global
I S S U E 10

RAISINGTHEIR GAMEGULF ECONOMIESLOOK TO THE FUTURE
COOL AND CONNECTED
SMART CITIES GO TO NEXT LEVELNOTHING VENTURED

MARKET TRENDS IN GOING PUBLIC

MAKING THEIR MARKEMERGING ECONOMIES TO WATCH

The networkfor doingbusiness

2 UHY GLOBAL August 2020

WORD OF WELCOME

IN THIS ISSUE

3

BIO-LOGICAL
Natural science
makes perfect sense

4

MAKING CITIESSMARTER
Metropolitan hubs
use tech to connect

17
MEXICAN WAVESBlue biotech
feeding our future

18

JOINING THE CLUB
Spotlight onemerging economies

8

GOING PUBLICDo IPOs havea future?

21

COGS ANDWHEELS
Focus on network
quality

11

GLOBAL NEWS
Roundup of world’s
big stories

12

22

PARALYMPIC
HOPES LIVE ON
Shelly Woods keeps
Games dream alive

POWERINGAHEAD
New UHY chairman
takes the reins

23
14

WIDENING
THE GULF
What next for
Middle Eastbusiness?

SERVING CLIENTS,SERVINGCOMMUNITIES
Celebrating our
inspirational people

WORD OFWELCOME
Welcome to the 10th issue of
UHY Global, our magazine
for international businesses.
It is something of a landmark,representing a full five years of
insightful reporting on global
topics that matter to our clients,
with expert commentary fromour experienced people aroundthe world. It is also available as
an interactive online publication,
without the constraints of paper,
bringing our readers additional
narratives, including video,
and a rich resource of source
material just a click away.

Our feature Joining the Club
considers which emerging-market
economies are shaping up to
become this decade’s foreign direct
investment favourites, and why.

A word on Covid-19. When I
introduced our previous issue inJanuary and forecast a year ofchange, this is not quite what I –or anybody – had in mind. Experts
still disagree on the depth andlongevity of its impact, but eventhough the likelihood of global
recession remains at or near 100%,
I have no doubt we will, as people,
and as a connected economic
ecosystem, bounce right back.
On behalf of UHY and all of ourmember firms and professionals
worldwide, I wish our readers safe
passage and healthier times ahead.

Also, in this issue you will find ourbehind-the-scenes view on quality
management and our regular
Perspectives report, this timelooking at the current climate for
IPOs. In All Around The World welook at what is happening with
global bioscience, and our Serving
Clients, Serving Communities
news celebrates the achievementsof some of our remarkablepeople across the network.

Indeed, our key features in thisissue are all about opportunity andgrowth. In Making Cities Smarter,
we explore the developmentof the smart city concept.
Driven by social, economic andenvironmental needs, and enabled
by vision and new technology,
connected urbanisation has a
lot to offer. We look at what
is happening, and where.
Another question at the forefrontof international expansion for
ambitious businesses, governments
and investors, is where the next
investable growth will come from?

In the third of our growththemed features, we look at
new opportunities for small andmedium enterprises in the Middle
East, which according to theWorld Bank is fast becoming oneof the best places to do business.
In Widening the Gulf, we ask
our UHY experts on the groundto explain what is changing.

As always, I hope you enjoy
this issue of UHY Global – andif you would like to read moreand dig deeper on the topics wehave featured, then browse our
expanded digital edition, at uhy.
com/publications. Meanwhile,please let me once more wish
you safe, healthy and prosperous
times ahead and much success.
Dennis Petri
Chairman, UHY International

ALL AROUND THE WORLDUHY GLOBAL August 2020 3

BIO-LOGICALLOOKING TO NATURAL SCIENCES AND TECHNOLOGYFOR A HEALTHIER FUTURE MAKES PERFECT SENSE

I

f one thing can bring
optimism to solving someof the world’s pressing
challenges, it is the marriageof biology and technology.
The rate of advance in the mainstream oftechnology that we hear about everyday– artificial intelligence (AI), robotics,
quantum leaps in computer power,
the internet of things – is also reflectedin the natural sciences. In particular,
breakthroughs in biotechnology, thoughless understood in the broader global
population, are by no means fewer or lessdramatic. On the contrary, they are thebuilding blocks of a sustainable future
for nine billion people and counting.

become pre-eminent, are recognised
as real societal issues. As a result,pan-governmental organisations andthinktanks are engaged in building ethicaland legal safeguards to minimise risk.
This follows years of controversial headlinemaking by biotech pioneers. Most people
remember Dolly the sheep, who was bornin 1996 and became the world’s most
famous clone, the first mammal to be
successfully created from the DNA of an
adult cell. Fewer people know that Dolly’s
research programme yielded breakthroughs
in how to manufacture potential
treatments for muscular dystrophy.

In its simplest form, ‘biotech’ is about
using biological processes for industrial
purposes, most prominently in medicine
and agriculture. Early and familiar examplesof biotech in action would include brewing
and bread-making, which create products
from the manipulation of microorganisms.

PUSHING BOUNDARIESIn healthcare, the dangers are clear andpresent. Some populations are living
longer while others are still emerging
from health poverty. Disease is a persistent
threat. The global search for a successful
Covid-19 vaccine is a topical example, on
top of longstanding effort to find effective
treatments for cancers, organ impairments
and neural disorders, among many others.
Biological science is not without otherchallenges. The fears of biological
warfare, or a future in which robots

Biotech is a

critical cog in thewheel that keeps

human life turning.

DIGITAL DIAGNOSTICS

MORE THAN BEER AND BREAD

Today, biotech scientists are called on
to ensure the future security of ourglobal food and fuel supply, protect
the environment, eradicate diseaseand create a bio-economy based onsustainable natural resources. Biotech
harnesses innovation and imagination
with biology and technology, to create
solutions that meet our global needs.

moral questions under the spotlight but today’s advances, breakthroughsand discoveries continue to build ahealthier future for millions of people.

ACCELERATING THE SCIENCE
There is no doubt that data-driven
diagnostics and the role AI is set to play indrug discovery and targeting, for example,
will accelerate progress in biotech,
genetics and biosynthetic engineering.
Massively complex human machinerywill eventually be capable of replication.
There are already ground-breaking
developments which would suggest thequestion of artificial kidneys and bioniceyes is not a matter of if, but when.
Biotech in this sense is a critical cog
in the wheel that keeps human life
turning. The vast majority of bioscientificwork, of course, is conducted withtransparency and integrity within existing
ethical and regulatory frameworks
and guidelines. Technology helps thishappen faster, and more effectively.
Undoubtedly, pushing the boundaries ofwhat is possible will increasingly bring

The rise in popularity of the personal
fitness tracker or smartwatch, isevidence of a sea change in future
healthcare, enabled by technology.
Consumers looking after their own
health and wellbeing can do so witha sophisticated range of wearable
devices that will monitor and record
exercise, heartrates, oxygen capacity,
sleep quality, nutrition, weight andmore besides. The potential for
predictive diagnostics is clear.
Increasingly, consultations with
doctors and specialists will be
conducted remotely. This is inlarge part dependent not on thetechnology itself, but on its adoption
by people who are cautious aboutsharing personal health data with a
medical support network online. It is
likely to be a behavioural shift driven
by more informed, more demanding
and ultimately more trusting patients.
But looking past issues of privacy
and the need for patients to control
their own data, the future of
preventative health provision is oneof digitally-enabled opportunity. n

Dolly the Sheep photo courtesy of The Roslin
Institute, The University of Edinburgh.

4 UHY GLOBAL August 2020

MAKING CITIESSMARTER
SMART CITY INITIATIVES ARE SPROUTING ACROSSTHE GLOBE, WITH THE AIM OF CREATING TRULYCONNECTED CITIES FOR LIFE AND WORKFEATURE – MAKING CITIES SMARTERUHY GLOBAL August 2020 5

I

n January 2020, Japanese car manufacturer Toyota revealedplans to build an entire city from scratch near the foot of Mount
Fuji. Named for its integrated design, Woven City will not belarge, but it will be smart. Around 2,000 residents will live andwork in the 175-acre site initially, surrounded by some of themost sustainable and connected technology currently available.

