Words of wisdom for working in the Middle East
Beale and Company partner Sheena Sood offers some advice - and warning - to those thinking of entering Dubai's resurgence infrastructure market.
Despite the recent fall in the oil price, the Middle East region remains in the midst of a remarkable construction boom. The recovery of the UAE since the 2008 downturn, plus a continuing focus on development in other GCC states underpins the growth of construction across the region.
Add in increased infrastructure and social investment in Saudi Arabia and renewed investments in major construction projects in Egypt, supported by regional and international funders, and we see the region attracting developers, contractors and consultants from around the world.
"Post crash, with demand for European and US expertise, consultants are keen to avoid the mistakes of the past and adopt better risk management to secure better profit margins."
Consultants went hell for leather before the crash to win work in the region. Contract terms were agreed with little or no negotiation. Many were left burnt and not by the Dubai sun!
Post crash, with demand for European and US expertise, consultants are keen to avoid the mistakes of the past and adopt better risk management to secure better profit margins.
So what words of wisdom would the stalwarts give to the new entrants to the market? We think it would look something like this
First payment practices are improving but remain poor by UK standards - more important than the overall fee is the payment schedule. Get money on account wherever possible but pay close attention to the payment schedule in the contract. Seek to match payments as closely as possible to when the work is done. Carry out due diligence, adopt good invoicing and credit control practices to mitigate risk.
Beale & Company has opened an office in the DIFC, Dubai.
Contact s.sood@beale-law.com for further information
Next educate internally on the differences in the way business is done in the region so as to manage expectations back home.
Then there is bureaucracy. It is rife so the right paperwork, the right company stamp, the right power of attorney all matter. And contract wording matters.
Finally know your rights and obligations particularly when things are not going to plan. Make sure your professional indemnity insurance matches as far as possible the liabilities you are taking on. Know the position with regard to limitation under UAE law, understand decennial liability and understand the dispute resolution process embodied in your contract.
And, of course, wherever possible avoid throwing yourself to the mercy of the local courts.