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JEDDAH

Khalil Khazindar Law Firm
in Association with
JASON HUF INTERNATIONAL pc
Ammar Commercial Center

Al Murjan Street (off of King Abdul Aziz Street), Office # 202
P.O. Box 157,  Jeddah  21411
Kingdom of Saudi Arabia
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www.khazindarlaw.com
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  • Non-Billable Time Can Still Be Valuable Time

    By R. Jason Huf

    When recollecting the uses of my spare time as I sat down to pen my previously promised piece on fully utilizing the summer months to achieve Work-Life Balance goals, I realized that a simple "How I Spent My Summer Vacation" article would be insufficient. During the summer, indeed throught 2017 thus far, I seemed to gravitate to leisure activities that were relaxing and - sometimes - valuable beyond taking a mere breather for myself.

    So, I have instead decided to include something in this writing about how time taken to relax, though not billable, can still be valuable - to ourselves and others. Indirectly, a more relaxed you is likely to be of greater help to your client. But, beyond that, there are activites that are relaxing, interesting AND enriching to your profession and society more broadly.

    After all, a desire to influence and shepherd positive change is at least part of the motivation that drove us - and still drives us - along our respective career paths, isn't it?


    I have always been public-service minded. This is reflected in my legal practice, wherein certain investments, projects and other client matters have over time and in the aggregate served as a small piece of a small piece of the large, complicated puzzle of establishing a foundation for economic and social reform in Saudi Arabia and the larger Middle East (parenthetically, I am pleased to see that today's reforms are more sweeping and are being enacted much more quickly than I had anticipated, or even hoped).

    Accordingly, I often find "relaxation" and satisfaction when I can make time for pursuits that have some intrinsic (but, not necessarily obvious) value to the larger world around me. Take, for example, a presentation hosted by Oxford University's North American office on Manar al-Athar and its efforts to catalogue ancient sites in the war-torn Levant so that they can be preserved or (in the event they have already been or are going to be destroyed by insidious groups like Daesh) restored after the shooting finally stops. When "endangered" cultures become lost civilizations, it degrades the whole of humanity. I encourage you to give this group's efforts a fair look.  And, hey, wine was served...

    Jason Huf and HRH Princess Sarah Zeid Ra'ad of Jordan  (Sometimes, to your surprise, you may get to meet fabulous people like the one pictued here. Also pictured, standing next to this fabulous person, is a member of the Hashemite Royal Family... )

    (Attorney Disclaimer:  NOT an endorsement of JHI by HRH!)


    Whatever your line of work, your position as a professional provides you with access. In addition to being present at the above-referenced presentation, I'm rather excited to say that I have accepted an invitation to join the New York City Bar Associations's Committee on Middle Eastern & North African Affairs (MENA Committee).  Then again, the MENA Committee has a pretty robust agenda, so I may end up regretting this...

    Kidding aside, there aren't too many bar association committees in New York, Pennsylvania or New Jersey (the jurisdictions where I am admitted to practice) that specifically focus on subject matter so closely aligned to my practice, so in addition to being recognized for my work after so many years in the field, I am actually looking forward to the (non-billable) work ahead.


    Now, I'm not saying that all of your spare time needs to be "meaningful", only that the added element of being satisfyingly productive in some measure may add to the value of your relaxing uses of the downttime you manage to carve out of your busy schedule. Different people have different interests and run at different speeds. I may be someone who has yet to take a real "vacation" at any point in my life, but I do not dispute the notion that relaxation for relaxation's sake is absolutely fine.

    For those of you who have the discipline to make the effort to force yourself to take a vacation, more power to you. For the rest of us its enough of an endeavor to find forms of refreshment that are somewhat more limited in scope. But, no worries - it ain't that tough. Really!

    Again, Pennsylvania is one of the jurisdictions in which I am admitted to practice. On occassion, I travel to Philadelphia on business. When I know I'm to make the short drive into Philly, well, being a long-time Philadelphia Phillies fan (and, you cannot be a Phillies fan without being a an of baseball period - trust me on that one) I like to catch an evening game when they are playing at home. Why not? I'm a phan, its the thinking man's sport, Citizens Bank Park is a great ballpark and I love Dollar Dog Day.

