest natural gas reserve in the world. Since becoming independent in 1971, Qatar has used its considerable natural resources to transform itself into an economically flourishing nation in the Gulf.

In a bid to become less vulnerable to the boom and bust cycles of oil and natural gas prices, Qatar has shifted its focus from the energy sector towards developing a robust financial industry and infrastructure portfolio.

In recent times, however, geopolitical pressures have forced the country to diversify its economy. In 2017, the United Arab Emirates, Bahrain, Saudi Arabia and Egypt cut diplomatic trade ties with Qatar, claiming – among other allegations – it supported terrorism. Although these claims have been vehemently denied by Qatar, a land, sea and air blockade remains in place today.

Despite the blockade, Qatar has maintained steady economic growth. According to Nasser Al Taweel, chief legal officer of Qatar Financial Centre Authority (QFCA), there are positives to be derived from the incident.

‘It was a major event that happened in the State of Qatar, but speaking about it three years after the blockade, it was a very good thing that it happened to us, simply because it was a wakeup call,’ explains Al Taweel.

‘It made us think a lot more about the future, thinking about cost efficiency in terms of whatever goods or services we need. It forced us to think about building our financial sector in a more robust manner and to think about depending less on others.’

Compared to neighbouring nations, Qatar has been slow to develop its now thriving economy. Making up for lost time, Qatar’s rich history has enabled it to adopt a uniquely global outlook as it continues to develop at a rapid pace.

‘The country has only become rich in the last 20 years. That has resulted in very quick changes, not just in the business environment, but to the economy and the look and feel of the city,’ says Christopher Berlew, chief legal officer of Qatari Diar.

As a result, in house counsel have been playing a crucial role behind the scenes to assist and facilitate such rapid change.

The build up

A major driver for change occurred in 2010, when Qatar won its bid to host the 2022 FIFA World Cup. The decision secured Qatar’s place in history as the first Middle Eastern country to host the event, while refocusing the nation’s infrastructure development agenda.

Leading legal operations for the property development branch of the State of Qatar’s sovereign wealth fund, Qatari Diar, is Christopher Berlew.

‘As part of the state sovereign wealth fund, we are quite a large player in the market here and we are playing an integral part to the preparations for the 2022 World Cup,’ he says.

‘We are building the Lusail City project, which is an enormous new city just north of Doha, which will become the new administrative capital of Qatar.’

The development will hold numerous sports arenas, five training fields and will be the location of the main stadium for the 2022 World Cup. Construction plans also include 22 hotels with fully equipped facilities to host teams, spectators and visitors.

‘We are ramping things up to get the key parts of the Lusail City project finished and operating by the time of the World Cup. The pace will continue to pick up until 2022 – the games are sort of at the end. We are targeting for everything we are building to be ready in the middle of summer, this time in three years.’

With the construction of several major stadiums and housing developments under way, Qatar has made a significant investment into upgrading its infrastructure networks. As the general counsel overseeing these developments, Berlew believes acting on behalf of a sovereign wealth fund gives rise to its own set of challenges and considerations.

‘What makes it uniquely interesting and challenging is: a sovereign wealth fund is not purely an economically rational actor. It doesn’t just chase the highest returns. It does not behave like a purely private investor. Although it has an interest in making good returns on the State’s money, it is interested in getting some perhaps non-monetary returns from some of its investments – whether that be diplomatic or charitable.’

On the right track

Experiencing similar challenges is Stephen Hibbert, general counsel of Qatar Rail, a state-owned and operated enterprise. Joining the team in 2012, Hibbert was tasked with the legal challenge of overseeing the construction of Qatar’s multibillion-dollar rail network.

‘In terms of the legal challenges, they were setting up and running a company and drafting all of the contracts from square one,’ he says.

“What makes it uniquely interesting and challenging is: a sovereign wealth fund is not purely an economically rational actor.”

‘This is not like Sydney Trains or National Rail, where you’ve got suites of contracts and you’ve got a library of technical specifications. Actually, nothing existed. You’re starting from a blank sheet of paper.’

The rail network is comprised of three major projects: the Doha Metro, the Lusail Tram, and the Long Distance Rail, which will connect to a wider rail network.

‘The legal challenges were primarily concerned with the drafting of big, complex contracts for an environment which had never seen this type of work before, and for contractors coming from overseas, many of whom had never worked in Qatar before.’

