presentation alex watson
TRANSCRIPT
WHAT IS DUBAI ALL ABOUT?
Alex WatsonGlobalScot
TRADE• UAE is the 18th largest exporter Globally.• The United Arab Emirates (UAE) is the UK’s largest Civil Export
market in the MiddleEast.• Annual trade between Dubai and the UK is worth around GBP 9
billion, making Dubai and the wider UAE Britain’s 16th biggestoverseas market.
• The UAE remains the largest market in the region accounting for GBP605 million of Scottish export.
• Gateway to a GBP 100 billionmarket.• Springboard intomore challengingMarkets• 90% of trade conducted through Dubai and Northern Emirates.
Sources:• Opportunities in the Middle East: Guide – published by Scottish Enterprise on 18th March 2015• Guidance note – Exporting to the UAE, UK Trade – published 21 March 2014• Glittering gateway to the Gulf – Chamber International
HOW DUBAI WORKS
• Dubai is ruled by the Al Maktoum royalfamily
• Sheikh Mohammed Bin Rashid AlMaktoum is the Vice President & PrimeMinister of the UAE and the Ruler ofDubai
RULING FAMILY
DUBAI: THE BUSINESS HUB OF THE MIDDLE EAST
• Dubai’s strategic location gives easyaccess to 2.2 billion consumers, from aunique centralised time zone thatcombines East and West business hours.• Dubai is the perfect gateway betweenEast and West and the preferred hub forthe region’s imports and exports market– one of the most lucrative in the world.
MAJOR UAE PROJECTS
Aladdin City
MAJOR UAE PROJECTS
• High value opportunities for Scottishbusinesses in the areas of aerospace, airports,railway, metro, infrastructure projects andprofessional services.
MAJOR UAE PROJECTS
EXPO 2020
• The UAE won the right to host the World Expo inDubai in 2020. This will be the first time that theWorld Expo is staged in the Middle East, NorthAfrica and South Asia, truly bringing to life thetheme of “Connecting Minds, Creating theFuture”.
• Expo 2020 Dubai is expected to attract 25 millionvisitors, 70% of which will come from overseas.
Sources:• EXPO 2020 Dubai UAE – The official website of Expo 2020 Dubai – available at http://expo2020dubai.ae/en/index.php
EXPO 2020
• Scottish expertise in delivering suchevents is held in high regard globally, andgiven our close and historic links to theUAE, we stand in good stead to competefor at least GBP 1.3 billion of businessplanning, designing and delivering theDubai Expo 2020 site.
KEY ISSUES
• Don’t forget about the growing NorthernEmirates and Abu Dhabi
• Niche opportunities for Scottish companies• Have a Middle East Strategy (and beyond?) notjust UAE
• Understand the wider pricing issues• Take legal advice with M.E knowledge• Research, Research, RESEARCH
DOING BUSINESS INTHE UAE• Dubai is the second largest member of the UAE.It’s home to the most important port and is thecountry’s commercial capital.
• It offers easy access to the 1.5 billion consumermarkets situated in Africa, West Asia, CIScountries and Eastern Europe as well as theareas surrounding the Red Sea and the Gulf.
• Setting up in the UAE is relatively easy andstraightforward.
Sources:• Reasons for Doing Business inDubai – Cross Border Business Consultants
DOING BUSINESS IN THE UAE
Growing and diverse economy• In terms of its economic performance, Dubai (andthe UAE in general) has been the most successfuleconomy within the GCC region for diversifying awayfrom oil.
• UAE has been making huge investments in thetourism, financial and construction sectors.
• In 2012, manufacturing activity accounted for 42% ofoutput growth, transport/communication for 23%,wholesale/retail trade for 16.5% andrestaurants/hotels for 15.5%.
Sources:• Reasons for Doing Business inDubai – Cross Border Business Consultants
DOING BUSINESS IN THE UAE
Legal Framework• Investment laws, regulations and incentives arecontinuously improving to encourage furtherforeign investment.
• This includes the introduction of foreignownership of land and stocks – Dubai becamethe first emirate within the UAE to open itsproperty market to foreign ownership, followedby Abu Dhabi.
DOING BUSINESS IN THE UAEPhysical Infrastructure -‐ Ports• Dubai dominates the cargo and re-‐export markets thanks tothe size and sophistication of its two ports, Port Rashid andJebel Ali Port.
• The massive Jebel Ali facility is one of the busiest ports inthe world with over 70 berths. It also includes an economicfree zone (JAFZA) which is part of the Economic ZonesWorld.
Sources:• Jafza – Dubai, UAE – UAE Information Guide• Reasons for Doing Business in Dubai – Cross Border Business Consultants
DOING BUSINESS IN THE UAE
Physical Infrastructure -‐ Airports• Emirates is one of two flag carriers of the UAEalong with Etihad Airways and is based inDubai.
• Emirates is the Arab world’s largest airlinewith more than 140 destinations and 230aircrafts in 2015, and plans to increase its fleetto up to 280 by 2020.
