The United Arab Emirates (UAE)
The United Arab Emirates (UAE) is the UK’s largest export market in the Middle East and the 13th biggest globally. The UK exported £9.8 billion of goods and services in 2016, this was a 37% increase since 2009. The UAE is the UK’s fourth largest export market outside the EU.
The UAE has made huge progress diversifying its economy away from oil. Non-oil sectors now contribute about 70% of the UAE’s Gross Domestic Product (GDP). According to International Monetary Fund (IMF) forecasts, as of March 2018, it’s expected to be the second largest Arab economy in 2017 after Saudi Arabia in terms of GDP (in current prices). The IMF expects UAE to be ranked 25th globally (in current price terms), with a GDP per capita of $37,346.
There are over 5,000 British companies operating in the UAE, including BP, Shell, Rolls Royce, BAE Systems, Mott McDonald, SERCO, Standard Chartered, HSBC and John Lewis / Waitrose. 779 commercial agencies and 4,762 British brands have invested in the UAE. The majority of the UAE population is made up of expatriates, with around 120,000 UK residents. In In 2016 14.9 million people visited the UAE, of which 1.25 million were from the UK.
Incentives for UK businesses exporting to UAE include:
Challenges of doing business in the UAE
The UAE can be a demanding and sometimes frustrating market in which to do business. However it doesn’t present major challenges to UK companies wanting to develop trade. Competition for business is fierce from the high growth Asian economies as well as the more traditional competitors in Europe and north America.
Each emirate retains control of regulatory powers, this covers commercial activities such as issuing of trade licences and the incorporation of corporate entities, where the activity is not already regulated under federal legislation. The interaction of federal laws, individual emirate laws and free zone laws can be complex and confusing.
Other unique challenges include:
Growth potential of the UAE market
The UAE economy continues to grow and the overall economic outlook is positive, the UAE’s reserves of oil and natural gas both rank in the top 10 largest in the world and it has the third fastest growing economy in the GCC.
The UAE has diversified its economy to help to make the country’s revenue sources more balanced and create a sustainable economy that can withstand long-term oil price volatility. Hydrocarbons provide the largest single source of income for Abu Dhabi. Dubai’s hydrocarbon reserves are far more limited which has led to successful efforts to diversify their economy into the region’s business, logistics, media and leisure hub.
The award of EXPO 2020 to Dubai is forecast to boost the economy by USD 23 billion. This will result in about USD 8 billion worth of opportunities across many sectors particularly in hospitality and construction.
Other positive factors for growth include:
Source : GOV.UK
The UAE has made huge progress diversifying its economy away from oil. Non-oil sectors now contribute about 70% of the UAE’s Gross Domestic Product (GDP). According to International Monetary Fund (IMF) forecasts, as of March 2018, it’s expected to be the second largest Arab economy in 2017 after Saudi Arabia in terms of GDP (in current prices). The IMF expects UAE to be ranked 25th globally (in current price terms), with a GDP per capita of $37,346.
There are over 5,000 British companies operating in the UAE, including BP, Shell, Rolls Royce, BAE Systems, Mott McDonald, SERCO, Standard Chartered, HSBC and John Lewis / Waitrose. 779 commercial agencies and 4,762 British brands have invested in the UAE. The majority of the UAE population is made up of expatriates, with around 120,000 UK residents. In In 2016 14.9 million people visited the UAE, of which 1.25 million were from the UK.
Incentives for UK businesses exporting to UAE include:
- A diverse economy which is continually growing and expanding.
- It’s an entry route into other Gulf Cooperation Council (GCC) countries.
- It’s an important market for re-export into other countries.
- No taxation on personal income and capital gains.
- It’s ranked 21st in the World Bank’s ease of doing business overall ranking, but first in the Middle East and North Africa (MENA) region.
- The strong cultural and historical ties as many Emiratis have studied in the UK, have UK homes and visit regularly.
- English is widely spoken and accepted as the language of business.
- Its strategic geographical location; Dubai is regarded as a regional hub and commercial capital for the Middle East, north Africa and beyond.
- Large expatriate population.
- A liberal trade regime which attracts capital from across the region.
Challenges of doing business in the UAE
The UAE can be a demanding and sometimes frustrating market in which to do business. However it doesn’t present major challenges to UK companies wanting to develop trade. Competition for business is fierce from the high growth Asian economies as well as the more traditional competitors in Europe and north America.
Each emirate retains control of regulatory powers, this covers commercial activities such as issuing of trade licences and the incorporation of corporate entities, where the activity is not already regulated under federal legislation. The interaction of federal laws, individual emirate laws and free zone laws can be complex and confusing.
Other unique challenges include:
- Restrictions on company ownership by non-GCC nationals; a national sponsor must retain 51% ownership.
- Arabic will often be the first language and documentation will be in Arabic - although English is recognised as the language of business.
Growth potential of the UAE market
The UAE economy continues to grow and the overall economic outlook is positive, the UAE’s reserves of oil and natural gas both rank in the top 10 largest in the world and it has the third fastest growing economy in the GCC.
The UAE has diversified its economy to help to make the country’s revenue sources more balanced and create a sustainable economy that can withstand long-term oil price volatility. Hydrocarbons provide the largest single source of income for Abu Dhabi. Dubai’s hydrocarbon reserves are far more limited which has led to successful efforts to diversify their economy into the region’s business, logistics, media and leisure hub.
The award of EXPO 2020 to Dubai is forecast to boost the economy by USD 23 billion. This will result in about USD 8 billion worth of opportunities across many sectors particularly in hospitality and construction.
Other positive factors for growth include:
- Well-established infrastructure.
- A strong banking system.
- A stable political system.
- The number of free trade zones that can allow 100% foreign ownership and a nil taxation regime.
- Ongoing and new developments including Sadiyaat Island in Abu Dhabi, Mohammed Bin Rashid City in Dubai, Dubai South, Al Maktoum .Airport, Dubai and the Fujairah Master Plan.
Source : GOV.UK