From a legal standpoint, the sheer management of such an endeavour would be a challenge for any in-house lawyer. Drawing from his past railway work in Australia and Asia, Hibbert explains that the key to success is providing support on every level.

‘We put people inside with government agencies, payment organisations, within the department of environment and we engage with them directly with the supply chain at various points, to make sure that our contractors were successful.’

Making financial cents

In addition to major infrastructure developments, Qatar has worked to strengthen its economy by building a robust and steady financial sector.

‘The financial sector in Qatar has been very stable. It’s one of the more stable financial sectors I think regionally, and I think it would be fair to say in the world. The financial sector is strong and is growing,’ explains Nasser Al Taweel, chief legal offer of Qatar Financial Centre Authority (QFCA).

The QFCA is a platform within which investors and business owners can set up a company in Qatar. It consists of an independent regulator, as well as an independent judiciary – which includes a civil and commercial court, in addition to a regulatory tribunal.

‘The QFCA has its absolute autonomy when it comes to regulations, when it comes to establishing businesses, when it comes to issuing licences,’ explains Al Taweel.

‘The role of chief legal officer at QFCA, in addition to the normal ins and outs that chief legal officers do – like ensuring contracts are drafted and reviewed, providing legal advice, managing legal matters and defending their organisations against any litigation – we have the role of the regulator.’

QFCA provides an independent legal and business framework that promotes the development of a capital market. Al Taweel believes an autonomous system that serves the interests of both regional and international investors will only strengthen Qatar’s economy.

‘For the system to work, what we need to do is have our own laws and regulations. Putting in these laws and regulations is the responsibility of the legal department. Therefore, we spend a lot of time basically drafting these regulations, making sure that they work, which is a completely different beast altogether compared to drafting a contract,’ says Al Taweel.

‘When I draft a contract, it’s a bilateral agreement, or sometimes multilateral. But when you have unidentified parties when you draft a law, it’s completely different, it’s a completely different set of skills.’

Although building a parallel and separate financial body is a challenge, it is an essential element needed in order to keep up with – and further promote, particularly internationally –Qatar’s economic growth story.

‘Since our financial sector is developing so rapidly, a lot of the development of that is a legal development. So, we are talking about amending laws, amending regulations and hence forth. I am involved in a number of committees, a number of engagements outside the boundaries of the QFCA, mainly to try and assist in basically upscaling the financial sector in the State of Qatar,’ says Al Taweel.

‘It’s not easy to make changes and improvements in any system, let alone the financial system, which is normally hard to amend and change because there are so many interests involved.’

A hotel takeover

In addition to establishing a secure financial sector, the State of Qatar has developed an enviable property portfolio – which is only set to expand in coming years. Overseeing part of this growth story is legal director of Katara Hospitality, Kushagra Priyadarshi.

‘Katara Hospitality is owned by the sovereign wealth fund of Qatar, which is the Qatar Investment Authority. They hold almost all of the luxury real estate in almost four continents. They also have a huge portfolio of luxury real estate in this country, which is Qatar,’ explains Priyadarshi.

Qatar’s property portfolio is currently valued at over USD$15bn and includes iconic hotels such as the Plaza in New York, the InterContinental Amstel Amsterdam, The Savoy in London, Raffles Hotel Singapore and The Peninsula Paris – just to name a few.

“Qatar is full of opportunities, endless opportunities. Every day you have something new. We are a very vibrant country, with a very young leadership.”

‘Most of the legal work happens from the head office where I am stationed. My work includes any transactional plus legal and compliance work that relates to all our properties and portfolios, which are basically under my oversight,’ says Priyadarshi.

‘My job here includes a whole spectrum of hospitality and luxury real estate work, which includes overseeing any mergers and acquisitions, any and all sorts of financing which relates either to deposit financing, corporate financing, acquisition financing, treasury matters and all of that. Then any litigation disputes.’

Katara Hospitality manages over 75 subsidiaries, which are spread all across the world. Managing these jurisdictions has been one of the biggest challenges, explains Priyadarshi.

‘One of the key challenges is the interaction between all of these different jurisdictions. Since all of it is being managed through the central location here from the head office [Doha], we need to have an overview of all jurisdictions and how they interact with each other to come up with a comprehensive legal strategy of compliances and conformity across these jurisdictions.’

