Are you looking to expand your automotive business to countries in the Gulf Cooperation Council (GCC)? Would you like to set up a car dealer or open a distributorship in any of the Middle Eastern nations? Do you know all the laws and regulations governing the foundation of a car company in these areas?

Driving Into High Gear

If you or your company is looking into opening an automotive-related business in the GCC, then you will certainly need the expertise of a reputable legal team. Availing yourself of lawyer services when it comes to setting up shop in GCC countries will greatly benefit you as they will have the wisdom of experience, in-depth knowledge of local laws, and the extensive network to properly guide you towards a rule-abiding and successful business set-up.

The automotive sector in the Gulf region and the United Arab Emirates (UAE) is enjoying a considerable boom, thanks to low fuel costs, low tariffs on imports, and high per capita disposable income. Additionally, favorable taxes, attractive insurance offers, and lucrative financing options also make it relatively easy to own automobiles. A burgeoning population brought about by continued migration also adds to the positive outlook of the automotive economy.

Without a serious automotive manufacturing industry, especially for passenger car and commercial vehicles, sectors such as luxury cars, hybrid and electric vehicles, and motorcycles all get their fair share of the purchase pie.

It would do you well to take the law seriously when it comes to doing business in the area. Here are three legal services that a skilled lawyer can help you with to conduct successful business operations in the automotive sector:

1.     Commercial Law

Some of the common issues encountered by those in the automotive industry include commercial agency law issues. These matters may arise from the appointment and termination of local agents or dealers, product safety and warranty queries, and recall obligations under local consumer protection laws. Legal services are also called for issues concerning counterfeit accessories and spare parts, as well as import and re-export matters under local customs laws.

Skilled lawyers can provide valuable advice regarding commercial contracts as well as compliance with local regulations. Aside from providing regulatory instruction, a reliable legal team can also help you with all types of commercial agency arrangements, such as distribution agreements, franchise agreements, and other types of representative agreements. They can also help with licensing and foreign shareholder matters, and provide a tailor-made approach to your unique legal needs.

2.     Mergers and Acquisitions

There are specialist lawyers who are adept at helping business owners with mergers and acquisitions. This would include full-service attention to your specific needs that may consist of matters regarding due diligence and disclosure carve-outs, deal negotiation and transaction documents, closings for both asset and share transactions, pre-closing restructuring, and regulatory approvals.

A capable and accomplished legal team will also help you, not only with acquisitions, but also with disposals, joint ventures, listed and unlisted mergers, and listed takeovers.

3.     Tax Law

Understanding and managing taxes is a tough job, more so when you are dealing with the tax structure of another country. When you’re planning to start an automotive business in the GCC, it would be wise to get the tax expertise of a reputable law firm who has established itself as an expert in international tax practice in the Middle East.

The expertise of trained lawyers in several specialized tax fields will save you the headache and ensure you avoid tax penalties. You can get the legal advice of a lawyer on the following areas:

•   Corporate Tax and Zakat
•   Inbound and Outbound Tax Advisory
•   International Tax Planning and Structuring
•   Mergers and Acquisitions Tax
•   Tax Disputes, Ruling, and Litigation
•   Tax Policy
•   Tax Risk Management
•   Transfer Pricing
•   Value Added Tax

They can provide lawyers services on other indirect taxes such as the applicability of excise tax on your business, advice on tax efficiency structures, obtaining customs duty relief, exemptions, deferral when necessary, and developing supply chain strategies for customs purposes.

Go Full Throttle

The advice and assistance of a distinguished law firm with specially trained lawyers can help you establish your business on firm ground. With the changes and revisions on local laws, these lawyers are always kept abreast of legal updates for the MENA region that will be beneficial to your company. Add to that the strong relations they have established over the years and you are assured of a credible network of commercial agencies that can support your legal needs.

If you want to conduct a successful automotive business operation in the GCC areas, then you should make sure that you are in accordance with the local rules and regulations.

AUTHOR BIO

Sharon Danso-Missah is the Head of Marketing at Al Tamimi & Company, the largest law firm in the Middle East, with 17 offices across nine countries. Established in 1989, they are a full service commercial firm combining knowledge, experience and expertise to ensure all clients have access to the best legal solutions that are commercially sound and cost effective.