Setting up business in a foreign country is by no means easy. So if there is someone who can guide you, then the path becomes smoother. Aparna Shivpuri Arya spoke to John Martin St. Valery, Founder and CEO, Links Group, to find out how he ventured into this field and how he has worked to help foreign companies set up base in the region.
How did it the journey start?
Links Group is a company formation advisor. We started in the region in 2002. We were an advisory and consulting business really aimed at helping foreign individuals or foreign companies looking to establish a foothold or a legal commercial presence in the UAE and Qatar. We have our head office here in Dubai; we have both serviced offices and an advisory office in Abu Dhabi and the same in Doha, Qatar.
Initially, in the early stages it was very much a question of a consultative approach to companies or individuals who required advice on how to establish. It soon became very clear that we needed to offer practical assistance, as well as advising these companies, particularly in relation to local partner services. By local partner services, I mean sponsorship or local agencies that are required for the majority of licenses that are established on shore rather than in a free zone.
Can you explain a bit more about local partnership?
The majority of companies are required to select a local partner, agent or sponsor. In the case of an LLC, for example, the local partner must hold the majority equity share holding so 51% or more. The unique thing about the Links Group model is that we offer that local partner service as a corporate nominee partner rather than an individual national.
The main benefits of local partner being a company and not an individual to the foreign party are that firstly you are taking out the emotional relationship of dealing with an individual, from both sides. So as a corporate nominee partner the foreign company is complying with Companies Law. Whatever the commercial law is in the particular jurisdiction, like having a local partner holding the majority shareholding, the difference with Links is that it’s a highly structured board, that in effect becomes your local partner.
So from a corporate governance perspective, for transparency and so forth, this adds a number of benefits to the foreign party, not least of which is succession planning. Companies often worried about coming into the market and selecting a local partner and then wondering what would happen if the local partner were to die or change his mind. With a corporate entity, the contractual terms remain in place, so it gives more rigidity to the arrangement than having an individual national being the local partner. Over this ten year period we have built up a portfolio of 250 companies ranging from branches of multinational companies or stand alone limited liability companies for multinationals down to single, sole traders, or micro start up businesses in some instances, so a fairly wide range of portfolios.
Are there any specific or specialised services that you provide for startups and SMEs?
We operate within a network of what we call affinity partners, which are corporate service partners that can add or value add benefits to these companies that have just started up; they might be in the financial services sector, banking and so forth. But the core business for Links is to advise a company on the legal structures and make sure from a bureaucratic perspective that they are always licensed correctly, individuals have the correct visas and they have the right permits in place for that company to conduct its business.
Do you consider it an easier process here in the UAE than on the international level?
When one looks at the processes, the ratings for setting up businesses in UAE are improving but I think there is still room for those initial advisory services to be far stronger. This is not just a question of coming in, landing with your briefcase and apply for licence; it’s about doing the correct market research, making sure the business plan is in place, and particularly for start ups or micro businesses, having the correct advice on financial reporting for example from day one. It will then be much easier for that business 18 months down the road to secure funding if they have been reporting their accounts correctly from the beginning. In the past I think that has been lacking.
Do you work in partnership or coordinate with government agencies?
Yes we do work with investment agencies as well as Chambers of Commerce, for example. Then it also depends on the nationalities of the companies that are coming in, for example we have the UK Trade and Investment team for the UK, Commercial Attaches from the US and various Counsels to actually target specific companies to come into the market
Let’s talk more about your own philosophy of management and running your own company.
As for me I’m running a service business and a service business is all about people. We are very fortunate to have a strong, loyal and professional team here. We have very little attrition as far as staff is concerned. I think that is because it is a multicultural, international business. We represent a large number of nationalities, cultures and religions within the business, which gels very well. So personally my philosophy is that it’s all about people who are able to deliver outstanding service and I think that goes across the service sector. If one looks at the trading sector, for example, it is also about your product it still is all about your people.
What is your key to success?
Tenacity and humour are the main ingredients. One has to offer something different. There is little sense in being repetitive in this market, where every product and service is available in abundance. Therefore you have to be outstanding and innovative, which can be delivered through training your staff and professional and personal development. When we first established here, it was a transient market and people would leave after two or three years. However, that has changed and now people want to stay in this region. That is because infrastructure is now developed – good education opportunities, housing facilities, transport, communication, so it’s not difficult to attract high quality people to this market.
What challenges have you faced in setting up business in the region?
We started in UAE in 2002 and went into Qatar in 2005. We went into Qatar with a slightly different model. Our core service is company formation and local partnership services, but we noticed that there was a need for ancillary services, such as serviced offices, resource management, marketing services and so forth. In Qatar, we went as a serviced office provider but we have grown. From a funding or financial perspective, it is a little difficult to start in the region, from scratch. Also, having a right mentor, to be guided through what can sometimes be a maze can be a little difficult. Even though a lot of institutions have been set up, there is still a long way to go for foreign companies to come in the market, unless they are funded.
Any advice for entrepreneurs in the UAE?
Don’t cut corners, as much as it is tempting. Once you identify a gap in the market, initial business planning is the key. Your business plan has to be recognised by the banking sector. It is important to find out how you build the connection between banks and SMEs. What can banks and advisors do to better brief startups, to ensure that they have their financial accounting in order, to secure financing later. To get that foundation in place is the key. Secondly, it’s about people, whether its product or service; it’s all about the right people.
John Martin St. Valery is an entrepreneur who has been recognised as a corporate governance specialist. He has been involved in the establishment and ongoing local partner services of over 250 companies ensuring that the interests and assets of the foreign party are always fully protected while maintaining a strict duty of care for local partners involved. John founded Links Group in 2002, a 100% UAE national owned company, which works as a nominee shareholder/partner for foreign companies who require this service. To find out more please visit: www.the-links-group.com