Financing the future

Considerable oil and gas reserves, wise infrastructure investments, and a strong financial sector have secured Qatar as one of the wealthiest countries in the world on a per capita basis, and general counsel have played a vital role behind the scenes advising and assisting upon the nation’s continued growth.

‘I think a country that is undergoing a major development and a major improvement of their systems – for that country there will always be a role for in-house counsel,’ explains Al Taweel.

‘Qatar is full of opportunities, endless opportunities. Every day you have something new. We are a very vibrant country, with a very young leadership that is ambitious, that wants to change for the better and that is very well educated.’

The opportunities available to general counsel are also a reflection of Qatar’s outward-facing business agenda. Hosting the 2022 FIFA World Cup is not only a breakthrough for the Middle East, but strengthens Qatar’s global outlook.

‘I think the World Cup is going to change the map,’ says Al Taweel. ‘It’s going to change the way people are looking at business and the State of Qatar. I think a lot of people are now encouraged, compared to before Qatar was hosting the World Cup.’ n

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Commentary | Al Busaidy, Mansoor Jamal & Co

2019 has been a year of change for those conducting business in the Sultanate of Oman, as the government continues with its plans to strengthen and diversify the country’s economy in the face of regional instability and a world moving towards a post-oil future.

Some of the key changes to the business landscape that have occurred during 2019 include the introductions of a new Commercial Companies Law, RD18/2019 (CCL); a new Privatisation Law, RD 51/2019 (Privatisation); a new Public Private Partnerships Law, RD52/2019, (PPP); the issue by the Omani Capital Markets Authority of the Takeover and Acquisition Regulations for public joint stock companies listed on the Muscat Securities Market, Decision No. 2/2019, (Takeover Code); and changes to the Omani tax system, which have seen both the temporary suspension of the application of withholding tax and the introduction of new ‘sin taxes’ on the consumption of products such as tobacco and alcohol.

In our view, the most significant of the changes has been the introduction of the new Commercial Company Law, (CCL). While this new law is not a complete departure from the old law, it has made sweeping changes to the establishment and administration of commercial entities. Some of the more interesting changes introduced include:

    • The introduction of a new commercial entity known as the single member company. This new type of entity allows for the establishment of a limited liability company with a sole shareholder;

 

    • The removal of certain restrictions concerning the issue of preference shares, previously only possible at the time of a company’s incorporation;

 

    • The requirement that holding companies be established as Joint Stock Companies, resulting in more detailed organisational and administrative structures; and

 

    • The introduction of specific provisions relating to Sukuks, recognising the growing importance of Sharia compliant finance as a source of funding for companies in Oman.

The CCL came into force on the 17 April 2019 and there is a transition period of one year for companies to make the necessary changes. As a result AMJ has been busy advising clients seeking to make their organisations compliant ahead of the 17 April 2020 deadline.

While many of the changes introduced by the CCL are seen as a welcome attempt by the government to streamline corporate structures and improve the appetite for foreign investment, specific provisions regarding the implementation of some of the changes remains uncertain. That said, the CCL provides that the Ministry of Commerce and Industry are to publish Executive Regulations by the 17 of April 2020 and the expectation is that these regulations will clarify the current uncertainties.

To further the government’s objective of diversifying the Oman economy, the new Privatisation and PPP Laws seek to improve the process for introducing private investment into public services. While the Privatisation Law refreshes the methods by which the government of Oman can sell certain of public assets to private operators, the PPP Law introduces a new framework whereby the government can invite private sector operators to provide government services – a new innovation in the Oman market and one that is likely to prove tempting to international investors with expertise in re-invigorating the provision of government services. As with the CCL, certain aspects providing for the implementation of the Privatisation and PPP Laws remain unclear, with the detail to be provided in the form of Executive Regulations over the course of next year.

With respect to capital markets, the Omani Capital Market Authority, CMA) has recently issued a Takeover Code. Under the Code, a person who intends to acquire 25% or more of the voting rights of a company listed on the Muscat Securities Market is obliged to make an offer to all the remaining shareholders of the target company. The requirement of a mandatory offer is also triggered when a person (alone or in concert) holding 25% of the voting shares or voting rights increases its stake by acquiring additional shares carrying more than 2% of the voting shares of the target company in any 6 month period from the date of first purchase. The provisions of the Code will therefore be a material consideration for any potential investor looking to take a controlling stake in a publicly listed company and brings the Oman capital market more in line with international norms on the conduct of takeovers, something that will be welcomed by international investors and shareholders alike.

