Welcome back to Monday Legal, the podcast where law, business, and life intersect. Today's episode is very special, not just because of our guests, it's because of where we are filming it. We are recording in a stunning villa in Dubai. This villa have been acquired and developed by Arnold Legal Family Office from Switzerland. This property was sold, renovated, and redeveloped after a rigorous due diligence process, full permits and a lot of legal work behind it. done by the family office of Arnold Legal from Switzerland in collaboration with the right consultants, the right legal adviserss from Dubai. Our guest for today is James the Arnold. He's a true deal architect coming from Switzerland to show us how did he turn an 8 million dirham property into a 16 million dirham. Thank you very much James for finding the time to come and meet us. Yes, thank you very much for having me. Thank you. Thank you. Actually we are in his place. We are shooting in uh in in James uh villa which actually the villa that is owned by the family office that James is representing and it's one of the most beautiful places I've seen in Dubai. So thank you for letting us shoot here. Thank you. It's a great pleasure to have you here. Uh a little bit of of a brief introduction to James. James and his family are uh in start Switzerland as James as as Arnold's legal and James is representing the family office of arm of the uh law firm which is operating between uh EU uh Asia and the Middle East. He's responsible of the Dubai office and he is here to talk to us about their activities and what they're doing in the UAE and what kind of business and uh advice they're giving their clients. Um can we start a little bit by an introduction about your career and your professional background and what brought you to the UAE from Switzerland? Yes, absolutely. Well, thank you very much again for having me. I uh started my career out by studying finance essentially which sort of got me into this field. Both my parents are both like uh from the law side of this type of industry. I never wanted to study law. I wanted to do something a bit different. So I decided to study finance and after having completed my degree I went into investment banking for some time. I did healthcare M&A and there I sort of learned the hard skills one needs to do this business. From that I then uh well then having worked in the sales side for some time I saw how that works and then I ventured into the buy side of it through my own family's family office with the law firm and since the buy side is the more fun I guess side of the finance game. It's uh given me a lot of opportunities to see different things and to sort of see the business from the other side I experienced before and then we uh not too long ago we sort of assessed our capital position and we saw that we would like to diversify a bit towards the Middle East and Asia. So I had the opportunity then to venture the family office out to to the Middle East and Asia in um mid 2024. So that's how I came to Dubai and now I'm here. What drew you into the region and what exactly? I understand that diversification is quite a good reason but what I'm pretty sure you had manyam many examples of of great um jurisdictions or territories all around the world to put the attention of the family office from Switzerland too. What brought you to Dubai and what kept you? Yes. I think um if you consider the Middle East right now, it's one of these markets you cannot ignore. So we sort of found that from all of the markets at the moment we want to be in the Middle East is probably the one that is most likely the one single market we cannot afford not to be in. So we assess that and uh seeing the proximity to Asia from here to manage the business we do in Asia there's a lot of synergies for one it's much closer than from Switzerland for the other it's uh one of these markets where things like even the time zones give us a big benefit because we can respond to things much faster and we can be more uh engaged with our operations in Asia. So we thought it was from that perspective a very efficient solution to do. On the other side we also thought that the opportunities here in the Middle East with Saudi Arabia the vision 2030 with what is happening also here in the UAE is very interesting and let alone from the side of real estate you can't ignore Dubai. I mean it's it's all it's all over the place. It's a very interesting a very volatile market. But if done right, we think that this can be of a long-term benefit to the family office and our investors. Since you mentioned real estate, what makes the real estate investments uh in the UAE as as interesting uh uh to uh in comparison to other JCC or other Middle Eastern uh countries uh and at the same time what kind of risks that you are trying to mitigate by diversifying to the Middle East here? Yeah, I think if we compare it to the market in Europe at the moment at least, it's of course a much more mature market. So in the market there is of course many different opportunities being offered and you have to understand what is your risk appetite and what does your structure want to do and what does what do your investors or what do yourself want to do? What are you looking for? So having that in mind, there is always a certain fundamental yeah I guess assessment you need to do on the risk end. If you want to do redevelopment you have to work with a contractor who has a good track record. If you uh need to assess certain things you have to run it by lawyers which understand which implications your development has on for example attaining an NOOCC at the end. So these are all features you need to understand and since the market is not mature enough to maybe have certain guidelines or certain um protection mechanisms in place let's call them that you have to do more of that work on your part maybe in Europe it's more of a guided approach you buy a house you do this you do that you cannot really um lose too much money since you can also not make too much money because it's it's the yields are more capped here you can make a lot of yields, you can make big returns if done right, but it goes the other way