Doing Business in UAE

Steps to Establishing an Office:

In the U.A.E., economic activity is regulated by the individual emirates, as well as the federal government. The exact requirements that a firm setting up an office will face will depend mostly on the nature of the business the firm is engaged in, its level of involvement in the U.A.E., and the emirate where it locates. This last item is usually the least important, in terms of procedure, because the laws are very similar among emirates.

First, firms will need a local sponsor, both for the firm and for its resident employees. A sponsor must be a U.A.E. citizen, or institution, such as a free zone. The sponsor can be involved in the business, or simply a service sponsor providing, for a fee, legally required administrative functions.

Second, firms are required to be licensed by the emirate of domicile before beginning business activities. In general, individual emirates will issue: Trade Licenses covering all kinds of trading activity; Professional Licenses covering professions and services; Industrial Licenses for industrial and manufacturing activities; and Vocational Licenses for craftsmen and artisans. Licenses for some categories of business require approval from certain federal ministries and other authorities: for example, banks and financial institutions from the Central Bank of the U.A.E., insurance companies and related agencies from the Ministry of Economy and Commerce, manufacturing from the Ministry of Finance and Industry, and pharmaceutical and medical products from the Ministry of Health. More detailed procedures apply to businesses engaged in oil and gas production and related industries.

In addition to the required licenses, all firms must be registered with the chamber of commerce in each of the emirates where the business is licensed to operate. In the U.A.E., chambers are part of the government and membership is mandatory.

Firms must decide on the purpose of the office it wishes to establish, as this will determine ownership requirements. For firms conducting regional marketing or administrative functions, a representational office, allowing 100 percent ownership, may be best. For firms conducting offshore services, a branch office, also allowing 100 percent ownership, is suggested. Establishing an office in any of the free trade zones available in the U.A.E., regardless of activity, allows 100 percent ownership. While the above options allow maximum ownership, they restrict activities allowed in the U.A.E. market itself.


Import/Customs Regulations

There are no custom duties on personal belongings entering the UAE. Visitors may bring with them up to 2000 cigarettes, 400 cigars, 2 kg tobacco, 2 litres of spirits and 2 litres of wine. The 4% custom duty covers all imports entering the country for local consumption and sale. A list of duty exempted products is available at Trade Promotion office and is generally provided free of charge to any inquirer. All food products are duty exempted. Port, airport and customs clearance charges are low compared to international standards.

Business Environment

Business Hours
Government Offices: 07:30 to 14:00 Saturday to Wednesday
08:00 to 12:00 Thursday

Most Business: 08:00 to 13:00 and 16:00 to 19:00 Sat to Wed
08:00 to 14:00 Thursday

Some companies: 08:00 to 15:00 Saturday to Thursday.

The normal weekend is Thursday afternoon and Friday, but there is an increasing trend towards 5 day weeks, Sunday to Thursday, working straight shift from 8:00 am to 5:00 pm (Trade NZ Dubai hours). Realistically a business visitor can expect to schedule five meetings
per day, three in the morning and two in the afternoon.

Payment Terms Letters of Credit are commonly used as means of financial settlement between UAE companies and foreign suppliers. Bank Guarantees and bank drafts are also used. Generally payments are made in US Dollars.

Agents and Distributors Companies in the GCC prefer to act as an exclusive agents and distributors for any product they wish to handle. Commercial agencies are well established throughout the GCC states and provide the means whereby a foreign company can conduct organised marke ting activities without establishing a local presence. Hence, choosing the right agent is very important since it is very difficult to terminate the agency agreement once it is established and registered. UAE laws and commercial arbitration committees wi ll often rule in favour of the local agent. Therefore, drafting an agency agreement must be made with the assistance of a lawyer familiar with both Western and local laws and practices.

Travel Tips

Visas
Citizens of GCC countries (Gulf Cooperation Council: Saudi Arabia, Kuwait, Bahrain, Qatar and the Sultanate of Oman) and British nationals with the right of abode in the UK do not need visas to enter the UAE. GCC nationals can stay more or less as long as they like. Britons can stay for a month and can then apply for a visa for a further two months.

For others, the easiest and most common way to enter the UAE is on a hotel-sponsored visa. This means either a 15-day transit visit or a 30-day visit visa. The difference is that the transit visas cannot be extended. The visit visa can be extended for another 30 days by the hotel that initially acted as sponsor.

