Vietnam on the EU Tax Blacklist: A Guide for EU Buyers

12 May 2026

  • Vietnam
  • Corporate
  • Distribution
  • Tax

Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

What the EU decision does (and does not) do

The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

The ideological paradox: a Socialist Republic on a tax-haven list

Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

Why Vietnam was added: the listing criteria and timeline

Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

Vietnam’s response and the path to delisting

Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

How different payment types are affected in practice

Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

How European banks may respond (and what that looks like in practice)

Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

Non-tax defensive measures and EU funding implications

Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

DAC6 reporting and public country-by-country reporting

Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

Country notes (alphabetical)

Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

 

Practical next steps for EU companies

  1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
  2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
  3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
  4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
  5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
  6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
  7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
  8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
  9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

  • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
  • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
  • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
  • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
  • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
  • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

Legal Forms of Joint Ventures

Investors should understand the different corporate structures available for joint ventures:

  • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
  • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
  • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

Foreign Investment Law

Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

  • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
  • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

Why is ISIC4 Relevant?

The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

  • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
  • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
  • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
  • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
  • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
  • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

Strategic Considerations

  • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
  • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

Practical Tips

  • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
  • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
  • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

Compliance with Local Regulations

  • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
  • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
  • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

Conclusion

Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

Executive Summary

The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

Looking Back: The Promise of a Single African Market

When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

The Reality Check: Intra-African Trade Remains Structurally Weak

Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

Implementation Has Been Slow — and Often Symbolic

Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

Tariffs Are Not the Main Barrier — Trade Costs Are

AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

Integration Complexity and Distributional Politics

Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

What This Means for Egypt: The Opportunity Is Real — But Conditional

Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

For Egypt’s private sector, the decisive factors are practical:

  • predictable and efficient customs clearance and border procedures,
  • logistics corridors and port efficiency,
  • regulatory convergence (standards, certification, compliance),
  • stable access to trade finance and payments,
  • competitive energy and production conditions for manufacturing and processing.

AfCFTA can support these developments — but it cannot replace them.

The “Game Changer” Pathway: What Must Happen Next

FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

For Egypt and its partners, a pragmatic strategy would be to:

  1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
  2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
  3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
  4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

Conclusion

AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

How to obtain a mortgage loan when Purchasing Property in Spain

When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

  • The public deed of sale, and
  • The mortgage deed.

At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

Key Differences for Foreign Buyers

Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

  • Submission of translated or apostilled foreign documents,
  • More extensive due diligence and KYC (Know Your Customer) procedures, and
  • Generally longer processing times.

These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

Are there debts associated with the property that the buyer will be liable for?

The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

What are the specific provions of Spanish Coastal Law (Ley De Costas)?

Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

 

What rules apply to Country Houses (Fincas Rústicas)?

Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

How are squatting cases  (Okupas) regulated under Spanish law?

In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

Effective deterrents include:

  • Alarm systems and surveillance cameras,
  • Remote monitoring,
  • Local property management services (especially for second homes).

Spanish law differentiates between:

  • Intrusion into a primary residence (treated as unlawful entry),
  • Occupation of vacant or second homes (classified as usurpation, requiring court action).

Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

  • Within the first 48 hours of occupation:
    Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
  • After 48 hours: Eviction must follow a formal judicial process.
  • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

Tariff Sharing agreements

For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

Importer’s responsibility to seek reimbursement

It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

Preventive Agreements on Litigation and Cost Allocation

When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

How to handle new tariffs and their potential cancellation

To safeguard against uncertainty, the agreement should be organized into two stages.

  • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
  • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

Conclusion: Three practical steps for companies exporting to the US

The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

Where this new duty comes from

The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

Companies involved in the investigation

The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

Next steps in the procedure

Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

The preliminary nature of this determination means there is still room to change the decision before it becomes final.

Possible effective date

The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

 What to do between now and January 1, 2026?

At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

  • Some rushed to ship as many products as possible before the potential effective date of the duty;
  • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
  • Some suspended orders, pending definitive news on the impact of the duties.

These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

30-Year Tax Holiday

Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

Operational Substance Requirements: RHQ Functions and Compliance

At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

Mandatory Activities (to be activated within the first year):

  • Preparation and implementation of the regional strategy;
  • Strategic coordination of the MNE’s operations in the region;
  • Selection of products and services offered in the region;
  • M&A support;
  • Financial performance review;
  • Budget planning for regional operations;
  • Coordination of business units across MENA;
  • Market research and competitor analysis;
  • Identification of new market opportunities;
  • Marketing strategy development;
  • Preparation of operational and financial reports.

Optional Activities (minimum of three to be activated): These include, among others:

  • Research, development and innovation;
  • Sales and marketing;
  • Human resources and training;
  • Financial management, foreign exchange and treasury services;
  • Legal consultancy, compliance, internal audit;
  • Logistics, IP management, production, and technical support.

The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

Additional Substantive Requirements

  • Minimum of 15 employees in the first year;
  • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
  • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
  • RHQ operations must be exclusively performed within the Kingdom.

Licensing Process and Timing

The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

True Regional Authority and Kingdom-Centric Operations

Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

Localization Requirements

To ensure genuine local presence, the RHQ regime mandates:

  • Saudi residency and work permits for all RHQ personnel;
  • No hybrid or remote models from abroad;
  • Local registration of intellectual property and commercial identifiers;
  • Internal reporting and supervision obligations anchored in Saudi Arabia.

Is RHQ Establishment Mandatory or Optional?

While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

Conclusion: High-Reward, High-Compliance Environment

The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

The Brazilian market took the bait

Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

The same effect hit other sectors, from orange, honey, and coffee to aircraft.

Brazil’s response and sorcery: don’t mess with us (or our weather)

Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

Trump might want to check the weather forecast next time before penning another angry letter.

The unpredictable becoming predictable

Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

This is where good contract drafting comes into play

Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

  • hardship clauses that allow renegotiation when costs become commercially unreasonable;
  • price adjustment mechanisms linked to tariff thresholds;
  • termination rights triggered by specified levels of customs duties;
  • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

The unwitting cupid: strengthening EU-Brazil relations

While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

Federico Vasoli

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    How to Joint Venture in Saudi Arabia

    25 March 2026

    • Saudi Arabia
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    Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

    For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

    What the EU decision does (and does not) do

    The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

    At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

    In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

    The ideological paradox: a Socialist Republic on a tax-haven list

    Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

    Why Vietnam was added: the listing criteria and timeline

    Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

    The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

    Vietnam’s response and the path to delisting

    Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

    How different payment types are affected in practice

    Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

    The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

    Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

    If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

    Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

    Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

    Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

    Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

    Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

    Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

    How European banks may respond (and what that looks like in practice)

    Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

    For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

    A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

    Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

    A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

    This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

    A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

    A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

    Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

    EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

    Non-tax defensive measures and EU funding implications

    Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

    DAC6 reporting and public country-by-country reporting

    Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

    Country notes (alphabetical)

    Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

    France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

    Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

    Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

    For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

    Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

    Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

    Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

     

    Practical next steps for EU companies

    1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
    2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
    3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
    4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
    5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
    6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
    7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
    8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
    9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

    Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

    Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

    Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

    • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
    • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
    • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
    • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
    • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
    • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

    Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

    Legal Forms of Joint Ventures

    Investors should understand the different corporate structures available for joint ventures:

    • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
    • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
    • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

    Foreign Investment Law

    Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

    • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
    • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

    Why is ISIC4 Relevant?

    The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

    Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

    • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
    • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
    • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
    • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
    • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
    • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

    Strategic Considerations

    • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
    • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

    Practical Tips

    • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
    • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
    • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

    Compliance with Local Regulations

    • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
    • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
    • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

    Conclusion

    Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

    Executive Summary

    The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

    Looking Back: The Promise of a Single African Market

    When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

    In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

    The Reality Check: Intra-African Trade Remains Structurally Weak

    Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

    A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

    Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

    Implementation Has Been Slow — and Often Symbolic

    Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

    The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

    A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

    Tariffs Are Not the Main Barrier — Trade Costs Are

    AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

    FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

    This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

    Integration Complexity and Distributional Politics

    Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

    There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

    Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

    What This Means for Egypt: The Opportunity Is Real — But Conditional

    Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

    For Egypt’s private sector, the decisive factors are practical:

    • predictable and efficient customs clearance and border procedures,
    • logistics corridors and port efficiency,
    • regulatory convergence (standards, certification, compliance),
    • stable access to trade finance and payments,
    • competitive energy and production conditions for manufacturing and processing.

    AfCFTA can support these developments — but it cannot replace them.

    The “Game Changer” Pathway: What Must Happen Next

    FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

    At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

    For Egypt and its partners, a pragmatic strategy would be to:

    1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
    2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
    3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
    4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

    Conclusion

    AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

    For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

    This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

    How to obtain a mortgage loan when Purchasing Property in Spain

    When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

    Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

    Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

    • The public deed of sale, and
    • The mortgage deed.

    At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

    While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

    Key Differences for Foreign Buyers

    Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

    • Submission of translated or apostilled foreign documents,
    • More extensive due diligence and KYC (Know Your Customer) procedures, and
    • Generally longer processing times.

    These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

    Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

    The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

    In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

    If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

    Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

    Are there debts associated with the property that the buyer will be liable for?

    The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

    To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

    What are the specific provions of Spanish Coastal Law (Ley De Costas)?

    Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

    Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

    Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

     

    What rules apply to Country Houses (Fincas Rústicas)?

    Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

    Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

    Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

    How are squatting cases  (Okupas) regulated under Spanish law?

    In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

    Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

    Effective deterrents include:

    • Alarm systems and surveillance cameras,
    • Remote monitoring,
    • Local property management services (especially for second homes).

    Spanish law differentiates between:

    • Intrusion into a primary residence (treated as unlawful entry),
    • Occupation of vacant or second homes (classified as usurpation, requiring court action).

    Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

    • Within the first 48 hours of occupation:
      Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
    • After 48 hours: Eviction must follow a formal judicial process.
    • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

    While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

    After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

    Tariff Sharing agreements

    For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

    The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

    Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

    As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

    If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

    Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

    In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

    For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

    To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

    The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

    The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

    Importer’s responsibility to seek reimbursement

    It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

    Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

    This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

    For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

    Preventive Agreements on Litigation and Cost Allocation

    When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

    Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

    How to handle new tariffs and their potential cancellation

    To safeguard against uncertainty, the agreement should be organized into two stages.

    • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
    • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

    This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

    This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

    This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

    Conclusion: Three practical steps for companies exporting to the US

    The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

    The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

    The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

    Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

    Where this new duty comes from

    The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

    Companies involved in the investigation

    The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

    U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

    Next steps in the procedure

    Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

    The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

    The preliminary nature of this determination means there is still room to change the decision before it becomes final.

    Possible effective date

    The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

    If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

     What to do between now and January 1, 2026?

    At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

    So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

    • Some rushed to ship as many products as possible before the potential effective date of the duty;
    • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
    • Some suspended orders, pending definitive news on the impact of the duties.

    These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

    The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

    The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

    New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

    Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

    Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

    30-Year Tax Holiday

    Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

    Operational Substance Requirements: RHQ Functions and Compliance

    At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

    Mandatory Activities (to be activated within the first year):

    • Preparation and implementation of the regional strategy;
    • Strategic coordination of the MNE’s operations in the region;
    • Selection of products and services offered in the region;
    • M&A support;
    • Financial performance review;
    • Budget planning for regional operations;
    • Coordination of business units across MENA;
    • Market research and competitor analysis;
    • Identification of new market opportunities;
    • Marketing strategy development;
    • Preparation of operational and financial reports.

    Optional Activities (minimum of three to be activated): These include, among others:

    • Research, development and innovation;
    • Sales and marketing;
    • Human resources and training;
    • Financial management, foreign exchange and treasury services;
    • Legal consultancy, compliance, internal audit;
    • Logistics, IP management, production, and technical support.

    The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

    Additional Substantive Requirements

    • Minimum of 15 employees in the first year;
    • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
    • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
    • RHQ operations must be exclusively performed within the Kingdom.

    Licensing Process and Timing

    The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

    True Regional Authority and Kingdom-Centric Operations

    Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

    Localization Requirements

    To ensure genuine local presence, the RHQ regime mandates:

    • Saudi residency and work permits for all RHQ personnel;
    • No hybrid or remote models from abroad;
    • Local registration of intellectual property and commercial identifiers;
    • Internal reporting and supervision obligations anchored in Saudi Arabia.

    Is RHQ Establishment Mandatory or Optional?

    While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

    As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

    This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

    Conclusion: High-Reward, High-Compliance Environment

    The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

    Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

    And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

    In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

    Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

    The Brazilian market took the bait

    Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

    The same effect hit other sectors, from orange, honey, and coffee to aircraft.

    Brazil’s response and sorcery: don’t mess with us (or our weather)

    Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

    And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

    Trump might want to check the weather forecast next time before penning another angry letter.

    The unpredictable becoming predictable

    Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

    At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

    In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

    This is where good contract drafting comes into play

    Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

    • hardship clauses that allow renegotiation when costs become commercially unreasonable;
    • price adjustment mechanisms linked to tariff thresholds;
    • termination rights triggered by specified levels of customs duties;
    • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

    In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

    Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

    The unwitting cupid: strengthening EU-Brazil relations

    While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

    The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

    So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

    Christian Ule

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      Why the African Continental Free Trade Agreement has not yet turned into Reality — and What That Means for Egypt

      26 February 2026

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      Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

      For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

      What the EU decision does (and does not) do

      The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

      At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

      In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

      The ideological paradox: a Socialist Republic on a tax-haven list

      Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

      Why Vietnam was added: the listing criteria and timeline

      Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

      The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

      Vietnam’s response and the path to delisting

      Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

      How different payment types are affected in practice

      Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

      The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

      Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

      If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

      Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

      Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

      Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

      Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

      Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

      Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

      How European banks may respond (and what that looks like in practice)

      Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

      For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

      A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

      Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

      A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

      This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

      A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

      A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

      Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

      EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

      Non-tax defensive measures and EU funding implications

      Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

      DAC6 reporting and public country-by-country reporting

      Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

      Country notes (alphabetical)

      Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

      France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

      Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

      Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

      For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

      Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

      Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

      Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

       

      Practical next steps for EU companies

      1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
      2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
      3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
      4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
      5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
      6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
      7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
      8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
      9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

      Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

      Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

      Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

      • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
      • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
      • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
      • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
      • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
      • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

      Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

      Legal Forms of Joint Ventures

      Investors should understand the different corporate structures available for joint ventures:

      • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
      • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
      • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

      Foreign Investment Law

      Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

      • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
      • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

      Why is ISIC4 Relevant?

      The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

      Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

      • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
      • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
      • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
      • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
      • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
      • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

      Strategic Considerations

      • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
      • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

      Practical Tips

      • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
      • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
      • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

      Compliance with Local Regulations

      • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
      • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
      • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

      Conclusion

      Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

      Executive Summary

      The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

      Looking Back: The Promise of a Single African Market

      When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

      In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

      The Reality Check: Intra-African Trade Remains Structurally Weak

      Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

      A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

      Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

      Implementation Has Been Slow — and Often Symbolic

      Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

      The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

      A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

      Tariffs Are Not the Main Barrier — Trade Costs Are

      AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

      FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

      This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

      Integration Complexity and Distributional Politics

      Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

      There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

      Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

      What This Means for Egypt: The Opportunity Is Real — But Conditional

      Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

      For Egypt’s private sector, the decisive factors are practical:

      • predictable and efficient customs clearance and border procedures,
      • logistics corridors and port efficiency,
      • regulatory convergence (standards, certification, compliance),
      • stable access to trade finance and payments,
      • competitive energy and production conditions for manufacturing and processing.

      AfCFTA can support these developments — but it cannot replace them.

      The “Game Changer” Pathway: What Must Happen Next

      FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

      At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

      For Egypt and its partners, a pragmatic strategy would be to:

      1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
      2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
      3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
      4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

      Conclusion

      AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

      For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

      This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

      How to obtain a mortgage loan when Purchasing Property in Spain

      When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

      Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

      Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

      • The public deed of sale, and
      • The mortgage deed.

      At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

      While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

      Key Differences for Foreign Buyers

      Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

      • Submission of translated or apostilled foreign documents,
      • More extensive due diligence and KYC (Know Your Customer) procedures, and
      • Generally longer processing times.

      These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

      Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

      The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

      In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

      If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

      Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

      Are there debts associated with the property that the buyer will be liable for?

      The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

      To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

      What are the specific provions of Spanish Coastal Law (Ley De Costas)?

      Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

      Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

      Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

       

      What rules apply to Country Houses (Fincas Rústicas)?

      Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

      Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

      Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

      How are squatting cases  (Okupas) regulated under Spanish law?

      In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

      Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

      Effective deterrents include:

      • Alarm systems and surveillance cameras,
      • Remote monitoring,
      • Local property management services (especially for second homes).

      Spanish law differentiates between:

      • Intrusion into a primary residence (treated as unlawful entry),
      • Occupation of vacant or second homes (classified as usurpation, requiring court action).

      Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

      • Within the first 48 hours of occupation:
        Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
      • After 48 hours: Eviction must follow a formal judicial process.
      • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

      While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

      After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

      Tariff Sharing agreements

      For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

      The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

      Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

      As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

      If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

      Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

      In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

      For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

      To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

      The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

      The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

      Importer’s responsibility to seek reimbursement

      It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

      Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

      This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

      For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

      Preventive Agreements on Litigation and Cost Allocation

      When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

      Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

      How to handle new tariffs and their potential cancellation

      To safeguard against uncertainty, the agreement should be organized into two stages.

      • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
      • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

      This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

      This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

      This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

      Conclusion: Three practical steps for companies exporting to the US

      The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

      The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

      The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

      Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

      Where this new duty comes from

      The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

      Companies involved in the investigation

      The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

      U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

      Next steps in the procedure

      Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

      The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

      The preliminary nature of this determination means there is still room to change the decision before it becomes final.

      Possible effective date

      The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

      If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

       What to do between now and January 1, 2026?

      At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

      So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

      • Some rushed to ship as many products as possible before the potential effective date of the duty;
      • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
      • Some suspended orders, pending definitive news on the impact of the duties.

      These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

      The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

      The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

      New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

      Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

      Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

      30-Year Tax Holiday

      Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

      Operational Substance Requirements: RHQ Functions and Compliance

      At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

      Mandatory Activities (to be activated within the first year):

      • Preparation and implementation of the regional strategy;
      • Strategic coordination of the MNE’s operations in the region;
      • Selection of products and services offered in the region;
      • M&A support;
      • Financial performance review;
      • Budget planning for regional operations;
      • Coordination of business units across MENA;
      • Market research and competitor analysis;
      • Identification of new market opportunities;
      • Marketing strategy development;
      • Preparation of operational and financial reports.

      Optional Activities (minimum of three to be activated): These include, among others:

      • Research, development and innovation;
      • Sales and marketing;
      • Human resources and training;
      • Financial management, foreign exchange and treasury services;
      • Legal consultancy, compliance, internal audit;
      • Logistics, IP management, production, and technical support.

      The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

      Additional Substantive Requirements

      • Minimum of 15 employees in the first year;
      • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
      • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
      • RHQ operations must be exclusively performed within the Kingdom.

      Licensing Process and Timing

      The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

      True Regional Authority and Kingdom-Centric Operations

      Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

      Localization Requirements

      To ensure genuine local presence, the RHQ regime mandates:

      • Saudi residency and work permits for all RHQ personnel;
      • No hybrid or remote models from abroad;
      • Local registration of intellectual property and commercial identifiers;
      • Internal reporting and supervision obligations anchored in Saudi Arabia.