as well. And that's sometimes what people don't want to see because you see these high numbers, these high yields, you know, if somebody comes to you and promises you 300% return, maybe it's too good to be true. Yes. And you should also consider maybe it can go the other way that the downside is the same or maybe even more. Do you think Swiss investors or European investors in general coming up to the UAE are better off coming through investor advisors or family offices and and and sort of this structure of consultancy because I from my experience for example I see a lot of uh foreign direct investor coming not institutionalized. Yes. And they those who go for the legal route and to go to the lawyers, spend a little bit on the due diligence and so on are kind of protected. And those who do everything on their own, it's it's a it's a tricky uh situation. And we are here in a in a very nice villa at the moment shooting in in one of your examples of investment. And I'm pretty sure that you have done a lot of due diligence and a lot of legal work behind before you start investing in such an asset. Talk to us a little bit about the due diligence that you had to do when deciding to buy this asset and to renovate it and to put it up again in the market. So I think first of all to answer this question it's very important to note that I think as in any new market a investor comes into it's always advised to get advice because if you want to do things yourself you you might you know go right you might be lucky but you might also not be lucky right so it's one of these things it's always best if you do it the first time do it with somebody who's done it before who can give you that independent advice because the issue is of course if you can get advice from somebody who's not independent And you know that yourself as a lawyer there is always a certain bias towards a certain direction maybe which is something uh which might have an inverse effect right so to then find somebody who can guide you in this path of uh these investments as I said before it's a very impulsive place here in the sense you find a lot of different things you find a lot of artists of of all sort of natures right and uh that can be a certain risk so going to the due diligence one needs to do for a project like this here. It's um it certainly starts out by the the fundamental idea. What do I want to do? What do I want to do as an investor? Do I want to take an active role? Do I want to have something more passive? If you want something more passive, you'll go for something off plan because you can just sort of let the developer do what they do best and you know fingers crossed it's going to be fine, right? If you want to take a more active role, you will maybe buy an existing asset and you will redevelop that there. Of course, if you by taking a more active role, there's more active risks and you and you have to work actively to mitigate those risks. If you don't do that, you're being negligent. So, there is different things you have to then do. If you want to have this active role, you would essentially first check the price of the asset you're buying. Is it priced in a way where there can be money made? in in in many communities at the moment of course here in Dubai in the uh legacy communities such as Meadows prices have been rising quite a bit. So for for you to get that market entry is very important because the price you buy dictates how much you can invest and then potentially sell it for or what your yield will be if you rent it out. So that's the most important part. But it's not just done alone by the purchase. You have to assess of course also the hard facts of the asset. Where is it? How is it? How is the plot laying? What can I do with the plot? Is there a is there any sort of uh things that certain buyers don't like? Power lines, you know. Yeah, it it goes from the macro assessment to the micro to the walking on the plot and sort of seeing around what can we do here and what might I not like. I think the most important thing and the most important feature of doing due diligence is you have to always ask yourself, would I buy this? Would I want to live here? And if you can say yes to all of these questions, then most likely you have a plot or you have a an an type of asset which could have a winning potential and that's exactly what you're looking for. Now, once you acquire something like this, it doesn't stop there. You have to do feasibility. You have to talk to the engineers, the architects. What can we do? what does the developer allow us to do? Because we have to stay within the framework of what they allow us to do otherwise you will not get the NOC and cannot sell the asset which is a problem for itself as I'm sure you're aware of. So it's uh very multiaceted. It doesn't end just by finding a good asset. It sort of ends when you're finished with the development and have sold Yes. and have sold the asset. So it's a it's a process but you get used to it. And I think coming from a law or finance background, we are used to doing a lot of due diligence, doing a lot of digging. Yeah. Doing a lot of factchecking. I think in one of your previous um segments, there was said that lawyers are somewhat of perfectionists. And I think that is very much applied to here. If you can apply the same mindset to these investments, you're not going to go wrong. I absolutely agree with you on the legalities of the due diligence when we talk about the ownership if there are any um interests over the property or if there is any violation even on the construction level that uh when when you buy a property and so on you kind of buy it with its problem. So if this has a legal problem with the bank or it has a legal problem with the with the master developer or is there something wrong with the permits that it has or there is a violation from the electricity and water or any kind of issue like this this diminish the value of the asset you're buying. So the due diligence whether legal, engineering or on the investment side as well is very important and uh we see this uh very often because a lot of investors come in put a lot of money behind the property with very