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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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  • Eid Al Adha, Labor Day & Observance of the Anniversary of September 11

    JHI wishes our many friends in the Muslim world a happy Eid Al Adha holiday. To those able to perform Hajj rites, congratulations.  We would also like to advise clients and friends who do not observe this holiday to expect delays in certain services due to office closures - particularly banks and government offices - throughout the Middle East region during the holiday, which is scheduled to begin at sundown on Friday, September 1, 2017.
    In the United States, to all those who labor, have a happy Labor Day weekend. JHI will keep its doors closed until Tuesday, September 5. In the case of urgent matters, Mr. Huf will be available remotely during the weekend, including Monday, September 4.

    JHI ordinarily issues bills for professional services rendered during the previous month on the first business day of the following month. However, for only the second time in the Firm's history thus far, we will issue August's invoices on the second business day of the month (in this instance, September 5).

    Liberty Tower - World Trade Center (WTC), NYC, NY, USA   [ Never Forget:  Liberty ALWAYS Rises ]

    Per Firm custom, at 5:00pm on Thursday, September 7, JHI's NYC HQ will close again, this time in observance of the anniversary of the September 11th terrorist attacks on our country. We will reopen our doors on Tuesday, September 12.
    On September 11, we honor and remember those loved ones and fellow countrymen lost to sudden and senseless evil. But, there is never a day wherein we forget.

    The best way to honor them, especially in New York - the greatest city in the world, is to LIVE (in every sense of the word). To that end, coming soon, we will publish Mr. Huf's report on a productive and enjoyable summer (well, really, a very good year thus far it seems) as part of our Work-Life Balance series. This will be followed by a note on the famously "tax-free" United Arab Emirates' imposition of a tax scheme, including a Value Added Tax and certain Excise Taxes. We also plan, in the very near future, to introduce JHI's new Youtube channel; and, provide on update on EB-5 (Investor) Visas & legal services related to applications for such.

    Mr. Huf at Madain Saleh, Hijaz, Saudi Arabia  (Another day at the office... Exploring the Boundaries of Your Business)

    Watch this space. In the meantime, whatever you are celebrating and/ or observing over the next two weeks as summer comes to a close, we hope that it is meaningful and that you and your families enjoy it.
  • Big Firm Resources Without the Massive Overhead

    By R. Jason Huf

    Some of you may have obtained entry to the "Monastery" (as I've taken to calling my office) as and when business has required. However, for most of those reading this, I realize that I'm letting you in on a little secret: the advertised address of JHI's NYC HQ office is just a mail stop associated with a shared space & services operation on the 6th floor of good old 11 Broadway.  To maintain my strict "No Pop-Ins" Policy, the exact location of the Firm Headquarters Office/ Monastery's actual physical presence is kept confidential, and that confidence is only breached when necessary.

    Being able to advertise the mail stop as the office address, and the convenience of renting conference room space by the hour on the 6th floor, both enable me to concentrate on my work with minimal interruption.  In addition to this "buffer", availing myself of the shared services when certain tasks need to be performed rather efficiently assists me with keeping costs down, which in turn contributes to my ability to maintaining hourly rates that are very competitive.

    The World is Yours (As an old boss of mine used to say, "This is not the Fish Market"; but, with our competitive rates and innovative price structures, there may not be much need for you to bargain when seeking high-quality, world-class International Legal Services that your company can afford)


    Perhaps most fundamentally to those of you (still) reading this piece, JHI can make available to your company the seamless provision of professional services spanning just about the entire legal prism, without having to figure massive overhead costs into our hourly rates (or more innovative billing arrangements). The outfit that runs the 6th floor operation only caters to attorneys, and many of these attorneys elect to house their firms and solo practices in physical office space on the site. Irrespective of the level of their arrangement, all who participate in some form or another are listed in a directory and, over time, some of us get to know each other reasonably well.

    These attorneys practice in virtually every area of the law, and possess a variety of experience levels. In short, I have at my fingertips a storehouse of legal minds to draw upon, from commercial real estate specialists, to business litigators, to tax professionals - even a very smart fellow who focuses on energy trading. And, like myself, they tend to maintain a relatively unburdensome level of overhead costs, which in turn, permits them to be reasonable with their fees as well.

    A few people still tend to think of my practice as rather narrow, until I dispell them of that illusion - JHI is a Commercial, Corporate, Energy & Banking law firm and we perform a wide range of services for clients hailing from a broad variety of industries.  We just happen to have extensive experience in the Middle East, which may occassionally give rise to some folks instinctively thinking of JHI as a boutique servicing a particular "specialty" area.  However, JHI's capabilities are even broader than I previously reasoned:

    Between the NYC HQ, our Jeddah, Saudi Arabia Office, additional reources in the UAE (Abu Dhabi & Dubai) and access to Singapore and various major cities in India, JHI as a Brand is known as a capable provider of professional services in the Middle East and South Asia, ranging from company formation to arbitration, for those who have invested - or are looking to invest - in those regions in the world.