      Is RHQ Establishment Mandatory or Optional?

      While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

      As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

      This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

      Conclusion: High-Reward, High-Compliance Environment

      The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

      Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

      And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

      In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

      Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

      The Brazilian market took the bait

      Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

      The same effect hit other sectors, from orange, honey, and coffee to aircraft.

      Brazil’s response and sorcery: don’t mess with us (or our weather)

      Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

      And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

      Trump might want to check the weather forecast next time before penning another angry letter.

      The unpredictable becoming predictable

      Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

      At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

      In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

      This is where good contract drafting comes into play

      Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

      • hardship clauses that allow renegotiation when costs become commercially unreasonable;
      • price adjustment mechanisms linked to tariff thresholds;
      • termination rights triggered by specified levels of customs duties;
      • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

      In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

      Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

      The unwitting cupid: strengthening EU-Brazil relations

      While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

      The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

      So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

      Christian Ule

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        Buying a House in Spain: Mortgage Contingency Clauses and Legal Checks

        26 February 2026

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        Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

        For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

        What the EU decision does (and does not) do

        The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

        At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

        In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

        The ideological paradox: a Socialist Republic on a tax-haven list

        Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

        Why Vietnam was added: the listing criteria and timeline

        Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

        The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

        Vietnam’s response and the path to delisting

        Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

        How different payment types are affected in practice

        Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

        The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

        Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

        If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

        Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

        Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

        Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

        Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

        Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

        Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

        How European banks may respond (and what that looks like in practice)

        Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

        For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

        A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

        Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

        A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

        This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

        A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

        A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

        Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

        EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

        Non-tax defensive measures and EU funding implications

        Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

        DAC6 reporting and public country-by-country reporting

        Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

        Country notes (alphabetical)

        Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

        France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

        Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

        Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

        For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

        Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

        Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

        Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

         

        Practical next steps for EU companies

        1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
        2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
        3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
        4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
        5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
        6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
        7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
        8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
        9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

        Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

        Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

        Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

        • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
        • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
        • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
        • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
        • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
        • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

        Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

        Legal Forms of Joint Ventures

        Investors should understand the different corporate structures available for joint ventures:

        • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
        • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
        • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

        Foreign Investment Law

        Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

        • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
        • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

        Why is ISIC4 Relevant?

        The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

        Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

        • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
        • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
        • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
        • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
        • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
        • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

        Strategic Considerations

        • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
        • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

        Practical Tips

        • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
        • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
        • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

        Compliance with Local Regulations

        • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
        • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
        • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

        Conclusion

        Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

        Executive Summary

        The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

        Looking Back: The Promise of a Single African Market

        When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

        In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

        The Reality Check: Intra-African Trade Remains Structurally Weak

        Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

        A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

        Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

        Implementation Has Been Slow — and Often Symbolic

        Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

        The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

        A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

        Tariffs Are Not the Main Barrier — Trade Costs Are

        AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

        FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

        This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

        Integration Complexity and Distributional Politics

        Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

        There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

        Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

        What This Means for Egypt: The Opportunity Is Real — But Conditional

        Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

        For Egypt’s private sector, the decisive factors are practical:

        • predictable and efficient customs clearance and border procedures,
        • logistics corridors and port efficiency,
        • regulatory convergence (standards, certification, compliance),
        • stable access to trade finance and payments,
        • competitive energy and production conditions for manufacturing and processing.

        AfCFTA can support these developments — but it cannot replace them.

        The “Game Changer” Pathway: What Must Happen Next

        FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

        At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

        For Egypt and its partners, a pragmatic strategy would be to:

        1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
        2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
        3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
        4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

        Conclusion

        AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

        For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

        This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

        How to obtain a mortgage loan when Purchasing Property in Spain

        When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

        Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

        Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

        • The public deed of sale, and
        • The mortgage deed.

        At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

        While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

        Key Differences for Foreign Buyers

        Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

        • Submission of translated or apostilled foreign documents,
        • More extensive due diligence and KYC (Know Your Customer) procedures, and
        • Generally longer processing times.

        These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

        Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

        The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

        In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

        If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

        Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

        Are there debts associated with the property that the buyer will be liable for?

        The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

        To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

        What are the specific provions of Spanish Coastal Law (Ley De Costas)?

        Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

        Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

        Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

         

        What rules apply to Country Houses (Fincas Rústicas)?

        Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

        Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

        Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

        How are squatting cases  (Okupas) regulated under Spanish law?

        In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

        Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

        Effective deterrents include:

        • Alarm systems and surveillance cameras,
        • Remote monitoring,
        • Local property management services (especially for second homes).

        Spanish law differentiates between:

        • Intrusion into a primary residence (treated as unlawful entry),
        • Occupation of vacant or second homes (classified as usurpation, requiring court action).

        Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

        • Within the first 48 hours of occupation:
          Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
        • After 48 hours: Eviction must follow a formal judicial process.
        • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

        While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

        After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

        Tariff Sharing agreements

        For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

        The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

        Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

        As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

        If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

        Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

        In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

        For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

        To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

        The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

        The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

        Importer’s responsibility to seek reimbursement

        It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

        Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

        This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

        For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

        Preventive Agreements on Litigation and Cost Allocation

        When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

        Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

        How to handle new tariffs and their potential cancellation

        To safeguard against uncertainty, the agreement should be organized into two stages.

        • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
        • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

        This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

        This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

        This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

        Conclusion: Three practical steps for companies exporting to the US

        The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

        The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

        The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

        Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

        Where this new duty comes from

        The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

        Companies involved in the investigation

        The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

        U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

        Next steps in the procedure

        Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

        The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

        The preliminary nature of this determination means there is still room to change the decision before it becomes final.

        Possible effective date

        The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

        If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

         What to do between now and January 1, 2026?

        At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

        So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

        • Some rushed to ship as many products as possible before the potential effective date of the duty;
        • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
        • Some suspended orders, pending definitive news on the impact of the duties.

        These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

        The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

        The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

        New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

        Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

        Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

        30-Year Tax Holiday

        Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

        Operational Substance Requirements: RHQ Functions and Compliance

        At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

        Mandatory Activities (to be activated within the first year):

        • Preparation and implementation of the regional strategy;
        • Strategic coordination of the MNE’s operations in the region;
        • Selection of products and services offered in the region;
        • M&A support;
        • Financial performance review;
        • Budget planning for regional operations;
        • Coordination of business units across MENA;
        • Market research and competitor analysis;
        • Identification of new market opportunities;
        • Marketing strategy development;
        • Preparation of operational and financial reports.

        Optional Activities (minimum of three to be activated): These include, among others:

        • Research, development and innovation;
        • Sales and marketing;
        • Human resources and training;
        • Financial management, foreign exchange and treasury services;
        • Legal consultancy, compliance, internal audit;
        • Logistics, IP management, production, and technical support.

        The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

        Additional Substantive Requirements

        • Minimum of 15 employees in the first year;
        • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
        • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
        • RHQ operations must be exclusively performed within the Kingdom.

        Licensing Process and Timing

        The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

        True Regional Authority and Kingdom-Centric Operations

        Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

        Localization Requirements

        To ensure genuine local presence, the RHQ regime mandates:

        • Saudi residency and work permits for all RHQ personnel;
        • No hybrid or remote models from abroad;
        • Local registration of intellectual property and commercial identifiers;
        • Internal reporting and supervision obligations anchored in Saudi Arabia.

        Is RHQ Establishment Mandatory or Optional?

        While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

        As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

        This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

        Conclusion: High-Reward, High-Compliance Environment

        The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

        Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

        And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

        In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

        Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

        The Brazilian market took the bait

        Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

        The same effect hit other sectors, from orange, honey, and coffee to aircraft.

        Brazil’s response and sorcery: don’t mess with us (or our weather)

        Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

        And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

        Trump might want to check the weather forecast next time before penning another angry letter.

        The unpredictable becoming predictable

        Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

        At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

        In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

        This is where good contract drafting comes into play

        Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

        • hardship clauses that allow renegotiation when costs become commercially unreasonable;
        • price adjustment mechanisms linked to tariff thresholds;
        • termination rights triggered by specified levels of customs duties;
        • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

        In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

        Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

        The unwitting cupid: strengthening EU-Brazil relations

        While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

        The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

        So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

        Javier Gaspar

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          US Tariffs | How to Draft Contracts to Handle Tariffs, Refunds, and Disputes

          22 February 2026

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          Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

          For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

          What the EU decision does (and does not) do

          The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

          At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

          In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

          The ideological paradox: a Socialist Republic on a tax-haven list

          Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

          Why Vietnam was added: the listing criteria and timeline

          Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

          The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

          Vietnam’s response and the path to delisting

          Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

          How different payment types are affected in practice

          Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

          The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

          Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

          If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

          Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

          Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

          Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

          Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

          Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

          Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

          How European banks may respond (and what that looks like in practice)

          Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

          For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

          A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

          Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

          A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

          This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

          A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

          A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

          Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

          EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

          Non-tax defensive measures and EU funding implications

          Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

          DAC6 reporting and public country-by-country reporting

          Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

          Country notes (alphabetical)

          Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

          France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

          Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

          Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

          For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

          Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

          Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

          Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

           

          Practical next steps for EU companies

          1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
          2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
          3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
          4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
          5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
          6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
          7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
          8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
          9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

          Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

          Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

          Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

          • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
          • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
          • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
          • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
          • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
          • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

          Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

          Legal Forms of Joint Ventures

          Investors should understand the different corporate structures available for joint ventures:

          • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
          • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
          • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

          Foreign Investment Law

          Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

          • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
          • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

          Why is ISIC4 Relevant?

