33 ASIAN LEGAL BUSINESS – JULY 2024 WWW.LEGALBUSINESSONLINE.COM on complex regulatory matters. These collaborations can enhance service offerings and provide a competitive edge in attracting multinational clients,” Kim says. He adds that as competition for high-value clients, such as multinational corporations and large investment funds, grows, law firms will need to demonstrate their ability to navigate the regulatory landscapes of both countries, provide strategic legal advice, and offer innovative solutions to complex legal issues. “Firms that can effectively market their expertise and track record in handling cross-border transactions will be better positioned to attract and retain these clients,” Kim says. SECTORS IN FOCUS This increased cross-collaboration will take place across a variety of sectors that are primed to grow following the implementation of the CEPA. President Yoon’s office said the UAE reaffirmed a 2023 pledge of $30 billion in investment for South Korean businesses in areas from nuclear power and defence to hydrogen and solar energy. The Abu Dhabi National Oil Company signed a letter of intent for Hanwha Ocean and Samsung Heavy Industries to build at least six LNG carriers valued at about $1.5 billion, it said. The CEPA substantially removes South Korea’s tariffs on crude oil imports from the UAE, stimulating increased energy trade between the nations. New work for law firms will be generated from an increased focus on renewable energy projects, regulatory compliance for new energy ventures, and structuring joint ventures in the energy sector, Ha explains. Legal professionals will be asked to advise on regulatory compliance, environmental impact assessments, and the structuring of contracts for large-scale energy projects, Kim adds. Further, new environmental standards and incentives for green technologies will lead to opportunities in advising on compliance with environmental regulations, accessing incentives, and structuring sustainable ventures. Another sector that is likely to spur cross-border trade will be technology, as the UAE will look at Korea’s marketleading innovations to continue its diversification from oil and gas. Consequently, law firms will bolster their specialised practice groups, focused on tech deals, intellectual property, financial technology, data privacy and cybersecurity. Other sectors in focus will include infrastructure and construction, automobiles, healthcare and pharmaceuticals, and financial services. While no defence deal has been unveiled yet, South Korea has signed a series of global defence equipment contracts as part of its plans to become the world’s fourth-largest defence exporter by 2027. This is reflected in the CEPA, and defence exports from South Korea to the UAE will likely go up soon. To attract more Korean capital in the UAE, the nation’s foreign ownership restrictions will be eased, and sectorspecific regulatory regimes will be created and constantly updated based on feedback. Additionally, antitrust notifications, environmental clearances, and data localisation laws will develop, giving rise to more compliance and corporate work for law firms. “These changes will allow lawyers to develop new practice areas, offer comprehensive strategies for market entry, provide ongoing compliance advice, assist with regulatory filings and approvals, and conduct client training on new regulatory requirements,” Ha at Al Tamimi explains. “Additionally, reductions or eliminations of tariffs and streamlined customs procedures will necessitate advice on tariff classification, rules of origin compliance, and optimising supply chains,” adds Ha. CLIENT CONCERNS Navigating complex foreign regulatory environments is a key concern for clients from both countries. Kim at BKL explains that for Korean clients, UAE regulations are considered less accessible compared to South Korean regulations. “In South Korea, an official inquiry system is well-established, making it easier for businesses to seek clarification and access regulatory information. In contrast, dealing with government authorities in the UAE to obtain similar clarifications is considered to be more challenging,” Kim adds. Ha says that in addition to regulatory compliance work, cultural and business practice differences, which require navigating cultural nuances in negotiations and understanding local business etiquette, will also require deployment of local expertise by law firms. Increase in demand for local talent is also prompted by due diligence challenges, such as accessing reliable information on potential partners or acquisition targets and verifying asset ownership and financial statements, explains Ha. Another key area of concern for clients are the tax implications in both countries, as any investment requires careful navigation of the distinct tax regimes in South Korea and the UAE. Differences in corporate tax and value-added tax rates, niche differences in tax regulations, such as transfer pricing and double taxation agreements, will trigger an increased investment by law firms in tax practices in both countries. “Changes in tax regulations will bring opportunities in structuring investments to optimise tax benefits, advising on transfer pricing, and ensuring compliance with new tax requirements,” says Ha. Lastly, substantive and procedural dispute resolution laws in both countries are a top concern for businesses in the UAE and South Korea. “Korean clients, in particular, are often concerned about the efficiency of the UAE’s court system and the enforcement of arbitration awards. The perception is that litigation in UAE courts can be protracted, predominantly involving local lawyers, and characterised by unfamiliar procedures, and enforcement of arbitration awards are often denied with grounds not common in other jurisdictions,” Kim explains. “Ensuring that there are reliable mechanisms in place for resolving disputes amicably and efficiently is essential to maintaining business relationships and protecting investments,” he adds. MIDDLE EAST
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