    What JHI is not (yet) necessarily known for is our ability to assist businesses based in the Middle East and elsewhere with their expansion into the US "mega-market". Whether you are an individual foreign investor entering through the EB-5 Visa process, or a family-owned conglomerate of businesses looking to invest in US real estate, or a publicly traded company in Riyadh entering a joint venture, or a participant in the new US public-private partnerships designed to reform the nation's infrastructure, JHI is well-placed to help get you started as well as protect your US-side business interests down the road.

    We have access to an entire network of intellectual assets encompassing a variety of practice areas ordinarily comanded only by big law firms, without having to factor "big firm" overhead into our fees. So, when investing from West to East, or East to West, consider the cost-effective but powerful option of contacting JHI for your legal needs.

    Feel the difference and put our NYC HQ and affiliated Community of Attorneys to work for you in concert with our Jeddah office and/ or resources in the UAE, India & Singapore (wherever you're from!) as we help you and your company Explore the Boundaries of Your Business.

     – Jason Huf
    Wednesday, August 8, 2017
    New York, NY

  • Happy Eid al-Fitr

    JHI wishes our many friends in the Muslim world a happy Eid al-Fitr.  We hope you enjoy the celebration of the spiritual, intellectual and human growth you and your families achieved during the month of Ramadan.

    We would also like to advise clients and friends who do not observe this holiday to expect office closures throughout the Middle East region, including JHI resources in Saudi Arabia & the United Arab Emirates, during the holiday.

    Peace, Holiday, JHI, Middle East, Arabia, Islam, Muslim, Eid, Law Firm, Huf, Jeddah, Abu Dhabi, Dubai, UAE, KSA, Saudia, Emirates, Corniche, Commercial, Corporate, Banking, Energy, Oil, Gas, Legal, Sharia
  • Saudi Arabia's "Companies Law" of 2015

    Saudi Arabia's (KSA) new Companies Law of 2015 came into effect on May 2, 2016.  At JHI, we wished to see the new law in practice and how it would be enforced by Saudi authorities before commenting.  In the meantime, much has already been written about the new law and we need not cover the same ground here.

    Of particular interest to clients and potential clients of JHI is, we believe, the law's provision of the option of Sole Proprietorships (or "Single-Shareholder" companies), and how applications for the licensing and registration of such by foreign investors are treated by the Ministry of Commerce and Investment and the Saudi Arabian General Investment Authority (SAGIA).

    As a general matter, the new law provides that SAGIA may continue to impose additionally stringent incorporation requirements on companies being established with the backing of foreign investors.  While the process of approving incorporation applications has been somewhat streamlined at SAGIA, a certain level of uncertainty, especially at the beginning stages of such an application, remains.

    When considering establishing or reforming an entity in the KSA, JHI feels that if a foreign investor has a trustworthy local partner/ agent (or "sponsor") then, for the time being, it may remain prudent to make use of such local parties when doing business in the Kingdom.  In addition to possibly enjoying a smoother approval process, one might avoid any potential bureaucratic pushback by some recalcitrant officials who may still be resistant to the Vision 2030 reforms more generally.

    The relationship with one's local sponsor can be further clarified via a side letter to the sponsorship agreement.  Such sideletters have been enforced by Saudi courts with increasing regularity.  And, JHI hopes that the provision for Single-Shareholder companies in the new Companies Law is not seen by the local judiciary as a rationale for reversing this trend.

    We will have more to say about the execution and enforement of the new Companies Law and other reforms as events (rapidly) progress.  Speaking of events, recent news indicates a very real likelihood of a shift in the direction of investment capital flowing between the Untied States and the Kingdom of Saudi Arabia.

    Where the Riyals of the Sovereign Wealth Fund go, other Saudi-based investment capital tends to follow.  With that in mind, JHI is seriously considering offering the shepherding of EB-5 (Investor) Visa applications to the menu of professional services our firm offers to incoming companies that invest in the United States, particularly New York, Pennsylvania and/ or New Jersey, where Mr. Huf is admitted to bar.  JHI will have more to say on this in the near future as well.
  • Happy Memorial Day & Ramadan Mubarak

    In the United States, we set aside one day to remember those who have fallen in war, defending our freedoms.  But, there isn't a single day wherein we forget.  We hope that you and yours enjoy the holiday weekend, and that we all take a little time to say a prayer of rememberance and gratitude for our fallen heroes and their families this Memorial Day.

    We all die, the only variables are where, when and how - and, sometimes, why.  They may be gone, but our war dead are never lost.  These soldiers, sailors, airmen & marines are forever in our hearts.

    To all of our friends around the world who observe the Holy Month of Ramadan, we at JHI hope that you and your families enjoy a meaningful period of dedication to fasting, reflection and prayer during this period of tremendous changes throughout the Middle East.  May your loved ones take this holiday as an opportunity grow closer to each other, your neighbors, the less fortunate and the whole of humanity.

    We wish you good health in the year ahead.  Ramadan Mubarak!
  • A "21st Century" Saudi Arabia

    21st Century Saudi Arabia

    Near the close of 2016, while the West was focused on the High Holidays, a new American President and the NFL Post-Season that would culminate in a historic Super Bowl LI, the government of Saudi Arabia (KSA) leapt into the 21st Century - literally.

