Hawki Middle East - Spring 2013

Middle East Spring 2013

IN THIS ISSUE Page 2 - Welcome from Tim Cartwright - Director - Hawksford Page 3 - Meet the Hawksford Middle East team Page 4 - “Building lasting relationships for long term value in the Gulf” - Sean Costello - Jersey Finance Page 6 - “Understanding our Clients” - Hawksford Middle East Team

Middle East Spring 2013

Welcome to Hawki Following on from one of our general themes in 2012, the first part of 2013 has seen us visiting a number of countries and states in the Gulf Co-operation Council (GCC).

In so doing, it has helped us to understand more about our clients, their needs and aspirations. In addition, we have been able to discuss face-to-face, matters that will have an immediate and longer term impact on them, their families and ultimately their wealth wherever it may be located outside of their home territory.

Furthermore, visiting the regions of the GCC has allowed us to align ourselves with other professional services firms who also occupy the same space of looking after clients who choose to place assets outside their home nation.

Tim Cartwright Director T: +44 (0) 1534 740115 E: tim.cartwright@hawksford.com

What have we learnt so far?

Using the old clichÊ – the world really has become a smaller global village; In general, many clients do not immediately appreciate that the legislative changes taking place in Europe and the US will have an impact on them, if not now, sometime in the future; and More sophisticated planning and structuring is required for those that look to move assets from a zero tax regime to a high tax regime.

What will remain in focus for the rest of 2013/2014?

Looking at things in a little more detail, we feel the focus will be on: The impact that the new tax regime will have on clients who continue to acquire high value UK real estate; How the provisions of the newly introduced UK Statutory Residence Test (SRT) will impact clients and their families in the GCC. We believe that there is a lot more work to be done in order to educate clients, as it is not all doom and gloom; For those that have for many years maintained structures offshore, now perhaps is as good a time as any to undertake a root and branch review of those structures.

Are these still fit for purpose?; and At corporate level, the issue of governance continues to raise its head with certain states and countries recognising the need for their corporates to be applying best practice. The result has been the introduction of new legislation in these territories in an attempt to bring companies more in line with accepted international business standards.

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We continue to remain passionate about meeting and working with our clients in the GCC in order to truly understand their situation and financial aspirations.

Our Middle East team will continue to visit the region to ensure that we as a business add value for clients, meet with new family members, speak with their advisers and ultimately implement bespoke solutions that cater for their changing situations.

Meet the Hawksford Middle East team Our dedicated Middle East team have extensive experience and expertise having dealt with clients affairs from the region for many years. They manage more than 150 client relationships in the region, with structures that have over USD7bn in assets under administration.

Tim Cartwright Director T: +44 (0) 1534 740115 E: tim.cartwright@hawksford.com Based in our Hawksford office in Jersey

We have offices in Dubai and regularly visit clients, their families and advisers across the GCC. To find out more or to arrange a meeting, please get in touch with one of the team in our Dubai or Jersey office.

James Howe

Lynda O’Mahoney

Daniel Hainsworth

Director

Business Development Manager

Trust Manager

T: +44 (0) 1534 740246 E: james.howe@hawksford.com

T: +971 (0) 4 420 3375 E: lynda.omahoney@hawksford.ae

T: +44 (0) 1534 740179 E: daniel.hainsworth@hawksford.com

Based in our Hawksford office in Jersey

Based in our Hawksford office in Dubai, UAE

Based in our Hawksford office in Jersey

Nathan Taylor

Kay Gouyette

Ryan Crawford

Senior Company & Trust Admin

Company & Trust Administrator

Trainee Company & Trust Admin

T: +44 (0) 1534 740241 E: nathan.taylor@hawksford.com

T: +44 (0) 1534 740244 E: kay.gouyette@hawksford.com

T: +44 (0) 1534 740146 E: ryan.crawford@hawksford.com

Based in our Hawksford office in Jersey

Based in our Hawksford office in Jersey

Based in our Hawksford office in Jersey

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Middle East Spring 2013

Building lasting relationships for long term value in the Gulf

by Sean Costello, Head of Business Development, GCC & India, Jersey Finance - Abu Dhabi If your job is about building high-value, lasting relationships in the Gulf region, whether as a fee earner or a business developer, then this short article may well help you.

You will have heard the tried and tested maxim “it’s all about relationships” and “the Gulf is a relationship-driven culture”.

Both are 100 per cent true, but in the race for ‘results’ they are too often over-looked or circumvented.

If you have a five-year start up plan, then you do need to really buy into the view that you will have to take a controlled approach to business development, or all that investment will be undone in the rush for results.

I once learnt from a wise former boss that you have to “invest in relationships before you have certainty of the return.” I will take this as the theme for this article.

