At the British Chambers of Commerce (BCC) 2015 International Trade Conference, Peter Cook (British Chamber of Commerce Qatar) and Joe Hepworth (British Centres for Business in the UAE) shared their advice for doing business in the Middle East.
Dominant trends in Middle East Markets
Increasing economic diversification
Many of the countries in the Middle East are energy exporters with “fiscal cushions” that remain robust even when energy prices fluctuate. However, the countries are aware that natural oil is a finite resource and are taking active steps to plan for the future and expand into other sectors and industries.
Dubai is already ahead of this trend: as the Emirate never had oil and gas resources, it has already established itself as a trading hub, retail and tourist destination.
Market and product niches
As part of their drive towards diversification, the economies of the Middle East are investing in:
- Infrastructure: projects include transportation initiatives such as metro and rail networks, as well as air and sea ports
- Healthcare: populations and treatment trends (including medical tourism) are increasing
- Education: there’s high demand for training the local population so the society can “look after itself” once the oil runs out
- Security: solutions to address regional concerns about safety
Accordingly, there are significant opportunities for businesses to bring their goods to market. Peter Cook illustrated this with the example of airplane purchases: “When Emirates buys planes, they buy 100 at a time. This means that every time Emirates buys a plane, they need to hire a team of 400 to service the plane – 400 extra families that need retail, healthcare and leisure.”
The strength of Brand Britain in the Middle East
British companies are in an especially strong position to seize the vast array of opportunities in the Middle East: building on the UK’s historical links to the region, there’s a strong sense of Anglophilia, fondness of the UK. This is especially good news for businesses in the retail sector, where there is strong demand for products and brands from the UK as well as British design.
Tips for doing business in the Middle East
To help British companies enter the market, Joe Hepworth and Peter Cook also shared their advice for best business practices:
Don’t assume all Middle Eastern markets are the same!
Especially if you’re just entering Saudi Arabia, Qatar or the UAE, bear in mind that the markets are quite different in terms of product demand and business practices! Peter Cook emphasised that as Qatar is a small city state, it can be a comparatively easy place with which to do business.
The speakers also noted that doing business as a woman is “no issue” in the UAE, and a representative from the Saudi British Business Council added that the perception of women doing business in Saudi Arabia is also changing.
Don’t rush it!
Despite the differences, there are some commonalities in establishing business relations in the Middle East: be patient. Don’t expect to send an email and succeed – developing strong relationships can take 15 to 25 years! Bearing this in mind, spend the first meetings building up a rapport, as your prospective business partners generally want to get to know you before they get to your product or service. “Talk about football, talk about your families – the handshake is as important as the bit of paper.” Having a local presence also demonstrates your commitment to doing business in the region and working with local organisations as a true partner.
Also remember that as business sometimes moves at a different pace from the UK, payments can take longer to process.
Bear in mind legal considerations
Joe Hepworth advised that each country in the Middle East operates its own jurisdiction. If you wish to register a product, for example, you need to have a local agent or distributor. Also note that a British company can’t register a product in the UAE – you need a local presence.
Businesses need to understand the Foreign and Commonwealth Office guidance and law for operating in the market: “Do your due diligence before you get on the plane, but there’s plenty of help available.” This local support to ease market entry includes UKTI, Chambers of Commerce and local lawyers.
DHL also has many resources to help businesses trade with the Middle East – including destination fact sheets, a cultural etiquette guide to doing business in the Middle East and a video with tips on navigating Saudi Arabia Customs (see below). For more advice, call our Business Export Advisors: 0844 248 0675.
How to trade with Saudi Arabia: Customs tips