    Under the direction of Deputy Crown Prince Mohammed bin Salman, with the full support of his father King Salman, the Saudi Government officially abandoned the Hijri Calendar (the Islamic, lunar calendar which begins with the Prophet Mohammed's trek from Mecca to Medina and the establishment of the first-ever Islamic state), and has adpoted the "Gregorian" calendar (named after Pope Gregory XIII, the solar calendar predominantly used as the civil calendar in the West and elsewhere, which begins one week following the Roman church's, and the day of the Eastern Orthodox churches', traditionally espoused birth of Jesus Christ; the civil calendar used in the West arbitrarily measures months as being either 28/29, 30 or 31 days in length).

    Initially functioning as a budget cutting measure, with government employees receiving the same monthly salaries while working an additional eleven (11) days of the year, its the eternal questions of "what next?" that holds the world's attention as those with commercial ties to the KSA wait the other shoe(s) to drop.  What are the other consequences, both intended and unintended, of the Saudi government's adherence to this new calendar?  How, if at all, will this impact governance and/ or commerce in the Kingdom?

    Saudi Arabia is, and was founded to be, an Islamic state.  Its Constitution is the Quran.  The change from a calendar that is dear to their faith and which honors the pilgrimage of their holiest and most revered prophet, to a calendar created by a Roman military dictator and revised by a Catholic Pontiff is, in and of itself, revolutionary.

    For now, its impact is seen strictly as a government austerity measure. Nonetheless, and predictably, the more conservative elements of Saudi society, including the clerics with whom the King shares and exercises power, are resisting this particular change.  They presently appear to center their resistance around their concern that the masses will not adhere as faithfully as they have in the past to the holy month of Ramadan (which, like all months in the Hijri calendar, is measured by the lunar cycle).
     
    JHI is confident that good muslims will adhere to Ramadan, just as good christians adhere to Easter, the date of which is determined by the advent of the Jewish observance of the Passover holiday (the Jewish calendar measures months by lunar cycles, occasionally adding a month to make up the discrepancy in days between 12 lunar months and one solar year; thus, while Passover - and the subsequent Christian Easter - are celebrated on the same days of year, every year, on the Jewish calendar, they are celebrated at different times of the year on the civil, or "Gregorian", calendar).

    Neverless, acquiescence to the Saudi government's new calendar will not occur overnight.  As conservative elements tend to dominate the judiciary, and are well-ensconced in the various levels of the bureaucracy in the KSA, JHI feels that for the time being it remains prudent to continue to use language referencing the "Gregorian" calendar as controlling in the boilerplate of contracts and other documents pertaining to business in the Kindgdom of Saudi Arabia - including and especially those documents related to participation in government projects, whether as a contractor or sub-contractor.

    JHI will continue to follow the evolution of this particular change, and other developments related to the Vision 2030 reforms, as the Deputy Crown Prince pulls his country into the 21st Century - both metaphorically and literally.
  • "A Day in Riyadh": An Exhibition of History, Culture, Modernization & Reformation

    During the last week of September, immediately following the opening of the United Nations (UN) General Assembly in New York, a series of seminars, workshops and interactive displays collectively coined "A Day in Riyadh" was showcased at the UN.  This week-long "Riyadh Day" was sponsored by the High Commission for the Development of Arriyadh (Riyadh), and particularly featured the ongoing work of the Arriyadh (Riyadh) Development Authority (ADA).  As a Representative (Observer) for a Non-Governmental Organization (NGO) to the UN, and an attorney with an office in Saudi Arabia, Mr. Huf, Principal of JHI, was pleased and excited to attend.

    Riyadh (Saudi) Exhibition at the United Nations
    Focused on the capital city of Saudi Arabia (KSA, or the Kingdom) and the governate (province) of Riyadh, the series of presentations covered subjects relevant to the economy, culture, commerce and development of the entire Kingdom, and the Arab and Islamic worlds more generally.

    Of particular interest to those who follow this space will be the planned reformation of Riyadh's transportation system which, if fully executed, may be the single-largest public works project on earth during the period of construction. However, we will list all of the subjects covered by the panel presentations at the UN between September 27 - 30, to provide a broad look at the planned continued development of Riyadh (one of the chief purposes of the conference) which, in turn, may give us a better view of the Kingdom-wide social and economic reforms known as Saudi Arabia's "Vision 2030".

    Eng Khalid Al Hogail, CEO Saudi Public Transport Company  Saudi Nuclear Program  Arriyadh Development Authority

    9/27 "Riyadh:  Planning for People" - the overall City Plan (by 2030) moving forward, including details on Riyadh's new "Smart City" initiative.

    9/28 "Riyadh:  A Sustainable & People-Friendly City" - details concerning the Sustainable Development of Riyadh.

    9/29 "Riyadh:  On the Move" -  The King Abdulaziz Project for Riyadh Public Transport.

    9/30 "Riyadh:  Development of Civilization and Social Partnership" - Plans for the continued social, economic and intellectual development of the city's population in line with Islamic principles and the traditions of Arabia, particularly youth and especially young women, empowering them to take a more active role in the growth of the city and the future of the Kingdom as a whole.