Woven City streets will hum with thesound of electric and driverless vehicles.
Renewable energy will power its
sustainably designed homes. Everything– people, vehicles, buildings – will be
digitally connected, with inhabitants
acting as the pampered lab rats ofa real-world experiment in ultraefficient, AI-assisted urban living.
“With people, buildings and vehicles
all connected and communicating witheach other through data and sensors,
we will be able to test connected AI
technology, in both the virtual andphysical realms, maximising its potential,”
said Akio Toyoda, Toyota’s president.
PRESSURE ON INFRASTRUCTURE

The concept of a smart city is not new, but
growing concerns about climate change
and overpopulation are driving ever-more
ambitious projects. Scores of nations
around the world are piloting their own
interpretations of smart urban design, as
authorities react to growing pressure on
public amenities and city infrastructure.
The Netherlands, for example, has
adopted a nationwide Smart City
Strategy, with the aim of developing
projects that will create healthier, greener,
more liveable urban environments. Paul
Mencke, partner at Govers Accountants/
Advisors, UHY’s member firm in the
Netherlands, says the need is obvious.
“The ambition of the government
arises from global developments suchas urbanisation, climate change, labour
participation, digitisation, mobility andnatural resources becoming rare. These
global developments have a disruptive
impact on societal systems, and they
put pressure on cities to create new
business models,” he explains.

Paul cites the example of his own
city, Eindhoven, which is creating a
32-kilometre-long cycle loop aroundand through the city, currently in its final
stages of construction. “The route is
an example of a sympathetic initiativethat has a positive combined impact
on mobility (reducing congestion), thereduced use of fossil fuels, public healthand parking problems,” he says.
Dubai, meanwhile, has long embraced theconcept of technology-driven urban living.
Now, its Smart City 2021 initiative boasts
the ambition of demonstrably improving
happiness. It aims to embed technology
into every element of public life, helping
to create more satisfying interactions
between inhabitants, businesses andgovernment bodies. There are currently
545 planned or ongoing smart city
initiatives, harnessing AI, blockchain andpaperless technologies to drive efficiency.

Dubai’s Smart City
2021 initiative aims

to embed technology
into every elementof public life,

helping to create
more satisfying

interactions between
inhabitants,businesses andgovernment bodies.

6 UHY GLOBAL August 2020

“The basic premise for smart city
adoption is to ensure every aspect
and transaction of daily life in the city
adds to the happiness quotient of its
residents, from a smart technology
standpoint,” says James Mathew, CEOand managing partner of UHY James,
based in Dubai, United Arab Emirates.
While smart city technologies do nothave to be digital – the Eindhoven
cycle track is a case in point – many
inevitably are. Dubai is a leader inblockchain adoption, for instance, witha blockchain community 5% larger than
the global average. And innovation does
not stop there, as James explains:“By 2030, Dubai is set to have the firstsmart police station with 25% of its
workforce being ‘robocops’,” he says.
“The first robot officer was launchedin 2017 to patrol Dubai streets.”
TECHNOLOGY FOR LOCAL NEEDS
Around the world, cities are promoting
smart technologies that best meet their
specific needs. According to Sunil Hansraj,
joint managing partner, Chandabhoy& Jassoobhoy, Mumbai, India’s Smart
Cities Mission was created to help easeovercrowding in the country’s biggest
cities. “Its aim is to provide the burgeoning
middle class with an aspirational lifestylein their own hometowns, rather thanhave a large population continually
migrate to the larger cities – which arebursting at the seams,” says Sunil.

Overcrowding is not unique to India,
of course. Combined with overall
population growth, urbanisation is
likely to add another 2.5 billion people
to cities globally over the next three
decades. But a number of India’s cities
have reached saturation point already,accelerating the need for smart city
initiatives. The aim is to improve qualityof life in India’s biggest urban centres,
while at the same time making smaller
towns and cities more economically viable,
slowing the pace of internal migration.
“Accordingly, the purpose of the Smart
Cities Mission is to drive economic growthand improve quality of life by enabling
local area development and harnessing
technology, especially technology that
leads to smart outcomes,” says Sunil.
“Growth and development will
enable smart cities to use technology,
information and data to improve
infrastructure and services.”
Mexico, meanwhile, has seen the creationof ‘smart zones’. “They are ‘little cities’in or near a major city,” says José Carlos
Villegas, partner at Mexican member firm
UHY Glassman Esquivel y Cía. “In addition,
the Mexican technology firm Netcity iscreating smart initiatives in Mexico City.”
These smart zones are testbeds fortechnology that might eventually berolled out across the country and, again,
are aimed at helping to solve some of
Mexico’s most pressing urban challenges.

“With technology, we hope we
can improve security systems,
communication and telecommunication,
electricity provision and cleanwater supplies,” says José.
SMART MONEY

Smart city initiatives aim to improve
quality of life, and by doing so confer
real economic benefits. For a start,
they make doing business easier.
A connected network of Internet ofThings (IoT) sensors could alter traffic
light timings in response to changing
needs, making commutes quicker andsmoother. Sensors on lampposts might
guide vehicles to free parking spots.

With technology,

we hope to improvesecurity systems,

communication andtelecommunication

systems, electricity
provision and cleanwater supplies.

UHY GLOBAL August 2020 7

At the same time, blockchain technology
could be used to speed up bureaucratic
processes and cut red tape, while data
gleaned from thousands of IoT devices
could lead to better evidence-led businessdecisions. Smart buildings, meanwhile,
can reduce energy costs while maintaining
optimum conditions for creative work. And
truly digital cities make home and remote
working easier and more productive.
Even before the first IoT sensor has been
installed, the creation and managementof smart city initiatives offers a significant
opportunity for companies in a range ofsectors. Telecoms providers, software firms,
construction companies and component
manufacturers are all scrambling to be
involved in the first wave of smart city
projects. Some forecasters estimatethat the global smart cities market
could exceed USD 2.5 trillion by 2025.
That is an enormous figure, and theexcitement around smart cities is real.
SLOW PACE OF CHANGE

For the moment at least, hype might be
outpacing reality. While mega projects likeWoven City create interest and publicity,in many cases the push towards smart
cities is piecemeal, local and relatively
small scale. In India, Sunil points out that
the Smart City Mission was first discussed
in 2014. Six years later, only 50% of thebudget for projects has been allocated,of which about 75% has been released
and an even lesser proportion utilised.
“There is still some distance to go before
the physical benefits will be visible,” hesays. “The Covid-19 crisis is not goingto hasten the progress of these projects
and so for now the smart cities concept
may remain just that – a great concept.”
In Mexico, too, government inertia
is slowing the pace of change.
“For example, despite the fact thatbusinessmen and investors are awareof the importance of clean energy
initiatives and are willing to invest, thegovernment is less proactive in promoting
the use of clean energy,” says José.
Paul says the current situation in the
Netherlands is also a scattered picture of
sympathetic initiatives. “While there arequite a lot of projects, they seem to be on
a local level, and relatively small in size.”
A CONNECTED FUTURE?

Nevertheless, while the developmentof smart cities is haphazard at best,
the direction of travel is set. Increasingpressure on urban environments will
force authorities to act. Big businessis eyeing an opportunity. Few cities
are as far down the path to a fully
connected future as Dubai, and the city
is already seeing economic benefits.
“Smart technology initiatives are
expected to account for savings worth
almost USD 1.2 billion through shared
government infrastructure and services,”says James. “And Dubai has becomea playing field for startups – the smart
initiatives provide startups with aplatform to scale their business anddemonstrate their capabilities to contributeto the futuristic vision of Dubai.”
Retail is a major contributor to Dubai’s
economic success, and James says thecity’s move to enhance data collection
and analytic capabilities is providing thesector with new and valuable information.
“The end objective of leveraging data andanalytics in the retail sector is to gauge
retail trends, analyse the performance ofthe sector and improve the environment
for doing business in the city,” he adds.
Dubai’s high-end retail sector may beunique, but it is one example of whatsmart initiatives can do for business
when targeted at local needs. In themeantime, the fully connected city
may be some way off, but it is on theway. When companies like Toyota startbuilding entire neighbourhoods fromscratch just to test their technology,
you can be certain that the momentum
behind the adoption of smart city
initiatives is only going to increase. n
For more information on
UHY’s capabilities in the media andentertainment sector, email the UHY
executive office,info@uhy.com, orvisit www.uhy.com

8 UHY GLOBAL August 2020

GOING PUBLICINITIAL PUBLIC OFFERINGS ARE OUT OFFASHION AS PRIVATE FINANCE BACKSGROWING BUSINESSES – BUT MOST COMPANIESSTILL WANT TO GO PUBLIC EVENTUALLYW

hen the Wall Street
Journal called 2019 the‘Year of IPO Disappointment’,it raised a few eyebrows. Afterall, this was the year that highly
regarded firms like Uber, Lyft
and Slack made stock market
debuts. December brought
the first public listing of oil
giant Saudi Aramco, the mostvaluable initial public offering(IPO) on record.
So why the Wall Street gloom? Because,
according to some commentators, a
few high-profile exceptions masked a
far less positive picture. According toinvestment bank Renaissance Capital,
there were 159 IPOs in the US witha value of USD 50 million or more in
2019, down from 192 the previous
year. Historical comparisons paint aneven starker picture. Between 1980
and 2000 an average of 310 companies
went public in the US every year.

