Announcing a new department to promote business between the Gulf states and Israel
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Following approximately 18 months of discussions between our firm and a renowned expert from the United Arab Emirates, we opened our new department for promoting business between the Gulf states and Israel in early September 2020.
Opening the markets of the United Arab Emirates, Bahrain and Israel to mutual investments and transactions presents new and unfamiliar challenges for Israeli companies, businesspeople, lawyers and accountants. These countries have different cultures and entirely different legal systems, alongside special laws for foreign investors. The new friendship between the countries may therefore be accompanied by conflicts arising from a lack of experience in doing business between their residents.
The United Arab Emirates and Bahrain have several leading business groups that control numerous sectors and possess vast international experience. Their financial strength may intimidate Israeli businesspeople. Some companies are controlled by the royal families; the remainder belong to the private sector. These companies have substantial financial capabilities and considerable interest in getting to know Israeli companies with advanced technologies in agriculture, medicine, high-tech and cybersecurity.
The advantages of free-trade zones
The United Arab Emirates has several free-trade zones near seaports, airports and elsewhere that may appeal to Israeli businesspeople as gateways to business in other countries with which Israel has no diplomatic relations. Israeli businesspeople may naturally be interested in the economic advantages of these zones, each specialising in a particular business sector: foreign investors’ right to own ventures outright, exemptions from various taxes, including corporate and personal taxes, unrestricted withdrawal of capital and profits, and opportunities to recruit employees and obtain local assistance, including housing assistance.
Alongside its free-trade zones, the United Arab Emirates offers investors other interesting opportunities. Take, for example, the Dubai International Financial Centre (“DIFC”), established as part of Dubai’s strategic vision to diversify its economic resources and attract capital and investment. This free financial zone is defined as an “independent jurisdiction” within the United Arab Emirates and is authorised to create its own legal and regulatory framework for all civil and commercial matters. Three principal bodies were established with the financial centre: the DIFC Authority, the Dubai Financial Services Authority (“DFSA”), and the DIFC judicial system.
Choosing Germany as a legal platform
Will Israeli businesses agree in advance to submit to this judicial system, or will they prefer to base contracts with UAE companies on the laws of a neutral country whose legal system is familiar to us?
In the new reality of friendly relations between the United Arab Emirates and Israel, companies and businesspeople will likely grapple with how to do business with the Gulf states, how to deal with different legal systems, which choice-of-law rules apply and how to resolve disputes. The new professional desk is shared by a leading German law firm and our firm, assisted by highly experienced economic and industrial advisers in Abu Dhabi and Israel.
With more than 400 lawyers, tax advisers and notaries providing legal services in eight German offices and an office in Zurich, [1] Heuking Kühn Lüer Wojtek is one of Germany’s largest commercial law firms and among its ten leading firms by annual revenue. It advises a broad range of clients, from German and foreign medium-sized companies to major international corporations, including listed companies, on all aspects of commercial law. The firm also practises public law, advising decision-makers at all levels of government. Commercial and capital-markets clients also benefit from specialists in other departments, including finance, regulation and taxation. Internationally, the firm works closely with leading partners around the world, each an expert in the relevant jurisdiction, enabling it to provide the best and most comprehensive legal advice for international transactions.
For approximately five years, E. Shiloh & Co. has worked with the professional team of Heuking Kühn Lüer Wojtek at its Chemnitz office. We were recently selected as local partners in the firm’s work directing and providing legal advice on international transactions between commercial parties in the United Arab Emirates (UAE) and Israel.
Germany is known as a neutral country with an efficient legal system. Its reputation and the principles of German law, some of which resemble Israeli law, make German law a natural choice as the governing law of contracts, and Germany a natural choice as a jurisdiction and/or venue for international arbitration and mediation.
An international multidisciplinary team at our clients’ service
To provide professional assistance on economic issues, introductions to parties in the Gulf states, developing business relationships, arranging meetings with reliable parties and advancing significant business initiatives between parties in Israel, Bahrain and the United Arab Emirates, the new legal desk works with experts native to Abu Dhabi and the economic consultancy K.O. Dekel & Co.[2] , which operates with a selected team of advisers with extensive experience in international transactions. The team includes investment managers in international companies and experts in the United Arab Emirates and Israel, including:
Mr. Daniel Gould (London and Abu Dhabi)—an investment-banking and business-development specialist who has worked and operated in Abu Dhabi for approximately eight years.
Mr. Yossi Dekel — an economist, business valuer and actuary. He has held senior management positions in the economy, including CEO of several technology and medical-services companies, vice-president at a leading banking corporation, and vice-president and regional manager at a publicly traded insurance company. He has managed credit committees, served as an anti-money-laundering officer and more. He also worked as a financial journalist and wrote a regular column on management and capital markets for Forbes (Isr).
Mr. Yitzhak Zilberman — has thirty years of experience in medical technology and biotechnology in the United States, Western Europe, Japan and Israel, at companies including Bioness, where he was an entrepreneur and CEO; Advanced Bionics, where he held various management positions in R&D, operations and regulatory affairs; and the Alfred Mann Foundation, where he led business development and intellectual property. Yitzhak served for fourteen years in Unit 8200, including as a senior participant in a project that won the Israel Defense Prize. He is currently writing a doctorate in the history and philosophy of science at Tel Aviv University.
Mr. Ilan Shafir — an economist and financial manager with more than 25 years’ experience in multinational publicly traded companies, including service as chief economist of the Delek Group.
Mr. Shimshon Avrahami — has extensive industrial experience as vice-president of sales at Lordan Coils, marketing and sales manager at Plassim Fittings, European sales manager at Log Plastic Products, and marketing manager of KETER’s Tool Storage division. He has also held development and production management positions at Arkal Plastic Products.