Export to United Arab Emirates: where to start?
The United Arab Emirates’ economy is thriving and opportunities to do business in the country are many:
- the UAE’s currency, the dirham, which is pegged to the US dollar, is secure and freely convertible;
- here are no restrictions on profit transfer or capital repatriation;
- import duties are low (less than 4 per cent for virtually all goods and zero for items imported for use in free zones);
- labor costs are competitive;
- federal corporate tax and personal taxes are nil and numerous double taxation agreements and bilateral investment treaties are in place. In addition, the financial risk is minimal.
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 are key elements in attracting foreign investment.
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
How to find your agent or distributor?
You must appoint an Emiratis agent to conduct trading activities if you do not have a physical presence in the UAE.
- Commissioned Agents: They act as brokers, who link an exporter’s product with a foreign buyer. Usually, the agent does not fulfill the orders, but passes them to the exporter for acceptance. These agents can sometimes assist with export logistics such as packing, shipping and export documentation.
- Export Management Companies (EMC’s): EMC’s act as an exporter’s off-site export department, representing the exporter’s product to potential foreign buyers. The EMC searches for business on behalf of the export firm and takes care of all aspects of the export transaction. Hiring an EMC is often a viable option for smaller exporters who lack the time and expertise to break into foreign markets on their own. An EMC provides a range of services from negotiating export contracts to providing after-sales services. Usually, the EMC’s operate on a commission basis, but some take title to the products they sell and make a profit on the mark-up.
- Export trading companies (ETC’s): ETCs perform many of the functions of EMC’s. However, they tend to be demand-driven and transaction-oriented, acting as an agent between the buyer and seller. Most ETC’s will take title to your goods for export and will pay your company directly. This arrangement practically eliminates the risks associated with exporting. However, the exporter needs to make sure that appropriate checks are made regarding the ETC. More often than not, ETC can be a good source of export opportunity.
- Export merchants: Export merchants will purchase and then re-package products for export, assuming all risks and selling the product to their own customers. This export intermediary option should be considered carefully; as your business runs the risk of losing control over your product’s pricing and marketing in foreign markets.
- Co-exporting: In this case, an exporter allows another firm, which already has an export distribution system in place, to sell your product in addition to its own. Co-exporting (sometimes called piggyback exporting) has several advantages. This arrangement can help you gain immediate foreign market access. Also, all the requisite logistics associated with selling abroad are borne by the exporting company.
- Distributors: Foreign distributors buy a product from an exporter and re-sell it at a profit. They maintain an inventory of the export product, which allows the buyer to receive the products quickly. Distributors often provide after-sales service to the buyer as well as dealing with the issues involved in import country customs regulations and processing.
- Foreign government buying agents: Foreign government or quasi-governmental agencies are often responsible for procurement. This form of exporting can often represent significant export potential for small exporters. Foreign country commercial attachés in the UAE can provide exporters with the appropriate in-country procurement office contact details.
Alliance experts can find the right agent or distributor within 6 to 8 weeks
Alliance experts helps companies with entering new markets profitably. In the Middle East we work from the Palestine territory with experienced business development specialists.
We have a clear and structured approach to find the best partner
We first want to know what kind of partner you are looking for. Based on your information, we make a long-list of 15-20 potential partners that fit your description. After your approval we find the right decision maker, approach him or her personally and share your business profile with them. This mostly leads to 3-5 companies who are suitable as your partner and interested in working with you. Once we have found these companies, we plan your meetings and accompany you during the first visits.
