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Preparing to export

Consultation and bespoke research

Visit: https://www.great.gov.uk/ for guidance on how to research overseas markets as well as a range of other important issues for exporters.

Researching the UAE market

The UAE is a diverse country with seven different Emirates. Each region is likely to have different industry clusters. Good local research is needed and you should consider regional plans and market-entry requirements using both desk research and market visits.

You need to determine whether:

  • there is a market for your product or service

  • your pricing is competitive

  • to adapt your business model

The questions listed below should help you to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal UAE strategy, although this may not be necessary or appropriate for all companies:

Your aims:

  • Do you wish to buy from the UAE, sell to the UAE or both?

  • Do you wish to establish your own company presence in the UAE (for example through a corporate or non-corporate entity, direct sales, appointing a local agent, online selling, licensing or franchising)?

  • Do you need to be involved in the UAE at all?

  • Do you see the UAE as part of a wider plan including e.g. other Middle Eastern markets now or in the future?

Your company:

  • Can you carry out a detailed SWOT analysis of your company?

  • What are the unique selling points for your product or service?

  • Do you know if there is a market for your product or service in the UAE?

  • Do you know if you can be competitive in the UAE?

  • Are your competitors already in the UAE? If so, what are they doing?

  • Do you have the time and resources to handle e.g. the demands of communication, travel, product delivery and after-sales service?

Your knowledge:

  • Do you know how to secure payment for your products or service?

  • Do you know where in the UAE you should start?

  • Do you know how to locate and screen potential partners, agents or distributors?

  • Have you carried out any UAE-specific customer segmentation, and do you know how to best reach potential customers in-market?

It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ could form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations.

Talking to other people in your industry and regularly visiting the UAE will give you access to the most current advice, and such experience can often lead to new insights and form the basis for further research.

There is also some useful guidance on developing a marketing strategy, customer segmentation, competitor and SWOT analysis etc. on the https://www.great.gov.uk/ site – and the IOE&IT can help too.

There may be trade shows held in the UAE each year, which could be useful to test product viability in the market. The Department for International Trade (DIT) Tradeshow Access Programme at: https://www.gov.uk/guidance/tradeshow-access-programme provides funding in the form of grants for eligible businesses to attend overseas trade shows.

The funding helps your business gain:

  • market knowledge

  • experience in attending and getting the most from overseas trade shows

  • advice and support from trade experts

Visit the DIT events portal at: https://events.trade.gov.uk/ to find upcoming events and missions.

Find out more about marketing your goods and services for the UAE at: https://www.great.gov.uk/.

Contact the DIT team in the UAE at: https://www.gov.uk/government/world/organisations/department-for-international-trade-united-arab-emirates#contact-us for events and company launches at British Embassy locations.

 

Start-up considerations

Visit: https://www.great.gov.uk/ which has guidance for new, occasional and frequent exporters, as well as tools and sources of other information to meet your exporting needs.

As a federal country comprising seven separate Emirates, different regions have different needs and regulations. Therefore regional plans and good local research are needed.

You will need to determine whether:

  • there is a market for your product or service

  • your pricing is competitive

  • you need to localise your product

  • to adapt your business model

  • your brand/trademark will work in an Arab market, taking into account cultural/religious considerations

  • to network with an active British business group in the UAE

Contact the British Centres for Business (BCB) (http://www.bcbuae.com/) for market research.

There are a significant number of trade shows held in the UAE each year – these are useful to test product viability in the market. The Department for International Trade (DIT) Tradeshow Access Programme (https://www.gov.uk/guidance/tradeshow-access-programme) provides funding in the form of grants for eligible businesses to attend overseas trade shows. The funding helps your business gain:

  • market knowledge

  • experience in attending and getting the most from overseas trade shows

  • advice and support from trade experts

Visit the DIT events portal (https://events.trade.gov.uk/) to find upcoming events and missions in the UAE.

The BCB can help you find the right people and organisations for your company to be talking to commercially. See: www.bcbuae.com.

Contact the DIT team in the UAE at: https://www.gov.uk/government/world/organisations/department-for-international-trade-united-arab-emirates#contact-us for help or support to start exporting to the UAE.

 

Getting started in the UAE

UK companies setting up in the UAE should seek professional legal advice: https://www.gov.uk/government/publications/united-arab-emirates-list-of-lawyers.

Due diligence is important before any contracts are signed. Contracts must be in both English and Arabic – Arabic will be the one referred to in any dispute in courts. This is important as it is difficult to terminate a contract. The contract should therefore be specific, and include performance measures.

Main options for conducting business in the UAE are:

  • establishment of a local company or other commercial entity

  • establishment of a branch office

  • appointment of a commercial agent or distributor

Direct exports to the UAE

Direct selling to established importers and traders is the best route for businesses with low trade volumes to test the market.

