How businesses can navigate legal diversity across GCC and North Africa without costly disputes
As businesses across the Middle East and North Africa (MENA) expand, partnerships and joint ventures are increasingly crossing borders—between GCC markets like the UAE and Saudi Arabia, and civil law jurisdictions like Egypt, Tunisia, or Morocco. But with this regional integration comes legal complexity: drafting a cross-border contract without understanding the underlying legal systems and local enforcement practices can lead to unintended liabilities, unenforceable clauses, or costly litigation.
This article explores the most common pitfalls in cross-border contracting within the MENA region and offers practical strategies to avoid them.
Civil Law vs Common Law in the MENA Region
MENA countries operate under a hybrid legal landscape:
- Civil law jurisdictions (e.g., Egypt, Morocco, Tunisia, Algeria, Jordan): These systems rely on codified statutes and place less emphasis on case law or judicial precedent.
- Common law influences exist in offshore zones like the DIFC (Dubai) or ADGM (Abu Dhabi), and in dispute resolution preferences for arbitration based on English common law.
Understanding this difference is essential when selecting governing law, dispute mechanisms, and contract structure.
Five Common Mistakes in Cross-Border Contracts in MENA
1. Ignoring Local Contract Law
A clause enforceable under UAE law might be invalid in Tunisia or Egypt. For example:
- Penalty clauses are often subject to judicial modification in civil law jurisdictions.
- Liquidated damages and termination without cause clauses may be unenforceable or require justification under local laws.
Tip: Always review local commercial law (e.g., Egypt’s Civil Code, KSA’s Commercial Transactions Law) before reusing template clauses.
2. Poorly Defined Jurisdiction & Dispute Resolution Clauses
Choosing the wrong jurisdiction can make enforcement impossible. Many businesses default to arbitration but fail to ensure:
- That the seat of arbitration is in a New York Convention signatory state (for international enforceability).
- That local courts will respect foreign arbitral awards (some North African courts apply strict criteria).
Tip: For cross-GCC/North Africa contracts, consider arbitration under DIAC, ICC, or LCIA with the seat in a neutral, arbitration-friendly state like the UAE.
3. Ambiguous Language in Bilingual Contracts
Arabic is often the official language of the contract in many MENA countries. If a bilingual contract gives precedence to English, disputes may arise.
Tip: Always include a language supremacy clause and certified translations when working with Arabic–English contracts across borders.
4. Overlooking Tax and Regulatory Compliance
Different jurisdictions have different VAT structures, withholding taxes, and reporting requirements. A contract with a Saudi entity may be subject to ZATCA’s e-invoicing laws, while working with Egypt may require currency exchange approvals for remittances.
Tip: Add clauses that clarify tax responsibility, including whether payments are gross or net of taxes.
5. Lack of Local Legal Review
Many companies rely solely on in-house or foreign counsel, resulting in terms that conflict with local laws—especially in employment, franchising, and agency contracts.
Tip: Always involve a local law firm or licensed consultant in the country of execution or performance.
Essential Clauses for Cross-Border MENA Contracts
| Clause | Why It Matters |
| Governing Law & Jurisdiction | Reduces ambiguity in enforcement |
| Dispute Resolution Mechanism | Arbitration vs litigation: decide early |
| Language Supremacy Clause | Avoids misinterpretation in bilingual contracts |
| Taxation & Duties | Clarifies who bears VAT or cross-border tax |
| Force Majeure | Reflects region-specific events (e.g. political unrest, FX controls) |
| Payment Currency & Transfer Rules | Avoids FX delays or capital control issues |
| Anti-Corruption & Compliance | Especially when dealing with government contracts |
How TheRightContract Helps Businesses Simplify Cross-Border Drafting
Platforms like TheRightContract are enabling smarter, faster international contracting by offering:
- Pre-reviewed templates for common MENA cross-border agreements
- AI-powered customizations that adjust clauses to local laws
- Localized bilingual contracts with built-in compliance alerts
- Tools for digital signing and secure storage, trackable across jurisdictions
Our legal document marketplace bridges the gap between efficiency and enforceability, empowering SMEs, law firms, and multinationals alike.
Final Takeaway
In the expanding business landscape of the MENA region, a one-size-fits-all contract no longer works. Success depends not only on sound commercial terms but on deep legal localization—especially in jurisdictions that blend civil, common, and Islamic law traditions.
Avoiding the most common cross-border contracting mistakes starts with awareness, and ends with the right tools.
At TheRightContract, we’re building a legal ecosystem where businesses can confidently grow across borders—with clarity, compliance, and enforceability at the core.