Royal Decree No. 9/2017 introduced key changes to the Oman Income Tax Law (Royal Decree 18/2009) (“Tax Law”) including the introduction of new categories of payment attracting withholding taxes such as dividends, interest and the provision of services which previously were not taxable . The accompanying Executive Regulations issued by Ministerial Decision No. 14/2019 have clarified that withholding tax only applies to joint stock company dividends and investment funds. Consequently, no withholding tax is payable on profit distributions by LLCs. Furthermore, the CMA announced on the 15th of May 2019 that, pursuant to a Royal directive, withholding tax applicable to dividends distributed by the Omani joint stock companies to its foreign shareholders and interest on foreign borrowings stands suspended for a period of three years from 6th of May 2019. The Secretariat General for Taxation subsequently issued a circular on the 11th of June 2019 confirming the suspension. Also this year, Royal Decree No. 23/2019 introduced an excise tax, known as the ‘sin tax’, which taxes the consumption, on health grounds, of alcohol, tobacco and energy drinks. While the impact of these changes to the Omani tax system in 2019 are still to be fully felt, they are adding to the overheads for the tourism and hospitality sectors.

Looking towards 2020, the big change will be the introduction of the new Foreign Capital Investment Law, RD 50/2019 (FCIL). While this law was promulgated on the 1 July 2019, it will not come into effect until 1 January 2020. Importantly, the FCIL appears to remove the requirement for a minimum 30% Omani ownership in a commercial company. As such it appears that full foreign ownership may be permitted in respect of certain economic activities once those activities have been determined by the Omani Ministry of Commerce and Industry.

Lastly, over the past few years, we have noticed a more assertive CMA in its role as regulator and custodian of the Oman capital markets, as it looks to expand these markets. It will be interesting to see how it seeks to develop these over the next 12 months in the context of a number of planned, high-profile Initial Public Offers.

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Richard McLaughlin, Oman Oil Company Exploration and Production

Oman, like many countries in this region, is highly dependent on oil revenues. Oman produces about a million barrels of oil per day, and about 80% of it is exported, mainly to China. The rest is exported into the local market to make petrol and aviation fuel.

Oman Oil Company Exploration and Production is only about 10 years old. It acts as both operator and non-operator in Oman and overseas. When the government issues exploration and production blocks here in Oman, the government often reserves for itself the ability to ‘back in’ to the development later. So they allow the foreign entity, usually, to invest and look for oil or gas and then if there is a successful development, the government can ‘back in’ at that point. We have been the de-facto recipient of those back- in rights, so we work very closely with the Ministry of Oil and Gas, either as a partner to incoming investors or as a party to these agreements.

My role is broad and covers the spectrum of general counsel, work and this includes significant commercial activities and transactions. A key challenge with large transactions is timing and resourcing them properly, because at times we have had numerous transactions happening simultaneously – so that can be a stretch, resource wise.

In Oman and the Middle East more widely, government entities are very influential. So if you look at Saudi Arabia, the United Arab Emirates, Kuwait and Oman as examples, government-owned entities are highly visible. That is different from other places I have worked and brings with it a different dynamic.

There is a lot of interaction with the government and numerous other agencies as a result. Different government agencies have different drivers which have to be taken into account. Although you are a commercial entity, there are a lot of factors to consider. I think something you have to learn pretty quickly when you’re working in a government-dominated sector is that it is not always solely about commercial interests – and that’s quite different for many counsel.

Most of what we do is done in-house because we are specialist oil and gas lawyers. But we do seek external help from time to time. The usual things we seek external assistance on are either large transactions where we are looking for additional resource or large disputes.

Most oil and gas transactions, financings and partner agreements are governed by English law, but we often need a combination of English law and local law advice. The local law elements tend to be less significant in the overall context, but nevertheless they need to be checked. n

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United Arab Emirates

Internationally, the Middle East is often seen – at least in a commercial sense – to revolve around the United Arab Emirates. In many ways, it does. For a combination of reasons – mostly financial – the country’s business environment has matured at a speed far beyond its neighbours. That the UAE largely shares a legal history with the rest of the Middle East makes the country a fascinating case study: why has the UAE managed to position itself as a hub for international commerce, when many of its neighbours have not?