The trend is global. According to datafrom Dealogic, the number of new listings
fell by one fifth in 2019, and the trend has
been gently downwards for two decades.
Globally, companies raised a combined
USD 188 billion from IPOs last year, athree-year low. Hopes for an upswing in2020 have been dashed – like so muchelse – by the coronavirus pandemic.
Dominik Biel, partner at UHY ECA,
Poland, confirms the trend from a local
perspective. “We have seen a declining
number of companies debuting on the
Warsaw Stock Exchange since 2015,”
he says. “In that year 30 companies
conducted the IPO process, while only
seven did in 2019. It’s worth notingthat in 2007 the number was 81.”
Nor was the small number of debuts
offset by the value of the shares offered,
Dominik confirms. The combined valueof both existing shares and new issues
on the Warsaw Stock Exchange was
25 times higher in 2017 than 2019.
That is a dramatic decline. So why
has the popularity of the IPO waned?

Image: iStock.com/Pgiam

UBER NEEDS A LIFT
Dominik points to local factors, likereform of the Polish pension system andeconomic scandals, for contributing to
the decline. Steven Pinsky, consulting
principal for UHY Advisors NY, Inc.,
US, sees larger forces at play behindthe modest number of recent IPOs.
“The public markets are subject toa plethora of external micro andmacroeconomic factors which affectboth regular and irregular fluctuations
in market liquidity,” he says. “There
are times at which the market is justnot susceptible to new offerings. Someof the fluctuations are typical market
cycles while others are impacted
by external market influences. The
coronavirus crisis is a perfect example.”
While coronavirus is negatively affecting
IPO numbers in 2020, last year Brexit
and the China-US trade standoff
helped dampen investor enthusiasm.
And while some smaller IPOs did well,
one highly anticipated listing flopped.

PERSPECTIVESUHY GLOBAL August 2020 9

Uber’s stock market debut lost
more in dollar terms than any other
American IPO for over 40 years.
Robert Kidson, managing director of
corporate finance in the London officeat UHY Hacker Young, UK, agrees
that enthusiasm for IPOs can ebb andflow with wider market conditions.
“Companies will choose to list theirshares if the market is conducive tolistings – i.e. there are investors wishingto put funds into an IPO and there isadequate liquidity in the market – and
if not they will probably look at otheralternatives or simply wait,” he says.
Companies considering public listings
refuse to be rushed into decisions.
Rumours of Saudi Aramco’s IPO
had been circulating for years
before its eventual debut.

Some fluctuations

are typical market
cycles while others
are impacted byexternal market
influences –coronavirus is aperfect example.

WAITING FOR THE MOMENTAnd that, perhaps, is the crux of theissue. Growing businesses always needfinance, whether to move into new
territories, invest in infrastructure, or
buy out competitors. One reason forthe slowing rate of public listings is thatso many alternative channels of finance
now exist. They allow companies toremain privately owned while achieving
many of their early business goals. If
the IPO environment is not optimal,
companies can and will wait until it is.
While private finance channels havealways been an option, the sheer volume
of venture capital out there is new.

According to data from Pitchbook andthe National Venture Capital Association(NVCA), the venture industry ploughed
USD 136.5 billion into US-based
companies in 2019. In the same year,
Crunchbase projects that, globally,roughly USD 294.8 billion was privately
invested in nearly 32,800 deals.
Venture capital has become a huge
contributor to company growth,
especially in the technology and biotech
sectors. Similarly, angel investment(individuals who back startups at an
early stage) has helped create a startup
culture, allowing a generation ofentrepreneurs to turn good ideas into
viable businesses. Private equity funds
are seeing record levels of fundraising,while family offices are accelerating
investments in private companies.
The advantage of all these channels isthat they can offer quite significant funds
while shielding firms from public scrutiny.
“Companies that list obviously have toreport their figures more regularly andare subject to the ups and down of thestock market, whereas private equity
backed companies are not subject tothe same public scrutiny,” says Robert.
Steven agrees, suggesting that, forsome companies, remaining in private
ownership has competitive advantages,
especially during the scaling phase ofbusiness growth. “Private companies
can shield competitive information thatpublic companies may not be able to,such as acquisitions, known risks andexecutive compensation,” he says.
He also pinpoints anotheradvantage of delaying an IPO.

A lot of private investment comes withthe promise of business expertise,
also known as ‘smart money’.
“In many cases, financing sources such asprivate placements or private equity comewith financial and operational expertiseto assist companies in achieving andmanaging growth,” he says. “Partneringwith a reputable private equity fundor family office gives you access toresources such as financial advisors,operational advisors, buying groups,
and business improvement consultants.”
VENTURE CAPITAL CAVEATS
Venture capitalists also offer businesssupport, and that can be invaluable tosome growing businesses. But the venture
capital route is not for everyone, as Mark
Nicholaeff, UHY Board member, chairman,
UHY Haines Norton, Australia and
New Zealand, and partner, UHY Haines
Norton (Sydney), Australia, explains:“Most venture capitalists impose onerous
financial conditions and dependingon the quantum of the investment
may require close involvement in thecompany. Some companies do notwant a venture capitalist looking overtheir shoulder all the time,” he says.
“On average, however, a company will
always take this route first, assuming it
is not too onerous, as the shareholders
do not want to dilute a company thathas a good future, as the value may
significantly increase in the short term.”
Dominik agrees that venture capital often
comes with strings attached. “Companies
wishing to benefit from venture capital
support must take into account the10 UHY GLOBAL August 2020

partial loss of control over managing theenterprise, because these funds have avery active management policy,” he says.
Entrepreneurs may resent suchinterference. Luckily for them, technology
has also sparked the creation of completely
new channels of business funding.
While not common everywhere,
instruments like crowdfunding andInitial Coin Offerings (ICOs – a typeof funding using cryptocurrencies),
are increasingly popular in somejurisdictions. Crowdfunding is usuallymore appropriate for businesses at a
relatively early stage of development.
“The growth of financing platforms
such as Kickstarter and GoFundMe are
creating an alternative financing sourcefor growing companies,” says Steven.
“The cost of alternative sources is often
less expensive and intrusive than IPOs.
The downside is that many of thesefunding sources have limitations on thesize of funding realistically available.”

Companies wishing
to benefit fromventure capital
support musttake into accountthe partial lossof control overmanaging theenterprise.

DELAY – NOT REPLACE
While alternative financing channels are
increasingly popular, most are designed
to delay the need for an IPO, rather thanreplace it entirely. And while many eligible
companies may wait for exactly theright market conditions, they are
unlikely to abandon the idea ofgoing public altogether. For establishedbusinesses with a stable market
position, IPOs remain a potent formof both financing and publicity.

GLOBALPERSPECTIVESNEWS“The companies that don’t IPO are
the ones that have minimal probabilityof successfully listing or do not want
the regulatory burden. Otherwise IPOs
are still the preferred route for mostestablished businesses,” says Mark.
Robert mentions that private investors will
eventually be looking for a return, often
realised by an IPO. Indeed, growth stage
investment is sometimes offered in theimplicit understanding that a successful
business will eventually float. As Stevenexplains, private equity funds are seeing
record levels of fundraising in part because
they offer business owners cash now
and the promise of more cash later –the proverbial second bite at the apple.
“It lets them take money off the table
while still maintaining both operational
control and enough of an equity stakethat they benefit significantly from afuture liquidity event, be it sale or IPO,”
he says. “The alternative crowdsourcing
options are also allowing companies
to delay the expensive IPO process or adilutive PE investment with a less dilutive
or less expensive option until larger
growth investment capital is needed.”Robert says that for companies thathave not listed before, UHY Hacker
Young provides a ‘hand-holding’ service
throughout the process. In Poland,
UHY ECA also provides a complete
service, including preparing businesses
for the rigours of reporting as a publiccompany, while Steven says UHY
Advisors provides ‘comprehensive
attest and compliance services’ as well
as a full menu of ancillary solutions.
IPO numbers have declined in recent years,
as companies tap into other sources offinance to meet initial business goals.
But for companies that make it that
far, an IPO can still be the ultimate aim.
The UHY network is ideally placed tohelp companies thrive as they transition
from private to public entities. n
For more information about UHY’s
capabilities in corporate finance services,
email the UHY executive office,info@uhy.com, or visit www.uhy.com