    Dr. Sana H Alorf and Jason Huf
    (Jason Huf and Dr. Sana Alorf.  Dr. Sana is extraordinary, but not unique. She is a medical doctor working in Riyadh who also participates in many charitable and civic endeavors.  She volunteered, along with many other young Saudis, to travel to New York and talk about their culture, heritage and way of life in side bars at the exhibition.  Many ladies are taking up professions [including and increasingly fields such as law, medicine and science], starting businesses and participating in life outside their homes in the Kingdom.  Dr. Sana has a wealth of information that dispells many of the illusions concerning Saudi society and highlights the progress Saudi women have made - and continue to make.)

    The public transortation project, scheduled for completion in 2018, is a massive affair that could revolutionize life in Riyadh.  In addition to a new bus service, the project includes the construction of a commuter railway (Riyadh Metro) with six lines, dozens of stations, a main terminal for each line, and services areas at each stop, including large-scale shopping complexes at each of the main terminals.  Anticipating use by roughly 3.6 million residents daily, over 3,000 transport stands will be constructed to accomodate waiting commuters.

    With billions of Saudi Riyals being invested into the project, and given the rather brief time frame, this will generate a labor boom in the capital for qualified Saudis and expatriates.  Mr. Huf asked Eng. Hassan Al Musa, Deputy Director of the Transport Planning Department of the High Commission for the Development of Riyadh, if resources had been allocated to process what should be a substantial spike in Visa applications.  Potential contractors and subcontractors will be interested to know that the Deputy Director responded that his office is in touch with the Ministry of Labor on a regular basis as they set up for this contingency.  So long as employers comply with their filing requirements, he said, there should be no delays in the project caused by a labor shortage brought about by paperwork backlogs.

    Eng Hassan Al Musa and Jason Huf
    (Eng. Hassan Al Musa and Jason Huf.  Mr. Huf found him to be capable, earnest and modest.  Although entrusted with day-to-day management of a massive public works project, with a tight schedule, he always gives credit to others, refering to his "Army" of dedicated public servants.  "That makes you a General", responded Mr. Huf, who later added, "Eng. Hassan is a nice guy".)

    In addition to the lifestyle transformation and relief of traffic congestion that will take place once this project is complete, young Saudis who are lacking in resources such as cars of their own will be able to much more easily venture beyond the confines of their own neighborhoods to look for satisfying work and important educational opportunities.  And, everyone who lives in Riyadh should enjoy the benefit of cleaner air arising from fewer cars on the highways.

    The entire program provided a window through which one could sample Saudi Arabia's Vision 2030, the rapid modernization and other wide-ranging reforms ordered by King Salman and spearheaded by Deputy Crown Prince Mohammed bin Salman, with the aim of guiding a modern but authentically Islamic Saudi Arabia that remains true to its people's history and traditions into a future "Post-Oil" economy.

    These reforms include the KSA's Sustainable Development program, which closely follows the UN's Sustainable Development Goals while keeping in conformity with Kingdom's Islamic principles; increased opportunities for youth & women; and, Saudi Arabia's nuclear power program.

    At JHI, we have offered our own modest suggestions for the shaping of such sweeping reforms, with an emphasis on attracting increased Foreign Direct Investment in the Saudi market.

    With an incoming US Administration that seems keen on utilizing America's energy resources; and, (if feasible) working with Russia to defeat ISIS (which, in addition to commiting henious atrocities, has been fighting forces led directly or indirectly by the Iranians), some may see such investment from the West as slow in coming, and the KSA's reception of it to be less-than-enthusiastic.

    Seen by some as signalling potential push-back against the further development of US energy resources and other recent or possible future policy changes, Prince Alaweed bin Talal of Kingdom Holding Company (Saudi Arabia's soverign investment apparatus) suggested selling holdings previously classified "not sellable" (such as shares in Citi Group and US Treasury bonds), which would be a divorce from Saudi Arabia's long-standing policy of having "buy-ins" in important American economic institutions and, thus, the American economy - effectively giving the US a stake in the KSA's existence and continued success.

    Noises concerning such potential push-back seem unlikely to stem the increased exploitation of US energy resources (another dip in the price of oil, for example, would seem more likely to give pause to an increase in US production).  And, the US-Saudi alliance of over seven decades, while fraying a bit over the last several years, should remain rather tightly tethered:  after ISIS is destroyed, a check on Iranian ambition will have been eliminated, and the US and the KSA will more clearly and simply share strong interests in containing Iran and managing increasingly complicated relationships with Russia.

    In fact, the strong relationships the KSA enjoys with the West, the interest Western countries have in seeing the continued modernization of Arab states, and Western companies' keen eye to continue - and, possibly increase - their investments in the Gulf region were reinforced recently by UK Prime Minister Theresa May in her mid-December visit to the Gulf Cooperation Council summit in Bahrain.

    Overview City Plan Riyadh 2030
    Pending changes to the Kingdom's commercial and corporate laws, which continue to be rolled out, and given at least one or two geopolitical uncertainties, JHI presently and on the whole views it likely that the environment for Foreign Investors will become even more attractive as the Vision 2030 reforms are implemented in the KSA.  As to the Great Social & Economic Reformation of the Kingdom known as "Saudi Arabia's Vision 2030", Mr. Huf doesn't think its on par with the Maji Restoration (the radical transformation experienced in Japan during the late 19th century), but he does see it as the most significant series of reforms in the history of the KSA since the reign of King Faisal (perhaps in the Kingdom's entire history - we'll see) and the most positive collection of developments to take place in the Arab world thus far in this new, turbulent 21st century - and, he certainly viewed the exhibition at the UN positively.

