Doing Business with United Arab Emirates
|Population||10.08 million (8.92 million foreign nationals)|
|Language||official language Arabic, English widely used|
|Religion||Islam (77%), others (23%)|
|State system||federation of 7 emirates (Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Fujairah, Ajman, Umm Al Quwain)|
|Head of State||Sheikh Mohammed Bin Zayed Al Nahyan|
|Head of government||Sheikh Mohammad bin Rashid Al Maktoum|
|Currency name||Emirati Dirham (AED)|
|Time shift||+3 hours (+2 hours in summer)|
|Nominal GDP (billion USD)||707.7|
|Economic growth (%)||3.8|
The United Arab Emirates is a federation of seven emirates. The head of state is the president, who is His Highness Sheikh Mohammed Bin Zayed Al Nahyan, the ruler of the Emirate of Abu Dhabi, who took office after the death of his brother Sheikh Khalifa (13/05/2022). The president is also the chairman of the Supreme Council, which is composed of the rulers of the individual emirates. The executive body of the federation is the government, appointed by the president on the recommendation of the prime minister. The advisory body is the Federal National Council (FNC), composed of 40 representatives of all emirates.
The UAE has a strong diversification vision and is doing everything to fulfill this vision. The share of industry in the creation of GDP is to increase from the current 17% to 30% in the next 10 years. The basis of industry should be production. Part of the diversification economic policy of the United Arab Emirates is the significant development of renewable energy sources. According to the plan, their share in the energy mix will increase to 40% by 2050. The policy of supporting science, research and innovation is the government’s main strategic thesis for the development of the economy. Although the economy of the United Arab Emirates is relatively well diversified, it is still somewhat dependent on the oil trade. The contribution of the UAE’s non-oil sector to the country’s overall economic performance rose to 72.3% in 2021, and real GDP growth reached 3.8% in the same year. According to the long-term government strategy, further economic growth is to be stimulated mainly by the non-oil sector. Projects related to the world exhibition EXPO 2020 provided the economy with a new growth impulse. Growth in the non-oil sector was fueled by hotels and restaurants, wholesale and retail trade, and the health and social services sectors, which accounted for 21.3%, 14.1% and 13.8% of GDP in 2021, respectively. In the long term, a fundamental change in the framework of centralization will become increasingly apparent, which means strengthening the influence of the most economically important emirate of Abu Dhabi on decision-making processes within the entire federation. Thus, Dubai will no longer develop independently and uncoordinated, but in synergy with its politically stronger neighbor. A positively perceived trend will bring economic and political empowerment of the UAE throughout the GCC region. At the beginning of November 2021, the United Arab Emirates administered around 2million doses of the vaccine against Covid-19, reaching 87.4% of the fully immunized population. This makes the UAE one of the most vaccinated countries in the world.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
- 24/7 ambulance: 998
- police: 999
- firefighters: 997
- traffic police: 90001234
Important web links and contacts
- Ministry of Economy – www.economy.gov.ae
- Department of Economic Development Abu Dhabi (conditions for registration of companies in Abu Dhabi and online register) – https://added.gov.ae/
- Department of Economic Development Dubai (conditions for registering companies in Dubai and online register) – https://dubaided.gov.ae/Default/en
- Abu Dhabi e-government – www.tamm.abudhabi/en
- Abu Dhabi Chamber of Commerce and Industry – www.abudhabichamber.ae
- Dubai Chamber of Commerce and Industry – www.dubaichamber.com
- Organization for the control of certification of imported products – www.esma.gov.ae
- Central Bank of UAE (Central Bank of UAE) www.cbuae.gov.ae
- Stock exchanges: Dubai Financial Market (DFM) www.dfm.ae, holding Borse Dubai www.borsedubai.com, Abu Dhabi Securities Exchange – www.adx.ae, Dubai International Financial Exchange (DIFX) – www.difxlistings.com
- Information on current fairs: www.dwtc.com, ww.adnec.ae
The Ten Commandments for Doing Business with the United Arab Emirates
The PaulSourcing agency has prepared ten recommendations for doing business with the United Arab Emirates for Czech entrepreneurs interested in business relations with the United Arab Emirates. In 2020, it was supplemented with 4 current tips.
4 recommendations for entering the UAE market during the coronavirus pandemic:
- Search for business partners
In the initial phase, it seems appropriate to look for contacts on the local market for potential partners for cooperation. In the UAE, there is no verified functional database of local companies in which it would be possible to filter these. The local phone bookcan only be used to a limited extent. The most reliable way is to search for local companies through the Google search engine. According to keywords corresponding to the subject of business interest, these companies can be reliably found.CzechTrad’s foreign office in the UAE (ZK SAE) offers you help with this step in the initial phase and, according to the definition of a potential business partner, to search for these companies and send you this database. It is certainly advisable, if you already have existing contacts from the territory, to send these contacts to ZK SAE so that it can eliminate them in its selection in the initial phase.
