Stefano Simontacchi: “We wanted to be a first mover in Libya's resurgence and growth”
As BonelliErede launches an exclusive cooperation agreement with Zahaf & Partners, one of Libya’s most prominent law firms, we discuss the move with BonelliErede’s president.
Leaders League: What are the obstacles to expanding in Africa as a European law firm?
Stefano Simontacchi: I would not talk about obstacles, yet from our experience I must admit that the setting-up and integration stages are crucial.
The setting-up stage may be quite time-consuming as you first need to get to grips with the local regulatory framework to ensure that the envisaged step into the new market fully complies with local laws.
Equally crucial is finding the right local partner with similar values and vision and that is truly committed to creating a long-term partnership.
Once you have found a local partner law firm, it is key to get their team to feel part of the firm, i.e. fully familiar with the firm’s organizational structure, policies and procedures and capable to understand how to work in full synergy with their colleagues from other offices.
Often, a key enabler of the integration stage is seconding associates from local foreign offices to our European offices and vice versa, as well as organizing regular firm-wide business and social gatherings.
What are the opportunities? Have recent events (Covid-19, the Ukraine crisis) impacted its potential? If so, how?
Africa is an attractive investment for European law firms for a variety of reasons. Here are the three main ones:
Firstly, Africa has been growing more than any other region over recent decades and its rapid evolution is expected to continue. Of course, Africa is being squeezed by Covid-19, but with a lower impact than elsewhere mainly due to the younger age of the population and to their experience in managing the Ebola outbreaks.
The IMF [International Monetary Fund]’s GDP estimates show that in 2019, just before the Covid-19 outbreak, Africa and the Middle East were the regions with the highest number of countries growing at 5% p.a. or more, and that by 2026 the same will apply, meaning we can expect Africa and the Middle East to resume their growth fuelled by their young and growing populations.
Publicly available surveys show that international investors share a positive outlook about Africa’s attractiveness and return on investments also in the long term. We constantly get confirmation of this from our clients and network. For the moment, we are not experiencing any impact from the Russia-Ukraine conflict, yet we are carefully observing its evolution.
The second main reason Africa is an attractive investment for European law firms is that it has become easier and easier for international investors to do business in Africa. Local governments continue to introduce reforms to attract and protect international investments including tax incentives, free zones with accelerated licensing and permitting regime, favourable commercial agreements, etc.; Libya’s free zones are a key example of this, and remarkable opportunities – probably widely unknown – do exist for international corporations.
The third reason is as simple as it is crucial: geographical proximity, linguistic and cultural affinities, and deeply rooted governmental ties between Europe and Africa naturally facilitate European expansion in Africa.
How does this move fit into BonelliErede’s existing Middle East and Africa strategy, since the firm already has presence in the region?
Our exclusive cooperation with Zahaf & Partners represents an additional step to grow in Africa and the Middle East for BonelliErede, in full adherence with our strategy that focuses on North Africa, on top of East Africa and Middle East.
Libya is certainly facing an unstable political situation, yet it is a very dynamic market, rich in opportunities for international investors in all sectors involved in its reconstruction. We already have experience in assisting our clients in Libya and we thought it was key to be a ‘first mover’ in counting on its resurgence and medium-term growth.
Our view is that a strong cooperation is possible among our Libyan partner law firm Zahaf & Partners and our offices in Africa and the Middle East, especially the Cairo office. We believe that Egyptian companies as well as Italian ones may play a key role in the supply chain for the reconstruction of Libya, and so we may assist all actors involved thanks to the combined capabilities of our professionals in Cairo and Tripoli.
Which areas of law will the firm focus on in Libya?
As you may know, Zahaf & Partners is well known in the local and international market for its assistance in all areas of law, with particular focus on dispute resolution and project finance across several industrial sectors, including oil and gas, construction, heavy industry, transport, aviation and defence, and telecoms.
Our cooperation with Zahaf & Partners will focus on further reinforcing our offering in some key sectors, especially oil and gas (including liquefied natural gas), and the construction and engineering sectors, where BonelliErede has distinctive capabilities. In addition, we aim to combine the teams’ capabilities to assist clients in international arbitration, international taxation and transfer pricing.
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