Direct exports means you supply your products direct to the customer. You handle all the logistics of marketing, selling, sending overseas and getting paid.

However, direct marketing (DM) by overseas companies to UAE consumers is not common, as transactions have to be carried out with local importers and agents already established in the UAE. 

Overseas companies in UAE free zones may undertake DM themselves through online and media advertisements, subject to free zone regulations. Also foreign companies participating in local trade shows can undertake DM to promote their products at the event. See: https://government.ae/en/information-and-services/business/starting-a-business-in-a-free-zone.


Commercial agents and distributors in the UAE

If you just intend to export goods or services to the UAE, you may want to appoint an agent, distributor or franchisee, which must be either a UAE national or a company entirely owned by UAE nationals.

You should look closely at their:

  • local business reputation

  • financial resources

  • regional coverage

  • marketing ability

It may be necessary to appoint a series of agents or distributors to cover different Emirates in the UAE.

DIT’s trade specialists (https://www.gov.uk/overseas-customers-export-opportunities) can help you identify local representatives for your products in the UAE.

Setting up a business entity in the UAE

To register a company in the UAE and submit a registration application, you must obtain approval from the Licensing Section of the Dubai Department of Economic Development (DED): http://www.dubaided.ae/English/Pages/default.aspx.

When establishing a local company or other commercial entity, foreign ownership is generally limited to 49%, with the remaining 51% to be held by UAE nationals. There are five forms of recognised commercial entity:

  • general partnership

  • limited partnership

  • public joint stock company

  • limited liability company (LLC)

  • private joint stock company

Branch offices in the UAE

The UAE allows foreign companies to establish a branch office. Although activities permitted vary from Emirate-to-Emirate, generally a broad range of commercial activities can be undertaken.

If you are establishing a branch office, you need consent from the Ministry of Economy and a bank guarantee deposit of AED 50,000. The branch office has to be sponsored by a UAE national or a locally-registered company entirely owned by UAE nationals. A formal national agency agreement is needed where the national agent sponsors and assists the foreign company in return for a fee.

In certain businesses, you need to get the permission of a particular authority, for example the Central Bank regarding finance, or the Municipality in Dubai regarding engineering and construction.

Contact BCB to find out about incubator services for company set-up: http://www.bcbuae.com/.

UAE free zones

There are many UAE free zones, which offer a wide variety of benefits to businesses and a degree of flexibility including:

  • 100% foreign ownership through branches, single or multiple shareholder companies – known as Free Zone Enterprises (FZEs), Free Zone Companies (FZCOs) or Free Zone Limited Liability Companies (FZ-LLC)

  • no national agent required for branch offices of foreign companies

  • no customs duties on imports and re-exports (except re-exports into onshore UAE)

  • special assistance in getting work permits for staff

  • guaranteed exemptions from corporate taxes

See: https://government.ae/en/information-and-services/business/starting-a-business-in-a-free-zone for more information on the benefits of starting a business in a UAE free zone.


Selling online to the UAE

Find out about DIT’s E-Exporting programme (https://www.gov.uk/guidance/e-exporting), which can help you export your products to the UAE.

Check out online marketplaces in the UAE (https://selling-online-overseas.export.great.gov.uk) where DIT has negotiated listings at better-than-commercial rates.

Licensing or franchising in the UAE

Franchising is a growing area in the UAE. However, you should take advice from a local legal franchise expert who understands the UAE Commercial Agencies Law and other requirements. You should also ensure you carry out due diligence when selecting a franchisee, take appropriate IP protection and be conscious of Islamic dietary laws (halal meat/cosmetic products, prohibition of pork and alcohol content, etc.) as well as local dress and customs.

Visit the international section of the British Franchise Association at: http://www.thebfa.org/international for more information on franchising.

[Source – DIT/ gov.uk]

 

Getting finance to fulfil an export contract in the UAE

Overall, the UAE ranks 21st out of 190 economies in the World Bank’s 2018 Doing Business Rankings, although 90th for ease of getting credit. See: http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates.

Schemes are available to UK companies selling products and services to the UAE to make it easier to fulfil an export contract and grow your business. Contact your bank or specialist financial organisations for assistance.

UK Export Finance (UKEF) has significant risk capacity to support exports to the UAE, see: https://www.gov.uk/guidance/country-cover-policy-and-indicators#united-arab-emirates-uae. You can contact one of UKEF’s export finance advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager for free and impartial advice on your finance options.

Transferring money from the UAE

The process to transfer money is quite easy – all you need is a bank account. Electronic transfers are simple but you must not take more than AED 100,000 out of the country.

There are no restrictions on profit transfer or capital repatriation.

[Source – DIT/gov.uk]


 

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