- Selection of suitable companies The subsequent step is the selection of suitable companies to be approached further. If you are looking for companies yourself, it is a good idea to focus on those that list supplier references for the segment of your interest on their website. It should be noted that the target customer is in most cases served by a local importer/distributor, who should be targeted as a potential partner, not the end customer. A specific feature of the territory is that local companies often manage multiple segments of business interest and specialization. When searching, it is therefore necessary to carefully find out which section of the given company, or possibly a holding company, has the given subject of business in charge.When selecting companies with knowledge of local specifics, ZK SAE focuses on companies that meet the above attributes. The overview of companies that you will receive from ZK SAE represents distributor companies that you can approach directly.
The next step is to approach targeted companies by telephone and subsequently send them promotional materials. The language of communication is English, promotional materials should be prepared in English at a professional level. In the UAE, references from the GCC are taken care of, if you do not have them, it is advisable to mention references especially from Germany, Great Britain, the USA, or Japan.In the current situation, it can be problematic to appeal to local companies in connection with measures against the spread of the covid-19 disease, when the local government still recommends implementing work activities in the form of a “home office” wherever possible. The permitted office occupancy is 30%. Even under normal circumstances, it happens that, especially when contacting by phone, when it is obvious that the call is from abroad, these calls are not accepted. It is therefore a good idea to point out in the initial e-mail communication that you will contact them by phone with a phone number.ZK SAE is ready to help you at this stage as well and offer the implementation of targeted telephone outreach to traced contacts together with the sending of promotional materials, based on the current workload by prior agreement.
- Verification of a partner In the UAE, it is practically impossible to verify the creditworthiness of a local partner, there are no publicly accessible registers of business companies, as we know from e.g. the Czech Republic or other EU countries. Local companies that are not located in one of the many free zones are required to be registered with the Chamber of Commerce and Industry of the relevant emirate according to their jurisdiction. Certain limited information can be verified about companies in their publicly accessible registers. First of all, it is possible to find out whether the company is actually registered or whether it has a valid registration. In the case of paid services of the chamber, you can get more detailed information about the subject.
Ten Ten for Doing Business with the United Arab Emirates
- Mobile phone Giving out a mobile phone number is common. If you fidgeted, it could be taken as a sign of distrust. We recommend putting the number on business cards and, in case of frequent trips to the UAE, get a local mobile number – it pays off both socially (it creates confidence that you are serious about entering this market) and economically.
- Language skills In the UAE, you will fully use English, as it significantly dominates the official Arabic language in the country. It follows from the composition of the population. Only 16% are local, and foreigners of non-Arab origin from many countries of the world, who use English as their language of communication, are significantly predominant. And so the Arabs, in order to be able to negotiate in their own country, also control it.Catalogs in English are fully acceptable, as the Arabic version will not be read by non-Arabic workers anyway. In addition, if you have an Arabic version, the Arab businessman will only be pleased until he finds out that there are mistakes in the translation, which unfortunately often happens with translations into Arabic in the Czech Republic.
- Traditional society Emiratis strongly respect family and tribal ties, where older members of the family usually have the main say, so it is very credible when your delegation includes an older, experienced expert with the necessary insight and experience. Clothing is possible according to European customs, we recommend that women cover their shoulders and wear a longer skirt.
- Reliability Keep in mind that if Muslims do not attend a meeting, it is because “Allah did not wish for it.” But it doesn’t mean that he didn’t wish that way forever, you need to speak up, be generous, don’t talk about wasting time, on the contrary, express deep understanding and propose a new date. They expect Europeans to be punctual. Time in the Arab world is very relative, don’t be impatient.
- Communication In communication, fax is preferred over e-mail. The message that the office-boy brings to the manager is perceived as a tangible document, unlike virtual e-mails. However, written communication is not enough. It is necessary to make a phone call, and as soon as you find out that the offer of the partner is interesting, arrange a visit, because deals are created after personal acquaintance.
- Patience Local businessmen act cautiously and “tap” their business partners for a long time. They often do not show interest in order to first check your interest, patience and potential for long-term cooperation. Whoever understands this and overcomes the pitfalls will gain not only a long-term business partner, but also a friend on a non-business level among the Arab partners.
- Making appointments You rarely get a definite promise of a specific date. Go on the road, but expect that you will adjust the meetings promptly on the spot. Be flexible and pack more into your trip than you can realistically manage. If some do not happen, the program of your trip was successful.
- Conduct of the meeting It may happen that the meeting will be interrupted by handling other matters. For Arabs, interpersonal relationships are a priority, and if someone makes a private call during a work meeting, it is often a reason to wait, as it would be impolite to decline a personal phone call for work.
- Prayer If the partner is Muslim, it may happen that he asks you for a moment of patience (20 minutes) and goes to the prayer room. Keep in mind that in addition to lunch, Muslims are entitled to pray during working hours.
- Decision -making Send company representatives on business trips to the UAE who are authorized to make decisions and answer questions, so that there is no impression that a representative has been sent and that the relevant counterpart has not arrived.