Big brother UAE

‘As in-house counsel for this region, you’re operating in an environment which Transparency International will tell you is some of the most challenging,’ describes Bruce McAlister, general counsel for GE’s Global Growth Organization. ‘The UAE, obviously not. The UAE is far more mature and the ease of doing business, and business conduct, is very good.’

It’s this maturity that has allowed the UAE to become the region’s business paragon, with the commercial certainty that follows. For a company looking to invest capital in the region, a jurisdiction in which avenues of dispute resolution are clear and plentiful, and in which the legal system is accessible and, above all, fair – is critical.

‘For the region, it is very much on a jurisdictional basis. In the UAE, you have a good judiciary here. You’ve got a good, competent judiciary, and you’ve got good arbitration and mediation forums. So you have the ability to predict the outcome,’ says McAlister.

‘The UAE obviously have spent a lot of time training up their judiciary and spending a lot of money and resources on it.’

This maturity isn’t by accident, and it extends to nearly all facets of business life in the UAE. Seeing the opportunity and knowing what a barrier uncertainty can be, the UAE has made a concerted effort to develop its business and legal infrastructure to encourage businesses, both local and international, to set up in the country – and stay there. While vestiges of older times still exist in this respect, the UAE has moved fast – and continues to do so – to achieve its goals.

‘The UAE is highly regulated,’ continues McAlister. ‘It has looked to best practices around the world in terms of regulation. So for example, for nuclear, the regulations of creating a nuclear authority and nuclear regulatory bodies were all taken from best practice and from regulations that have been permeating throughout the world.’

For instance, the bones of UAE’s labour laws have been in place since 1980 – a time vastly different from the current era of towering skyscrapers and hundred-million dollar super yachts. It is no surprise then that these have been a priority for the governments in UAE, and this year. The last 24 months have seen a slew of proposed and enacted regulations, as well as decrees to flesh out the underlying law – bringing in concepts such as multiculturalism and anti-discrimination. This is part of a wider push by the government to sell the country as a tolerant one – in fact, 2019 has been designated by the government as the ‘Year of Tolerance’. This interplay between the definition of a goal and the willingness by the arms of government to enact meaningful change in order to achieve it has been characteristic of the UAE, and goes a long way towards explaining the country’s meteoric rise on the world business stage.

Paved without gold

Today, the UAE’s reputation precedes it. However, the legal infrastructure supporting the country and its towering skylines began life further afield in Egypt. This, say general counsel, has informed the legal development of the Emirates and Dubai in particular – and still colours business today, as the country sources best practice from all over the world to build a haven most compatible with international investment.

‘The Gulf Cooperation Council (GCC) legal systems are mostly based on Egyptian systems,’ explains Fady Zedan, senior counsel at Kuehne + Nagel. ‘When the Gulf was coming up, they hired Egyptian law professors to put the constitutions, the legal systems in place. Some countries actually developed to the point that they ran faster than Egypt – for instance, Dubai – and some stayed in the same position they were in 40 years ago.’

“The last 24 months have seen a slew of proposed and enacted regulations, as well as decrees to flesh out the underlying law.”

Because of this quirk of history, the UAE’s constitution prescribes a civil law jurisdiction, and distinguishes between two sources of law – those at the local level (passed by the individual emirates that make up the UAE) and those at the federal one (passed by the federal government and applicable across the Emirates). As in other civil law jurisdictions, the legal principles on which the country is governed are codified as opposed to sourced eclectically as in common law. When the UAE constitution was enacted in 1971, it was inheriting the civil code of Egypt, which itself was largely built even earlier, at the start of the 20th century.

‘If you look at this civil law for example, they have a civil procedural law, which talks about procedure. And you have the civil law itself, which talks about the rules and the substance of the law. Now, for the whole of the GCC – let’s say Qatar, Saudi, Kuwait, the UAE – take the Egyptian law, and you’ll find the exact same article but with a different number,’ Zedan explains.

‘If you compare the dates, you’ll find that the Egyptian law was put in when the British were in Egypt in the 20s and 30s. Here, it’s the 70s, but it’s pretty much the same thing. Whenever I am faced with a legal issue in the Middle East, I know that whatever I know in one country will be reflected in the law of another country, but under a different article.’

