Business climate Dubai

BUSINESS CLIMATE

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The UAE economy is booming and the opportunities to do business in the country are limitless. The UAE’s currency, the dirham, is secure and freely convertible in any country, there are no restrictions on profit transfer or capital repatriation; import duties are low (around 5 per cent for virtually all goods) and, in the case of items imported for use in the free zones, non-existent; labour costs are competitive; corporate tax and personal taxes are nil and 44 double taxation agreements and 32 bilateral investment treaties are in place. In addition, the financial risk is minimal (Moody’s credit rating Aa3). These factors, combined with a strategic, accessible location for major regional markets, an excellent reliable infrastructure and an extremely pleasant, stable and safe working environment bode well for investment.

Not surprisingly therefore, the UAE ranks high in the list of the Middle Eastern and GCC countries deemed to be the most attractive to direct foreign investments (FDI), securing 60 per cent of FDI flows to the region during 2006.

But the country is not resting on its laurels and every effort is being made to foster an enabling regulatory environment. For example, amendments to the company law are currently being made in order to streamline procedures; the federal commercial Law that requires a 51 per cent local partner for businesses located outside of free zones is under review; the Ministry of Economy is in the final stages of drafting competition law that should provide further assistance in combating cartels; and the Government is working on introducing a foreign investment law that will further increase private sector competition and therefore lower inflation. Indeed, several steps have already been taken to deal with inflation: a consumer protection law was recently passed and several rent ceiling initiatives were issued at the emirates level to deal with rent increases.

Finally, the UAE is a contracting party to the General Agreement on Tariffs and Trade (GATT) since 1994 and a member of the World Trade Organization (WTO) since 1996. It is also a member of the Greater Arab Free-Trade Area (GAFTA) in which all Gulf Cooperation Council (GCC) states participate. The UAE is in the process of negotiating free trade agreements with the US and has embarked on negotiations, either individually or with the GCC, on several regional trade agreements.

The UAE is a highly cosmopolitan well-educated society familiar with the methods and means of doing business worldwide. However, there are a few points that people new to the Arabian business environment should keep in mind.

Here, more than anywhere else, business is conducted on the basis of personal relationships and mutual trust. It is vitally important to build on these.

Good manners and courtesy are prized attributes. Nevertheless, although you should always arrive on time for a meeting, punctuality is not considered a virtue and you may be kept waiting. Take the time to chat and drink the coffee, tea or soft drink that is always on offer and establish the relationships that will stand you in good stead. Do not be put off if your meeting is interrupted by other guests or telephone conversations.

Hospitality is a way of life in the Arab world and business is frequently conducted over lunch or dinner – more than likely in a hotel or restaurant. It is also considered polite to return the invitation.

Dubai Business name registration

UAE Population

In 2010, the UAE's population was estimated at 4,975,993, of which less than 20% are UAE nationals or Emiratis, while the majority of the populations are expatriates.

However by 2020, Emiratis are projected to form 10% of total population. There is growing presence of Asians, Europeans and people from more than 160 countries of the world making UAE a truly cosmopolitan country.

The UAE occupies an area of 83,600 sq km along the south-eastern tip of the Arabian Peninsula. Qatar lies to the west, Saudi Arabia to the south and west, and Oman to the north and east. The capital and the largest city of the federation, Abu Dhabi, is located in the emirate of the same name. Four-fifths of the UAE is desert, yet it is a country of contrasting landscapes, from awe-inspiring dunes to rich oases, precipitous Rocky Mountains to fertile plains.

LANGUAGE
Although Arabic is the official language, English is widely used in business transactions.

BUSINESS HOURS
The official weekend is on Friday and Saturday. Some smaller private companies only close on Friday.
Government offices open at 7.30 a.m. and close at 3.00 p.m. Private offices tend to keep longer hours, many coming back to work in the evening after an extended mid-day break, whilst others are open from 8 a.m. to 5 p.m.
During Ramadan most work is accomplished in the early hours of the morning or much later in the evening after the day’s fast is broken (at sunset).

WOMEN & BUSINESS
Professional women are commonplace in the UAE and are generally treated seriously. Patience and good humour will carry you through most situations.

CLOTHING
Smart slacks, shirt (ideally long-sleeved) and tie are sufficient for most meetings, Nevertheless, bring a lightweight suit or blazer/jacket. Women should dress conservatively. All buildings are air-conditioned, so much of the year it is quite comfortable to wear a jacket indoors.