  • Observance of September 11 & Eid Al Adha Greetings

    This is one day of the year all of us set aside for remembering, but there is never a day when we forget.

    As with dates officially deemed "National Holidays", JHI's New York HQ Office - per annual Firm tradition - will be closed for business this Monday, September 12, in observance of the 15th anniversary of September 11, 2001.

    Just as JHI is proud to perform work that may make some small contribution to what, some day, may be the development of a broad, self-sustaining middle class in the Middle East, JHI is honored to be a witness to the resurgence of downtown Manhattan.  The Financial District's magnificent comeback is best symbolized by our neighboring Liberty Tower:


    Liberty Tower September 11 Never Forget Always Win Victory USA

    September 11 will be a day of remembrance and reflection for us all.  JHI will resume offering high-quality professional services on Tuesday, September 13.

    JHI also wishes our many friends in the Muslim world a happy Eid Al Adha holiday.  We would also like to advise clients and friends who do not observe this holiday to expect delays in certain services due to office closures - particularly banks and government offices - throughout the Middle East region during the holiday, which is scheduled to begin at sundown on Sunday, September 11.
  • Qatar's International Commercial Court

    As Co-Chairman of the New York County Lawyers' Association's (NYCLA) Foreign & International Law Committee, Mr. Huf enjoys the occassional pleasure of hosting some rather interesting guests.

    Just this past March, the Foreign & International Law Committee welcomed the Honorable Gerald Lebovits, Justice of the New York Supreme Court in Manhattan and Adjunct Professor of Law at Columbia, Fordham and NYU.  Justice Lebovits provided a presentation covering the Qatar International Court and the time he spent in Doha teaching local attorneys there.

    JHI has briefly covered Qatar's Bifurcated Legal System in an earlier piece and we refer you to it for some of the bare bones basics.

    Justice Lebovits, in addition to describing his teaching experience in Doha, discussed the history of Qatar's International Court (the Court) for hearing commercial disputes, the caliber of its personnel, its procedures and costs.  He also discussed some of the decisions already rendered by the Court, where he participated as one of its distinguished Judges.

    Clara Flebus, Gerald Lebovits, Jason Huf
    (Left to right: Clara Flebus, Co-Chair, NYCLA Foreign & International Law Committee; Hon. Justice Gerald Lebovits; and, Jason Huf)

    Justice Lebovits pointed out, at length, what he viewed to be the efficiency of the Court relative to Arbitration facilities elsewhere in the Gulf region. The speed, cost and fairness of the proceedings made the Court, from his perspective, an ideal solution for Dispute Resolution and wondered aloud why parties did not avail themselves of the use of the Court more often in the dispute resolution clauses of their agreements.

    Mr. Huf agrees that, on paper and based on performance thus far, the Court is an attractive facility. However, the Court was founded relatively recently (2009), and as an active international practitioner who focuses on the region, Mr. Huf made the point that attorneys might be more receptive to the idea of recommending the use of the Court to their clients after more data is at hand (that is to say, after the Court has adjudicated more disputes). Of course, with attorneys perhaps hesitating to suggest that their client be something of a new legal system's "guinea pig", it may take some time before such additional data is generated.

    That said, you would be hard-pressed to find a lawyer in New York City who is as knowledgeable of the inner workings of the Court and the procedures it employs than Justice Lebovits.  His entire presentation – including his positive view of the Court's cost and time-effectiveness – was well-informed and compelling.

    JHI invites you to research the Qatar International Commercial Court and Dispute Resolution Centre and draw your own conclusions:

    www.qicdrc.com.qa


    After all, as very good lawyers, aren't we always in search of the next "better idea"?

  • 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.
  • Eid al-Fitr, July 4 & Medina

    JHI wishes our many friends in the Muslim world a happy Eid al-Fitr.  We hope you enjoy the celebration of the spiritual, intellectual and human growth you and your families achieved during the month of Ramadan, despite the challenges to peace and security during the Holy Month this year.  We would also like to advise clients and friends who do not observe this holiday to expect office closures throughout the Middle East region during the holiday.

    In the United States, we celebrated the 240th anniversary of our Independence on July 4.  These past several weeks have seen barbarity at its worst. With specific reference to the terrorist attack at Medina, we in the Land of Liberty, irrespective of faith, stand with and pray for the innocent victims of that atrocity.  Everyone has a right to freedom from terror.

    While the savage primitives of ISIS/IL are strongly suspected of coordinating the attack in Medina and other places throughout Saudi Arabia, no group as of the date of this writing has claimed responsibility and
    the motives of the suicide bomber in Medina are as yet unknown.  It was nonetheless a murderous act of barbarity that the whole of the civilized world must reject.  ANY "cause" served by the use of Terror as a tactic must, summarily, be deemed illegitimate.

