Doug Anderson, Sales and Marketing Manager of Guttridge, looks at top things to consider when exporting to the middle east and offers a few tips along the way.
Did you know that there are over 5,000 British companies operating in the United Arab Emirates (UAE)? This trend of companies looking to export into this diverse economy doesn’t look like stopping as it continues to grow and expand. In recent years the UAE has diversified its economy away from oil and the whole dynamic of the country has changed, the bulk of the UAE population is made up of expatriates, with around 120,000 UK residents.
There are many incentives for UK businesses exporting to UAE, such as no taxation on personal income and capital gains. English is widely spoken, especially when doing business, and its important market for re-export into other countries.
The UAE has a well-established infrastructure, with both a strong banking system and stable political position. Not to mention, there always seems to be ongoing and new development.
Here are a few pointers to be aware of if planning on exporting to the UAE.
Visit the UAE
A trade visit is always useful to help familiarise yourself with the region, and search for potential export partners. This is always a great opportunity to take a better look at the economy and conduct basic market research. If you are really on the ball, it also offers an opportunity to meet with potential distributors.
Assess the Opportunities
The Middle East will always hold a number of exciting opportunities for businesses wanting to export. But you need to be aware of which economies are worth investing it. As UAE is trying to diversify, they are investing in industries, including mining services, agriculture, infrastructure and education services. Aim to bring your goods to this market.
If you want to establish a branch office, you’ll need consent from the Ministry of Economy and have to pay a bank guarantee. The branch office will also need to be sponsored by a UAE national, or locally registered company. It’s also important to remember that in certain businesses, you’ll need permission from a particular authority.
If all you want to do is export goods or services to the UAE, perhaps appointing an agent is a good idea. Also known as a distributor or franchise, they should be either an UAE national or a company owned by UAE nationals.
As with exporting in any countries, or starting to infiltrate new markets, you definitely need to comply with the federal laws governing business activity. The most common are:
Commercial Companies Law
Commercial Register Law
Commercial Agencies Law
Civil and Commercial Codes
It’s important to consult an advisor on this to make sure you’re not missing anything.
Standards and Technical Regulations
Always consider standard regulations, as the UAE does prohibit and restrict the importation of specified products.
As usual when exporting abroad, a certificate of origin is needed for all exports to clear customs. Certificates of Origin must be provided by the original exporter, and recognised by an authorised representative in UK.
This may seem less important than the other points previously outlined, but the Gulf Standardisation Organisation sets the framework for the UAE’s packaging and labelling requirements. So you need to adhere to their technical requirements for certain exports, as well as considering cultural norms and values when designing and developing product packaging.
Tax and VAT
There is no direct personal taxation in the UAE, also most Emirates levy various municipal taxes. However, indirect taxation through official fees is commonplace. There is currently no value added tax or sales tax in the UAE, although the imposition of a Gulf wide value added tax has been discussed for the last several years.
Don’t assume all Middle Eastern markets are the same!
We hope you’ve found these tips useful when considering to export to the Middle East, but my number one tip is to make sure that all your documents are in order, such as invoices initiated by supplier, a certificate of origin and an airway bill.
Finally, don’t forget to seek advice as there are many support networks and organisations out there to help you make the most of exporting to the Middle East.