          The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

          Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

          • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
          • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
          • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
          • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
          • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
          • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

          Strategic Considerations

          • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
          • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

          Practical Tips

          • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
          • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
          • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

          Compliance with Local Regulations

          • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
          • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
          • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

          Conclusion

          Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

          Executive Summary

          The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

          Looking Back: The Promise of a Single African Market

          When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

          In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

          The Reality Check: Intra-African Trade Remains Structurally Weak

          Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

          A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

          Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

          Implementation Has Been Slow — and Often Symbolic

          Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

          The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

          A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

          Tariffs Are Not the Main Barrier — Trade Costs Are

          AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

          FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

          This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

          Integration Complexity and Distributional Politics

          Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

          There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

          Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

          What This Means for Egypt: The Opportunity Is Real — But Conditional

          Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

          For Egypt’s private sector, the decisive factors are practical:

          • predictable and efficient customs clearance and border procedures,
          • logistics corridors and port efficiency,
          • regulatory convergence (standards, certification, compliance),
          • stable access to trade finance and payments,
          • competitive energy and production conditions for manufacturing and processing.

          AfCFTA can support these developments — but it cannot replace them.

          The “Game Changer” Pathway: What Must Happen Next

          FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

          At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

          For Egypt and its partners, a pragmatic strategy would be to:

          1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
          2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
          3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
          4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

          Conclusion

          AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

          For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

          This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

          How to obtain a mortgage loan when Purchasing Property in Spain

          When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

          Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

          Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

          • The public deed of sale, and
          • The mortgage deed.

          At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

          While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

          Key Differences for Foreign Buyers

          Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

          • Submission of translated or apostilled foreign documents,
          • More extensive due diligence and KYC (Know Your Customer) procedures, and
          • Generally longer processing times.

          These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

          Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

          The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

          In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

          If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

          Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

          Are there debts associated with the property that the buyer will be liable for?

          The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

          To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

          What are the specific provions of Spanish Coastal Law (Ley De Costas)?

          Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

          Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

          Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

           

          What rules apply to Country Houses (Fincas Rústicas)?

          Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

          Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

          Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

          How are squatting cases  (Okupas) regulated under Spanish law?

          In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

          Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

          Effective deterrents include:

          • Alarm systems and surveillance cameras,
          • Remote monitoring,
          • Local property management services (especially for second homes).

          Spanish law differentiates between:

          • Intrusion into a primary residence (treated as unlawful entry),
          • Occupation of vacant or second homes (classified as usurpation, requiring court action).

          Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

          • Within the first 48 hours of occupation:
            Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
          • After 48 hours: Eviction must follow a formal judicial process.
          • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

          While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

          After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

          Tariff Sharing agreements

          For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

          The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

          Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

          As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

          If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

          Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

          In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

          For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

          To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

          The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

          The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

          Importer’s responsibility to seek reimbursement

          It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

          Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

          This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

          For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

          Preventive Agreements on Litigation and Cost Allocation

          When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

          Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

          How to handle new tariffs and their potential cancellation

          To safeguard against uncertainty, the agreement should be organized into two stages.

          • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
          • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

          This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

          This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

          This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

          Conclusion: Three practical steps for companies exporting to the US

          The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

          The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

          The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

          Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

          Where this new duty comes from

          The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

          Companies involved in the investigation

          The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

          U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

          Next steps in the procedure

          Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

          The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

          The preliminary nature of this determination means there is still room to change the decision before it becomes final.

          Possible effective date

          The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

          If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

           What to do between now and January 1, 2026?

          At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

          So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

          • Some rushed to ship as many products as possible before the potential effective date of the duty;
          • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
          • Some suspended orders, pending definitive news on the impact of the duties.

          These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

          The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

          The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

          New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

          Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

          Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

          30-Year Tax Holiday

          Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

          Operational Substance Requirements: RHQ Functions and Compliance

          At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

          Mandatory Activities (to be activated within the first year):

          • Preparation and implementation of the regional strategy;
          • Strategic coordination of the MNE’s operations in the region;
          • Selection of products and services offered in the region;
          • M&A support;
          • Financial performance review;
          • Budget planning for regional operations;
          • Coordination of business units across MENA;
          • Market research and competitor analysis;
          • Identification of new market opportunities;
          • Marketing strategy development;
          • Preparation of operational and financial reports.

          Optional Activities (minimum of three to be activated): These include, among others:

          • Research, development and innovation;
          • Sales and marketing;
          • Human resources and training;
          • Financial management, foreign exchange and treasury services;
          • Legal consultancy, compliance, internal audit;
          • Logistics, IP management, production, and technical support.

          The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

          Additional Substantive Requirements

          • Minimum of 15 employees in the first year;
          • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
          • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
          • RHQ operations must be exclusively performed within the Kingdom.

          Licensing Process and Timing

          The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

          True Regional Authority and Kingdom-Centric Operations

          Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

          Localization Requirements

          To ensure genuine local presence, the RHQ regime mandates:

          • Saudi residency and work permits for all RHQ personnel;
          • No hybrid or remote models from abroad;
          • Local registration of intellectual property and commercial identifiers;
          • Internal reporting and supervision obligations anchored in Saudi Arabia.

          Is RHQ Establishment Mandatory or Optional?

          While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

          As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

          This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

          Conclusion: High-Reward, High-Compliance Environment

          The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

          Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

          And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

          In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

          Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

          The Brazilian market took the bait

          Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

          The same effect hit other sectors, from orange, honey, and coffee to aircraft.

          Brazil’s response and sorcery: don’t mess with us (or our weather)

          Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

          And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

          Trump might want to check the weather forecast next time before penning another angry letter.

          The unpredictable becoming predictable

          Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

          At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

          In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

          This is where good contract drafting comes into play

          Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

          • hardship clauses that allow renegotiation when costs become commercially unreasonable;
          • price adjustment mechanisms linked to tariff thresholds;
          • termination rights triggered by specified levels of customs duties;
          • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

          In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

          Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

          The unwitting cupid: strengthening EU-Brazil relations

          While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

          The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

          So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

          Roberto Luzi Crivellini

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            U.S. Tariffs at 107% on Italian Pasta? Another episode in the saga of exporting to the United States

            8 October 2025

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            Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

            For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

            What the EU decision does (and does not) do

            The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

            At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

            In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

            The ideological paradox: a Socialist Republic on a tax-haven list

            Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

            Why Vietnam was added: the listing criteria and timeline

            Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

            The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

            Vietnam’s response and the path to delisting

            Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

            How different payment types are affected in practice

            Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

            The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

            Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

            If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

            Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

            Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

            Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

            Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

            Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

            Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

            How European banks may respond (and what that looks like in practice)

            Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

            For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

            A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

            Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

            A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

            This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

            A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

            A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

            Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

            EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

            Non-tax defensive measures and EU funding implications

            Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

            DAC6 reporting and public country-by-country reporting

            Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

            Country notes (alphabetical)

            Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

            France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

            Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

            Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

            For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

            Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

            Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

            Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

             

            Practical next steps for EU companies

            1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
            2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
            3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
            4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
            5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
            6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
            7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
            8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
            9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

            Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

            Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

            Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

            • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
            • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
            • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
            • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
            • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
            • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

            Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

            Legal Forms of Joint Ventures

            Investors should understand the different corporate structures available for joint ventures:

            • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
            • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
            • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

            Foreign Investment Law

            Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

            • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
            • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

            Why is ISIC4 Relevant?

            The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

            Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

            • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
            • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
            • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
            • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
            • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
            • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

            Strategic Considerations

            • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
            • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

            Practical Tips

            • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
            • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
            • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

            Compliance with Local Regulations

            • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
            • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
            • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

            Conclusion

            Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

            Executive Summary

            The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

            Looking Back: The Promise of a Single African Market

            When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

            In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

            The Reality Check: Intra-African Trade Remains Structurally Weak

            Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

            A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

            Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

            Implementation Has Been Slow — and Often Symbolic

            Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

            The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

            A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

            Tariffs Are Not the Main Barrier — Trade Costs Are

            AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

            FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

            This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

            Integration Complexity and Distributional Politics

            Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

            There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

            Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

            What This Means for Egypt: The Opportunity Is Real — But Conditional

            Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

            For Egypt’s private sector, the decisive factors are practical:

            • predictable and efficient customs clearance and border procedures,
            • logistics corridors and port efficiency,
            • regulatory convergence (standards, certification, compliance),
            • stable access to trade finance and payments,
            • competitive energy and production conditions for manufacturing and processing.

            AfCFTA can support these developments — but it cannot replace them.

            The “Game Changer” Pathway: What Must Happen Next

            FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

            At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

            For Egypt and its partners, a pragmatic strategy would be to:

            1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
            2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
            3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
            4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

            Conclusion

            AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

            For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

            This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

            How to obtain a mortgage loan when Purchasing Property in Spain

            When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

            Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

            Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

            • The public deed of sale, and
            • The mortgage deed.

            At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

            While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

            Key Differences for Foreign Buyers

            Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

            • Submission of translated or apostilled foreign documents,
            • More extensive due diligence and KYC (Know Your Customer) procedures, and
            • Generally longer processing times.

            These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

            Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

            The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

            In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

            If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

            Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

            Are there debts associated with the property that the buyer will be liable for?

            The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

            To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

            What are the specific provions of Spanish Coastal Law (Ley De Costas)?

            Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

            Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

            Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

             

            What rules apply to Country Houses (Fincas Rústicas)?

            Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

            Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

            Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

            How are squatting cases  (Okupas) regulated under Spanish law?

            In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

            Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

            Effective deterrents include:

            • Alarm systems and surveillance cameras,
            • Remote monitoring,
            • Local property management services (especially for second homes).

            Spanish law differentiates between:

            • Intrusion into a primary residence (treated as unlawful entry),
            • Occupation of vacant or second homes (classified as usurpation, requiring court action).

            Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

            • Within the first 48 hours of occupation:
              Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
            • After 48 hours: Eviction must follow a formal judicial process.
            • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

            While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

            After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

            Tariff Sharing agreements

            For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

            The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

            Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

            As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

            If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

            Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

            In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

            For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

            To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

            The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

            The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

            Importer’s responsibility to seek reimbursement

            It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

            Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

            This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

            For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

            Preventive Agreements on Litigation and Cost Allocation

            When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

            Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

            How to handle new tariffs and their potential cancellation

            To safeguard against uncertainty, the agreement should be organized into two stages.

            • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
            • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

            This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

            This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

            This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

            Conclusion: Three practical steps for companies exporting to the US

            The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

            The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

            The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

            Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

            Where this new duty comes from

            The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

            Companies involved in the investigation

            The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

            U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

            Next steps in the procedure

            Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

            The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

            The preliminary nature of this determination means there is still room to change the decision before it becomes final.

            Possible effective date

            The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

            If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

             What to do between now and January 1, 2026?

            At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

            So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

            • Some rushed to ship as many products as possible before the potential effective date of the duty;
            • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
            • Some suspended orders, pending definitive news on the impact of the duties.

            These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

            The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

            The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

            New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

            Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

            Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

            30-Year Tax Holiday

            Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

            Operational Substance Requirements: RHQ Functions and Compliance

            At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

            Mandatory Activities (to be activated within the first year):

            • Preparation and implementation of the regional strategy;
            • Strategic coordination of the MNE’s operations in the region;
            • Selection of products and services offered in the region;
            • M&A support;
            • Financial performance review;
            • Budget planning for regional operations;
            • Coordination of business units across MENA;
            • Market research and competitor analysis;
            • Identification of new market opportunities;
            • Marketing strategy development;
            • Preparation of operational and financial reports.

            Optional Activities (minimum of three to be activated): These include, among others:

            • Research, development and innovation;
            • Sales and marketing;
            • Human resources and training;
            • Financial management, foreign exchange and treasury services;
            • Legal consultancy, compliance, internal audit;
            • Logistics, IP management, production, and technical support.

            The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

            Additional Substantive Requirements

            • Minimum of 15 employees in the first year;
            • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
            • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
            • RHQ operations must be exclusively performed within the Kingdom.

            Licensing Process and Timing

            The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

            True Regional Authority and Kingdom-Centric Operations

            Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

            Localization Requirements

            To ensure genuine local presence, the RHQ regime mandates:

            • Saudi residency and work permits for all RHQ personnel;
            • No hybrid or remote models from abroad;
            • Local registration of intellectual property and commercial identifiers;
            • Internal reporting and supervision obligations anchored in Saudi Arabia.

            Is RHQ Establishment Mandatory or Optional?

            While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

            As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

            This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

            Conclusion: High-Reward, High-Compliance Environment

            The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

            Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

            And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

            In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

            Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

            The Brazilian market took the bait

            Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

            The same effect hit other sectors, from orange, honey, and coffee to aircraft.

            Brazil’s response and sorcery: don’t mess with us (or our weather)

            Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

            And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

            Trump might want to check the weather forecast next time before penning another angry letter.

            The unpredictable becoming predictable

            Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

            At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

            In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

            This is where good contract drafting comes into play

            Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

            • hardship clauses that allow renegotiation when costs become commercially unreasonable;
            • price adjustment mechanisms linked to tariff thresholds;
            • termination rights triggered by specified levels of customs duties;
            • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

            In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

            Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

            The unwitting cupid: strengthening EU-Brazil relations

            While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

            The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

            So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

            Roberto Luzi Crivellini

            Practice areas

            • Arbitration
            • Distribution
            • International trade
            • Litigation
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              Saudi Arabia – Draft Rules on Regional Headquarters (RHQ): A Call to Multinational Enterprises

              26 September 2025

              • Saudi Arabia
              • Corporate
              • Foreign investments
              • Tax

              Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

              For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

              What the EU decision does (and does not) do

              The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

              At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

              In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

              The ideological paradox: a Socialist Republic on a tax-haven list

              Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

              Why Vietnam was added: the listing criteria and timeline

              Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

              The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

              Vietnam’s response and the path to delisting

              Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

              How different payment types are affected in practice

              Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

              The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

              Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

              If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

              Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

              Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

              Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

              Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

              Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

              Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

              How European banks may respond (and what that looks like in practice)

              Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

              For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

              A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

              Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

              A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

              This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

              A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

              A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

              Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

              EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

              Non-tax defensive measures and EU funding implications

              Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

              DAC6 reporting and public country-by-country reporting

              Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

              Country notes (alphabetical)

              Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

              France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

              Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

              Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

              For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

              Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

              Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

              Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

               

              Practical next steps for EU companies

              1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
              2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
              3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
              4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
              5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
              6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
              7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
              8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
              9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

              Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

              Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

              Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

              • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
              • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
              • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
              • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
              • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
              • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

              Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

              Legal Forms of Joint Ventures

              Investors should understand the different corporate structures available for joint ventures:

              • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
              • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
              • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

              Foreign Investment Law

              Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

              • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
              • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

              Why is ISIC4 Relevant?

              The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

              Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

              • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
              • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
              • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
              • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
              • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
              • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

              Strategic Considerations

              • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
              • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

              Practical Tips

              • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
              • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
              • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

              Compliance with Local Regulations

              • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
              • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
              • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

              Conclusion

              Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

              Executive Summary

              The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

              Looking Back: The Promise of a Single African Market

              When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

              In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

              The Reality Check: Intra-African Trade Remains Structurally Weak

              Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

              A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

              Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

              Implementation Has Been Slow — and Often Symbolic

              Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

              The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

              A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

              Tariffs Are Not the Main Barrier — Trade Costs Are

              AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

              FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

              This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

              Integration Complexity and Distributional Politics

              Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

              There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

              Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

              What This Means for Egypt: The Opportunity Is Real — But Conditional

              Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

              For Egypt’s private sector, the decisive factors are practical:

              • predictable and efficient customs clearance and border procedures,
              • logistics corridors and port efficiency,
              • regulatory convergence (standards, certification, compliance),
              • stable access to trade finance and payments,
              • competitive energy and production conditions for manufacturing and processing.

              AfCFTA can support these developments — but it cannot replace them.

              The “Game Changer” Pathway: What Must Happen Next

              FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

              At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

              For Egypt and its partners, a pragmatic strategy would be to:

              1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
              2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
              3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
              4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

              Conclusion

              AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

              For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

              This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

              How to obtain a mortgage loan when Purchasing Property in Spain

              When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

              Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

              Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

              • The public deed of sale, and
              • The mortgage deed.

              At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

              While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

              Key Differences for Foreign Buyers

              Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

              • Submission of translated or apostilled foreign documents,
              • More extensive due diligence and KYC (Know Your Customer) procedures, and
              • Generally longer processing times.

              These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

              Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

              The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

              In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

              If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

              Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

              Are there debts associated with the property that the buyer will be liable for?

              The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

              To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

              What are the specific provions of Spanish Coastal Law (Ley De Costas)?

              Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

              Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

              Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

               

              What rules apply to Country Houses (Fincas Rústicas)?

              Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

              Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

              Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

              How are squatting cases  (Okupas) regulated under Spanish law?

              In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

              Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

              Effective deterrents include:

              • Alarm systems and surveillance cameras,
              • Remote monitoring,
              • Local property management services (especially for second homes).

              Spanish law differentiates between:

              • Intrusion into a primary residence (treated as unlawful entry),
              • Occupation of vacant or second homes (classified as usurpation, requiring court action).

              Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

              • Within the first 48 hours of occupation:
                Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
              • After 48 hours: Eviction must follow a formal judicial process.
              • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

              While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

              After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

              Tariff Sharing agreements

              For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

              The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

              Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

              As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

              If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

              Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

              In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

              For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

              To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

              The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

              The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

              Importer’s responsibility to seek reimbursement

              It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

              Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

              This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

              For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

              Preventive Agreements on Litigation and Cost Allocation

              When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

              Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

              How to handle new tariffs and their potential cancellation

              To safeguard against uncertainty, the agreement should be organized into two stages.

              • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
              • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

              This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

              This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

              This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

              Conclusion: Three practical steps for companies exporting to the US

              The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

              The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

              The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

              Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

              Where this new duty comes from

              The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

              Companies involved in the investigation

              The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

              U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

              Next steps in the procedure

              Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

              The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

              The preliminary nature of this determination means there is still room to change the decision before it becomes final.

              Possible effective date

              The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

              If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

               What to do between now and January 1, 2026?

              At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

              So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

              • Some rushed to ship as many products as possible before the potential effective date of the duty;
              • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
              • Some suspended orders, pending definitive news on the impact of the duties.

              These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

              The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

              The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

              New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

              Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

              Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

              30-Year Tax Holiday

              Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

              Operational Substance Requirements: RHQ Functions and Compliance

              At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

              Mandatory Activities (to be activated within the first year):

              • Preparation and implementation of the regional strategy;
              • Strategic coordination of the MNE’s operations in the region;
              • Selection of products and services offered in the region;
              • M&A support;
              • Financial performance review;
              • Budget planning for regional operations;
              • Coordination of business units across MENA;
              • Market research and competitor analysis;
              • Identification of new market opportunities;
              • Marketing strategy development;
              • Preparation of operational and financial reports.

              Optional Activities (minimum of three to be activated): These include, among others:

              • Research, development and innovation;
              • Sales and marketing;
              • Human resources and training;
              • Financial management, foreign exchange and treasury services;
              • Legal consultancy, compliance, internal audit;
              • Logistics, IP management, production, and technical support.

              The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

              Additional Substantive Requirements

              • Minimum of 15 employees in the first year;
              • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
              • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
              • RHQ operations must be exclusively performed within the Kingdom.

              Licensing Process and Timing

              The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

              True Regional Authority and Kingdom-Centric Operations

              Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

              Localization Requirements

              To ensure genuine local presence, the RHQ regime mandates:

              • Saudi residency and work permits for all RHQ personnel;
              • No hybrid or remote models from abroad;
              • Local registration of intellectual property and commercial identifiers;
              • Internal reporting and supervision obligations anchored in Saudi Arabia.