    Further, when terrorism is employed, the actors betray their so-called "cause" to be nothing more than a pretext for a war of conquest.  This is the reality civilized people across the globe must face with the determination that any such enemy will be defeated and placed in history's rubbish pile, along with so many other would-be tyrants of the past.

    JHI will continue its expansion in the region and hopes that, even as they mourn those lost this past week, the good people of Medina, Jeddah and elsewhere in the Kingdom celebrate God-given life and its highest pursuits.

    Liberty,Medina,KSA,JHI,Huf,Law,LawFirm,Holiday,Eid,Muslim,Islam,Terror,Commercial,Corporate,Banking,Arbitration,Terrorism,Independence,Legal,Saudi,Arabia,Jeddah,GCC,Gulf,Emirates,UAE,AbuDhabi,Dubai,Freedom,Ramadan

  • April Showers Bring May Flowers

    By R. Jason Huf

    Its been quite some time since JHI's last Note or Comment, but that doesn't mean that there hasn't been anything to write about.  And, its certainly too much to write about all at once.

    With Ramadan just around the corner, should the usual business cycle associated with the Holy Month and High Summer come about, I will make maximum use of the time and write more often:


    April was a pretty busy month, inside the office and out.  Saudi Arabia's "Vision 2030" was unveiled by Deputy Crown Prince Mohammed bin Salman on April 25.  JHI will provide analysis of the KSA's plan for a "post-Oil" economy, and any changes to the laws of the Kingdom resulting therefrom.  We will also continue to track legal developments elsewhere in the Gulf region.

    Also, as UN Representative for an NGO, I enjoyed the opportunity of hearing United Nations (UN) Secretary-General Ban Ki-moon speak about the UN's Sustainable Development Treaty, the Sustainable Development Goals, and what the private sector (including the Legal Community) can do to help achieve those goals.  This was followed by attending several open forums at the UN, and hosting a talk on 'Conflict Minerals' with an expert on the subject.

    I also moderated two very successful Continuing Legal Education panels, one on the Foreign Corrupt Practices Act (FCPA) and the other an Ethics course on Attorney "Branding" for international practitioners.

    Almost forgot! In March, I had the pleasure of hosting a New York State judge who discussed the Qatari Commercial Courts after returning from his experience teaching new, young Qatari lawyers in Doha.

    More recently, after months of deliberations and conversations with colleagues and others I respect, I have come to a decision on JHI's future in the Middle East - and, beyond.

    [ for some of the backstory, click here ---> 
    JHI - The Law Firm of Jason Huf International   ].


    Further details concerning our expansion of capabilities and services, as well as the other topics outlined above, will be distributed in due course.

    In the meantime, Happy Memorial Day -- enjoy the start of summer!



     - Jason Huf
    Wednesday, May 25, 2016
    New York, NY

  • Saudi Banking Market to Open Up?

    During King Salman's recent visit to Washington, DC, members of the Saudi delegation issued several announcements concerning planned commercial reforms and other developments that could prove significant to Foreign Direct Investment (FDI) in Saudi Arabia (KSA) as the Kingdom looks to broaden its economy at a time when low oil prices are projected to be the norm for the medium term.  We will highlight some of the more significant announcements in this and subsequent notes.

    While Saudi Arabia remains committed to continuing its current record-setting output of light sweet crude (one of the major factors contributing to low oil prices), the KSA is now facing projections of massive budget deficits and rapidly depleting cash reserves.  Increased FDI, particularly from the United States, appears to be critical to the KSA's strategy for coping with the downsides of consistently low oil prices. 

    Reforms in the Arab world often begin with teasers that function as "trial balloons".  This note will reference such a trial balloon floated by a Saudi official associated with the Deputy Crown Prince.  In a closed door meeting with business leaders in DC, this official announced that the Kingdom is considering opening the Saudi banking market to permit entry of additional foreign banks - especially American ones - wishing to do business in the Kingdom.  In additional to financing major projects, it is hoped that such banks would also cater to small businesses and individual depositors.

    Even with the recent entry of a branch of a bank based in fellow Gulf Cooperation Council (GCC) Member State Qatar, Saudi Arabia is still seen as, perhaps, the most "under-banked" market in the world.  To attract additional FDI, which has been in slight decline in recent years, some see the entry of additional Foreign banks and the capital they bring as critical.  Entry by foreign banks based elsewhere in the GCC has been helpful, but it will take the power of additional American and other western banks to take a more broad-based growth to the next level.

    Not stated, but understood, in this announcement is Saudi Arabia's desire that western powers continue to see that they have a stake in the stability of the Kindgom vis-a-vis its continuing conflict with Iran and, increasingly, Russia.

    Of course, the devil is in the details: What will be required to gain entry? And, once in the market, how secure is a bank's investment in the Kingom and how will such a bank be regulated and taxed?  How might such a venture impact an investing bank's legal and regulatory position at home?

    JHI will continue to track the flight path of this trial balloon and let you know where it lands...
  • Observance of September 11

    As with dates officially deemed "National Holidays", JHI's New York HQ Office will be closed for business this Friday in observance of the anniversary of September 11, 2001.