When I first arrived in Abu Dhabi, a young partner in a magic circle law firm told me that his firm had briefed him that there were no targets for the first twelve months. He was told “set up, build the brand and go out and network.” The firm is now one of the most successful in the region and has merged with a local law firm. It has also earned its place as one which we have naturally gravitated towards to build a lasting, strategic, relationship with.

I have often seen firms, from various sectors, looking for “quick wins” and immediate results. This doesn’t work in the Gulf, as the opposite is often true. A former head of a large global consultancy firm told me recently that he had to sit and drink Arabic coffee with a Sheikh for about a year before the Sheikh turned to him one evening and said “so, what is it you would like to discuss?”

On a personal level, I have found that being a member of the British Business Group (BBG) in Abu Dhabi has been incredibly useful, as some of the members

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“Being a relative new-comer, I have been able to be introduced to their influential network in the UAE” of the Committee have lived in the region for around 30 years. Being a relative newcomer, I have been able to be introduced to their influential network in the UAE. So it begs the question - how can you fast-track some of the relationships you need to succeed? The BBG is one such forum. Some of the leading Sheikhs hold an almost daily Majlis and while you may not meet the ‘principal’ for long, those who attend the Majlis can be very influential and you can meet them in a relaxed environment, usually held in the evenings. Regular attendance is important to show face and - more importantly - the commitment the locals are looking for.

We are all under pressure for results so we need to deliver them, but in good time.

Living in Abu Dhabi, I have found that you can develop a good network after about two years on the ground. You are then in a position to get referrals and introductions and to work out a map of who’s who and how they might be connected to

one another. This takes time, and some guidance, to fathom out.

The Jersey Finance office has created a Jersey Advisory Group (JAG) to shape and influence our business development efforts and the members of this group have all been incredibly helpful to support and guide our efforts. I would encourage member firms to meet them, or form their own close group of special advisers, as this is another way to fast-track relationships and get advice on your market approach, (we have now established JAGs in all of our key target markets).

However, nothing is easy or straightforward and one has to choose which relationships to target and really develop deeply over the medium to long term. An understanding of what makes people “tick” is important, what influences them and what their personal preference for a meeting is. Is it an evening meal, a breakfast, watching the rugby, playing a round of golf, or just a regular coffee?

Spending quality time with them, in an environment of their choosing, will pay back the dividends you are seeking.

I have found that gentle persistence pays off and people like to have that regular contact, so that they can get to know you better. Having a rotating calendar of commitments and scheduled appointments is one way to get around all your contacts. I am fortunate to have two excellent support staff, who share responsibility for fixing appointments and they have a great success rate - often building relationships with the gatekeepers directly or via their PAs. This makes all the difference when you’re asking for time from busy people.

A Jersey Finance member firm recently told me that after several years of sustained effort in the Gulf, they are now seeing some “tremendous opportunities” coming through. For other firms this is also true, usually helped by having someone on the ground, who can be omnipresent and keep

“Sometimes you have to hold your nerve and commit to more frequent visits, coming often enough to build a head of steam” their eyes and ears open for opportunities.

For firms travelling in, they may need to take a reality check on how often they are coming over and who they are building relationships with. Sometimes you have to hold your nerve and commit to more frequent visits, coming often enough to build a head of steam. Luck and judgement also plays a part, as does a healthy dose of perseverance.

At a Jersey government and industry level the relationships developed with the UAE are probably some of the best business relationships that we have globally. With almost 14 per cent of our bank deposits originating from the Gulf, there would

appear to be a very strong corollary based on building these relationships – sensibly and slowly – for the last decade or so.

If you are a Jersey Finance member firm and you are travelling to the Gulf, then please do drop me a line and we will help to try to connect you to the right people to build those all-important and long-lasting relationships that deliver value - for you and your firm.

Sean Costello E: sean.costello@jerseyfinance.je

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Middle East Spring 2013

Understanding our clients

by The Hawksford Middle East team

“Listen to many, speak to a few.”

William Shakespeare

We believe that understanding a client’s situation and the challenges they are presented with before attempting to outline a solution, is one of the most important first steps in building long standing relationships. We have been providing bespoke services to our clients from the Middle East for more than 25 years. In doing so, it is imperative to appreciate that each client’s circumstances are different and therefore a ‘one size fits all’ solution will never work.

Our client and adviser relationships span the region and as a result we have built up a wealth of experience in understanding the nuances of family and business dynamics. This is especially poignant given that the vast majority of the wealth has been generated from family run businesses.

We maintain contact with an array of other professional advisers from private bankers to lawyers and accountants, all of whom are recognising that patriarchs and matriarchs must plan for the future - be it business transition or the devolution of family wealth throughout the world.

