Exporting to the United Arab Emirates

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Design Business Association Exporting to the United Arab Emirates

Exporting to the UAE The UAE ranks among the top countries in its region in terms of the business environment and relative openness. It is recognised as a leading trading hub and a launch pad for companies looking to do business in the MENA region. The country is also considered a safe haven in the Middle East. The UAE economy is increasingly becoming diversified, gradually shifting focus away from oil & gas. The diversification strategy has paved the way for large construction, infrastructure development and cultural projects offering a myriad of opportunities across sectors. Here we bring together advice from the Sector Lead for the Creative Industries at the British Embassy in Dubai, guidance from the Embassy of the UAE and helpful nuggets from the UKTI LinkedIn Group, to offer useful pointers for any agency looking to work in this market. UAE background information — The UAE consists of 7 emirates , ruled by 7 Sheikhs. The President of the federation is the ruler of Abu Dhabi and the Prime Minister is the ruler of Dubai. — The Capital is Abu Dhabi but Dubai is the largest city and the creative hub for the UAE. — The country is slightly larger than Scotland with a population of 8.19m. However of the 8.19m only 16.5% are nationals, the others being ex-pats. The ex-pats are mainly from Asia and the Indian subcontinent but 120,000 British citizens live and work in the UAE. — It is home to the world’s largest sovereign wealth (ADIA) and has had proven oil reserves for 100 years. — Their weekend is Friday and Saturday. — It’s a liberal and business oriented economy built on a strong history of trade. — British businesses have a good reputation in UAE for delivering excellent services. — There is a strong infrastructure with well-established road and port facilities. — The labour force is both multilingual & multicultural. Working with clients There is no need to get things translated into English as it is commonly spoken. (Saudi Arabia is the exception to this in the region - they like things translated into Arabic). Be aware in your communication with clients, that while emails will be read, they will rarely be responded to. Business is done either on the phone or face to face. Face to face meeting is the best way of doing/starting a business relationship. Never offer your hand to a local (emirati) woman first, wait for her to offer - some of them don't shake hands. Throwing business cards across the table is considered rude. Allow more time for meetings as local contacts may be running late (ie don't arrange back to back meetings). During meetings it is common to attend to mobile calls - it is a practice with no offense meant. The time frames people work to are often shorter than in the UK. It is not unusual for meetings in the UAE to be arranged with relatively little notice. In fact it can be counterproductive to try and arrange them too far in advance. By the same token meetings can be cancelled or postponed at short notice. This does not necessarily indicate a lack of interest, however priorities can change suddenly. Interlocutors may not always be prepared for a meeting and you may find it necessary to start by explaining again who you are, why you are visiting and something about your company's product or service.

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Design Business Association Exporting to the United Arab Emirates

Contact building and networking is essential to build and maintain business relationships. You can make contacts through the Dubai Department of Economic Development, Chambers of Commerce, British Business Groups. UAE – the market The UAE acts as a regional trade, tourism, financial and exhibition hub; it is the perfect stepping stone for exporting to the Middle East and a large number of companies have their regional/MENA offices there. It is the regional leader in retail, cosmetics and fashion expenditure, social media usage and penetration. Dubai is nearly saturated with regards retail opportunities although there are some opportunities in Abu Dhabi. Most of the well known brands already have their shops set up through franchise agreements. However there is a rapidly developing retail sector in Kuwait, The opportunities in UAE are mainly in infrastructure - transport, energy, utilities, healthcare, education, interiors and construction etc. Getting into the market You can do a one off project from the UK, but anything more and you will need someone on the ground in the UAE. A local presence or representation is necessary for long-term success. If setting up a business in the UAE you need to find a national partner (individual or company) who will have a 51% stake in the business, with you maintaining operational control. It is recommended to do a significant amount of research and due diligence on your partner/agent/sponsor – it is probably your most important consideration as they will be your representative in the market. Be aware that most Emirates are very wealthy so they may not have as much incentive to promote your business as you may imagine. Or alternatively try to find space in one of the Free Zones to set up a local presence. Free Zones The UAE has been diversified through a large number of Free Trade Zones (FTZs) such as JAFZA, DAFZA, DHCC, DIC, Knowledge Village, etc Establishing a business entity in one of the numerous FTZs can be an attractive option for foreign investors and businesses. All seven Emirates already have, or are developing, such economic zones. Free zones contribute to and stimulate the economy by attracting foreign direct investment, generating thousands of jobs, stimulating non-oil exports, encouraging the setting up of ancillary industries, and helping in the transfer of knowledge, expertise and technology to the country. The major advantages in operating in a free zone are: — 100 per cent foreign ownership of the enterprise — 100 per cent import and export tax exemptions — 100 per cent repatriation of capital and profits — No corporate taxes for 15 years, renewable for an additional 15 years — No personal income taxes — Less documentation, mostly in English — Assistance with labour recruitment, and additional support services such as sponsorship and housing.

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Design Business Association Exporting to the United Arab Emirates

When not to choose a Free Zone There are a few scenarios in which a prospective company might not want to choose to do business in a Free Zone, and should instead opt for a regular joint partnership. These are if a company: — Practices a regulated profession. — Requires a lot of visas or warehouse/office space. — Plans a long presence in the UAE and wants to reach a wider portion of the UAE market. — Has a particular UAE company or individual with which to go into partnership. There are over 20,000 businesses in 21 Free Zones around the UAE. Media City free zone is now full, but other zones have space. Email [email protected] Special Economic Zones Besides Free Zones, the UAE has established strategic frameworks for increasing the number of small- and medium-sized businesses in Special Economic Zones (SEZs). Abu Dhabi has set up the Higher Corporation for Specialised Economic Zones, which has since been renamed Zones Corp. Email [email protected]

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Design Business Association Exporting to the United Arab Emirates

UKTI help Funding UKTI can help with funding if you want to exhibit at one of the many exhibitions in UAE. £1-2k funding is available. Exhibitions coming up include INDEX, The Hotel Show, DEAL, Beauty world ME, Big5, Arab Health, GITEX, GESS. Overseas Market Introduction Service (OMIS) This is a service provided by UKTI to help exporters. Whether you're a first timer or a very experienced exporter, OMIS can provide help at any stage - from initial research, to arranging a market visit, to using their contacts and impressive facilities to help close a major deal. It’s a good way to develop a list of contacts in a particular sector. A service package could include: — Market, sector advice — Analysis of market entry strategies — Support during overseas visits — Identification of possible business partners reports UKTI do charge for this, but a lot less than market rates (the idea being that its weeds out those who are not serious). First time users of the OMIS scheme can get a 50% discount (until March 2013). Missions Outward and Inward, Cross-sectoral and sector focused (e.g., PACT mission in May, Mission expected in November) – contact [email protected] for details. UKTI team The team in UAE comprise specialist advisers with local knowledge – all multicultural and most speak 2-3 languages. They are truly representative of the country. Please contact [email protected] for more information Abu Dhabi – British Embassy, Abu Dhabi Tel: +971 (0) 2610 1111 Dubai – British Embassy, Dubai Tel: +971 (0) 4309 4404 Further supporting advice: Go to www.dba.org.uk/services/export and visit the dedicated UAE page to download UAE Creative Industries Sector Briefing Do’s and Don’ts when visiting UAE Investor’s Guide to the UAE For advice from UKTI www.ukti.gov.uk www.ukinuae.fco.gov.uk