    Just as JHI is proud to perform work that may make some small contribution to what, some day, may be the development of a broad, self-sustaining middle class in the Middle East, JHI is honored to be a witness to the resurgence of downtown Manhattan - it really is one of the truly great comeback stories of our age, as symbolized by the new neighboring Liberty Tower:

    New York, NYC, Downtown, Liberty, Tower, Financial District

    September 11 will be a day of remembrance and reflection for us all.  JHI will resume offering high-quality professional services on Monday, September 14.

    Liberty ALWAYS Rises.  We will never forget, nor will we quit.

  • Happy Eid al-Fitr

    JHI wishes our many friends in the Muslim world a happy Eid al-Fitr.  We hope you enjoy the celebration of the spiritual, intellectual and human growth you and your families achieved during the month of Ramadan.

    Eid al-Fitr, Jeddah, NYC, New York, KSA, Saudi, Gulf, Arabia, Islam, Muslim, Holiday, Ramadan, JHI, Law irm, Law, Legal, New York, Business  We would also like to advise clients and friends who do not observe this holiday to expect office closures throughout the Middle East region during the holiday.

  • Arbitration Clauses in Multi-National Agreements

    Arbitration clauses are often heavily negotiated and complex enough to be referred to as “a contract within the contract”.  The reasons for this are obvious (even to us transactional practitioners).  The exact terms of a dispute resolution clause can have far-reaching consequences.

    One of the goals in crafting such a clause is to mitigate the irreconcilability of disputes as they arise by putting your client in the best possible position in the event of a scenario that triggers termination and subsequent arbitration.  Naturally, both sides have this in mind during negotiations.  But, what happens in jurisdictions where the enforceability of arbitration clauses may be considered by some, fairly or unfairly, to be a somewhat unsettled question?

    Until recently, while the Kingdom of Saudi Arabia (or, KSA) has been a member to the New York Convention (on the enforcement of arbitral awards), this did not always lead one to predict with certainty that a Saudi court would recognize the validity of the arbitration clause in your agreement with a local party and direct that party to resort to arbitration, as per your agreement.  In the past, senior judicial officials and other legal professionals in Saudi Arabia have on occasion issued public pronouncements that arbitration clauses are contrary to Shari’ah and are therefore invalid, and should not be enforced by Saudi courts.

    That is to say, in Saudi Arabia you may have had the right to enforce an arbitral award granted by a tribunal (keeping in mind the difficulty some may experience in attempting actual collection in the Kingdom), but such public pronouncements may have lead some to wonder if you could successfully assert that the underlying dispute be entered into arbitration in the first place (in the KSA), depending on whether or not the judge in the Saudi court deciding the question deemed your particular arbitration clause (or, arbitration clauses generally) to be appropriate under, or contrary to, Shari'ah.

    Today, some are hopeful that the passage of the KSA's new Arbitration Law of 2012 (
    based on the UNCITRAL Model Arbitration Law) to supplant the KSA Arbitration Law of 1983, and the creation of judicial training centers and the subsequent appointment of judges to serve in a new commercial court system in the KSA, will lead to greater clarity on the subject of the enforcement of arbitration clauses.  As with any legal reform, time will tell.

    In the neighboring United Arab Emirates (UAE), the considerations differ.  The validity of the arbitration clause, the formation of the contact, and the nature of the relationship between the parties themselves are just a few of the considerations that a court could measure in weighing the enforceability of a given arbitration clause.

    Any Emirati national (individual or corporate) has the right to avail itself of the protection and justice of the courts of the UAE.  In the past, this may have prompted some local parties in the UAE to move that a local court should assert jurisdiction, despite the existence of an arbitration clause.  It should be said, however, that in the UAE (a commercial hub in the Gulf region that has become famous for the "City of Dreams", Dubai, and increasingly the "Green Emirate" of Abu Dhabi), such motions should rely on more than this basic right if a party wishes to succeed in its attempt to escape arbitration under a valid clause.

    Following certain provisions of the UAE (federal) Civil Code, judges in local courts should hold that validly written arbitration clauses are enforceable, except when there exist particular circumstances.  For example, in disputes arising from registered commercial agency agreements a judge may deem an otherwise valid arbitration clause unenforceable and declare it void on the grounds that clauses calling for alternative dispute resolution (or, ADR) in such contracts are contrary to, or inconsistent with, "Public Policy".  (Please note: the commonly used, colloquial term "sponsorship agreement" is much broader and could refer to several different types of business relationships in the UAE; whereas, "registered commercial agency agreements" refers to a specific type of business relationship, which must also be properly registered with the relevant government office in accordance with both the law and the terms stipulated in the agreement itself.)

    So, what do you do when doing business internationally, and some of your relationships are with parties in the Middle East?

    Negotiate an arbitration clause.

    And, retain an experienced attorney with local knowledge (preferably one with a presence in the specific jurisdiction in question: the laws of Middle Eastern jurisdictions, like the laws of countries in other regions of the world, are subject to change).

    If the local party with which your company is doing business has attachable assets outside of the Middle East in a country where collections may be deemed less frustrating, that can be a plus.  But, as with just about everything else, there is no substitute for experience -- and solid, relevant legal experience may be one of your best assets at the negotiating table.