In many scenarios an IPO is still thedefault destination, even if it is a little
further down the road than in thepast. And before the pandemic, someexperts were predicting that 2020 mightsee a bounce back in IPO numbers,
as market conditions improved. Thatmight now be delayed till 2021.
TAILORED SUPPORTWhen normality resumes, the goodnews is that UHY has the expertise tohelp companies navigate the complex
IPO process and make successful stock
market debuts. Expert professional advice
is crucial for companies considering public
listing, tailored to local circumstances.
“In Australia, an operating company
requires three years of audit and an
Independent Accountants Report (IAR)
to be included in the prospectus,”says Mark. “We can provide both
services. Due to our experience withmany listings we can guide a company
through the listing process andintroduce the company to the otherrequired service providers, like lawyers,
underwriters, promoters and so on.”Image: iStock.com/andykazieGLOBAL NEWSUHY GLOBAL August 2020 11

TOP PRIORITY
FOR COVIDTAX SUPPORTOLYMPIC HOPES REMAINJohn Coates, chair of the International
Olympic Committee’s (IOC) coordinationcommission has said that the postponed
Tokyo Olympics and Paralympics
should stand as a beacon of hopewith the Olympic flame being ‘thelight at the end of the tunnel’, despiteongoing uncertainty as to whether
the Games will take place in 2021.
The 2020 Olympics have been
rescheduled for 23 July to 8 August2021 and the Paralympics for 24 August
to 5 September 2021, in the hopethat this will allow sufficient time forhealth authorities and the organisers
to address the changing landscape anddisruption caused by the coronavirus
pandemic. But health experts havewarned that the Games may still be indoubt due to uncertainties around theability of the host nation and countries
around the world to control Covid-19.

Image: iStock.com/JohnnyGreig

The Organisation for Economic
Cooperation and Development (OECD)
has prioritised work on targeted
and temporary tax policy and tax
administration measures related to thecoronavirus pandemic. As well as theongoing publication of key fiscal andmonetary policy responses, this includes atoolkit and summary document outlining
measures taken by governments aroundthe world to support taxpayers
in response to Covid-19.
As work patterns have changed, andsome cross-border workers and individuals
have found themselves stranded injurisdictions that are not their countryof residence, the OECD has advised that
coronavirus-related tax concerns shouldbe treated as exceptional. It has also
highlighted the importance of countries
working together to mitigate potentiallysignificant compliance and administrative
costs, and to alleviate the unplanned tax
implications and any other new burdens
arising as a result of the Covid-19 crisis.
For further information on OECD’s
Covid-19 tax guidance, see
www.oecd.org/tax/tax-policy

Planning for the rescheduled Gamesis being led by two new task forces– the Tokyo Organizing Committee’s(TOC) ‘New Launch’ and the IOC’s‘Here We Go’. Toshiro Muto, CEOof the TOC, said that although there
is no guarantee that the Games will
go ahead in 2021, they will continue
to work hard to make preparations,adding, “We sincerely hope that comenext year mankind will manage toovercome the coronavirus crisis.”

The costs associated with rescheduling
the Games are likely to be significant,with estimates ranging from USD
2–6 billion. The estimated real cost to
Japan was already twice the official
budget of USD 12.6 billion prior to thepostponement, primarily due to theconstruction of secondary infrastructure.
Although these costs have largely beenborne by the Japanese government,
domestic companies – including
Nomura, Toyota, Canon and Panasonic– have supported the Tokyo Olympics
to an extent unmatched in previous
Games, committing over USD 3 billionin sponsorship revenue. The TOC is
hopeful that this support will continue.
The rescheduling of what had
been referred to as the ‘Recovery
Olympics’, representing a hugerebuilding effort after the 2011
Fukushima earthquake and tsunami,
marks the first time in history that
the Games have been postponed.

SOMALIA SET TO REJOINGLOBAL ECONOMY
Following a range of broad economic
reforms, the International Monetary
Fund (IMF) and the World Bank haveannounced that Somalia is eligiblefor debt relief through the Heavily
Indebted Poor Countries (HIPC) initiative– enabling the country’s reintegration
into the global economy after 30 years.
Under the HIPC initiative, Somalia’s
debt will be reduced irrevocably fromover USD 5 billion to USD 557 million
in three years’ time if the country
sustains its commitment to reform.
Bridge financing has been provided by
Norway, Italy, the UK and the European
Union (EU). Debt relief will normalise
Somalia’s relations with the international

community, providing greater accessto financial resources that will help
strengthen the economy, accelerate
growth, improve social conditions
and raise millions out of poverty.
Kristalina Georgieva, Managing
Director of the IMF praised the Somali
government’s successful reform
efforts, which have laid the foundation
for inclusive economic growth.
“I am confident a more resilient andprosperous future lies ahead forthe people of Somalia,” she said.
Somalia is also planning to holdits first democratic elections since
1969 in late 2020 and early 2021.

12 UHY GLOBAL August 2020

POWERING
AHEAD(left to right), Sean, Chris, Danielle, DennisW

hen Dennis Petri, partner, UHY LLP and managing director of
UHY Advisors MI, Inc, became chairman of UHY at the endof last year, the world was blissfully unaware of the fear, personal
losses and economic impact that Covid-19 would bring in 2020.
The challenges at work and at home continue, but Dennis is certainthat UHY as a business is on course to be stronger than ever.
“I have been thrilled by theoverwhelming support and resilienceof our member firms across the worldright from the start of this pandemic,”says Dennis. “At every level of our
network, new leaders have emerged
and established ones are still proving
their weight in gold. This is the valueof UHY’s global team and I am soproud to be part of it. For us it isbusiness as usual and we will continue
to manage the situation until things
finally settle back into a new normal.”This tenacity was obvious in Dennis
from a young age. Describing himself

as a ‘natural optimist’, he is used toturning disappointments into victories.
Having originally wanted to study
medicine he diverted to accountancy
when his excellent grades were notquite good enough for medical school.
“I just missed out on the necessary
straight As across all the sciences,”says Dennis, “but both my father andgrandfather had been accountants
so it was an obvious decision for me
to follow in their footsteps. I havenever looked back. It is a wonderfulprofession to be involved in.”Dennis quickly established himself as
an ambitious new employee at Follmer
Rudzewicz & Co. who he joined straightafter graduating in 1983. He was there
when they merged with five similar sized
CPA firms in the United States. One of
the firms was the New York firm Urbach
Kahn & Werlin. When Urbach and Hacker
Young in London, UK, decided to work
together and establish an international
network, UHY International was
launched and Dennis has stayed at thefirm since its conception, 34 years ago.
“Loyalty and enterprise have always
been important to me. I was looking foropportunities to grow professionally andbring something valuable to the firm.
I became interested in the international
aspects of business so when the US waslooking for partners to participate in UHY
International, I jumped at the chanceand have been involved ever since,”says Dennis.

PERSONAL PROFILE“At my first UHY International meeting,over 15 years ago, I was introduced to
Steve Fisher, one of our now-retired
chairmen. He saw something in me,
became an informal mentor and has
been instrumental in my lifelong
belief that taking an internationalview and striving for a global reachis imperative in our profession.”“Thanks to Steve I understood that there
was room for me to help the networkbuild a world-class reputation. Four
years ago I was appointed by the US
firm to serve on the Board and that wasa wonderful milestone,” says Dennis.
“I have always kept up with the ‘day job’
supporting my clients and particularly
since my appointment as chairman I have
many new commitments, but I relishthem all and am privileged to be in theposition I am within this network.”
A big priority for Dennis is to produce
UHY’s new five-year strategy for 2021-25.
“The strategy will be built from, among
other things, a cross-network survey
to review member firms’ satisfactionlevels, together with Board input. We
are planning a robust new strategy
that considers everyone’s opinions andwill form strong foundations for our
network to thrive for generations.
“Some of our top priorities are that wewill continue to encourage cross borderreferrals so we can offer our clients thewidest choice about which countries
they can operate in with the guaranteeof a seamless, quality UHY service.

As chairman I
have many newcommitments, but I
relish them all andam privileged to bein the position I am
within this network.