    Also, this past year, the NFL Draft was hosted there (great event, and Philly did a fantastic job of hosting); and, the Philadelphia Orchestra celebrated the works of Mozart not very long ago - as part of that celebration, there was an opportunity to see a showing of the film "Amadeus" (one of my favorites), with the orchestra providing a live sound track.

    NFL Draft Day (Night) Philadelphia, Pa.  (NFL Draft - Philadelphia, Pa.)

    Some things can be done spur of the moment, without planning, and can be done by almost anyone, especially in New York. Catching the recent solar eclipse without special glasses was easily done by using my phone - I perched it over my shoulder and recorded a brief video.  Anyone who could walk to Battery Park (or any open space where the sun was at least partially blocked by the moon that afternoon) could have done the same thing.  Many did.

    https://www.youtube.com/watch?v=SpdAcRPtZ8Y   (As you can see, the Firm's YouTube Channel is still in the "experimental" stage)


    When I lived in Jeddah, Saudi Arabia years ago, I took up snorkeling on the weekends and fell in love with the Red Sea and the coral reef beneath its surface. Some folks encouraged me to take up diving, but diving is a great deal of work. If what I do for recreation is more work that what I do for a living, I have something of a philosophical problem with that...

    My dog can be a great deal of work (and, don't get a dog unless you are honestly ready, willing and able to do all of the work associated with sharing your home with a dog), but she is without question the exception to the above-referenced rule. When it comes to time well-spent, I am hard-pressed to think of anything more rewarding and relaxing than walking my dog.

    Sometimes, I'll just call it an early day at the office and go out. Its New York, man - hit the town. Fridays tend to be ideal: the Middle East is closed on Fridays and the West is in the process of shutting down for the weekend, with businesses in London generally closing by 12:00 noon, US Eastern time (though, I must be mindful of places in other time zones, such as Houston, Texas, which is an hour behind New York). And, naturally, your employees won't mind being able to knock off a little early before the weekend, or will they... 

    "Seriously, you don't have to stay... "  - Jason Huf  ("Seriously, you can leave... ")

    In any event, I find that making time for yourself and your favorite people (or, pets) is not impossible - it really boils down to time management. I have also found that taking the occasional, but regular, breather won't kill the bottom line, can make you better at your job and (depending on the activity at hand) may even have the potential to make the world a better place.  And, I feel like a million dirhams.

    This is what a million dirhams looks like... (Jason Huf)  (This is what a million dirhams looks like... )

    So, even with the cold winds of winter coming, ready to whistle through the concrete canyons of downtown Manhattan (and I hate winter) - I'm going to continue to make time for me. Since returning to the United States several years ago, I have ordinarily gone into hybernation every winter (absent JHI's Annual Informal Holiday Gathering), but not this year.

    Why work so hard in the first place?  I don't live to work, I work to live (and, my work is pretty darned good anyway, if I do say so myself).  So, I'll work as hard as I play, and play as hard as I work.  Maybe you should, too? Whether its rubbing elbows with royalty from an ancient noble line, or having a beer or two with your cheeseburger during an extra-long lunch.  Hey, whatever floats your boat.

    The bottom line is this:  You have an epic and fabulous career, so Live an EPIC and Fabulous Life. There is no point to doing anything else.

    I decided against supplying the entire list of extra-curricular activites because if I did you'd still be reading this instead of engaging in your own leisure pursuits (if reading this little blog is one of your leisure pursuits, well, I'm flattered).

    Oh, and we all have to get some work in once and a while, too.  OK, now back to the grind...  : )

    Jason Huf Heading Out 

     – Jason Huf
    Thursday, October 12, 2017
    New York, NY

  • Saudi Arabia's Vision 2030 & "Riyadh Day" at the UN

    You are about to see a rapid-fire (for this space, anyway) succession of as yet unpublished updates covering a period from Spring 2016 to present.  We will start with an initial discussion of Saudi Arabia’s “Vision 2030”, touted as the most sweeping series of reforms in the Kingdom’s history.
     