  • Observance of September 11

    JHI will be closed for business this Thursday in observance of the anniversary of September 11, 2001.  Just as JHI is proud to do work that may some day contribute to the development of a broad, self-sustaining middle class in the Middle East, JHI is honored to be a witness to the resurgence of downtown Manhattan - it really is one of the truly great comeback stories of our age.

    Thursday, September 11, will be a day of remembrance and reflection for us all.  JHI will resume offering high-quality professional services on Friday, September 12.


    New York, NYC, Liberty, Tower

    Liberty ALWAYS Rises.  We will never forget, nor will we quit.

  • Happy Eid al-Fitr

    JHI wishes our many friends in the Muslim world a happy Eid al-Fitr.  We would also like to advise clients and friends who do not observe this holiday to expect delays in certain services, and possible disruptions of projected time frames, due to office closures throughout the Middle East region during the holiday.
  • Drinking Tea with Jackie Robinson: My Meeting with Living History

    by R. Jason Huf
     
    Jokes about snakes in the road aside, I have always considered being an attorney to be a great honor and privilege.  I practice law, and the law is the ultimate guardian of equality and fair play.  I cannot imagine wanting to do anything else for a living.

    Some of the really great aspects of being a lawyer, especially one with my particular practice areas, are the things I learn and the people I meet.


        Meet Renad! 

    KSA, Saudi, Lady, women, female, law, legal, lawyer, NYC, renad, amjad, Jeddah, USA, Huf   


    Just last year, young Miss Renad T. Amjad became only the third lady in the entire history of the Kingdom of Saudi Arabia to officially register as a Female Trainee Lawyer with the Saudi Ministry of Justice.

    You can imagine how deeply honored I was when Renad asked to meet with me in New York.  She is a fascinating, intelligent, courageous and cheerful young lady who, after being one of those to break a Concrete Ceiling, has a bright future ahead of her.  In my line of work, this was akin to meeting Jackie Robinson, and was one of the great thrills of my career.

    (I should note here that, being modest and outwardly humble, Renad is not entirely comfortable with the comparison to Jackie Robinson, citing her lack of experience as a lawyer thus far.  I will also note here that as she becomes more experienced as a lawyer, she will get used to it - because she's stuck with it.)

    That's on a personal note.  Professionally, Renad is a living, breathing demonstration of the fact that change is coming to Saudi Arabia. 

    Such change may be incremental, but incremental does not mean insignificant.  Just look this young lady in the eye and tell her that her accomplishments are "insignificant".  I dare you.

    There are those who advocate for a faster pace of reforms in Saudi Arabia on the subject of women's rights, and more generally.  However, I strongly believe that King Abdullah has been shrewd in his implementation of incremental, but meaningful, reform.  A broader, faster-paced program of reform would risk destabilizing the Kingdom, which would, in turn, risk destabilizing the region and threaten to send economic shock waves throughout the world.

    Saudi Arabia may be insular, but it's not isolated.  Just as events there impact the global economy, international economic activity - including and especially trade - has had an impact on the Kingdom.  And, it shall continue to do so.

    I have never been one to liberally laud Middle Eastern rulers, but King Abdullah knows his people and is familiar with the different elements in his country with whom he exercises power.  To maintain stability, his people need to enjoy greater freedom and feel a larger sense of "ownership" of their lives and their country.  But, to move too quickly in that direction would innately threaten such stability.  It is a difficult balance beam to walk successfully.

    The subject matters and pace of reforms in Saudi Arabia have been thoughtful, and ably executed, thus far.  We will see how things progress from here.

    For now, I think I will just enjoy drinking tea with Jackie Robinson.

    - Jason Huf
    New York, NY, USA
    May 15, 2014

  • There's More to Doha than Soccer

    Stories concerning the 2022 World Cup tournament seem to have taken all the oxygen out of news and information about Qatar.  True, Doha is scheduled to be the first Arab state to host the world's largest soccer tournament, and this promises to generate something of an increase to the country's construction boom.  But, there's more to this small, wealthy Gulf state than sports.

    Businesses, whether they be engineering firms, banks, energy companies, franchisors, purveyors of luxury items or manufacturers of fast-moving consumer goods, might be interested to know that Qatar is the world's third largest producer of natural gas and has a legal and regulatory enviroment wherein compliance is relatively inexpensive.  With the highest GDP per capita in the world, Qatar's consumer base is awash in disposable wealth and opportunities abound.

    As a law firm, JHI takes particular notice of Qatar's bifurcated legal system.  The civil courts there are completely separate from and independent of the Shari'ah courts, and the rest of the government generally.  These separate courts that deal with matters relating to foreign commercial interests provide a level of transparancy and predictability for which Gulf-Arab jurisdictions, fairly or unfairly, do not always have a reputation.  This, in turn, provides an additional layer of security to companies that expand into, or otherwise invest in, Qatar.

    Conduct your own economic survey and have accounting crunch the numbers and provide you with the tax implications of such a venture.  Then, if satisfied (or, excited), contact an experienced law firm and ask them to provide you with a legal and regulatory survey.

    Take a look at Doha beyond the glamour of sports and see if you would like to Explore the Boundaries of Your Business.