Business strategies that can be adapted quickly to changes in regulation can help businesses overcome the challenges of uncertainty in the UAE, according to a senior legal expert at international law firm Pinsent Masons.
Catherine Workman was commenting after a study commissioned by Pinsent Masons found that uncertainty stemming from ambiguous laws is the biggest regulatory challenge perceived by business leaders in the UAE.
Catherine Workman
Partner, Head of Middle East
Ensuring that your voice is heard can make the difference between a project doomed to fail and one that will strive and expand across borders
The study included a cross-sector survey as well as interviews with experts from the energy, financial services, infrastructure, real estate and technology sectors, and was conducted prior to the onset of the current coronavirus pandemic. The results of the study are detailed in a new report by Pinsent Masons, 'The Future of the UAE's Regulatory Framework', which also provides further sector-specific insights and recommendations for businesses.
Workman said that the risk of uncertainty has heightened in light of the spread of coronavirus, officially Covid-19, and that it is now more important than ever for businesses to develop bespoke strategies that give them the flexibility to adapt to changes in the regulatory framework.
"The UAE’s business landscape has evolved over the past decade at tremendous speed and although this has brought with it immense opportunities, certain challenges have of course been borne from such rapid progression," Workman said. "In light of the Covid-19 pandemic, we are now in unprecedented times, and that will no doubt lead to further uncertainty from a regulatory and business perspective. We hope that this report will help to instigate important conversations about how the UAE business community and the government can work together to ensure that they UAE builds upon its unique business proposition."
"We advise clients to maintain a constant dialogue with other industry stakeholders and decision makers. The regulatory framework is not set in stone and ensuring that your voice is heard can make the difference between a project doomed to fail and one that will strive and expand across borders. Regulatory frameworks are not only for the purposes of compliance, but are used as a competitive advantage by governments. Businesses should devise and implement flexible strategies that will align with, or be easily adaptable to, future regulations. Pinsent Masons is deeply committed to working with businesses to understand how to best navigate these identified challenges and succeed during this incredibly turbulent period and the uncertain times that are yet to come," she said.
According to the study, 40% of people surveyed said that ambiguous laws present their number one challenge in the UAE. Foreign ownership restrictions and employment laws – particularly in relation to the hiring of top talent – were two other major barriers identified by respondents.
The study also identified issues specific to different sectors. For instance, while just 11% of respondents operating in the infrastructure sector said they find regulations especially challenging – compared to 44% in the energy sector -– almost four in five of those working in infrastructure said hiring top talent is the biggest challenge for their business.
In relation to financial services, almost two-thirds of respondents active in that sector said their organisation needs support to navigate an increasingly digital world, while business leaders in the technology and real estate sectors were emphatic in their calls for more regulation to "level the playing field".
However, the overwhelming view across sectors was that the UAE's regulatory framework is either "extremely business friendly" or "somewhat business friendly", while 89% of infrastructure and 85% of energy leaders said they think the UAE represents the ‘gold standard’ in terms of regulation, compared to other jurisdictions globally.
"Although challenges exist, the report highlights that business confidence is strong and this will be instrumental in ensuring the UAE’s recovery post Covid-19," Workman said. "At Pinsent Masons we firmly believe that the UAE is indeed extremely business friendly and it is up to us to ensure that our clients understand the extent of the UAE’s unique business proposition and to help them to thrive in this extremely dynamic business landscape."
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