less due diligence and then they realize there is a legal element into the into the the the asset that was not looked at. Yeah. And this automatically translate into three six to 9 months of delay on any uh sort of development they do in the investment and it affects automatically the profitability of such investment. So I want to understand how did you turn an 8 million dirham into 16 in Dubai in six months? That's very significant. Yeah, I think well thank you very much for that. I think uh it's one of these things I think a bit of luck was involved of course always I don't want to say for myself that this was just fully planned and we sort of wanted to do this and we did it we of course had certain measures in place from the start we worked with people who in the market have done this before we also chose an asset actually here which had one of these issues you just mentioned the house before the house you're sitting in now here in Meadows 6 had a problem it had an extension which it did not pay for and that was a that's that's a big issue. That's a big no no in the market. It's a big legal problem. So, we of course identified that at first. In some cases, buyers don't identify that and the seller gets away with it, which uh yeah, I think is a bit of a legal gray zone, I guess, if you sell it in under these uh circumstances. But it certainly is one of these things where what when you assess certain characteristics of an asset, you can of course use it to your benefit if assessed at the right time. So in this case, we understood that this particular seller at the time, he wanted to very like urgently sell the asset. He needed the money, but he could not pay for the extension that was done illegally. Mhm. So this was a criteria for us where we saw an opportunity. We saw the opportunity to use it into into our advantage and to maybe attain a better price for us to acquire the asset. So to straight up answer how we made this type of return within 6 months, the answer is we bought at a very good price. When we bought it at the end of last summer around September, the market here was not as strong as it is now. There was more assets for sale in this particular um area of Meadows. Now, we're the only house for sale on the block. There is nothing else for sale. You can go on a property finder or Bay. You will not find anything else to buy at the moment. We uh then found the right people to work with which means we got the permits very fast. While doing the planning, we applied for the internal demolition permit. So we got started practically after acquiring the property to rip everything out. We ripped it out to Shelon. There was there was nothing left of the old house besides the uh structural walls. So we did that. Then during that time we were very time efficient. We did the planning. We got the permits. We changed around floor plans and did extensions. Now they're legal extensions, I must say. So it's it's a very wellthoughtout plan and it's a very well structured plan of execution. We worked with a contractor. We did not want to choose the cheapest contractor. Also I think that's important to be said because for new investors coming to Dubai something very um tempting is which cutting costs but cutting costs is cutting corners and I think you have to keep that in mind because at the end of the day if you want to do that you will see the effect and the effect you will pay for it later you will pay for it in the way maybe that you can't sell the asset because it is not to the standard which the buyer wants it to be and so or or of a contractor does uh bad work or an illegal permit or an extension without an approval or any um any of his workers don't get paid their salaries so they don't renew their permit to work or they have the license suspended or any legal trouble or they go bankrupt because of uh of any financial issues for them. um all this due diligence that you're doing on every element of the investment uh is is very important and it seems like it's paying off in the in the end result. Yeah, I think so as well. It's one of these things where you look back and you're very lucky that you've had the right guidance. I think I I do go back to the guidance part because it is an important element here. If we wouldn't have had the guidance, if we would have been some would say I guess maybe um arrogant enough as a family office to say we can do this. We've done a lot of real estate in Europe, but we didn't want to take that stance and say we have the experience with it ourselves for the first time. We wanted to say let's find somebody that can help us because if you don't have that stance, you're exactly like opening yourself up to run into that type of issue. To just answer your question fully, we ended up being able to attain this type of return here just because we worked with the right people and we found the asset at the right time in the right location and also because we always ask ourselves one thing and I think that's the most important thing about it. Would we want to live in this property ourselves? I came here maybe two, three, four times a week and I had meetings with the contractors and the people. I I got very involved and I think the one thing I always asked myself was do I want to live here? Would I buy the asset? And if you go in it with that mentality, you can of course attain um big returns while being safe and while being uh secure in your investment. Um, looking at your main clients, the ultra high netw worth individuals, uh, who are the clients of the family office you're representing, what do they look for in 2025 where they would like to allocate their assets and whether if they're looking for a quick return or they're looking to build um a long-term assets in an area like the Middle East. So, how we operate is always vision based. We don't incentivize the thinking in quarters, we think in decades. We want to like understand if we work with a client or if we if we work with our family office, we always think where do we want to be in 10 years? Where do we see ourselves? Where do we see the world moving to? So in that sense, the simple answer is we don't want to just yield returns like