UHY GLOBAL August 2020 13“We will also be reviewing when andhow we introduce more use of artificial
intelligence (AI) which is nascent in our
industry, particularly in the compliancearea, but we are constantly looking
at how best it will work to enhance
our client offer,” says Dennis. “Board
members have been tasked with coming
forward with ideas. I am a great believerin staying ahead of the game and being
innovative, responsive and dynamic.”
Outside work Dennis is an avid reader,a keep-fit fan and passionate aboutplaying golf. In lockdown he treatedhimself to a driving range net which
he set up in his garage – “It will go on
giving me pleasure long after all theimpact of Covid-19 is over,” he says.
Dennis and his wife Chris have six
children between them. All adults now,
they are spread across many regions of
the US. “We have two of our children
and two grandchildren living locally and
we absolutely love seeing them. We arealso fortunate to be a very close-knit
family and even through lockdown weall stayed in touch virtually. I hope it
has made us all think differently about
the importance of family, as well as our
regional and global communities.”

Dennis with his twin grandchildren“I think that at the height of thepandemic many of us realised how
important people are to us. At UHY wecontinued to ‘meet’ virtually and weeven organised happy-hours online,
but nothing can equal the value oftalking face to face,” says Dennis.
Despite, or perhaps because of, therecent confines of Covid-19 andits repercussions, Dennis is moredetermined than ever to concentrateon the things that are most importantto him – “Building the strongest UHY
network and celebrating the wondersof friends and family. My wife Chris is
my rock and my sounding-board andour children and grandchildren are aconstant joy. We are very lucky.” n14 UHY GLOBAL August 2020

WIDENING
THE GULF

GULF NATIONS ARE SYNONYMOUS WITH OIL, BUT
FORWARD-THINKING GOVERNMENTS ARE MAKING
BUSINESS EASIER IN A WIDE RANGE OF SECTORSFEATURE – WIDENING THE GULF

A

ccording to the WorldBank’s Doing Business 2020
study, economies in the Middle
East and North Africa (MENA)
are doing more than everbefore to improve the businessclimate for small and medium
sized enterprises (SMEs).
To emphasise the point,
four Arab nations are in
the study’s top 10 countries
globally for improving
conditions for business.

These findings are not down to luck.
Collectively, governments of the MENA
region enacted 57 business climate
improving regulatory reforms in the
12 months to May 2019, up 14 on
the previous period. Gulf economies
were responsible for 35 of those.
Saudi Arabia, Jordan, Bahrain and Kuwait
all made the top ten improvers list, andthe United Arab Emirates (UAE) ranked
16th in the world overall for ease of
doing business in 2020. In fact, theUAE’s rise up the World Bank list overthe last decade has been impressive,
as Anand Ramani, corporate financepartner at UHY James, UAE, explains.
“Our ranking today compares to aranking of 46 amongst 181 countries a
decade ago. This is a direct reflection of
the significant efforts taken by the UAE
government in improving the overallbusiness environment in the country.”
SMALL FIRMS IN FOCUS
And it is not just the UAE. Governments
around the Gulf have been proactively
liberalising economies, reducing red tapeand inviting foreign investment. Qatar hastaken huge legislative strides towards agoal of attracting more overseas capital.
Kuwait recently leapt 13 places in the easeof doing business rankings in just one year.
“The Kuwaiti government is supporting
the private sector financially and nonfinancially,” says Wael Arafa, managing
partner at Kuwaiti member firm UHY
Pillars. “Young people in Kuwait want
to be entrepreneurs, and are supported
in that aim by the government throughinstitutions like the Kuwait National

UHY GLOBAL August 2020 15

Fund for Small and Medium Enterprise
Development, the Industrial Bank of
Kuwait, the Kuwait Direct Investment
Promotion Authority and others.”

The oil and gas sector contributed
only 25.9% of GDP in 2018, andthat is expected to reduce to lessthan 20% in the next few years.

SMEs have become a chief focus of
economic activity in the region for anumber of very good reasons. Populations
are growing at a significantly faster ratein the Gulf Cooperation Council (GCC)
area (Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia and the UAE) than the
global average, and young people makeup a larger proportion of the total thanelsewhere in the world. Governments
hope SMEs will absorb large numbersof young people entering the labour
market over the next few years.

“Going forward, we do not see the oiland gas sector playing a major role in the
future economic development model of the
UAE,” says Anand. “Once the contribution
from oil and gas drops below 20%, it will
become just one of the sectors contributing
to GDP, alongside trade and the financial
services and manufacturing sectors.”

Young people in

Kuwait want to

be entrepreneurs,

and are supported
in that aim by

the government.

The potential is certainly there. One study
found that SMEs could be worth USD
920 billion to the wider GCC economy
by 2022, and employ 22 million people.
Some countries are leading the charge
towards a more diverse and innovative
SME culture. The study noted that, in its
Vision 2021 initiative, the UAE had set
a target to increase the share of SMEs
in its non-oil GDP from 60% to 70%.
IMPACT OF OIL
In fact, there is a growing acceptance ofthe need for economies to diversify awayfrom over reliance on oil and gas. Saudi
state-owned oil company Saudi Aramco
was listed in the world’s most valuable IPO
last year partly to allow the government
to plough funds into the country’s non-oil
sector. The UAE, while never as dependent
on oil as some Gulf nations, is already wellon the way to a more balanced economy
and sustainable long-term prosperity.

In that regard, the UAE is unusual in
the region. In Kuwait, which controls
8% of global oil reserves, it is difficult
to overstate the importance of oil tothe economy. But even here, the needfor diversification is widely accepted.
“Oil will continue to play a vital role in theeconomy,” says Wael. “But the non-oil
sector has experienced a slight increase
and, with Kuwait and other countries
in the region supporting projects aimed
at broadening economic activity, we willcertainly see an increase in non-oil projects
and a wider spectrum in trading.”
Moomen Elsalawy, partner at UHY
Ammo & Co, Qatar, says that, Covid-19
notwithstanding, the Qatari economy islikely to expand significantly in the next
decade, and that much of that expansion
will come from non-oil sectors.

16 UHY GLOBAL August 2020

FEATURE – WIDENING THE GULF

“Recent economic policy is focusedon developing Qatar’s non-associatednatural gas reserves and increasing
private and foreign investment in
non-energy sectors, so I think that there
will be a range of sectors beside oilthat grow in importance,” he adds.

We do not see theoil and gas sector
playing a majorrole in the future

economic development
model of the UAE.

AMBITION BACKED WITH ACTION
In fact the pace of change in Qatar has
recently increased, alongside the level ofgovernment support. Qatar is currently
subject to a blockade by neighbouring
countries, including Saudi Arabia, the UAE,
Bahrain and Egypt. They accuse Qatarof backing militant groups, something
the Qatari government denies. Moomensays the blockade has forced Qatar to
strive for economic self-sufficiency.
“New factories were set up following theblockade to secure self-sufficiency, and thenumber of plants has doubled in the firstsix months, compared to the same period
the previous year,” he says. “New food,cement, plastic and steel production plants
have been developed at a particularly fastpace, and a total of 730 new industrial
facilities have been registered.”
Qatar’s SMEs are also encouraged by thegovernment’s focus on foreign investment,
which includes generous incentives.
Moomen says that, taken as a whole,
Qatar’s open market policy grants investors
the opportunity “to make good profits andbenefit from the freedom of unrestrictedtravel and movement of funds.”
In the UAE, too, ambition has been backed
with action. Anand mentions a recent
economic stimulus package aimed at
local businesses in Dubai and Abu Dhabi.