    In a nutshell, Saudi Arabia’s Vision 2030 is a collection of planned economic and social reforms designed to construct a “Post-Oil” Saudi Arabia, in line with globally-held concepts of Sustainable Development. King Salman has invested his son, Deputy Crown Prince Mohammed bin Salman, with broad, sweeping powers to enable him, his advisors and other subordinates to design and execute these reforms between now and the target date of 2030.
     
    Within the stated goals of weaning the Kingdom (KSA) off of being an Oil-based economy and becoming an industrialized state, with greater Foreign Direct Investment (FDI), full employment for working-aged males, improved access to high-quality education, greater rights for women and a more liberal social structure generally, two items are immediately obvious:  we are seeing Riyadh’s intent to finalize the end the era wherein OPEC, the powerful cartel of oil-producing states, has been the world’s definitive maker of oil policy; and, a rapid and intense military build-up intended to strengthen a block of states that includes the KSA, Egypt and the smaller Gulf States determined to withstand growing Iranian and Russian influence in the Gulf region following continued declining US influence and interest there and in the greater Middle East.
     
    While JHI is not a policy think tank, we feel it is important to know the backdrop and overall purpose of any upcoming reforms.
     
    Our principle concern is FDI, and the impact any reforms may have on the attractiveness of FDI in the KSA. This program is still young, so specific laws and regulations impacting FDI are not yet in effect. For the time being, there is nothing set in concrete that a law firm can dissect for the benefit of its clients.
     
    Therefore, in our typical less-than-modest fashion, JHI offers some suggestions on how to make FDI in the KSA more attractive to potential investors:
     
    1.  The Corporate Income Tax should continue to be (gradually) lowered, and personal income tax should remain zero.  Although declining oil revenues and their impact on the national government’s budget needs to be addressed, increasing the number of companies investing in the KSA, rather than increasing the tax existing companies pay, seems the best way to address the current budget shortfalls giving rise to the KSA’s national debt.
     
    2.  Saudization is seen, by and large, as a form of tax by potential foreign investors. The best way to address the employment crisis in the KSA is not by compelling investors to hire Saudi nationals, but by making the hiring of them more attractive.  Foreign investors ordinarily love to avail themselves of a local workforce – after all, importing staff and finding housing for them is pretty darned expensive!  Many such imported workers do not know the language or withstand the culture shock very well.  Unfortunately, fairly or unfairly, the idea of hiring Saudis is generally considered unattractive, thus the current Saudization requirements.  Rather than increase these requirements, education should be improved and made more accessible, and a sense of work ethic (rather than entitlement) needs to be instilled in the Kingdom’s youth.  And, the world needs to actually KNOW of the existence of such an educated, hard-working labor pool – numbering in the millions, and proud of real accomplishment at the workplace.  Do this, and Saudization will no longer be necessary at all.
     
    3.  Make the process of obtaining a business license less burdensome and more efficient.  Telling clients that it could take a minimum of six (6) months to obtain the necessary documentation before proceeding with business activity tends to be something of a turn-off for them.  Additional agencies designed to steer and otherwise regulate foreign investment eases nothing and are simply additional "layers” of bureaucracy.  Streamlining, rather than adding to, the process of licensing incoming businesses would be a productive step.
     
    4.  Women’s rights, and human rights generally, should be broadened – and, can be without offending the Kingdom’s religious sensibilities or its historical traditions.  It is much easier, on multiple levels, for a company to invest in a country whose culture is not the focus of controversial discussions centered around notions of equality and individual human dignity.  Additionally, it is essential that people throughout the Kingdom feel some sense of “ownership” in their country and their respective futures (see, 2. above).  They need to feel that their rights are being protected by their government, not denied.  This isn’t a call for the overnight imposition of Jeffersonian democracy.  Quite the contrary:  JHI asserts that the keys to unlocking a more liberal social structure (without rocking the stability of the KSA) lay within the old tribal and other cultural traditions of the modern Kingdom.
     
    5.  The labor market, and the regulation of such, should be loosened, and greater rights should be provided to foreign “unskilled” laborers and household staff.  As above (see, 4.), this is a matter of conscious for many potential investors, as well as foreign professional staff who visit the KSA.
     