              Is RHQ Establishment Mandatory or Optional?

              While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

              As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

              This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

              Conclusion: High-Reward, High-Compliance Environment

              The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

              Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

              And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

              In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

              Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

              The Brazilian market took the bait

              Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

              The same effect hit other sectors, from orange, honey, and coffee to aircraft.

              Brazil’s response and sorcery: don’t mess with us (or our weather)

              Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

              And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

              Trump might want to check the weather forecast next time before penning another angry letter.

              The unpredictable becoming predictable

              Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

              At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

              In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

              This is where good contract drafting comes into play

              Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

              • hardship clauses that allow renegotiation when costs become commercially unreasonable;
              • price adjustment mechanisms linked to tariff thresholds;
              • termination rights triggered by specified levels of customs duties;
              • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

              In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

              Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

              The unwitting cupid: strengthening EU-Brazil relations

              While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

              The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

              So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

              Christian Ule

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                The USA vs. Brazil Trade War | How to Lose a Trade Partner in 10 Tweets

                18 July 2025

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                Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

                For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

                What the EU decision does (and does not) do

                The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

                At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

                In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

                The ideological paradox: a Socialist Republic on a tax-haven list

                Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

                Why Vietnam was added: the listing criteria and timeline

                Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

                The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

                Vietnam’s response and the path to delisting

                Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

                How different payment types are affected in practice

                Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

                The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

                Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

                If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

                Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

                Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

                Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

                Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

                Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

                Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

                How European banks may respond (and what that looks like in practice)

                Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

                For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

                A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

                Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

                A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

                This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

                A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

                A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

                Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

                EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

                Non-tax defensive measures and EU funding implications

                Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

                DAC6 reporting and public country-by-country reporting

                Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

                Country notes (alphabetical)

                Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

                France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

                Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

                Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

                For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

                Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

                Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

                Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

                 

                Practical next steps for EU companies

                1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
                2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
                3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
                4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
                5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
                6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
                7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
                8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
                9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

                Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

                Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

                Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

                • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
                • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
                • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
                • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
                • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
                • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

                Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

                Legal Forms of Joint Ventures

                Investors should understand the different corporate structures available for joint ventures:

                • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
                • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
                • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

                Foreign Investment Law

                Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

                • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
                • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

                Why is ISIC4 Relevant?

                The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

                Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

                • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
                • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
                • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
                • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
                • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
                • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

                Strategic Considerations

                • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
                • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

                Practical Tips

                • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
                • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
                • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

                Compliance with Local Regulations

                • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
                • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
                • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

                Conclusion

                Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

                Executive Summary

                The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

                Looking Back: The Promise of a Single African Market

                When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

                In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

                The Reality Check: Intra-African Trade Remains Structurally Weak

                Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

                A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

                Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

                Implementation Has Been Slow — and Often Symbolic

                Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

                The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

                A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

                Tariffs Are Not the Main Barrier — Trade Costs Are

                AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

                FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

                This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

                Integration Complexity and Distributional Politics

                Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

                There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

                Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

                What This Means for Egypt: The Opportunity Is Real — But Conditional

                Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

                For Egypt’s private sector, the decisive factors are practical:

                • predictable and efficient customs clearance and border procedures,
                • logistics corridors and port efficiency,
                • regulatory convergence (standards, certification, compliance),
                • stable access to trade finance and payments,
                • competitive energy and production conditions for manufacturing and processing.

                AfCFTA can support these developments — but it cannot replace them.

                The “Game Changer” Pathway: What Must Happen Next

                FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

                At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

                For Egypt and its partners, a pragmatic strategy would be to:

                1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
                2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
                3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
                4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

                Conclusion

                AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

                For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

                This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

                How to obtain a mortgage loan when Purchasing Property in Spain

                When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

                Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

                Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

                • The public deed of sale, and
                • The mortgage deed.

                At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

                While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

                Key Differences for Foreign Buyers

                Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

                • Submission of translated or apostilled foreign documents,
                • More extensive due diligence and KYC (Know Your Customer) procedures, and
                • Generally longer processing times.

                These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

                Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

                The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

                In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

                If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

                Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

                Are there debts associated with the property that the buyer will be liable for?

                The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

                To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

                What are the specific provions of Spanish Coastal Law (Ley De Costas)?

                Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

                Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

                Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

                 

                What rules apply to Country Houses (Fincas Rústicas)?

                Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

                Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

                Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

                How are squatting cases  (Okupas) regulated under Spanish law?

                In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

                Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

                Effective deterrents include:

                • Alarm systems and surveillance cameras,
                • Remote monitoring,
                • Local property management services (especially for second homes).

                Spanish law differentiates between:

                • Intrusion into a primary residence (treated as unlawful entry),
                • Occupation of vacant or second homes (classified as usurpation, requiring court action).

                Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

                • Within the first 48 hours of occupation:
                  Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
                • After 48 hours: Eviction must follow a formal judicial process.
                • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

                While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

                After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

                Tariff Sharing agreements

                For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

                The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

                Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

                As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

                If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

                Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

                In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

                For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

                To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

                The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

                The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

                Importer’s responsibility to seek reimbursement

                It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

                Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

                This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

                For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

                Preventive Agreements on Litigation and Cost Allocation

                When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

                Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

                How to handle new tariffs and their potential cancellation

                To safeguard against uncertainty, the agreement should be organized into two stages.

                • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
                • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

                This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

                This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

                This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

                Conclusion: Three practical steps for companies exporting to the US

                The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

                The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

                The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

                Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

                Where this new duty comes from

                The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

                Companies involved in the investigation

                The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

                U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

                Next steps in the procedure

                Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

                The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

                The preliminary nature of this determination means there is still room to change the decision before it becomes final.

                Possible effective date

                The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

                If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

                 What to do between now and January 1, 2026?

                At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

                So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

                • Some rushed to ship as many products as possible before the potential effective date of the duty;
                • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
                • Some suspended orders, pending definitive news on the impact of the duties.

                These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

                The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

                The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

                New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

                Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

                Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

                30-Year Tax Holiday

                Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

                Operational Substance Requirements: RHQ Functions and Compliance

                At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

                Mandatory Activities (to be activated within the first year):

                • Preparation and implementation of the regional strategy;
                • Strategic coordination of the MNE’s operations in the region;
                • Selection of products and services offered in the region;
                • M&A support;
                • Financial performance review;
                • Budget planning for regional operations;
                • Coordination of business units across MENA;
                • Market research and competitor analysis;
                • Identification of new market opportunities;
                • Marketing strategy development;
                • Preparation of operational and financial reports.

                Optional Activities (minimum of three to be activated): These include, among others:

                • Research, development and innovation;
                • Sales and marketing;
                • Human resources and training;
                • Financial management, foreign exchange and treasury services;
                • Legal consultancy, compliance, internal audit;
                • Logistics, IP management, production, and technical support.

                The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

                Additional Substantive Requirements

                • Minimum of 15 employees in the first year;
                • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
                • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
                • RHQ operations must be exclusively performed within the Kingdom.

                Licensing Process and Timing

                The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

                True Regional Authority and Kingdom-Centric Operations

                Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

                Localization Requirements

                To ensure genuine local presence, the RHQ regime mandates:

                • Saudi residency and work permits for all RHQ personnel;
                • No hybrid or remote models from abroad;
                • Local registration of intellectual property and commercial identifiers;
                • Internal reporting and supervision obligations anchored in Saudi Arabia.

                Is RHQ Establishment Mandatory or Optional?

                While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

                As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

                This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

                Conclusion: High-Reward, High-Compliance Environment

                The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

                Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

                And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

                In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

                Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

                The Brazilian market took the bait

                Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

                The same effect hit other sectors, from orange, honey, and coffee to aircraft.

                Brazil’s response and sorcery: don’t mess with us (or our weather)

                Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

                And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

                Trump might want to check the weather forecast next time before penning another angry letter.

                The unpredictable becoming predictable

                Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

                At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

                In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

                This is where good contract drafting comes into play

                Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

                • hardship clauses that allow renegotiation when costs become commercially unreasonable;
                • price adjustment mechanisms linked to tariff thresholds;
                • termination rights triggered by specified levels of customs duties;
                • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

                In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

                Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

                The unwitting cupid: strengthening EU-Brazil relations

                While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

                The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

                So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

                Geraldo Fonseca

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                  Assessing the US-Vietnam Framework Agreement on Trade

                  13 July 2025

                  • USA
                  • Vietnam
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                  Vietnam has been added to the EU list of non‑cooperative jurisdictions for tax purposes (Annex I), following the Council’s update of 17 February 2026.

                  For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to “name and shame” and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement “defensive measures” that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.

                  What the EU decision does (and does not) do

                  The EU blacklist is a tax‑governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam’s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.

                  At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax‑governance pressure through listing mechanisms, so businesses should be prepared for a “partnership plus scrutiny” environment rather than expecting the two to be perfectly aligned.

                  In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.

                  The ideological paradox: a Socialist Republic on a tax-haven list

                  Vietnam’s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers and LuxLeaks) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, “tax haven” connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam’s hybrid economic model: politically socialist, but economically pragmatic since the Đổi Mới reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU’s concern is not Vietnam’s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one. 

                  Why Vietnam was added: the listing criteria and timeline

                  Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the “grey list”) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam “Non-Compliant” with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.

                  The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam’s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country’s practical capacity and procedural framework for responding to foreign tax authorities’ requests for information.

                  Vietnam’s response and the path to delisting

                  Vietnam’s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country’s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.

                  How different payment types are affected in practice

                  Goods (imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection/acceptance records and matching invoices.

                  The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.

                  Services (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because “what was delivered” is harder to evidence than a shipped product.

                  If your EU entity pays a Vietnamese provider for services, expect to need a well‑organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign‑offs, and a pricing rationale that matches the level of skill and effort involved.

