Transcript Fact and figures

Business Practices
in the UAE
Chapter 3&4
Prepared By Dr.Rashad Al-Saed
Skyline University
Fact and figures
Business as usual
• Despite the impact of the global financial crisis resulting
in an inevitable contraction in 2009, the UAE economy
remains robust (Strong), shielded by significant overseas
financial assets garnered during the era of high oil
revenues.
• Substantial public expenditure, made possible by those
assets, allied with strong fundamentals and sound fiscal
policies, has served to minimize the impact of the crisis
and receding petrodollar income on the UAE's economy,
and is expected to speed up its recovery in 2010.
• In particular, the government has pledged to maintain
its investment budgets at high levels, especially for core
long-term infrastructure projects, in order to rekindle
growth.
UAE General Information
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Official name – United Arab Emirates
Population – 2,602,713 (July 2006 est.)
Official Language – Arabic
Currency – Emirati Dirham (AED)
Capital city – Abu Dhabi
GDP – purchasing power parity $115.8* (2005)
GDP Per Capita - purchasing power
parity $45,200* (2005 est.)
Reasons for Doing Business in
the UAE
• Robust open economy
• The UAE has a vibrant (vital)free economy,
• a significant proportion of its revenues arising
from exports of oil and gas.
• Successful efforts have been made to diversify
away from dependence on hydrocarbons and a
solid industrial base has been created, together
with a very strong services sector.
• The establishment of free zones has been an
important feature of this diversification policy
and reform of property laws gave a major boost
to real estate and tourism sectors.
• Security and stability
• Since its establishment in 1971, the UAE has enjoyed
an enviable degree of political stability, unequalled in
the region.
• This has enabled the implementation of consistent
sound economic policies and the reinforcing of the
country’s social structure to produce one of the most
tolerant, prosperous, secure and safest societies in the
world.
• Dubai and Abu Dubai have been ranked the top two
cities in the Middle East region for quality of life,
according to the latest edition of a global survey.
• Long-time investors include a wide range of
multinational companies headquartered across the
globe.
Tax-efficient business environment
• Special economic zones and free zones offer 100 per
cent ownership, repatriation (back to home) of profit and
capital as well as exemptions from taxes.
• Outside of these areas, significant incentives are being
offered to investors and corporate governance provisions
ensuring transparency and accountability are being
enforced.
•A negligible 5 per cent tariff is imposed on goods
imported from non-Gulf Cooperation Council (GCC)
countries,
• although tobacco and alcohol products are subject to 50
per cent customs duties
Solid infrastructure
• Infrastructure in the UAE is second to none.
• Telecommunications, including mobile and fixed telephony as
well as internet access is on par, if not better, than the world’s
largest international business hubs.
• The road network is constantly upgraded and ports and
airports are of world-class standards.
• UAE is creating one of the world’s biggest and most efficient
cargo handling centers.
• To date, the Government has invested heavily in infrastructure
development, but it has also opened up its utilities and other
infrastructure to greater private sector involvement, so much
so that public-private partnerships are now the norm.
Proximity to growth regions
• The UAE’s strategic location between Asia, Europe and Africa
is a major advantage to investors, particularly the country’s
proximity to some of the world’s fastest growing economies in
Asia.
• India and China alone comprise almost 40 per cent of the
world’s total population and support a combined GDP in
excess of US$5 trillion, providing significant economic and
trading opportunities.
Intellectual property protection
• Intellectual property, including patents and trademarks, is
legally protected in the UAE
• The country is also a member of international bodies, treaties
including the World Intellectual Property Organization (WIPO),
World Trade Organization (WTO), Paris Convention.
Business practices in the UAE
Emirati Culture – Key Concepts and Values
• Islam – Religion has played an important and
influential role in shaping the society and culture of
the UAE.
• Islam is the official and majority religion and
pervades almost every aspect of life.
• Laws, education, food, clothes, daily routines and
even conversations are all strongly influenced by
Islam.
• The Islamic faith places great emphasis on behaviors
such as generosity, respect and modesty which most
Emiratis will display.
Emirati Culture – Key Concepts and Values
• Understanding Islam and the influence it has on
everyday life and Emirati business culture is the first
step to conducting successful business in the UAE.
• Family – Family and tribal connections form the basis
of Emirati social structure.
• The family and tribe are highly influential and play a
role in shaping a person’s values and behavior.
• The family comes before anything else and its honor
is protected by doing whatever necessary.
Emirati Culture – Key Concepts and Values
• Loyalty between family and tribe members carries
over into business where it is not uncommon for
companies to be run by and employ several
members of one family or tribe.
• Hospitality – Hospitality is an essential part of
Emirati culture and applies to both social and
professional contexts.
• Guests will be received with enormous generosity. In
the home this usually comes in the form of a feast of
traditional Emirati food, especially during the
holidays.