    6.  Banking reform is a must.  The KSA is one of the most – if not the most – “underbanked” markets on the face of the earth.  While new banks and fresh capital and competition need to be allowed in, stronger regulation and monitoring needs to be in place, giving rise to stronger internal compliance programs.  While banking needs to be more readily available in the KSA, companies and governments around the world also need to have more confidence in the country’s banks.
     
    7.  For local and foreign companies alike, receivables can be something of a headache in the KSA.  Its no secret that debt, and the collection of debt, can be problematic there.  As the Kingdom undertakes judicial reform, it should continue to consider the importance of the confidence a company can have in the investment it makes in Saudi Arabia.
     
    8.  One of the most crucial assets in play when investing in any country is a company’s intellectual property. Intellectual property protections and anti-piracy measures need to be greatly strengthened, and quickly.  It is important for any company (say, you sell shampoo and find yourself competing with a counterfeit knock-off of your product – that’s not good), but when looking to attract high-tech industries, especially, it is absolutely fundamental that such companies have confidence that intellectual property worth hundreds of millions, perhaps billions, of US dollars will not be stolen from them and effectively rendered next to worthless overnight.
     
    These are eight basic principle points upon which JHI would like to see the building of any reform package affecting FDI in the KSA.
     
    JHI will track any concrete steps within this subject, and Mr. Huf hopes to learn more when “Riyadh Day” (its actually a week of symposiums, workshops and other such meetings), sponsored by the KSA’s High Commission for the Development of Riyadh, is held at the United Nations in New York at the end of September.
  • The City of Dreams, or the Emirate of Reality?

    From time to time, a trial balloon is floated in one GCC jurisdiction or another concerning the imposition of a new tax, whether it be an individual income tax, corporate tax or a value added tax.  The most recent of these is now floating over Dubai, which is still grappling with the residual effects of the 2008 crash while maintaining high levels of infrastructure spending.

    A prominent Emirati businessman based in Dubai publicly raised the idea of a corporate income tax in Dubai and voiced his general support for such an idea.  This is easily to understand, given the depletion of Dubai's oil reserves, the reversal of 2008 and resulting cash crunch, and the Emirate's continued high level of spending.  However, it would be somewhat akin to Killing the Goose that Laid the Golden Egg.

    Dubai rose up from the desert, transforming itself from a small trading post adjacent to Sharjah into the "City of Dreams", on the basis of its business-friendly laws, easy access to the oil-rich Gulf region, an unburdensome regulatory environment, quick access to financing and investment capital, and clever marketing revolving around the fact that the Emirate is Tax-Free

    While there are numerous government fees, paid annually, along with payments to sponsors, exceedingly high rental costs and other expenses one could say amount to a sort of taxation, companies and individual entrepreneurs from all over the world continue to flock to Dubai, drawn to the City of Dreams by the prospect of Tax-Free wealth.  Imposition of a corporate income tax could threaten this influx and inspire existing businesses to relocate elsewhere in the Gulf.  Even if such a tax were quickly repealled, reestablishing Dubai's image, carefully crafted and astutely marketed for many years, might be next to impossible.  And, isn't the real "Dream" not quick wealth, but having a broad-based economy not entirely dependent upon oil in the very heart of the Gulf region? 

    If Dubai is the City of Dreams, the "Green Capital" of the United Arab Emirates, Abu Dhabi, has been the Emirate of Reality.  With much of the UAE's energy resources, over half the country's population and land mass (much of it still undeveloped), and a very similar body of business law and regulations, and a robust banking industry, Abu Dhabi is also Tax-Free Abu Dhabi may not be known for a miraculous boom of the sort that made Dubai famous, but it has enjoyed steady, broad growth that has withstood the 2008 crash.
     
    Today, and not accidentally, Abu Dhabi is a leading target for foreign direct investment.  A corporate income tax in Dubai would not only enhance the relative attractiveness of Abu Dhabi to newcomers to the region, it might also encourage some of Dubai's existing businesses to take a two-hour drive and check out why the Emirate of Abu Dhabi is "green" in more ways than one.