                  Royalties and IP-related payments (software licences, trademarks, know‑how, technology access) are particularly sensitive because they combine valuation complexity with cross‑border tax characterisation questions.

                  Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.

                  Intragroup charges (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for “benefit” evidence and allocation logic.

                  Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.

                  Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime/compliance sensitivities.

                  Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.

                  How European banks may respond (and what that looks like in practice)

                  Banks in the EU operate under a risk‑based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.

                  For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.

                  A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.

                  Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary’s beneficial ownership or corporate structure.

                  A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.

                  This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.

                  A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.

                  A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.

                  Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.

                  EU companies are advised to develop a “Banking Compliance Pack” for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.

                  Non-tax defensive measures and EU funding implications

                  Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam’s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.

                  DAC6 reporting and public country-by-country reporting

                  Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as “Rest of the World”-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.

                  Country notes (alphabetical)

                  Belgium: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.

                  France: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.

                  Germany: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany’s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.

                  Italy: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to “normal value,” while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy’s framework is directly triggered by the EU list, meaning Vietnam’s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.

                  For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.

                  Malta: Malta follows a dynamic approach to the EU list, meaning Vietnam’s Annex I status takes effect automatically in Malta’s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on “people functions.” Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.

                  Netherlands: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam’s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.

                  Spain: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam’s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council’s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.

                   

                  Practical next steps for EU companies

                  1. Map exposures: Identify and quantify all payment streams relating to Vietnamese entities, broken down by payment type (goods, services, royalties, intragroup charges, financing).
                  2. Understand your Member State’s rules: Confirm which defensive measures apply in the relevant EU payer jurisdiction, when they take effect (immediately or staged), whether the jurisdiction follows the EU list dynamically or statically, what relief conditions exist, and what documentation is required.
                  3. DAC6 readiness: Assess whether Vietnam-linked arrangements trigger DAC6 reporting obligations (particularly deductible cross-border payments between associated enterprises) and ensure reporting infrastructure is in place.
                  4. Transfer pricing and substance: Validate intercompany services, royalties and financing arrangements by reassessing pricing, benefit tests and contractual terms; strengthen contemporaneous documentation before year-end.
                  5. Public CbCR messaging: If within scope, assess public CbCR disclosure implications for Vietnam operations and align tax, legal, ESG and investor-relations communications accordingly.
                  6. Vendor due diligence: Implement or strengthen due diligence on Vietnamese counterparties, including tax residence evidence, beneficial ownership documentation, and substance and economic activity confirmation.
                  7. Banking compliance pack: Build a pre-assembled documentation pack for Vietnam-corridor payments (contract, invoice, proof of delivery/performance, business rationale, beneficial ownership information) to address bank queries within hours rather than days.
                  8. Monitor the October 2026 review: Track Vietnam’s progress on EOIR reforms and the EU Code of Conduct Group’s October 2026 review cycle. If Vietnam is removed from Annex I in October 2026, Member States that follow a static approach (Germany, Netherlands) will not apply defensive measures to Vietnam in their 2027 rules; France, which also follows a static approach but applies additional domestic criteria, may nonetheless retain Vietnam on its own non-cooperative state list even after EU delisting. The October 2026 outcome is therefore commercially significant for medium-term planning.
                  9. Embed internal governance: Install jurisdiction-risk gateways in approval workflows for new entities, contracts, loans, and IP arrangements involving Vietnam, to ensure proper sign-off and documentation from inception.

                  Establishing a joint venture in Saudi Arabia can be an extremely attractive option for foreign investors. It provides access to local expertise, market knowledge, business networks, and the financial strength of a Saudi partner. Additionally, potential economies of scale can be leveraged through such a partnership.

                  Despite the clear advantages of forming a joint venture in Saudi Arabia, foreign investors should undertake thorough planning that focuses on financial, legal, and strategic aspects. This article provides a practical guide to the key considerations.

                  Foreign investors must familiarize themselves with the local tax and financial framework to optimize their chances of success. Contractual agreements with local partners should clearly regulate the following key points:

                  • Capital Contribution: The parties should clearly define what assets (e.g., cash, intellectual property, know-how) and in what amounts they contribute to the joint venture. A realistic valuation of the contributed tangible and intangible assets is required.
                  • Profit Distribution: It must be determined when, how often, and in what proportion the profits generated by the joint venture will be distributed to the partners.
                  • Loss Allocation: The parties should agree on how potential losses of the joint venture will be borne.
                  • Financing Arrangements: Various financing options should be considered to cover the joint venture’s operational and investment capital needs. These include shareholder loans as well as Sharia-compliant financing models such as .
                  • Tax Regulations: The tax obligations of the parties must be clearly defined. Foreign investors are subject to a corporate tax rate of 20%, while Saudi partners pay a Zakat levy of 2.5% on their net income. Foreign investors should also examine whether double taxation agreements (DTAs) provide benefits such as tax exemptions or deductions. Notably, Germany has not concluded a DTA with Saudi Arabia. Moreover, companies operating in newly established Special Economic Zones (SEZs) can benefit from significant tax advantages.
                  • Exit Strategies: It is advisable to include clear exit strategies in the contract. These may include clauses regarding the purchase or sale of shares, as well as valuation methods for situations where a party wishes to exit the joint venture.

                  Foreign investors should familiarize themselves with the relevant legal framework in Saudi Arabia. This includes Saudi corporate law, the Foreign Investment Law and its implementing regulations, the Arbitration Law and commercial courts, as well as labor law.

                  Legal Forms of Joint Ventures

                  Investors should understand the different corporate structures available for joint ventures:

                  • Limited Liability Company (LLC): The most common structure for joint ventures, offering a flexible framework and limited liability.
                  • Joint Stock Company (JSC): Often used for large projects and ventures requiring significant capital.
                  • Simplified Joint Stock Company (SJSC): A new structure combining elements of LLCs and JSCs, providing greater flexibility in corporate governance.

                  Foreign Investment Law

                  Foreign investors should be aware of the key provisions of Saudi Arabia’s investment law, which governs their business activities in the Kingdom. The most important aspects include:

                  • Approval by the Ministry of Investment (MISA): Every foreign investment must be approved by MISA, which acts as a one-stop-shop for all necessary formalities, from company registration to obtaining licenses and permits. Notably, the previous licensing system will soon be replaced by a registration system, with detailed regulations expected in February 2025.
                  • Liberalization of Investment Restrictions: Saudi Arabia has significantly eased foreign investment restrictions and now allows up to 100% foreign ownership in most sectors, except for strategic areas such as oil and gas, media, security, and defense, which remain restricted.

                  Why is ISIC4 Relevant?

                  The classification of investment activities under the International Standard Industrial Classification (ISIC), Version 4 (ISIC4), is a key consideration for foreign investors in Saudi Arabia. ISIC4 is an internationally recognized system for categorizing economic activities, developed by the United Nations.

                  Correct classification of an investment activity under ISIC4 is crucial, as it directly impacts approval and regulation by MISA. The choice of the appropriate classification affects:

                  • Approval Procedures: MISA uses ISIC4 as a reference for categorizing investment projects, but responsible officials are often not sufficiently familiar with the classification details. Incorrect classification can therefore lead to delays or unnecessary restrictions.
                  • Permitted Activities: Certain sectors are subject to regulatory restrictions or specific requirements. A precise ISIC4 classification helps avoid unclear or incorrect restrictions.
                  • Investment Incentives: Tax benefits and incentives often depend on correct industry classification. Choosing an ISIC4 category that best matches the joint venture’s business activity can provide financial advantages.
                  • Minimum Capital Requirements: The choice of ISIC4 classification can have direct implications on the required minimum capital. For example, an industrial license for a business activity involving production requires a minimum capitalization of SAR 1,000,000.
                  • Trade/Distribution Licenses: Any sales activity, whether following a production phase or through resale, may require a trade or distribution license with significant capital requirements (at least SAR 26,667,000 with Saudi participation and SAR 30 million for 100% foreign ownership). Therefore, classification under certain trade categories should be avoided if the goal is to minimize capital requirements.
                  • Service Categories: Activities classified under service categories generally require significantly lower capital requirements.

                  Strategic Considerations

                  • Understanding local business culture and etiquette is crucial for the success of a joint venture in Saudi Arabia. Personal relationships and trust-building play a central role in business interactions.
                  • Investors should conduct thorough due diligence on potential local partners, including financial audits and assessments of market reputation. Ensuring that both partners share similar business goals can prevent conflicts. A deep understanding of the business and social environment is essential to avoid misunderstandings or negative consequences arising from disregard for prevailing business, social, and religious norms.

                  Practical Tips

                  • Business agreements should be documented in a comprehensive joint venture contract and a detailed business plan that allows for flexible adaptation.
                  • A well-structured joint venture should include a Matrix of Authority, defining roles, responsibilities, and decision-making powers. Critical decisions should be classified as Reserved Matters, requiring the approval of all partners.
                  • Investors should establish robust licensing agreements to protect intellectual property when contributing technology or know-how to the joint venture. Confidentiality agreements and regular audits can provide additional security.

                  Compliance with Local Regulations

                  • Anti-Money Laundering & Anti-Corruption Laws: Investors must ensure compliance with Saudi regulations on money laundering and corruption by conducting due diligence and implementing internal compliance programs.
                  • Labor Law & Saudization Requirements: Foreign companies must comply with the Nitaqat system, which mandates quotas for employing Saudi nationals. Non-compliance can lead to sanctions or restrictions on work permits for foreign employees.
                  • Dispute Resolution: A dispute resolution clause is essential in joint venture agreements. Saudi arbitration law, based on the UNCITRAL model, provides an effective dispute resolution mechanism. The Riyadh Commercial Arbitration Center and the International Chamber of Commerce (ICC) are widely recognized arbitration institutions.