Emirati Culture – Key Concepts and Values
• while in a business context, meetings are
almost always accompanied by traditional
• Arab coffee and pastries. The emphasis placed
on hospitality is closely connected to the
importance of relationships.
• Foreigners should show their gratitude and
dedicate time to cultivating relationships with
their Emirati counterparts.
Working practices in the UAE
• The working week traditionally starts on Saturday and ends
on Wednesday. Thursday and Friday are the official days of
rest, though in some cases, people will work Thursday and
take off Saturday instead.
• Office hours tend to be 0900-1300 and 1630-2000 though
today work often goes even later as a result of the
immense construction boom.
• Meetings should be scheduled in advance with extra time
allocated in case it should go on longer or start later than
anticipated.
• Often meetings are cancelled at the last minute, so it is
important to be flexible and come prepared with either a
business card or letter to let them know you were there.
• Attitudes to time in the UAE are much more relaxed than
in many Western cultures.
Working practices in the UAE
• People and relationships are more important
than schedules and punctuality.
• It is not uncommon, therefore, for your Emirati
counterparts to arrive late but foreigners are
expected to arrive on time.
• The Emirates are a considerably modern state in
relation to the rest of the Middle East.
• As such, many traditional attitudes and business
practices are evolving towards a more
Westernized approach.
• Nevertheless, it is still important to be aware and
respectful of some of the differences that might
exist
Working relationships in the UAE
• People
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in the UAE prefer to do business in person.
Relationships and mutual trust are paramount (basic) for any
successful business interaction and can only be developed
through face-to-face meetings.
It is important to spend time with your Emirati business
counterparts and ensure future meetings take place to
continue cultivating the relationship.
It is important to have connections to someone in the UAE
who can introduce you before attempting to do business
there on your own.
Emirati people prefer to do business with those they know, so
having someone to introduce you will be of immense benefit
to your business relationship.
Family and friends come before anything else.
As a result, it is not uncommon for an Emirati to reschedule or
cancel something to accommodate their needs or wishes.
Do &Don't
• The customary greeting is “As-salam alaikum,” (peace be upon
you) to which the reply is “Wa alaikum as-salam,” (and upon you
be peace).
• When entering a meeting, general introductions will begin with a
handshake. You should greet each of your Emirati counterparts
individually. In line with Muslim customs.
• Avoid shaking hands with a woman unless they extend their hand
first.
• Initial business meetings are often a way to become acquainted
(know) with your prospective counterparts. They are generally long
in duration and discussions are conducted at a leisurely pace over
tea and coffee.
Do &Don't
• Time should be allocated for such business meetings, as
they are an essential part of Emirati business culture.
• Business cards are common but not essential to Emirati
business culture. If you do intend to use business cards
whilst in the UAE, ensure that the information is printed
in both English and Arabic.
• DO address your Emirati counterparts with the
appropriate titles followed by his or her first name.
• If unsure, it is best to get the names and correct form of
address of those you will be doing business with before
hand. DO dress conservatively.
• While the UAE is more Westernized than many other Middle
Eastern countries and therefore home to many Western
style clothes, it is still important to dress modestly.
• As a sign of respect, men should wear a conservative suit
and women should ensure their clothing covers their legs
and arms.
• Doing Business in the UAE © Communicaid Group Ltd. 2007
DO accept an invitation to a meal or social event.
• Relationships are an integral part of doing business in the
Emirates.
• Spending time with your Emirati counterparts is the best
way to build trust and mutual understanding.
• DON’T schedule business meetings during prayer times or
any of the major Islamic holidays such as Ramadan or Eid.
• These are extremely important periods for the majority of
native Emiratis who are Muslims.
• Business is usually put on hold during these occasions as it is
a time for reflection and celebration.
• DON’T expect a one-on-one meeting to only include
yourself and the other person. Often there will be other
people present in the office or meeting room waiting their
turn to meet with that person.
• When you arrive, it is polite to greet the person, take a seat
and accept any coffee served until it is your turn.
• DON’T assume that the person who asks the most questions
in meetings holds the most responsibility. In the UAE, this
person is considered to be the least respected or least
important.
• The decision maker is usually a silent observer and will only
speak when discussions come to a close.
• DON’T ask about a person’s wife or daughters. It is polite to
enquire about a person’s family or health, but never ask
specifically about any female members.
• Family life which involves female members is kept extremely
private.
• Business Dress
Visitors are expected to abide by local standards of modesty
(humility) however, do not adopt native clothing.
• Traditional clothes on foreigners can be offensive. Despite
the heat, most of the body should always remain covered.
• A jacket and tie are usually required for men at business
meetings. Men should avoid wearing visible jewelry,
particularly around the neck.
• Women should wear modest clothing in public. High
necklines sleeves at least to the elbows are expected.