Image: elina/Shutterstock.com

The package includes a three-year freeze
in government fees and proposals toallocate 20% of government contracts to
SMEs. In addition, the country is one of
the most digitally advanced in the world,
fuelling the rapid emergence of a digital
startup culture. And that is not all.
“If we set aside the recent impact ofcoronavirus, which is having a global
impact on travel, trade and tourism,
generally speaking the hospitality,
healthcare, education and fintech sectors
have all registered significant growth in
the last few years in the UAE,” says Anand.
In Kuwait, the financial services sector isexperiencing significant growth, and the
Kuwaiti government is also channelling
support towards the food processing andconstruction industries. In addition, Waelsays UHY Pillars now works with a wide
portfolio of SME clients in the retail, realestate, services and non-profit sectors,
and that many small and medium sizedcompanies are transitioning to fully exploit
the potential of the digital economy.
MEETING NEW NEEDSAs the region diversifies, UHY members
are upgrading skills and specialisms tomeet the needs of new business sectors.
“At UHY Pillars we are trying to captureclients’ needs and provide customised
services,” says Wael. “For example,
the last two years have seen a boomin the food and beverage sector, andin response we have developed newservices to cover the needs of our clientsand potential clients in this area.”
UHY James in the UAE is also broadening
its expertise as new types of business seek
its services, many from the technology
and sustainability sectors. “We now haveclients from proptech, fintech, crypto
currency, specialised healthcare, AI,
vertical farming, hydroponics and more,”says Anand. “In the past, our clientswere from manufacturing, real estate,trading, healthcare and hospitality.”
SMEs across the region rely on high quality
professional advice of the kind offered by
local UHY member firms. While the non-oil
SME sector is growing, there are still real
challenges to overcome. Chief among
these, says Anand, is access to finance.
“Unfortunately, many of the financial
institutions still follow checklist-basedbanking and collateral-based lending,instead of cashflow-driven criteria.
SMEs, given the nature and size of
their business, generally struggle tooffer these collaterals or satisfy the
documentation requirements,” he adds. n

For more information on UHY’s
capabilities in the Middle East and North
Africa, email the UHY executive office,info@uhy.com, or visit www.uhy.com

CLIENT STORYUHY GLOBAL August 2020 17

MEXICANWAVES

Our strategy is

to use specialists
in every country

we are active in.

OLMIX IS A BUSINESS THAT MIGHTJUST CHANGE THE WORLDT

he company develops solutions for more natural, sustainable plant,
animal and human nutrition and health. Its ‘blue biotech’ focus on thecomplete food chain – from sea to plate – might sound ambitious, but thescience behind the soundbites makes sense. So does the company’s decision
to appoint UHY member firms to help its expansion into South America.
Olmix marine solutions are based on
macroalgae, a varied source of nutrientsand bioactive compounds. Macroalgae
offers a range of innovative ways toreduce the need for pesticides in plants,
antibiotics in animal feed and chemical
additives in human food and healthcare.
The company is based in Brittany, France,
but has now expanded into 28 locations,
including the Americas. The group has
a turnover of around USD 200 million
and over 900 employees. It opened its
Mexico subsidiary – Olmix Mex – in 2014.

operates in a heavily regulated sector.
When the group prepared to open a
Mexican subsidiary in 2014, it looked
for professional services providers that
also offered a wider advisory function.
Olmix met with three local accountancy
firms, and as a result UHY Glassman
Esquivel y Cía, UHY’s Mexican member
firm, was awarded the task of helping
Olmix develop a successful presence in the
country. Six years later, the UHY member
firm – and specifically UHY’s José Carlos
Villegas and his team in Mexico City – isstill Olmix’s preferred accountancy partner.

LOCAL KNOWLEDGE IS KEY
Olmix faced the same challenges all
businesses encounter when seeking
rapid international expansion. Each new
location demands local knowledge. As
a French company, Olmix needed local
partners to steer the business throughthe intricacies of national and regional
regulation, especially as it moved beyond
the familiar tax, accounting and legal
regimes of the European Union.
“Our group strategy is to use local
specialists in every country we are
active in – partners with knowledgeof local legislation, accounting andpolitics,” says Robert Bandner, regional
manager for the Americas at Olmix
Group. “We made a strategic decision
long ago not to use the Big Four.”As Robert implies, the role of an
accounting firm, in this scenario, isabout more than tax and audit. Olmix

RANGE OF SERVICES
The team provides Olmix withaccounting, tax, payroll, and invoicing
services. Additionally, UHY Glassman
Esquivel y Cía provides legal support
and business advisory services, andprepares price transfer studies.
“We chose UHY Glassman Esquivel yCía because they gave us the complete
set of services we needed,” says Robert.
“We were also attracted by reasonablepricing and trustworthy people.”
Since Olmix Mex was created six years
ago, the company has significantly
expanded its activities in the country.
Robert believes the partnership between
Olmix Mex and UHY Glassman Esquivel
y Cía has been key to that success.
“We have achieved our strategy in Mexico
thanks to the support of UHY Glassman

Esquivel y Cía,” he says. “We rely on thecooperation and vigilance of the people
at UHY to give us the service we need.”
PERU CONNECTION
The partnership between Olmix Mex
and UHY Glassman Esquivel y Cía has
been so rewarding that, when Olmix
was considering opening a subsidiary in
Peru, it asked José Carlos Villegas for a
recommendation. He had no hesitation inreaching out to UHY Blancas Sandoval &Asociados, UHY’s member firm in Lima.
Olmix has now created a Peruvian
subsidiary with the help of Carlos
Sandoval at UHY Blancas Sandoval &Asociados. What is more, the company isconsidering opening further import andsales offices in Central and South America.
José would not hesitate to recommend
other member firms of the UHY global
network in future, as Olmix Mex continues
to be delighted with the service it receives.
“The quality service we get from UHY
goes beyond a simple accounting
service,” says Robert. “We have a
special relationship and we trustthem to make sure Olmix can keep
developing in the right way.”

For more information about UHY’s
capabilities in the health sciences,
pharmaceutical and biotech sectors,
contact the UHY executive office
info@uhy.com, or visit
www.uhy.com/sectors

18 UHY GLOBAL August 2020

JOINING THE CLUBWHAT ARE THE EMERGING ECONOMIESTO WATCH IN THE 2020s?

T

hey call it the ‘7% club’, and the figure has not been chosen
at random. National economies that grow at seven percent arelikely to double in size every decade, and if you make it into thisexclusive club you might be on the fast track to a very bright future.

Or that, at least, is the theory. The 7%
club is not real, of course. There are no
perks of membership, no club outings, andno seat at the top table. The club is theinvention of international banking group
Standard Chartered, who coined the term
to categorise a group of economies thatit thinks will boast particularly impressive
growth rates over the coming decade.
As we all know, forecasts can quickly
fall victim to events, and never more sothan now. The Covid-19 outbreak has
rendered economic crystal ball gazing
an especially hazardous pastime. But
Standard Chartered’s research, released
last year, may still have value. Almost
every country on earth is likely to missgrowth targets in 2020. But if the 7% clubmembers’ fundamentals are sound, they
could still be on course for rapid growthover the remaining years of the decade.
There is good reason to hope they are.
Standard Chartered researchers Madhur
Jha and David Mann say, “Faster growth
not only helps to lift people more quicklyout of absolute poverty, but is also
usually accompanied by better health andeducation, as well as a wider range of –and better access to – goods and services.”
BRICS AND PIECES
The 7% club is not the only high growthclub in town, however. Economists
are forever trying to predict where thelightning of fast and sustained growthis likely to strike next, so they can better

advise clients looking for new andlucrative investment opportunities. The
most famous example is the BRICS group,an acronym coined by Goldman Sachs
economist Jon O’Neill in 2001 to cover
Brazil, Russia, India and China, with South
Africa added later. BRICS highlighted
the economies best placed to surge inthe early years of the 20th century.
In 2005 the BRICS researchers introduced
the ‘Next 11’, a group of countries they
believed would develop more slowly, butwere on course to become world economic
powers, nonetheless. South Korea,
Mexico and Vietnam were all on the list,
and South Korea has certainly lived up to
expectations. Other forecasts have included
African nations like Nigeria and Ethiopia.
Are these predictions of economic
take-off accurate? Vietnam is regularly
touted as an emerging economy to watch,and growth of well over 6% has beensustained for a number of years. Standard

FEATURE – JOINING THE CLUB

Chartered believes manufacturing andgrowth led by foreign direct investment(FDI) is likely to continue to drive its
economy. Thanh Nguyen, partner at UHY’s
member firm in Vietnam, UHY Auditing& Consulting Co Ltd, agrees that thecountry has the fundamentals in place toremain a beneficiary of sizable quantities
of foreign investment in the coming years.
“There are many reasons for Vietnam tobe an FDI hotspot, such as its strategic
geographical location, young and costeffective labour force, the transition of
FDI from China and other countries,
and an enormous market with large
purchasing power potential,” he says.
FDI creates jobs and wealth, and while it isfar from the only factor behind sustained
growth, it is often an important one. The
7% club research agrees with Thanh that
Vietnam could benefit from redirected
FDI as investors cool on China, where
growth has slowed considerably after
years of spectacular economic expansion.
NEW ASIAN TIGERS?
If the forecasts are right, South-East Asia
as a whole is likely to attract significant
FDI in the coming years. Like Vietnam, thePhilippines is a contender for Standard
Chartered’s high growth club. According
to authors Jha and Mann, “It has thepotential to move into the 7% clubwith greater infrastructure investment
and an increased focus on developing
the under-tapped tourism sector.”
The Philippines is currently third in
the region for GDP, 0.5% above theregional average. Michael Aguirre,managing partner, UHY M.L. Aguirre& Co. CPAs, Philippines, also believes
the fundamentals are in place toattract an increasing share of FDI.

