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Middle Eastern Inward Investment – The Silk Road Reborn

by Keerat

by Guvvy Sandhu, Corporate Solicitor – Mackrell Solicitors

 

For hundreds of years, England and much of Europe traded goods with the Middle East via the all-important Silk Road, which ran all the way from China to Britain’s shores.

While trade is now multi-national aided by advancements in technology and travel, the connection to the Middle East and countries, such as Saudi Arabia and Dubai, couldn’t be stronger.

To find out about new opportunities for investment between the UK and the Middle East we sat down with Guvvy Sandhu, Associate Solicitor at Mackrell.Solicitors offices in the heart of Birmingham and his colleague in Dubai, Aymen Elbilly, who leads the firm’s unique business consultancy in the region, Mackrell Consult DMCC.

 

Why are investors in the Middle East so interested in the UK?

The wealth of the Middle East is well documented, and while many of the region’s investors were once focused on income generated from local resources, such as property, tourism and oil, they are now looking further afield for new opportunities.

The UK offers a fantastic opportunity for investment to Middle Eastern businesses and business leaders for a number of reasons.

Firstly, the UK has a very fair and some may say generous tax regime, which encourages overseas investment and has a remarkably low Corporate Tax rate for a developed nation.

Secondly, it is often seen as the entryway to other English-speaking markets, such as the US, Canada, Australia and New Zealand, and despite the recent events of Brexit, it is still favoured for its close links to Continental Europe.

And thirdly, it is one of the major hubs for the world’s financial markets, thanks to its strong service sector, including its expertise in legal services and business brokering.

This one-stop-shop approach to business means that the UK is well-positioned to provide investment yields that in today’s brave new world are even more attractive.

 

Why haven’t we historically seen more investment from the region?

Middle Eastern investors have traditionally looked to invest in businesses that are asset rich, such as retail, leisure and, of course, high-end property.

However, there is now a growing interest in the UK’s tech sector and advanced manufacturing industries. It is thought that around $5 billion a year is currently being invested by businesses and individuals in the Middle East, with much of the focus now shifting towards these industries.

The United Arab Emirates (UAE) is one of the UK’s most important trading partners and one of the fastest-growing markets for UK exports. In fact, in 2018, exports to the UAE from the UK totalled more than £10.5 billion, showing a growing demand for UK products and services.

Despite recent events, the UAE’s economy continues to grow and diversification has made it less vulnerable to oil price changes. It is no surprise that Dubai has become a major centre for business, logistics, media and leisure.

When it comes to doing trade with the UAE in particular, the nation is ranked 16th out of 190 for ease of doing business.

 

Are there also opportunities for British businesses to invest in the Middle East?

Conversely, for business looking to enter the Middle Eastern market, many high growth industries are calling out for the expertise and support British businesses and investment. The Department for International Trade particularly highlight opportunities in training and education, infrastructure, healthcare and professional and financial services.

Cash might be king but long-term investment yields are a close second.
Breaking into a new market is never easy, particularly if you don’t share the same language or cultural connections or have the local knowledge of the new jurisdiction that you need to invest.

These are just some of the main obstacles to Middle Eastern investors and it is where the advice and support of an intermediary can make a substantial difference.

Thankfully, one of Birmingham’s newest law firms, Mackrell.Solicitors, has such a specialist service designed to aid inward investment from the Middle East.

 

Why should investors work with Mackrell.Solicitors?

Although its new Birmingham office in The Wharf in the City Centre is only a few months old, the firm’s London headquarters has a history stretching back to 1845 and was the founding member of one of the world’s leading legal networks Mackrell International more than 30 years ago.

Mackrell’s presence in Birmingham and London means that access to the Middle East is now available.

Through its Middle Eastern consultancy business, Mackrell Consult DMCC, it is able to offer extensive consultancy and introduction services from Dubai to Saudi Arabia and beyond.
Led by Dubai-based experienced consultant, Aymen Elbilly, this service has been designed as a business bridge between the Middle East and the rest of the world, in particular, businesses in the UK.

They are working and consulting with UK businesses, looking for investment, a sale or merger to connect with Middle Eastern investors – or for that matter any other business services or connection.

Conversely, they have a long list of Middle Eastern investors who are looking for businesses and other opportunities in the UK.

 

How does the firm deliver its services?

Working as an intermediary with the Mackrell.Solicitors teams in London and Birmingham, they can create effective deals that take into consideration key points regarding agreements, tax and legal issues in all jurisdictions, through the services they offer and the close connections that they maintain with other professionals.

The result of this is a seamless service for investors and UK sellers, which allows both parties to focus on the factors that will maximise the investment that is being made to realise the most value from whatever deal is reached.

 

What happens if a business doesn’t have support?

Failing to use the services of a consultancy firm, such as Mackrell Consult DMCC, and going it alone can be very difficult for businesses that do not have experience of working in the Middle East and UAE.

Different expectations and cultural rules can lead to confusion and a breakdown of trust, which is why it pays to have the services of local experts who can help broker a deal and reduce stress by handling the process from beginning to end.

To find out how Mackrell.Solicitors and Mackrell Consult DMCC can help you connect with the Middle East and the opportunities on offer, please contact Guvvy Sandhu at our Birmingham Office by emailing guvvy.sandhu@mackrell.com or calling 07795 488 070.

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