Hemlines, if not ankle-length should at least be well below the
knee. It is a good idea to keep a scarf handy, especially if
entering a Mosque.
Language for business
• Arabic is the official business language. Most government forms and
official contracts – e.g. tenancy, residence visa – are in Arabic.
• Official documents (e.g. university diploma, marriage certificate) that
have to be submitted to a government agency for processing or
authentication also frequently require translation into Arabic.
• However, English is commonly used in business circles.
Working hours
• Working hours are either ‘straight shift’ or ‘split shift.’ The former normally
requires eight working hours beginning from 7:30 a.m. or 9:00 a.m. with a
lunch break lasting 30 minutes to an hour. The latter comprises eight to
nine working hours that typically commence between 9:00 a.m. and 10:00
a.m. and ends between 8:00 p.m .and 9:00 p.m., with a three- to fourhour break in between. The split shift is thought to be an efficient means
of addressing the extremely hot weather during the summer months,
particularly for laborers. Working hours are shortened during the holy
month of Ramadan, usually by two to three hours.
Multi-national human resources
• Investors benefit from an abundant supply of human resource skills, courtesy of
professionals migrating to the emirate from nearly every country in the globe, as
well as the increasing number of UAE nationals that are joining the private sector.
Efficient government services
• E-government websites, free zone authorities as well as chambers of commerce
and industry provide new entrants with helpful information and guidance.
• Federal e-government www.government.ae/
Dubai e-government www.dubai.ae
Federation of UAE Chambers of Commerce and Industry www.fcciuae.ae/
UAE Ministry of Economy www.moe.gov.ae
UAE Central Bank www.centralbank.ae
Mubadala www.mubadala.ae/
UAE Offsets Group www.offsets.ae/
Abu Dhabi Investment Authority www.adia.ae/
Abu Dhabi Chamber of Commerce Online Services
www.abudhabionlineservices.ae
Abu Dhabi Department of Planning and Economy www.dpeportal.adeconomy.ae
• Women and Business
Professional women are commonplace in the UAE
and are generally treated seriously, particularly if
the woman acts in a confident and self-assured
manner.
• It is advised to dress conservatively and here
again good grooming (ready) is essential – you
will find that all business people, male and
female, are impeccably dressed. Patience and
good humor will carry you through most
situations.
• Communication Guidelines
Do not discuss the subject of women, not even to inquire the
health of wife or daughter. The topic of Israel should also be
avoided. Sports is a perfect topic for conversation.
• Names are often confusing. It's best to get the names in English.
Learn both their full names and how they are to be addressed in
person before you meet.
• Communication is a bit slow, do not feel obligated to speak during
periods of silence. "Yes" usually means "possibly".
• Meetings are commonly interrupted by phone calls and visits
from friends and family.
• One who asks the most questions in a meeting is likely to be the
least important. The decision maker is a silent observer.
• A customary greeting is salaam alaykum. Shaking hands and
saying kaif halak follows.
• Business Visa Rules for UAE
Business visas are issued only by UAE Embassy, and requires
company letter and sponsor in UAE to send a fax or telex to UAE
Embassy confirming the trip and accepting financial responsibility.
• A single-entry visa is valid within two months from the date of
issuance for stay of up to 30 days.
• To receive a visa, submit 2 application forms, 2 passport size
photographs and prepaid envelope for return of passport by
certified/registered mail.
• Public Holidays :Festival Date Detail New Year's Day January
1 Mount Arafat Day Date Varies Eid al Adha (Feast of
Sacrifice) Celebrated 3 Days. Date Varies Islamic New Year Date
Varies The Prophet's Birthday Date Varies Sheikh Zayed's
Accession Date Varies The Prophet's Ascension Date Varies Eid
al Fitr (End of Ramadan) Celebrated 2 Days. Date Varies National
Day December 2
Travel Tips
• Though tipping is not expected but it is a common practice.
Most of the restaurants include service charges in the bill. If
it is not included, add 10% to the total. Taxi drivers are not
tipped.
• Supermarket beggars, bag carriers and the windscreen
washers at the petrol stations are usually given Dh2.
• There are no departure tax.
• A passenger can carry without incurring customs duty, 2000
cigarettes and 400 cigars and 2kg of tobacco; 2l of spirits of
more than 22 per cent alcohol, and 2l of wine (non-Muslims
over 18 years only); a reasonable amount of perfume for
personal use (1l of eau-de-toilette and 150g of perfume for
those visiting Dubai and/or Sharjah).
Travel Tips
• Ask for permission before photographing
people in general. Do avoid taking photographs
of Muslim women
• Electricity is 220 volts.
• Standard of food hygiene and water quality is
very high.
• Water is generally produced by desalination,
hence it is safe to drink. Drink plenty of water in
the heat