One of the fastest growing markets in the world, the UAE is an exciting target for small businesses who want to expand to other destinations across the world. And though we at Fastlane know that just being small doesn’t mean the world is out of reach, it can sometimes be intimidating. That’s why we’re here to make sure you’re comfortable with your destination of choice.
Whether you’re shipping from the UK to Singapore or from the United States to France, we’re on hand to help you out. In this breakdown, however, we’ll be focusing on the United Arab Emirates, and the opportunities there are for expansion there.
Why the UAE?
As a Union of wealthy Emirates, the UAE is an appealing proposition for businesses planning to expand to new destinations. Once dominated by oil, the UAE has diversified into becoming the second largest Arab economy behind Saudi Arabia. And it has continued to grow, despite a general economic malaise globally, suggesting that the UAE is a safe bet for your business.
With some of the most liberal trade regulations in the Gulf, the United Arab Emirates act as a gateway to the Gulf region. Although there are challenges to face in establishing yourself in the UAE, the widely-varied population and strong buying power are pleasing rewards.
Fastlane ships parcels around the world, and deliver to the UAE every day. We know just what it takes to deliver successfully to the United Arab Emirates, so here are the challenges and rewards for doing business in the UAE.
Shipping to the UAE
With seven different Emirates and expats from around the world, there are a wide variety of potential customers to target. Thanks to the many races and religions represented in the United Arab Emirates, there is demand for a wide selection of goods throughout the Emirates for willing shippers to fulfil.
But for those not sure what to start with, there are plenty of resources available. The UK initiative Exporting is Great has a list of current opportunities in the UAE. And if you’re not sure that the item you want to send has demand, there are freely available lists of goods being sent to the UAE – you can find one on the Department for International Trade website, for example.
As recently as 2013, the main exports from the UK to the UAE were:
- Equipment or machinery for generating power
- Cars, trucks and other road vehicles
- Manufacturing goods
- Sound recording and telecommunication equipment
- Scientific equipment and other professional apparatus
- Industrial material
- Machinery and appliances
- Medicine and pharmaceutical goods
- Non-metallic mineral manufactures
- Perfume material and essential oils
If your goods of choice are not on the top ten list, don’t despair. There are still thousands of consumers who may want your goods. If you’re unsure, you can test the waters on social media or eBay to get an idea of who might be interested.
Getting Started in Shipping to the UAE
When you start shipping goods to the UAE, there are some important factors to keep in mind. If you would like to introduce a local branch of your company, you should keep in mind that foreign ownership of companies in the UAE is limited to 49%, which means that you will need to find a local partner for your enterprise.
Alternatively, if you would like to just export goods to the UAE, this is a much simpler proposition. However, there is still a requirement for a local aspect. When exporting to the UAE, you will require a local agent. As an agent, distributor or franchisee, they must be a UAE national or a company owned entirely by UAE nationals.
One other option is shipping to a UAE Free Zone. These Free Zones have a variety of benefits, including the ability to completely own your company as a foreigner and export to the UAE without requiring a local agent. If you don’t want to use an agent or share ownership with locals, it’s best to work in the UAE Free Zones. There are several Free Zones in major cities, such as Abu Dhabi Global Markets or Dubai Media City.
Customs in the UAE
Just like any other country, when you are shipping to the UAE, there are specific rules and duties to keep in mind. These apply uniformly to all of the seven Emirates that make up the UAE, and all parcels sent to the UAE will only be cleared if these regulations are met.
You’ll also need the following documentation:
- invoices – initiated by supplier
- Certificate of Origin
- Bills of Lading /Airway Bill
The duty rates for parcels being sent to the UAE is generally levied at 5%. This is true of most parcels, but some goods, like alcohol and tobacco, have higher duties rates and others, like printed materials, are exempt. Before sending parcels, be sure to check with the customs team to find out the current duties and exemptions.
If you are shipping to a UAE Free Zone, there’s no need to worry about duties, as goods shipped to one of these areas will not have duties levied.
Any shipment to the UAE will have to follow the rules about prohibited and restricted items however. The UAE have their own list of goods that are and are not allowed to be imported. You should check with the customs team before making you shipment, but you should keep in mind that any goods manufactured in Israel may not be imported into the UAE.
This is also true of narcotics and opium, alcohol, and cannabis, as well as firearms, fireworks, pornographic material and ivory.
Challenges in doing business in the UAE
There are some challenges to face when doing business in the UAE. These range from import rules – which are covered above – to cultural differences among locals and ex pats living in the UAE.
Since the UAE is made up of a collection of Emirates, the consumers you will be attracting may be different in each. Being successful throughout the UAE requires good research and understanding your target audiences. Dubai and Abu Dhabi are among the friendliest cities in the UAE to get started, so that may be where you choose to establish yourself.
But what other problems might you have?
One important thing to keep in mind is that companies that wish to import goods into the United Arab Emirates have to be registered in the UAE. Furthermore, the goods that are being imported must be relevant to the licensed activity of the business.
And if the goods are printed matter like books or maps, or are films or tapes, they will have to be cleared by the Ministry of Information before they can be brought into the country. This will take place during the customs clearance process.