Your Questions: Answered - Written by on Tuesday, December 4, 2012 1:36 - 0 Comments

Expanding into the Middle East raises questions about local partner: Peter Lloyd CEO Mabey Group answers your questions

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Question:

I run a business which is looking to enter the middle east market. We have been told that we need a local partner. The basic proposal is that the local partner will help us find business and make introductions for us for a stake in new business in the region.

I have been told this is how business is done in the region. Do you have any tips?

Peter’s Answer:

This is an issue that many companies face when they wish to operate in the Middle East.

In many countries you do have to have a local partner. There are many options as to the type of partner you can choose, from major companies who will effectively manage your operations as a ‘subsidiary’, through specialist ‘partners’ who help with local bureaucracy and finally down to local individuals who do nothing except provide a their name.

What is right for your business will need specialist advice and any of the major international law firms can help with this [Ed: that includes us…!].

In addition to choosing the right route you will need to check the ethical credentials and I would expect thorough due diligence, much as you would with any other form of partner or distributor. There are ways to make this relationship work successfully without losing control or facing ethical risks, but some of the mechanisms have a degree of complexity and the rules vary between the various countries.

All good work for lawyers, but people do make money in this region so it can be done successfully.

Peter Lloyd is CEO Mabey Group a world leader in trading ethically in challenging markets

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