Geneva Kennedy Day Two

10/15/12 - Today we had two presentations, Mohamed Afzal Koya and Priyesh Kapadia of BDO, an Accounting and Professional Services firm; and Sohail Zubairi of Dar Al Sharia, DuBai Islamic Banks.

The representatives of the BDO provided our group with information about the history of the UAE and about doing business in the UAE. We learned some interesting facts about the UAE business model, which in short has two tracks for interested businesses looking to start up here. There is the mainland track which are your traditional LLC and joint venture type businesses. The UAE requires businesses forming under this track to have a 51% partnership with a UAE national. The alternative business track is to establish a business in one of the Free Trade Zones area in UAE. Under this track a business is free to have 100% ownership as a foreigner without having to partner with any UAE national. There are pros and cons for both business models. The pros for the mainland model is that depending on the type of business forming, a new business can be formed in about 10 days. However, one of the cons is that on paper, you would have minority ownership in your own business. After further discussions with the representatives, we learned that this could be a real problem if a dispute arose between the business partners. The UAE ranks lowest in handling contract disputes in their court system. Since these types of business ventures are relatively new, the court systems here are still deriving ways to enforce contract disputes. In sum, business investors have a great opportunities to conduct business here in DuBai. However, that same opportunity lends itself to some high stakes risks, so weigh out the risks before jumping all in!!

The representative from the Dar Al Sharia gave us some detailed insights about Islamic Finance, which is based on religious teachings. In sum, unlike our traditional commercial banks in the US which lends out money and gets repayment of the loans through interest rates, Islamic Bank is not a lender, but a trader of the funds deposited by a depositor. No interest rates or fees are charged to depositors. The Islamic Banker goes out to invest the depositor's funds and receives what I took to be a commission on a percentage of the profits from the depositor's investment. However, if the investment is not profitable and through no fault or unethical dealings of the Islamic Banker, then the depositor shares the sole loss. Islamic Banking is a common practice here in the UAE and the banking system is doing well, but does not sound like something most of my MBAE peers and I would sign up for.

This evening we went out for a night on the town here in DuBai. We had dinner at the Board Walk, which is a beautiful floating restaurant on a pier. The restaurant is in the shape of a boat and we dined on Arabic cuisine looking out at the beautiful night skyline of DuBai and watching lighted up boats sail by. The atmosphere was awesome and reminded me of dinner cruises we have on Navy Pier in Chicago. We took tons of photos on camera phones, which will get posted later. We capped the night off at an English Pub in the hotel.....but no details to come on that little excursion, as you know what we all say...WHAT HAPPENS IN DUBAI STAYS IN DUBAI!!

Here's a photo overlooking the DuBai skyline from our hotel room. Enjoying my time here so far with my sister, Denise and Friends...until next time. Peace!!

Geneva, MBAE14
Sent from my iPad