                  Conclusion

                  Setting up a joint venture in Saudi Arabia presents substantial business opportunities but requires careful financial, legal, and strategic planning. Foreign investors can maximise their success by understanding local regulations and cultural nuances. Partnering with experienced legal advisors familiar with Saudi laws and business practices is essential to navigate the complexity of the establishment process and ensure long-term success.

                  Executive Summary

                  The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

                  Looking Back: The Promise of a Single African Market

                  When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

                  In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

                  The Reality Check: Intra-African Trade Remains Structurally Weak

                  Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

                  A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

                  Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

                  Implementation Has Been Slow — and Often Symbolic

                  Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

                  The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

                  A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

                  Tariffs Are Not the Main Barrier — Trade Costs Are

                  AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

                  FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

                  This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

                  Integration Complexity and Distributional Politics

                  Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

                  There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

                  Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

                  What This Means for Egypt: The Opportunity Is Real — But Conditional

                  Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

                  For Egypt’s private sector, the decisive factors are practical:

                  • predictable and efficient customs clearance and border procedures,
                  • logistics corridors and port efficiency,
                  • regulatory convergence (standards, certification, compliance),
                  • stable access to trade finance and payments,
                  • competitive energy and production conditions for manufacturing and processing.

                  AfCFTA can support these developments — but it cannot replace them.

                  The “Game Changer” Pathway: What Must Happen Next

                  FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

                  At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

                  For Egypt and its partners, a pragmatic strategy would be to:

                  1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
                  2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
                  3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
                  4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

                  Conclusion

                  AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

                  For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

                  This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).

                  How to obtain a mortgage loan when Purchasing Property in Spain

                  When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.

                  Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.

                  Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:

                  • The public deed of sale, and
                  • The mortgage deed.

                  At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.

                  While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.

                  Key Differences for Foreign Buyers

                  Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:

                  • Submission of translated or apostilled foreign documents,
                  • More extensive due diligence and KYC (Know Your Customer) procedures, and
                  • Generally longer processing times.

                  These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.

                  Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer

                  The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.

                  In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.

                  If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.

                  Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.

                  Are there debts associated with the property that the buyer will be liable for?

                  The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.

                  To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.

                  What are the specific provions of Spanish Coastal Law (Ley De Costas)?

                  Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.

                  Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.

                  Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.

                   

                  What rules apply to Country Houses (Fincas Rústicas)?

                  Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.

                  Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.

                  Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing. 

                  How are squatting cases  (Okupas) regulated under Spanish law?

                  In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.

                  Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.

                  Effective deterrents include:

                  • Alarm systems and surveillance cameras,
                  • Remote monitoring,
                  • Local property management services (especially for second homes).

                  Spanish law differentiates between:

                  • Intrusion into a primary residence (treated as unlawful entry),
                  • Occupation of vacant or second homes (classified as usurpation, requiring court action).

                  Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:

                  • Within the first 48 hours of occupation:
                    Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership.
                  • After 48 hours: Eviction must follow a formal judicial process.
                  • Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.

                  While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.

                  After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the “reciprocal” tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

                  Tariff Sharing agreements

                  For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

                  The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

                  Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

                  As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

                  If no formal agreements have been made on this point and the documentation refers generically to a “commercial discount” and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

                  Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

                  In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

                  For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

                  To achieve this, the first step is to accurately classify and document the discounts granted. If only a “commercial discount” appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

                  The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

                  The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

                  Importer’s responsibility to seek reimbursement

                  It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

                  Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

                  This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

                  For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

                  Preventive Agreements on Litigation and Cost Allocation

                  When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

                  Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

                  How to handle new tariffs and their potential cancellation

                  To safeguard against uncertainty, the agreement should be organized into two stages.

                  • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
                  • The second stage manages the possible “rollback” (right to reimbursement, process, allocation criteria).

                  This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

                  This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

                  This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

                  Conclusion: Three practical steps for companies exporting to the US

                  The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

                  The second is to clearly document any discount granted to offset a duty. If it remains a generic “commercial discount,” the right to a refund if reimbursement occurs will be much harder to enforce.

                  The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

                  Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

                  Where this new duty comes from

                  The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

                  Companies involved in the investigation

                  The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

                  U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

                  Next steps in the procedure

                  Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

                  The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

                  The preliminary nature of this determination means there is still room to change the decision before it becomes final.

                  Possible effective date

                  The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

                  If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

                   What to do between now and January 1, 2026?

                  At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

                  So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

                  • Some rushed to ship as many products as possible before the potential effective date of the duty;
                  • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
                  • Some suspended orders, pending definitive news on the impact of the duties.

                  These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

                  The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

                  The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

                  New Regulatory Framework for RHQs: Tax Relief, Substantive Presence, and Streamlined Licensing

                  Saudi Arabia has released the long-awaited draft of the “Rules Regulating the Licensing and Supervision of Regional Headquarters of Multinational Companies,” issued pursuant to Cabinet Resolution No. (338) dated 23/4/1445H. This regulatory framework, currently open for public consultation, forms part of the Kingdom’s ambitious Vision 2030 strategy to establish Saudi Arabia as the prime regional base for multinational enterprises (MNEs) operating in the Middle East and North Africa (MENA) region.

                  Far beyond mere tax incentives, the draft Rules introduce a binding, structured regime that combines regulatory clarity with strict compliance obligations and long-term benefits. The most salient features include the following.

                  30-Year Tax Holiday

                  Entities licensed as RHQs will enjoy a 0% income tax rate and a 0% withholding tax rate on dividends, related-party payments, and payments for services essential to RHQ activity. These tax incentives are granted for a period of 30 years, renewable under conditions set by the Ministry of Investment.

                  Operational Substance Requirements: RHQ Functions and Compliance

                  At the core of the RHQ regime lies the requirement for substantial and sustained business presence in the Kingdom. Licensed RHQs must activate both mandatory and optional activities as defined in Article 7 of the Rules:

                  Mandatory Activities (to be activated within the first year):

                  • Preparation and implementation of the regional strategy;
                  • Strategic coordination of the MNE’s operations in the region;
                  • Selection of products and services offered in the region;
                  • M&A support;
                  • Financial performance review;
                  • Budget planning for regional operations;
                  • Coordination of business units across MENA;
                  • Market research and competitor analysis;
                  • Identification of new market opportunities;
                  • Marketing strategy development;
                  • Preparation of operational and financial reports.

                  Optional Activities (minimum of three to be activated): These include, among others:

                  • Research, development and innovation;
                  • Sales and marketing;
                  • Human resources and training;
                  • Financial management, foreign exchange and treasury services;
                  • Legal consultancy, compliance, internal audit;
                  • Logistics, IP management, production, and technical support.

                  The selected optional activities must be aligned with the MNE’s global business strategy and must be regionally anchored.

                  Additional Substantive Requirements

                  • Minimum of 15 employees in the first year;
                  • At least 3 senior executives must be based in the Kingdom and must represent the top decision-making authority for the region;
                  • RHQ staff must reside in Saudi Arabia, be dedicated full-time, be licensed locally, and receive remuneration through Saudi bank accounts;
                  • RHQ operations must be exclusively performed within the Kingdom.

                  Licensing Process and Timing

                  The licensing process is clearly defined. Upon submission of the required documentation (commercial records, financials, activity plans), the Ministry of Investment will process the application within 30 working days.

                  True Regional Authority and Kingdom-Centric Operations

                  Licensed RHQs must hold administrative authority over all regional branches and subsidiaries. The RHQ must operate as the highest strategic, executive, and administrative authority in the MENA region. Furthermore, all RHQ-related activities must be carried out exclusively from within the Kingdom.

                  Localization Requirements

                  To ensure genuine local presence, the RHQ regime mandates:

                  • Saudi residency and work permits for all RHQ personnel;
                  • No hybrid or remote models from abroad;
                  • Local registration of intellectual property and commercial identifiers;
                  • Internal reporting and supervision obligations anchored in Saudi Arabia.

                  Is RHQ Establishment Mandatory or Optional?

                  While the RHQ license remains optional in principle, it is effectively mandatory for all multinational companies intending to contract with Saudi public sector entities.

                  As of 1 January 2024, the Saudi government will only consider public procurement contracts from companies that have an RHQ presence in the Kingdom, unless an express exemption is granted. Companies operating purely in the private sector without government contracts remain unaffected, but will nonetheless benefit from the RHQ regime if they choose to participate.

                  This regulatory shift creates a strategic filter: those seeking to participate in Saudi Arabia’s transformation across infrastructure, health, energy, and education must establish a fully embedded regional presence in the Kingdom.

                  Conclusion: High-Reward, High-Compliance Environment

                  The draft Rules represent a bold step in reshaping the MENA business landscape. Saudi Arabia is setting the bar high: generous tax relief and fast-track licensing are tied to substantive commitments in structure, personnel, and governance. For MNEs willing to assume regional leadership from within Saudi borders, the opportunity is as attractive as it is demanding.

                  Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: “The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!”

                  And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: “Due to Brazil’s insidious attacks on free elections…”.

                  In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

                  Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering “protection” after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

                  The Brazilian market took the bait

                  Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

                  The same effect hit other sectors, from orange, honey, and coffee to aircraft.

                  Brazil’s response and sorcery: don’t mess with us (or our weather)

                  Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

                  And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

                  Trump might want to check the weather forecast next time before penning another angry letter.

                  The unpredictable becoming predictable

                  Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

                  At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

                  In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

                  This is where good contract drafting comes into play

                  Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

                  • hardship clauses that allow renegotiation when costs become commercially unreasonable;
                  • price adjustment mechanisms linked to tariff thresholds;
                  • termination rights triggered by specified levels of customs duties;
                  • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

                  In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

                  Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

                  The unwitting cupid: strengthening EU-Brazil relations

                  While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

                  The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

                  So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

                  Federico Vasoli

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