under any circumstances. We want to have visions which are executed which if done right we are certain that they will yield very long lasting returns because we are not in the game of having short exposure. We want to have investments which we have a certain stake we have board seats we have control we have a say. That's that's also where the entrepreneurial part comes in a bit and I think that's the biggest difference from an asset manager to a family office. The family office has the time and has the capacity to take stake to take an interest and to follow a vision where you do not need to see a return tomorrow because you have certain investors which are pushing you day and night to see a return. Uh such as in for example a hedge fund you would see that a lot where if the first quarter is not good you'll lose the confidence. We don't have that because we work on a long-term basis. Would you put would you put more attention to Asia or to the Middle East at the moment or you will have to balance? I mean I I understand that you are based in Dubai at the moment and uh overseeing both. So where is the attention uh is is taking you? I think the attention is in multiple different markets. I think the name of the game at the moment is to be exposed in as many markets as you can be as I I think especially and I think that that goes for a lot of family offices in Europe. So understanding where Europe is heading at the moment, it is for us very important to be in as many different markets as we can be. We therefore see Asia and the Middle East as the two probably most important markets for us. And this is because one of course the Middle East has this huge potential which is not been reached yet with Saudi Arabia with the UAE with all the visions which are still being built. However, also in Asia there's a lot of industrial capacity which can be unlocked. You see it with a China there's a lot of new electric cars coming from there and they're taking a much more dominant stance onto the international stage. So to answer your question in a coherent way, I think the answer we would take here is that we want to be exposed in multiple different markets because we are to a certain degree not confident that Europe will prevail the way it has in the past. So while being in the Middle East is very important for us, we we do think that there is an added value of being in Asia. That is of course you have a huge population there from an industrial sense the manufacturing if you are in the industrial sector if you manufacture anything it's a market you cannot ignore so we are there and we think in a long-term basis there as well and therefore having these two markets adjacent to the European market we are in or are from is very important to us and we would say that not either one of these markets is more important than one another because we I think the synergy of having the exposure in many different markets is the best thing that we can do for our family office. Um, one of the things that is very common in throughout the history that in every region there is a city or a country which all the ultra high netw worth individuals they either base themselves or they find themselves a base and I think Switzerland is a perfect example of that in Europe. And as we always say here in the UAE that we are the new Switzerland or there's because there's a big similarity between how the UAE is becoming a a hub for businesses and for uh billionaires and millionaires all over the world and as well a trading hub which a lot of people intersect and come across as well as the neutrality in the political situation that the UAE don't really get involved in wars or in any international conflict in general, what do you see? And uh how's your how's the European view of the UAE? To be completely honest, I think you are mentioning a very important point here with with that uh Switzerland has taken a shift. We've always been a completely neutral state. In the past few years, we've lost that element quite a bit uh due to geopolitical circumstances around the region and uh us having to take a certain stance against that. Now we completely see that the UAE is somewhat taking that role, taking that hat which we used to always have, providing a safe space for a lot of wealthy individuals, for a lot of family offices, for a lot of structures which are just looking for that reassurance and that's certainly something which we have seen in the past years to be ever growing with I I just read last week in the financial times that there is a multitude of Swiss family offices flowing out of Switzerland and basing themselves in the UAE. So I think that just sort of underlines the notion of how people are thinking, how the wealthy are thinking and the the thought is that they know what to expect in the UAE. Whereas in Switzerland, politics is ever changing. There is a shift. It's not the same country it was 20 years ago. Unfortunately, we are seeing it in every element of life. And we understand that this creates a certain level of uncertainty. And I think uncertainty is something if you're wealthy enough to afford to not have uncertainty, it's something you don't want to have because you can live in a way which you know what to expect. And I think that's the single best product the UAE has is people know what to expect. You know the rules. you're here and sort of understanding that you get to benefit from this neutrality and from this like element which will preserve a family's enterprise over a very long time if need be. Well, thank you very much for all these very valuable advices and I believe um everything you said. uh it it resonates with me because I see a lot of interest not just from Switzerland from many European uh states and and from investors whether uh family offices or or just individuals or maybe I don't know sportsmen and and and celebrities are coming and basing their health in the UAE as a second home and then after few visits they kind of choose that UAE can be their place Would you see more and more coming in the coming years from uh not just Switzerland but from Europe in general and how do you see the UAE in the coming 10 years? Yes, I think the