Sources:• Our Destinations – Official Emirates Airlines website – available at
http://www.emirates.com/ae/english/destinations_offers/destinations/index.aspx• Reasons for Doing Business in Dubai –Cross Border Business Consultants
DOING BUSINESS IN THE UAEInvestment Support and Promotion by theGovernment• Dubai’s Department of Economic Development(DED), which is tasked with setting and drivingDubai’s economic agenda, supports the emirate’stransformation into a diversified, innovative, serviceand knowledge-‐based economy to improve thebusiness environmentand increase productivity.
• It develops economic plans and policies, identifiesand supports strategic sectors, and provides essentialadministration services to domestic and internationalinvestors and businesses.
DOING BUSINESS IN THE UAE
Open Trading Hub• Dubai has free and open trade with more thanthree-‐quarters of goods entering the emirateduty free.
• Dubai’s open-‐border foreign labour policy hasalso proved a major factor in the liberal traderegime, allowing private sector businesses torecruit expatriate workers at internationallycompetitive wages.
DOING BUSINESS IN THE UAE
Quality Lifestyle and Culture of Excellence• Ranked as the top Middle Eastern city in Mercer’s Quality of
Life Index, Dubai has become one of the world's mostpreferred expatriate locations.
• Although it is recognised as the fastest growing city in theworld, Dubai is also one of the safest.
• The emirate is home to the tallest building on the planet, thelargest man-‐made marina, the most luxurious hotels and withover 200 nationalities contributing to the city’s unique cultureand community, it is one of the most vibrant globaldestinations.
Sources:• Mercer Quality of LivingSurvey 2015
DOING BUSINESS IN THE UAE
Quality Lifestyle and Culture of Excellence• Dubai’s many attractions and experiencescombine a fascinating heritage with world-‐classshopping and entertainment facilities.
• Many of the world’s leading retailers chooseDubai as their first ventures in the Middle East.
• Year – round sunshine also means plenty ofopportunity to enjoy outdoor life.
DOING BUSINESS IN THE UAE
Visionary Leadership• The extraordinary perception and vision ofDubai’s leaders have created one of theworld’s most successful and vibrant cities.
• A belief in the potential and possibilities ofthe future has lifted this trading town into amajor player on a global stage. This visioncontinues, and with it, Dubai’s ambitionexpands.
DOING BUSINESS IN THE UAEGeneral Advantages offered by UAE• 0% Taxes• Very Low Import Duty• Double Taxation Agreements of UAE• Free Trade Agreements of UAE• Strong and Competitive Economy • Strategic Location Advantages of UAE• World-‐class Infrastructure of UAE
DOING BUSINESS IN THE UAE
• Direct Export – Agent/Distributor• Representative Office • Branch Office• Limited Liability• Joint Venture/Participation• Free zone or Sponsor/Partner?
DOING BUSINESS IN THE UAE
Direct Export – Agent/Distributor• No distinction between Agent and Distributor• Cultural aspects – RESEARCH is a must!• Registered or UnregisteredAgent?• Exclusivity can be via product line/specificservice
• Dubai and Abu Dhabi separate agencies?• Agreement subject to UAE law – ICC possible?• Ensure “getoutability” of contract
DOING BUSINESS IN THE UAE
Representative Office• Branch Office:• Sponsor generally needed – registration/formalities• Sponsors – no liability, investment or management• Fees are fairly established• Specialist UAE firms offer matching service• Termination may be difficult
DOING BUSINESS IN THE UAELimited Liability Company – LLC• At least 51% shares to be held by UAEnational/company
• Initial share capital AED 300,000 for Dubai – NOTnecessary to be deposited in the bank
• Profit shares can be flexible and are notdetermined by share ownership
• All or most of the share capital is provided byforeign investor
• Vast majority of profits passed to foreign investor• Protection Suite
DOING BUSINESS IN THE UAEJoint Venture (JV)/Participation• UAE Companies Law permits joint participation• 2 or more partners agree to share profits/losses• Does not need to be formally registered• Establishment immediate• JV would use name/trade license of localregistered
• Disadvantage – independent financing limited?
DOING BUSINESS IN THE UAEFree Trade Zones (FTZ)• Dubai is home to over 50 Free Trade Zones (existing and proposed)
catering to various industrial and business clusters where foreign investorscan enjoy 100% foreign ownership of their companies.
• 100% import and export tax exemptions• 100% repatriationof capital and profits• You can open a bank account in Dubai• Can be liquidatedanytime• You can conduct international business• No income tax• No capital tax• No currency restrictions• Low cost of operations• Excellent infrastructure
HELP IS AVAILABLE• Overseas Market Introduction
Service• Programme Arrangements• Company Information and
Profiles• Market Summaries
• Market Visits• Exhibitions• Major Project Data
But don’t forget others that can be helpful:• GlobalScot/SDI/Scottish Enterprise• UKTI/British BusinessGroup• Arab British Chamber of Commerce• UAE Chambers of Commerce• ME!
SUMMARY• Research, research, research• Understand cultural issues• Develop a regional strategy • Maintain personal contact• Plan for the long term, not a quick fix• Do not let the lack of a licence stop you from doing Business in the Middle East
ENJOY THE EXPERIENCE!!!