This combination of the rigidity of civil law and the inheritance of Egypt’s ageing legislation is not conducive to a bustling destination for international business. But, despite similar beginnings, experiences of these legal systems differ greatly between each country in the Gulf. This, Zedan says, is because of innovation and, in particular, the UAE’s willingness to modernise.

‘Take Kuwait, for example. If you go to Kuwait, you will find that the legal system and the government regulatory environment is similar to Egypt – it’s like a photocopy. Here in the UAE, it started like this, but then they developed. I think innovation plays a big part in this – the e-courts, the e-filing systems – these help a lot in terms of efficiency,’ he says.

‘In Egypt, you can have a labour case go up to seven years, and then you get a final verdict. Here in the UAE, you can get it in a year, maximum.’

The efficiency comes at a cost – quite literally. Whereas filing a dispute with courts in Egypt will cost very little, in the UAE, things are more expensive. This may deter would-be litigants to a degree, but the efficiencies that courts in the UAE have been able to achieve have changed the perception of dispute resolution when compared to Egypt, where the threat of a multi-year court battle is real, and enough to make parties consider other, more amicable resolutions.

‘Dubai made a more efficient system – how the cases get assigned to the judges, how the judges manage their time. Yes, some people still complain about how slow the justice system is in Dubai and in the UAE. But, in the UAE especially, I think compared to the rest of the region, it’s very developed.’

Position of general counsel

What results from all of the legal history, rapidly expanding infrastructure and ferocious desire by government to be seen as a suitable business destination, is an environment in which in-house counsel are critical – and one in which the top stakeholders recognise their value.

‘I would say there has been some maturity and understanding of legal’s role,’ explains Zedan. ‘You see this in companies which were outsourcing everything to the law firms – now they are hiring general counsel.’

Like the rest of the Gulf, the UAE suffered during the global financial crisis. As a newly developed nation, the tumult of that time forced business to confront issues it had largely managed to avoid during its prosperity.

‘There were lots of disputes about collections – companies not paying each other. And at this point, I think they realised the problem – you know, are contracts in place? What safeguards do we have? It wasn’t like the good old days where the money was flowing all around the GCC and everyone was happy, and everyone was being paid on time,’ explains McAlister.

‘I think that from [the UK], there was clearly a push by the in-house legal team to get recognition, to get onto the board. Here, it’s a pull. The board, having to deal with the types of issues [that you deal with in this region], have pulled the general counsel onto the board, pulled to place senior counsel into leadership positions and realised very quickly that they needed competent lawyers to be able to handle it.’

Local hospitality

The history of the UAE – and the same is true of much of the wider region – is such that, regardless of the dispute resolution infrastructure in place, business tends to lean away from disputes. While this was easier pre-financial crisis, a culture of relationship preservation has remained.

“The DIFC is an answer to those wanting to do business in the region, but are unable or unwilling to submit to the civil system, with its rigid and often outdated laws.”

‘When I look back in terms of our major disputes in the region, it’s always none – I mean, there’s very few. I don’t know if that’s just a reflection of the folks that we deal with or the nature of the specific industry we’re in,’ says Dzul Bakar, vice president and general counsel at Shelf Drilling.

‘In our business, I think there is this view, from a service contractor point of view, that we are interested in long-term work with the client. Invariably, there will be some disputes, but we try and resolve it as amicably as possible. No doubt, sometimes, from a contractual point of view, you feel strongly that you are entitled to something, but in the interests of future work, you compromise.’

International hospitality

The UAE and, in particular, Dubai, have never seen the need to eschew their local jurisdiction entirely in order to attract foreign investment. It has shown there that the two are not mutually exclusive. An often negotiated point in any cross- border deal is choice of jurisdiction and law, and Dubai has recognised this and created a way to make life easier for those doing business within its borders. The city of Dubai built the Dubai International Financial Centre in 2004 as a special economic zone. Operating as an independent jurisdiction, the DIFC has its own civil and commercial laws, which are codified in English and default to English law in the case of any uncertainty.

‘This is where Dubai played it smart, because they made the DIFC. If you are coming from the UK, or coming from another common law jurisdiction and you’re establishing a company, you might be hesitant to go through the local legal system; you still have the choice to use common law. You don’t have to be based in the DIFC to submit to the law of England and Wales,’ explains Zedan.