notion will certainly continue and prevail since there is certain structural problems we see in Europe and around the world also in Asia. I mean it's it's not it's not immune to that. Yeah. So we believe that this will continue at a very static and very uh continuous pace and we we we don't think this will slow down anytime soon especially since the leadership here in the UEE is very strong. It's very good and it has a clear vision and I think that I think underscores what most of these places don't have is a clear vision. you have shifting politics and it goes back to the fact of people don't know what to expect and also the the additional nice elements of the taxes are a nice cherry on top I think as you would say as well for many clients things like wealth tax which can erode you know a family's fortune a family's assets is a real problem because if you're in a market which is not is not a growing in a positive rate this is a problem because you're essentially eroding your assets and to have a high level of uncertainty where that will lead to. So markets which have these characteristics like the UAE will in the coming years prevail and will be much stronger than we see them or have seen them in the past. Um as a Gen Z yourself and I would say this because you are one of the youngest and brightest uh family office representatives I met in the last few years. What would you advise the Gen Z's who are starting up as entrepreneurs and coming to the UAE for the first time or they're thinking to make a shift out of Europe, where to go and what do they need to um take care of when they coming to invest here. So I think there's two sides to this. On the one side you have the personal skills side and on the other side you have the more legal and the more formal side. So let me touch upon the more personal skill set. I think you have to change a little bit the way you think. In Europe, you approach business as a technical skillbased feature where maybe you have a certain degree, people will respect you for it and you get a certain way, you get along with that quite well. Here in the Middle East and also in Asia to some parts, it's more who you know and how people perceive you and how maybe likable you are at the end of the day. Because I think at the end of the day in the gross picture like everybody has a good education here because otherwise you wouldn't be here right since it's a very competitive market by its nature. So the networking element is very strong and is very high compared to Europe in my opinion from what I've experienced. So if you're somebody which can network which can get along with people in a well manner in a very light fashion but get their points through it's it's a very very valuable skill. Whereas the people who might struggle with that feature might find it more difficult to find a group of people they can do business with to find friends because it's also important to have things next to your work which sometimes as lawyers I know is difficult to manage but uh it's certainly something which which one needs in life 100% I totally agree people here they really want to know that you care they want to know that you are there genuinely present in the room with them. Not just coming to sell them something or not just coming to show off your education certificate because as you said everybody here is educated, everybody here is smart otherwise you wouldn't survive. Um the thing is if you are smart enough to make people like you and like to do business with you, you'll get a chance and if you take this chance, prove yourself then you've got it all. Yes, I think that is very true. I think that's exactly how it is. I see you have experienced that yourself. Yes. And uh it's one of these things where you will realize that very quickly because even if you apply for a job here, if you don't want to start your own business yet, you want to apply for a job, people will choose you not just based on your skills, based on your character. Now in Europe, maybe in the past years, there has been a notion of choosing people purely based on the skills, but you know, you run a good and a big a big law firm in here in Dubai and you see that when you put people together just based on their skills, it usually doesn't work out. You need a synergy and I think that's the best thing the UAE has to offer. It's a synergy of a pool of a lot of bright minds and if you find your way around these bright minds in a personal fashion that's where you have the synergies to do excellent work to get excellent results. I think that's the name of the game a little bit which is the difference to the second part the more formal part I would recommend of course you have to be um very very well-versed with the differences in law I think you can say more to that than I can maybe but uh that's certainly something I would emphasize is before you do something before you can get into a formal business just reassure yourself get some advice maybe it's going to cost you something but it might save you some money on the backside if you then uh do end up in a sticky situation. I totally agree with you and I think it's one of the best advice that you have given today is to seek advice for sure. So if you are new in the UAE, don't just expect because of your um smartness or your education or your maybe experience in Europe or in US that everything applies the same way here. It's absolutely don't. You need to have completely different set of skills. There's a rule of law. There's a lot of regulations here. You need to get acquainted with it. And you need to ask the people who know the most about how to run the business and how to not be scammed or how not to do fall into a violation or anything like that. And the message in the end is that a young smart guy coming from Switzerland seeking the right advice having the correct support behind him can do magic like James did. And uh in the end I would like to thank you very much James and it was very uh enlightening and uh beneficial I guess for our audience to hear from you and your experience. Thank you very much for being on Monday legal. Thank you very much for having me. Thank you very much. Appreciate