To get a visa, you must first telephone or fax the hotel making a reservation and requesting a visa. Normally the hotel will require you to stay from one to three nights. You must also fax the hotel a copy of your passport along with the reason for your visit -- tourism is an acceptable reason -- and your arrival date. Make sure the hotel faxes you a copy of the visa when it is ready or the airline may not allow you to board the flight. The time needed to process a visa usually ranges from two days to three weeks.

Whatever kind of visa you request, it will be deposited at the airport for you to collect upon arrival. Transit visas cost Dh 120 and visit visas Dh 60, but the normal hotel charge for the service is about Dh 180.


Entry restrictions
Entry is forbidden to travellers whose passports bear Israeli stamps. Hotels/Recreation Many of the world's top hotels can be found in the UAE, including the Hilton, Sheraton, Ramada, Forte Grande, Marriott, Holiday Inn, Inter-Continental, and Hyatt Regency. Daily corporate rates should be added with a 25% tax and service charge. All hotels have a stand at Dubai airport for pick up and drop off of their guests, also Emirates Airlines first class and business class passengers get a free pick up and drop off from their hotels to the airports.

Cultural Considerations
The UAE follows the Sharia law that is based on the Quran. Dress in public should be very modest. Smoking and eating in public during the fasting period in Ramadan is prohibited. Alcohol is available in all hotels and many restaurants. Foreign visitors should consult with their host before ordering alcohol during meals or social functions. It is polite when meeting ministers, or a member of the royal family to address them as "Your Excellency", and when meeting business people it is polite to address them as "Mister". The UAE is a very conservative society. Generally speaking, usual polite business behaviour accepted in western countries will be acceptable in the UAE. English is widely spoken by business people and officials and rarely is it necessary to use the services of interpreters. Foreign visitors should not feel insulted if interrupted by a phone call or a walk in visitor during their meetings. Arab business people tend to have their offices used as a visiting place by friends and relatives. Usually coffee, tea and other beverages are served during business meetings. An excellent publication for business visitors is that by Jeremy Williams - Don’t They Knows it’s Friday: Cross-Cultural Considerations for Business and Life in the Gulf. Published by Motivate Publishing, London 1998.

Public Holidays 2000
Eid al Fitr* 7-10 January
Eid al Addha 16-19 March
Al Hijra-Muslim New Year 5 April
Milad al Nabi (Prophet's Birthday) 14 June
Lailat al Isra 23 October
UAE National Day 2 & 3 October
Eid Al Fitr* 26-28 December
* Dates of Muslim holidays depend on the lunar calendar and are
variable from year to year.

Some Useful Sources of Information

Markets and Sectors
http://www.tradeport.org/ts/countries/uae/sectors.html

Market Access
http://www.tradeport.org/ts/countries/uae/market.html

Investment climate
http://www.tradeport.org/ts/countries/uae/climate.html

General information on UAE

UAE Sharjah Government Customs Department - controls the export and
import of goods to and from UAE for all types of business
Home: http://www.sharjahcustoms.gov.ae

Ministry of Finance and Industry
Home: http://www.fedfin.gov.ae

Jebel Ali Free Zone - gateway to a market of over 1.5 billion consumers
Home: http://www.jafza.com

UAE Today: Good source of information on events within the UAE
http://www.uaetoday.com/channel/index.html

United Arab Emirates: General information about the UAE, including
tourism, geographical information, traditions and heritage
http://www.emirates.org/

Dubai Duty Free: Good site for information on the famous duty
free area in Dubai
http://www.ddf-uae.com/

Hamriyah Free Zone Sharjah: Site contains information on Trade
Incentives, Location, FAQ's and facilities available in the export
processing free zone setup in Sharjah, UAE
http://www.hamriyahfz.com

Ras Al Khaimah Free Trade Zone: Source of information on Ras Al
Khaimah Free Trade Zone
http://www.rakiftz.com/

GoDubai: A complete online information directory on Dubai,
United Arab Emirates
http://www.godubai.com/

Arab.net: Information on countries in the Middle East and North African
http://www.arab.net/

ArabiaBusiness: General Business Information and News
http://www.arabia.com/business/

Middle East North African Business Trade promotion programs, summits,
and country commercial guides
http://www.ita.doc.gov/mena/econof.html