4 minute read

Faizal Latheef

Business Attorney and Partner, Kochhar & Co. Dubai, UAE

You are a lawyer and entrepreneur in one of the most fascinating cities in the world. Tell us a bit about your journey:

My professional journey will complete two decades next year. It’s been amazing, I must say!

I primarily focus on the different facets of business laws, including foreign investment, joint ventures, mergers and acquisitions and employment. I also focus on compliance, in particular on anti-corruption. I am proud to be one of the few Certified Auditors in the Middle East for the recently adopted ISO Standards on Anti-Bribery Management Systems (ISO 37001). The certification not only enables me to audit the anti-bribery management systems of businesses, but also offers me great insights while working on other aspects of compliance, for e.g. designing a compliance program. Apart from this, I assist foreign investors in the UAE to safeguard their investments, through common law compliant DIFC Wills.

 

I have been fortunate to experience the profession from different perspectives – as a commercial litigation lawyer, as a private practice lawyer with one of the largest international law firms, as an in-house counsel leading the operations of a Fortune Global 500 corporation in the Middle East & Africa, and currently as a partner with the only Indian law firm in the Middle East. The different paths I have explored and the diverse experience gained from these journeys are giving me courage to look further. And I believe, much more amazing journeys await me!

 

You have been in the UAE for over a decade. What is your opinion on the investment climate therein, in particular, from a start-up perspective:

 

The UAE is one of the most attractive investment destinations, not just in the Middle East, but also across the world. Over 200 nationalities have made the UAE their second home and have invested billions of dollars, on a variety of sectors, from startups to large corporations.

 

The visionary rulers of the country have ensured a stable political and economic climate and have fostered an environment that is conducive to business. They have taken a myriad of initiatives to attract and promote start-ups – setting up of free zones, establishment of common law compliant courts and offering substantial incentives, being some of them. The UAE has over 50 free zones, which attract thousands of startups. The free zones offer hundred percent foreign ownership, full repatriation of profits, tax free environment (subject to the implementation of VAT in January 2018) and an option to engage in a wide variety of activities. Many of them offer cost effective solutions too, including an option to start business through a ‘flexi-desk’ wherein investors can share offices.

 

Dubai has done wonderfully well in the past few years by establishing itself as the preferred choice for tech startups. A great example that comes to my mind is the huge success of ‘AstroLabs’, a tech hub associated with the Dubai Multi Commodities Centre Free Zone, which has over 50 partners now from all across the world.

 

We understand that the UAE is moving away from an oil centric economy and is keen in attracting foreign investment. Do you think its legal infrastructure, in particular, its corporate governance standards are sufficient enough to ensure a transparent and competitive businesses environment?

 

The UAE has seen tremendous economic growth in the recent past. The UAE wants to be the best in whatever it does, and this includes a world-class legal infrastructure. The government is taking various steps to ensure that the country has regulations that effectively support its economic growth, improve corporate governance standards and ensure transparency. The recent amendment of the Penal Code to cover private sector bribery, setting up of the state audit system, amendment of the Companies Law to introduce stricter obligations for the directors and officers etc. will certainly help in cleansing the system.

 

As someone who works extensively on anti-corruption, I am glad to see the government toughening its stand on anti-corruption too. I can sense an increased interest both from the public and private sectors in the UAE to create a corruption free business climate. I believe adoption of international benchmarks like the ISO 37001 will certainly help organizations in taking a giant leap forward. Such certifications will not only help businesses in illustrating their commitment towards anti-bribery but also may provide them an edge in securing business contracts (implementation of an anti-bribery program is now mandatory in many countries to participate in government tenders).

 

Many foreign investors in the UAE are concerned about the application of Sharia’ law on inheritance. What is the implication of Sharia’ on inheritance? Is there a way to bypass it?

 

It may be shocking for many foreign investors to know that all their assets will be frozen upon their death. Such assets will be distributed to their legal heirs only upon successful completion of certain formalities, which are time consuming and expensive. Further, the local courts will distribute the assets only as per Sharia – meaning that the list of legal heirs may include persons who they never intended to gift their assets or in a proportion they never imagined (for e.g. in certain cases, a wife will get only 1/8th of the assets).

 

Fortunately, non-Muslim investors are now able to bypass the application of Sharia’ through a Will registered at the DIFC (Dubai International Financial Centre, one of the leading financial free zones in the world). A DIFC Will is governed by common law principles, and Sharia does not apply. An investor can now register a DIFC Will and gift his assets in Dubai and Ras Al Khaima (another UAE emirate that has attracted substantial foreign investment) to anyone of his choice. The process is simple, confidential and cost effective.

 

My biggest concern here is the lack of awareness among investors. Most of the investors are unaware of the implications of Sharia, and end up in trouble. I hope more and more investors take advantage of this wonderful opportunity to protect their investments!

 

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