The DIFC is an answer to those wanting to do business in the region, but who are unable or unwilling to submit to the civil system, with its rigid and often outdated (having been inherited from the Egyptian system) laws. It is being used to great effect too, growing in popularity each year. In 2018, the DIFC reported a record-high 437 new company registrations, a 15% increase in active registered companies to 2,137, a 15% increase in financial-related firms registering with the DIFC to 625 (including over 80 registered fintech companies), and an increase in net profit of 11%, raising the profit to USD$88m. These numbers put the DIFC squarely on track to meet its ambitious goal to triple in size by 2024. The global appeal of a zone such as the DIFC is also apparent in the diversity of the businesses it houses: the Centre reported that at the end of 2018, the DIFC’s resident companies are 36% Middle Eastern, 33% European, 11% from Asia and 10% American, with the remaining 10% from other countries.

GC abroad

Despite the lengths to which the Emirates has gone to ensure a comfortable business environment, it’s still an adjustment for the flock of legal personnel that find themselves serving in the UAE. The differences are still there. But, after all, it isn’t homogeneity with the rest of the world that draws expat general counsel to Dubai and the UAE. It is the challenge of difference.

‘One of the reasons why I wanted to move was that I was very much a Swiss product, and I knew that at some point people would potentially challenge me in my ability to adapt,’ explains Joanne Fischlin, head of corporate, external and legal affairs for Microsoft’s Gulf operations. After spending the first years of her in-house career in various Swiss companies, she made the move to Dubai as the senior legal counsel for Firmenich in 2013.

‘You know, as a female, if you go to the Middle East and you’re successful, it pretty much clears that question out of any line of questions in your future career.’

‘I think the big difference when I moved to Dubai is more the cultural sensitivity; understanding the codes and things like not taking offense if you have to get out of the room for the males to make the compromise because they just won’t do it in front of a female. You have to understand that sometimes you’ll be confronted with situations where you’re just going to have to accept that it’s not the way it’s done In your country, and it’s nothing against you, it’s just culturally different.’ n

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Dr Saleh Al-Oufi, TAQNIA

The Saudi Technology Development and Investment Company (TAQNIA) was established in June 2011 by Royal Decree to localise technology in Saudi Arabia and commercialise outputs of R&D centers. TAQNIA invests in technology that contributes towards Saudi Arabia’s economic diversification. TAQNIA is owned by the Public Investment Fund (PIF), which drives strategic and sustainable diversification enabling growth in different industries in Saudi Arabia. TAQNIA exerts all of its efforts to be fully aligned with Saudi Vision 2030.

My role as a general counsel is guiding and monitoring the legal affairs activities in TAQNIA Holding and its subsidiaries. As a general counsel for more than 17 years, our legal department work relates to guiding the company to its objectives. To be more illustrative, in recent years the role of our department has broadened far beyond narrowly defined legal matters to encompass such things as risk, compliance, finance, regulation, human resources, and business issues. Our department is becoming increasingly involved in matters that are not strictly legal, such as risk management and business strategy, especially in the area of risk management.

Saudi Arabia has initiated the 5 years development plan since 1975, so that the recent 2030 vision plan of modernisation is built on the progress of its antecedents as each generation benefits from the progress of past. Nevertheless, a new generation of the leaders brings with them new challenges and impetus for development, such as the Crown Prince unveiling of Vision 2030, an ambitious programme of development for the Kingdom. The Crown Prince noted that “Our Vision is a strong, thriving, and stable Saudi Arabia that provides opportunity for all”. Accordingly, I see my role and the role of every legal professionals is increasing as the Vision 2030 outlines economic development among several specific goals and initiative for the Kingdom to achieve. In the economic sector, regulations have been streamlined to encourage foreign investment, and that will lead to the emergence of key opportunities for partnership in a number of industries such as manufacturing, and technology transfer. These efforts will provide opportunity will provide all Saudi legal professional better opportunities to participate in the execution of the 2030 Vision of the Kingdom of Saudi Arabia.

For my role – or for that of any legal professional – it will make for a better environment to work with the changes that have been made and improvement to laws and regulations in the Kingdom. TAQNIA will have more opportunities for business as the 2030 Vision mandates localisation of any government-made contract which may reach 45% of the contract value and thats excellent for those companies that are well established in technology development like TAQNIA.