We currently have over USD7bn of clients’ assets under administration. From our extensive range of case studies, we have set out in this article two examples of where our dedicated Middle East team have assisted clients.

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CASE STUDY ONE

The client’s challenge

The solution

A UAE based company required corporate planning, structuring and administration to look after a complex, cross-border and multi-channel online media and technology business.

By implementing a structure that catered for these specific circumstances, the client was able to plan for the future, not only in order to achieve their financial objectives, but also to address the objectives of the individual shareholders.

Who we worked with?

IP specialist lawyers; Multi-jurisdictional tax professionals; and Property lawyers.

The planning Our team of experienced corporate administrators implemented a structure that holds and administers all of the business’s contracts with third parties, thereby enabling it to run efficiently.

Furthermore, for reputational reasons, and through liaising with our network of legal, tax and professional advisers, we needed to establish and structure the business through a number of Jersey and UK companies that were to ultimately hold the various IP, property and media assets of the business.

In addition, our solution presented the need to implement strong corporate governance in a well regulated jurisdiction. The structure that has been set up is well placed to achieve the best possible price for an IPO in the future.

The structure and jurisdictions we have used will add substantial value when the client is looking for a commercial exit or IPO.

In summary

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CASE STUDY TWO

The client’s challenge The client, a UAE based family, required solutions to be implemented for succession planning and wealth preservation purposes, allowing for the devolution of wealth in a controlled manner.

Who we worked with?

Multi-jurisdictional tax specialists; Hawksford’s Swiss team in Zurich; and Investment managers.

The planning Having already worked with this client for more than two decades, we understood the complexity of the client’s wealth portfolio and were able to identify a detailed plan of how we were going to implement a solution that assisted the client in achieving their financial objectives.

The structures would need primarily to be set up for succession planning and wealth preservation purposes, allowing for the devolution of wealth in a controlled manner, under the guidance

of Hawksford as professional trustees.

The client wanted to hold substantial assets within the structure and these would include real estate in the USA and the UK, traditional investments, works of art and a multi-generational family business.

The patriarch of the family advised the trustees of his intent to emigrate permanently from the UAE. Whilst the beneficiaries were resident in the UAE, the structure was tax neutral; however the move being proposed was to a jurisdiction that imposed a punitive tax regime on certain structures.

The solution As trustees, we engaged with a firm of specialist tax advisers in the relevant jurisdiction and by utilising our Swiss team’s expertise and knowledge (together with our own), we were able to recommend and create a New Zealand Private Trust Company (PTC), administered from our Swiss and Jersey offices.

This solution was not only compliant from a tax perspective, but also offered the patriarch additional control as he was able to act as one of the directors of the PTC. The structure continues to retain all the benefits that were originally created more than 20 years ago. This solution provides the client with a flexible approach to a complex and multi-jurisdictional and multi-asset class challenge.

The highlighted case studies provide a brief overview of what we have done for two clients, each with a very different challenge. We carefully listen, understand and acknowledge that each client situation needs to be fully planned and considered in order to implement the best solution. Our Middle East team has significant experience in dealing with complex situations. By accessing the wider Hawksford Group’s jurisdictional expertise and resources and by working with our network of external professional advisers, we are able to implement fully bespoke solutions.

For more information or to arrange a meeting, please get in touch with any of our Middle East team members. We have offices in Dubai and regularly visit other jurisdictions in the Middle East and India and would be happy to meet to discuss matters further.

“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”

Winston Churchill

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Contact details

Jersey Head Office Hawksford Group Hawksford House 15 Esplanade St Helier Jersey JE1 1RB T: +44 (0) 1534 740000

Switzerland For further details on any of the content of this issue, please contact: Matthew Morel Head of Marketing T: +44 (0)1534 740175 E: matthew.morel@hawksford.com

www.hawksford.com Hawksford Group (and Hawksford International) are the Registered Business Names of Hawksford Trust Company Jersey Limited which is regulated by the Jersey Financial Services Commission.

Hawksford LSS GmbH Talacker 50 Z端rich 8001 Switzerland T: +41 (0) 43 500 3870

United Arab Emirates Hawksford PO Box 340505, Unit 1307 JBC 5, Jumeirah Lakes Towers Dubai, United Arab Emirates T: +971 (4) 420 3375 Jersey | British Virgin Islands | New Zealand | Singapore | Switzerland | United Arab Emirates

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Managing family wealth

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Planning for future generations

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Helping your business grow

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Specialised advice tailored to you

Media & Sports

Confidential advice, specialist solutions

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Provision of bespoke administration services

Hawksford Trust Company Jersey Limited (Middle East Branch) is registered & licensed as a FREEZONE Company under the Rules & Regulations of the DMCCA.

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