UHY GLOBAL August 2020 19

But there are no guarantees. In 2010
Standard Chartered identified Nigeria
as a potential 7% club member,and the country remains the thirdlargest host economy for FDI in
Africa, behind Egypt and Ethiopia.
Lawrence Etukakpan, head of businessdevelopment, UHY Maaji, Nigeria,
believes the country has clear advantages
when it comes to attracting FDI.
“Nigeria has traditionally attracted asignificant amount of FDI compared to theAfrican average as a result of our partiallyprivatised economy, comprehensive andadvantageous tax system, significant
natural resources and low cost of labour,”he says. “The size of the domestic
market – Nigeria is the most populous
country in Africa – is also important.”
DOMESTIC STRESS
But FDI has decreased significantly inthe last two years. According to theUnited Nations Conference on Tradeand Development (UNCTAD), FDI flows
to Nigeria totalled USD 1.9 billion in
2018, compared to USD 3.5 billion
in 2017. This decline is a blow to the
Nigerian economy where, in 2018, FDI
represented 25.1% of the country’s GDP.
Lawrence says that domestic issues
have become problematic for the
economy, including factional violence
and insecurity in some areas. “Thenation’s infrastructure deficit is anothermajor investment deterrent,” he adds.
“The lack of stable power means
manufacturers have to rely on expensivealternative energy sources, such as diesel
generators, though the government isworking hard to address the situation.”transparent and fair legal system anda policy of economic liberalisation. Someof the Nigerian government’s attempts
at liberalisation have borne fruit, as has
its policy of promoting public-private
partnerships and strategic alliances withforeign companies. The country has leapt
15 places for ease of doing business in themost recent World Bank report, making
it one of the list’s top ten improvers.
Although UHY Maaji & Co is working
with clients to help them meet thedemands of policy and regulation,
bureaucratic obstacles remain. Lawrence
talks of a ‘challenging investment
climate characterised by some stringent
government policies, bureaucratic
bottlenecks for securing permits
and an unreliable legal framework.
Standard Chartered agrees, saying that‘perceptions of a more adverse businessenvironment have not helped growth’.

The lack of stable
power means

manufacturers haveto rely on expensivealternative energy

sources, such as
diesel generators,
though thegovernment is working
hard to address
the situation.

Vital elements in every nation’s appeal
to foreign investors also include a“The growth and the projection restson the country’s sound macroeconomic
fundamentals, a steady growth in thelabour market composed of a young
population, continued investment
in infrastructure, and the enactment
of investment focused legislation,
which includes incentives for foreign
ownership, tax reforms, and improving
the ease of doing business,” he says.
In these two South-East Asian cases
the 7% club research appears, at the
moment at least, to be right on track.
Image: Vietnam stock photos/Shutterstock.com

20 UHY GLOBAL August 2020

FEATURE – JOINING THE CLUBSTABILITY AND TRANSPARENCYLOCAL KNOWLEDGE IS KEY

If Nigeria can meet its challenges, it has
the potential to rejoin the 7% club in years
to come. And in every country aiming
for sustained growth, stable government
and a transparent commitment to free
trade are key factors. Thanh believes
Vietnam’s compliance with a numberof high-profile free trade agreements(FTAs) has accelerated the speed ofgovernmental reform in the country
and pushed a liberalising agenda.

Another factor that contributes togrowth potential is a strong professional
services sector. Robust professional
support networks smooth the path toincreased FDI by providing potential
investors with the local expertise theyneed to meet regulatory requirements.

“We have about 13 FTAs in place andthese – especially the Comprehensive andProgressive Agreement for Trans-PacificPartnership (CPTPP) and the European
Union-Vietnam FTA – continue to create
an impetus for Vietnam to speed up its
ongoing institutional reform and improve
its business environment,” he says.
In the Philippines, too, state policy
actively encourages FDI. The mostrecent measures include, in 2018, theEase of Doing Business and Efficient
Government Service Delivery Act, a lawthat aims to improve the efficiency andtransparency of government proceduresin regard to business applications.
Michael believes that, taken together,pro-business legislation is designed to‘attract, promote, and welcome productive
FDI investments that significantly
contribute to national industrialisationand socioeconomic development’.

“We provide a wide range of services
to support foreign firms operatingin Vietnam, from the early stages ofinvestment planning, including market
entry strategy, to licence applications andsubsequently the operating stage,” says
Thanh. “We deal with all compliancerequirements in Vietnam in terms ofstatutory audit (under both IFRS and
VAS, the local accounting standards),
internal audit, tax and accounting.”
That is true of UHY in the Philippines andNigeria too. Indeed, UHY member firms
in emerging economies around the world
have wide experience in helping foreign
investors set up businesses or acquire
existing companies and comply with local
tax, employment and business regulations.
They also offer informed advice about local
business conditions and opportunities,
and will happily work with other UHY
member firms from across the network
to provide end-to-end accountancy
services for cross-border clients.

The full effects of the coronavirus
pandemic on the short-term fortunes ofwell-placed emerging economies remain
to be seen. Similarly, the recent rise of
populist leaders with anti-globalist agendas
threatens even the most confident offorecasts. Nevertheless, in the longer
term, a young and cost-effective labour
force, backed by legislators that actively
encourage entrepreneurialism andforeign investment, mean that a numberof nations are on course to become
truly global economies this decade. n

For more information about UHY’s
capabilities, email the UHY executive office,info@uhy.com, or visit www.uhy.com

Image: ARTYOORAN/Shutterstock.com

COGS AND WHEELSUHY GLOBAL August 2020 21

QUALITYCULTURECOMMUNICATING AND SHARINGI

n our regular Cogs and Wheels section, we look at someof the components that make up a successful international
accountancy network. In this issue, our focus is on
quality, a wide ranging topic but one of the most criticaldimensions for a professional service organisation.

In a world of globalising standards,
increasing regulatory cooperation acrossinternational borders and calls for bettertransparency and data protection, it is nowonder that one of the biggest goals for an
organisation operating across the world, isto achieve compliance and consistency withthe profession’s international standards.
Quality standards in audit and assurance
are the measures of corporate financial
integrity that underpin global commerce,
so it is no surprise that accounting
regulators and professional bodies areon a mission of continuous improvement.
Global networks like UHY, delivering client
services through independent member
firms across more than 300 business centresworldwide, must continue to achieve
the highest standards of performance,
now and in the future. And not only inaudit, but in tax, advisory, consultancy
and every other service, regulated ornot, that will help to support the healthand growth of its client businesses.
STRATEGIC HEARTThe UHY network has always chosen
to put quality centre-stage in its global
strategy, recognising that network integrity,a robust compliance infrastructure and theprofessional quality and competence of its
member firms, are essential to success.
Quality informs the organisational culture,
the brand values and the goals of carefully
managed growth. UHY continues to extend
its national and global footprint to meetthe growing needs of international clients,

but without compromising on standards,
ensuring that a rigorous member firm
recruitment process includes significant
due diligence on quality measures, clientdelivery and brand fit. All UHY member
firms adhere to a stringent quality
charter as a condition of membership.
SUPPORTIVE INFRASTRUCTURE
In order to compete with the best, UHY
member firms lock into the network’s
compliance infrastructure, engaging with
its quality management processes andvarious support mechanisms designed
to ensure that performance to standards
remains world class and consistent acrossthe board. This reassures regulatory bodies
and clients, and further strengthens
UHY’s international reputation.
Having one-to-one engagement withmember firms, within a friendly andrelaxed but always professional culture ofworking together, is critical in a profession
where regulatory development can movequickly to address corporate stakeholder
concerns on, for example, audit efficacy
or tax transparency. UHY’s membership
quality and membership training working
groups, comprised of senior member
firm partners representing the network’s
primary regions of EMEA, Asia-Pacificand the Americas, ensure not onlythat the quality strategy is maintainedand developed, but also that member
firms fully understand and are ready to
implement regulatory revisions to practicein good time to support their clients.