Tax Efficient Business

Special economic zones and free zones offer 100 per cent ownership, repatriation 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. Corporate taxes are reserved only for branches of foreign banks and oil-producing companies. A negligible 5 per cent tariff is imposed on goods imported from non-Gulf Cooperation Council countries, although tobacco and alcohol products are subject to 50 per cent customs duties.

Access 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. Collectively 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.

CHAMBERS OF COMMERCE

Abu Dhabi Chamber of Commerce  Dubai Chamber of Commerce and Industry Ajman Chamber of Commerce & Industry  Ra’s al-Khaimah Chamber of Commerce & Industry  Sharjah Chamber of Commerce & Industry Umm al-Qaiwain Chamber of Commerce &  Industry  Fujairah Chamber of Commerce, Industry & Agriculture

SETTING UP BUSINESS in FREE TRADE ZONES

Establishing a business entity in one of the UAE’s Free Trade Zones (FTZs) can be an extremely attractive option for foreign investors. The major advantages in setting up in a free zone are:

• 100 per cent foreign ownership of the enterprise
• 100 per cent import and export tax exemptions
• 100 per cent repatriation of capital and profits
• No corporate taxes for 15 years, renewable for an additional 15 years
• No personal income taxes
• Assistance with labour recruitment, and additional support services, such as sponsorship and housing.
• An independent Free Zone Authority (FZA) governs each free zone, and is the agency responsible for issuing FTZ operating licences and assisting companies with establishing their business in the FTZ.
• Investors can either register a new company in the form of a Free Zone Establishment (FZE) or simply establish a branch or representative office of their existing or parent company based within the UAE or abroad. An FZE is a limited liability company governed by the rules and regulations of the Free Zone in which it is established. Except for acquiring nationality in the UAE, the provisions of the CCL do not apply to FZEs, provided that the Free Zones have special provisions regulating such companies.

FOREIGN BANKS

ABN-Amro Bank N.V. Al Ahli Bank of Kuwait K.S.C Arab African International Bank Arab Bank plc. Bank Melli Iran Bank of Baroda Bank Saderat Iran Banque Banorabe Banque du Caire Banque Libanaise Pour Le Commerce Barclays Bank plc. BLC (France) S.A. BNP Paribas Citibank N.A.

Credit Agricole Indosuez El Nilein Bank Habib Bank A.G. Zurich Habib Bank Limited HSBC Bank Middle East Janata Bank Lloyds TSB Bank plc. National Bank of Bahrain National Bank of Oman S.A.O.G. Rafidain Bank Standard Chartered Bank Standard Chartered Grindlays Bank United Bank Limited

REPRESENTATIVE OFFICES

A.G. Assets Management Int’l Abbey National Plc Aberdeen Asset Managers Ltd. American Express Bank Ltd. Arab Banking Corporation Bank Brussels Lambert Bank Gesellschaft Berlin AG Bank Muscat (S.A.O.G) Bank of America - National Association Bank of Bahrain and Kuwait (B.S.C) Bank of Beirut SAL Bank of New York Bank of Tokyo-Mistubishi Ltd. BLC (France) S.A. BNP Paribas Citi Group Global Markets Clearstream Banking S.A. Coutts & Co. Credit Lyonnais Credit Suisse Creditanstait A.G. Deutsche Bank A.G. Dresdner Bank A.G. Fidelity Investments International First Union National Bank Gulf International Bank HDFC Bank Ltd. HSBC Bank International Ltd. ICICI Bank Ltd. Indusin Bank Ltd.

Investment Bank for Trade & Finance Korea Exchange Bank Kotak Mahindra International Ltd. Kuwait Interests for Financial Investments (KSC) Man Investment Products Ltd. Merrill Lynch Bank (Suisse) S.A. Natexis Banque – BFCE Nationwide International Ltd. Philippine National Bank Prudential-Bache International Ltd. Qatar Islamic Bank Royal Bank of Canada Salmon Smith Barney Inc Scottish Widows Int’l Ltd. Societe Generale Bank Standard Bank London Ltd. State Street Bank & Trust Company Tempelton Worldwide Inc. The Equitable Life Assurance Society The Housing Bank for Trade & Finance Towry Law Asia HK Ltd. UBS A.G. Union Bancaire Privee (CBI-TDB) Union des Banques Arabes et Francaises (UBAF) Unit Trust of India United Bank of Kuwait Wachovia Bank National Association West LB A.G. Westdeutsche Landesbank Girozentrale

                                       

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