In general, Saudi Arabia will become a more open society, with more modern education and healthcare, which are the fundamentals of any society. In addition, employment opportunities for both male and female will expand, as society will become more open and accepting of a working environment in which females and males work side by side. n

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Commentary | Al Suwaidi & Company

Key trends and recent developments in the UAE business and legal landscape suggest continued growth in commercial opportunities for investors and corporates looking to enter and expand in the UAE.

In 2018, the UAE Cabinet passed a landmark decision allowing 100% foreign ownership of companies onshore. This marks a major change from the current regime, where foreigners must seek a local partner to set up and serve the onshore market and where the only alternative for 100% foreign ownership is with one of the UAE’s many free zones. With the recently passed Foreign Direct Investment (FDI) Law of 2018, 100% foreign ownership shall be allowed across 13 sectors and 122 economic activities within them.

We expect international investors to start preparations to identify relevant opportunities across the 13 sectors opened to 100% foreign ownership.

Along with the announcement of 100% foreign ownership in selected sectors, the UAE has also launched long-term residence visa programmes that aim to attract international talent into the UAE, such as entrepreneurs, investors, scientists and special talents. In addition to the above-mentioned 10-year UAE residence visa, investors who invest in a property in UAE can apply for a 5-year UAE residency visa, as can entrepreneurs who have secured a project within the UAE approved by an accredited business incubator.

As the UAE positions itself at the forefront of innovation and adoption of leading-edge technologies globally, it is worth highlighting specific initiatives and regulatory developments made by the UAE government to promote the transition of the UAE economy into one that is more digitally enabled and ready to adapt to the future.

The Dubai Land Department (DLD) is one UAE government agency that is leading in the push for innovation and rollout of seamless and efficient customer experiences through digital solutions. The DLD has rolled out blockchain technology to automate and optimise real estate business processes end-to-end. The DLD is employing blockchain across three initiatives: Ownership Verification, Property Sale by the Developer and Smart Leasing. Through the blockchain platform, DLD aims to improve the provision of services, effectiveness of collaboration among all parties involved in the real estate market and an enhanced security for real estate properties conducted digitally.

The DLD has also launched several digital applications to facilitate real estate transactions and processes across multiple stakeholders.

The UAE’s push on the international front as well is driving further economic growth as the UAE seeks to play a vital role in China’s Belt and Road Initiative. Recent visits by President Xi Jinping to the UAE last year and His Highness Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces to China resulted in a series of agreements that will surely propel the UAE further ahead in its economic agenda.

The UAE’s efforts to facilitate business and trade, to make starting and operating from the country easier on investors, are gaining recognition globally. The World Bank, in its Doing Business 2019 report, has elevated the UAE by 10 notches to 11th best in the world for doing business and #1 in the Middle East and North Africa (MENA) region. This ranking puts the UAE as the leader in the Arab world and the broader MENA region for the sixth consecutive year. The UAE’s focus on nurturing entrepreneurs and turning the UAE into the region’s start-up hub, has significantly pushed its ranking into the top 20 of the global rankings.

Construction and preparations are progressing on schedule for the organisers and exhibitors for Expo 2020 in Dubai that starts in October of next year. The Expo is expected to bring in tourists, businesses and investors to the UAE, which will have a cross-sectoral impact for the UAE economy. With the theme of “Connecting Minds, Creating the Future”, the Expo is expected to generate increased interest into the UAE and further promote its position as the place to do business in to address opportunities in the GCC, MENA and beyond.

No UAE outlook will be complete without touching upon the real estate and construction sector. While real estate prices and rents have decreased significantly from their peaks, it is worth mentioning that the construction sector in UAE showed growth in 2019 and is projected to continue in 2020. The growth rate of Dubai’s construction continued to trend upward in 2019 at a rate of 54%, with Expo 2020 driving the growth. Construction projects value hit AED 3 trillion in June 2019, with further growth and activity to continue beyond 2030.

Continued steady growth by the UAE economy, coupled with forward-looking legal and regulatory changes made by the UAE government ensure that the UAE remains the MENA region’s leader for doing business. The opportunities on offer, either through the acceleration of technology and digital initiatives or landmark international events, all add up and position the UAE as an attractive destination for investors and businesses. Interested investors, businessmen and highly skilled individuals have several options to establish themselves in the UAE and benefit from the opportunities on offer, aided by first-class infrastructure and an environment most conducive for doing business in the region, with world-class legal support available when required. n