The success of UHY’s quality strategy
and operations, lies not only in the
network’s relationship with its member
firms, but also in firms’ relationships
with each other. Sharing news,
updates, case studies, knowledge
and expertise around the world gives
plenty of opportunity to prepare
and implement quality managementchanges at practice level – and whenmember firms in different countries
are working with the same crossborder clients, maintaining a consistentquality of service is paramount.
As member firms in the network sharean international outlook, UHY’s annual
regional and global events provide
an excellent platform for networking,learning, sharing and doing business.
From a managing partners’ forum
to the annual conference, these
events, which include a rich technicalprogramme, are critical to member
firms’ quality development. While
Covid-19 has led to physical regional
events being cancelled this year, thesehave been replaced with interactive
online sessions, and member firms
have been communicating witheach other and the UHY Board via
videoconference. Now, more thanever, mutual support and sharing
ideas for clients is critical. The
network’s intranet, UHY Exchange,
also provides a 24/7 online home forcommunicating and sharing, and acomprehensive library of resources.
So with quality at the very heart of theorganisation, an infrastructure to deliverconsistent client service to international
standards, and a culture of working
together, the UHY network of member
firms is well-prepared to support clients
through the most challenging times.
For more information about UHY’s
capabilities, email the UHY executive office,info@uhy.com, or visit www.uhy.com

22 UHY GLOBAL August 2020

SERVING CLIENTS, SERVING COMMUNITIES

Shelly demonstrates
the qualities weadmire in life aswell as in work –tenacity, hard

PARALYMPIC
HOPES LIVE ON
AS WORLD WAITS

work, good humourand determination
not just as asportswoman but

as a human being.

The postponement of the Tokyo 2020 Olympic andParalympic Games has been disappointing for theathletes scheduled to compete – and despite being
rescheduled to 2021 the uncertainty surrounding theCovid-19 pandemic is keeping the event in doubt.

For her Paralympics campaign in 2020,
UHY Hacker Young, UK is sponsoring
elite British athlete Shelly Woods, whose
medals in T54 wheelchair racing include
silver in the London Paralympics 2012
marathon, silver and bronze in the
1500m and 500m at Beijing 2008 andwinning the London Marathon twice.
“The postponement of the Olympic andParalympic Games is huge but what ishappening around the world right now isa bigger deal and everyone’s health andwellbeing is more important,” says Shelly.

“I’m trying to see the setback as anopportunity to do more training to bein the best shape I can be as well as
making the most of the time with myfamily. My goals have not changed –just the dates. I also started creating
motivational fitness videos for athletes inlockdown which hopefully provided someinspiration for people stuck at home.”
Shelly was due to compete in the Boston
and London marathons in April 2020, butboth were postponed to later in the year.
“If they go ahead I have a busy autumn
season with Boston, London, Berlin and
New York marathons all just weeks apartin September, so we keep training!
“I’m grateful to UHY for its continued
support – it enables me to compete at
the highest level with the world’s best.
I am fully focused on recalibrating mycampaign for Tokyo 2021 in the hopethat the Games will go ahead then.”
UK group Chairman Colin Wrightsays, “During these difficult anduncertain times, we look to our sporting
heroes for inspiration and hope.
“Shelly demonstrates the qualities
we admire in life as well as in work –On the day the Boston
marathon was scheduled
to take place, Shelly
joined wheelchair racing
athletes for a virtual
marathon on rollers.

tenacity, hard work, good humour anddetermination not just as a sportswoman
but as a human being. UHY Hacker
Young is privileged to support her and
we look forward to seeing her compete.”
Shelly will also be supported by herhusband Chris Oxley, (pictured with
Shelly, right) who is a partner at UHY
Hacker Young’s Manchester office.
To follow Shelly’s progress follow her on
Twitter @ShellyWoods86, via the UHY
Twitter account @UHYHackerYoung.
Look out for the hashtag #UHY4Shelly.

SERVING CLIENTS, SERVING COMMUNITIESUHY GLOBAL August 2020 23

HONOUR FOR MEHMETPARTNER JOINSCAPA BOARD

his peers and clients and welldeserving of this award.”

Mehmet Sengulen, managing
director, UHY Advisors NY, Inc.,US, has been honoured as oneof the Long Island BusinessNews ‘40 under 40’ for 2020.
The award recognises those whohave a track record of success, whohave distinguished themselves inbusiness, government, education
or not-for-profit, who are involved
in mentoring and promoting
their profession and who giveback to their communities.

The managing partner of UHY’s member
firm in Nepal has been appointed as aboard member to the Confederation of
Asian and Pacific Accountants (CAPA).
With a 27 year career in audit, accountancy
and management consulting, and multi-sector
expertise, Dr Suvod Kumar Karn, (pictured
above left) of UHY Suvod Associates, based in
Kathmandu and Itahari, has served on numerous
platforms representing Nepal, and was presidentof the South Asian Federation of Accountants(SAFA). He is also a board member of the Nepal
Rastra Bank, the Central Bank of Nepal.
CAPA represents 33 national professional
accountancy organisations (PAOs) from 24
jurisdictions that operate or have an interestin the Asia-Pacific region, representing two
million accountants across the region.
“I am delighted to be appointed to the boardof CAPA, a valued organisation that contributes
to the development of professional accountancyorganisations, promotes quality accounting and is avoice of the profession,” says Suvod. “As directors
we look forward to helping steer CAPA’s ‘strategicplan towards 2025’ over the next few years.”
The confederation is one of four regionalorganisations recognised by the global
accountancy profession, represented by theInternational Federation of Accountants (IFAC).

CSR PRAISE
A Spanish online magazine specialisingin business corporate social
responsibility (CSR) has honoured
the Madrid office of UHY Fay & Co,
UHY’s member firm in Spain.
Celebrating its 15th anniversary byrecognising businesses that embracesustainability, Corresponsables praised

Mehmet is a previous recipient of
SmartCEO magazine’s Accounting
Rising Star and M&A Advisor’s
Emerging Leaders awards. He
says, “It is an honour to receive
this award. I look forward tocontinuing to provide the nextlevel of service to my clients.”

Michael Mahoney, Northeast
regional managing director, UHY
Advisors, says: “Mehmet is anatural leader and ambassador
for UHY, held in high esteem by

FUNDING THE FACTS

Always keen to support new
talent and promote the global
development of accountancy skills at
a prestigious place of learning, UHY
LLP, US is helping to fund a newdata analytics course for audit andcontrol at the University of Albany
School of Business, New York.
“This class gives students all theskills they will need to succeed after
graduation,” says Mike Zovistoski,
partner, UHY LLP, Albany (pictured
far left), who was joined at the

UHY Fay & Co for its work. The firm
was presented with a yearbook with adedication giving particular thanks to Max
Gosch, partner, and UHY Fay & Co’s CSR
and compliance teams for ‘helping to build
together a better world with journalism
and responsible communication’.
Max Gosch said: “We are gratefulfor this recognition and congratulate
Corresponsables for being a leading entity

presentation by fellow Albany
School of Business alumnae, Alex
Zhang, partner, UHY LLP, Albany,(second from right), Saolam Nguyen,
accountant, UHY LLP, Albany ꂩ,Jessica Blaha, senior accountant,
UHY LLP, Albany (third from left)and Howard Foote, managing
partner, UHY LLP, Albany (far right).
“It gives us great pleasure to be able
to invest in the future of our industry
and give back to the university that
supported many of us into this great
profession,” he says. “Feedback
from students was excellent. One
described it as the most useful classthe student had taken at the Schoolof Business, another thanked us
for no longer making her afraid ofdata analytics. This feedback makes
our funding feel so worthwhile.”in promoting good practices in the businesssector, related to sustainability and CSR.”Max Gosch

LET US HELP YOU ACHIEVEFURTHER BUSINESS SUCCESS
To find out how UHY can assist yourbusiness, contact any of our member
firms. You can visit us online atwww.uhy.com to find contact details
for all of our offices, or email us at
info@uhy.com for further information.

UHY is an international network of legally independentaccounting and consultancy firms whose administrative
entity is Urbach Hacker Young International Limited,a UK company. UHY is the brand name for the UHYinternational network. Services to clients are provided
by member firms and not by Urbach Hacker Young
International Limited. Neither Urbach Hacker Young
International Limited, the UHY network, nor any
member of UHY has any liability for services provided byother members. © 2020 UHY International Ltd.
The editorial opinions expressed in the magazine may
not necessarily be those of UHY International Ltd
or its member firms. Every effort is made to ensure
accuracy but the publishers cannot be held responsible
for errors or omissions. No part of this magazine may
be reproduced in any form without prior permissionof UHY International Ltd. We thank all contributors.
Design: Flex with UHY International. Editorial: Flex
with UHY International. Photography supplied by UHY
member firms, their clients and from stock.