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Wednesday, 30 November 2011

THE UNITED ARAB EMIRATES

By Arafat

Country Background
  • The United Arab Emirates were bound by truce (Trucial States) to Great Britain until WWII.
  • The seven Emirates formed a federation in 1971 and have since worked closely together to build a stable economy and political climate.
  • Political
    • Each Emirate has its own governmental institution.
    • The ruling family of each Emirate is a member of the Supreme Council, which is responsible for policy-making and electing the president and vice president for five-year terms.
  • Economic
    • Wealth is based on oil and gas exports (Abu Dhabi)
    • The government increased spending for infrastructure and job creation, and there is a greater opportunity for private sector investment.
    • Lately there has been a surge in real estate and shares prices and consumer inflation is elevated.
  • Social
    • Islam plays a large role in business
    • Women are seen as equals and are protected by rights and privileges laid down by Islam
  • Technological
    • Telephones (land line and cell), radio broadcast stations, television, internet
  • Legal
    • Court proceedings in the UAE are time-consuming.
    • There are no juries; only a single judge or a three-judge panel (depending on the case) hears cases.
    • All evidence submitted to the court must be in Arabic.
  • Environmental
    • Arid/tropical, sandy desert, and coastal areas.
  • United Arab Emirates is now the second-richest country in the Muslim world. This is because the UAE claims the world's third largest proven oil deposits.
  • The GDP per capita fell by 42% in the 1980s, but successful diversification helped to provide a positive growth of 48% in the 1990s.
  • Immigrants make up a large percentage of the UAE’s workforce.
  • The UAE government wants to preserve its traditional forms of art and culture. However, change is also apparent.


Major Opportunities

- Large export market

- Trade missions



Main Challenges
  1. Managing through the economic recovery with emphasis on finding new sources of growth.
  2. Monitoring the competitive environment and adjusting the strategic direction of the company accordingly.
  3. Adjusting to the challenging realities of continued globalization
  4. Maintaining morale and retaining top talent
  5. Building customer loyalty
  6. Protecting sensitive and private information
  7. Managing in an environment of increased regulatory oversight
  8. Understanding and responding to a changing risk profile
  9. Assessing capital and managing cash flow effectively
  10. Effectively using the data and information available in the organization to make timely and informed decisions


Doing Business in United Arab Emirate
  • Robust open economy.
  •   Security and stability.
  •   Tax-efficient business environment.
  •   Proximity to growth regions.
  •   Intellectual property protection.
  •  Solid infrastructure.
  •   Multi-national human resources.
  •   Efficient government services.


Using an agent/distributor
  • A local sponsor or service agent.
  • Trade license.
  • Register with the local Chamber of Commerce and Industry, the Economic Development Department, and with the Minister of Finance.
  • Annual renewal of the trade license.
  • Company can function only within the emirate where the license was granted.
  • Separate license must be obtained to open a branch in other emirates.
Joint Venture/Participation
  • A joint venture is a contractual agreement between a foreign party and a local party
  • Licensed to engage in the desired activity.
  • The local equity participation in the joint venture must be at least 51%, but the profit and loss distribution can be prescribed.
  • There is no need to license the joint venture or publish the agreement.
  • The foreign partner deals with third parties under the name of the local partner who - unless the agreement is publicized - bears all liability.
  • In practice, joint ventures are seen as offering a suitable structure for companies working together on specific projects.


Establishing an office

  • May only handle marketing and administrative functions on behalf of a foreign parent.
  • Not a separate legal entity from the foreign owner.
  • Must engage a UAE national agent to act as a service agent who will handle sponsorship and government paperwork.
  • May only employ up to three or four foreigners.

Selling to the government
  • Foreign businesses that do business with the federal government or the government of any Emirate must comply with public sector procurement rules
  • These rules provide that foreign entities must:
    • have a UAE national as a representative (either through registered commercial agent or a national agent for a branch or representative office)
    • Set up an entity that is majority owned by UAE Nationals; or
    • Work through a joint participation venture with a locally licensed entity.

Distribution & sales channels
  • To manage the complete distribution segment.   
  • Obtain and book orders from Distributors to meet the monthly   forecasts committed.    
  • Follow up of accessible panel builders to use totally Schneider LV products.  
  • Build up the list of small contractors involved in residential and domestics Projects and arrive at action to target this segment 
  • Organize regular technical training to Distributors' team to upgrade   their skills consistently.  
  • Organize regular technical training to accessible panel builder and    OEMs on Schneider products and tools and manage to convert them completely to Schneider.  
  • Set up and update the list of Projects residential and small building.  
  • Study and implement action plan to secure business thru retailers (souk market).
  • Study OEM channels and Industries and work out action plan to improve our share with them.  
  • Consistent updating of literature, catalogues and promotional tools for concerned customers (Distributors, Contractors, Panel builders).

Electronic commerce

E-government websites, free zone authorities as well as chambers of commerce and industry provide new entrants with helpful information and guidance. 


Right to private ownership & establishment
There are no restrictions on the right private entities to establish and own business enterprise and engage in all forms of remunerative activity.



Business customs
  •  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 before or during your meeting.
  •  Do not be impatient.
  •  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.
  •  The upfront, hard-hitting approach is generally not welcome.
  • Be aware that what may seem like evasiveness on the part of your host is usually an unwillingness to say no to your face.
  •  Nevertheless, once a deal is made, orally or otherwise, an Arab businessman’s word is his bond and you are also expected to perform accordingly, even if the agreement is a verbal one.
  •  This can be disconcerting if you come from a business environment where verbal agreements are not binding.


Local time, business hours, & holidays
  • The normal maximum working hours are eight hours per day or forty-eight hours per Week.
  • Many businesses work on a two-shift system (for example, 8am - 1pm and 4pm - 7pm).
  • As in all Muslim countries, Friday is the weekly day of rest.
  • In practice, commercial and professional firms work 40-45 hours a week and government ministries about 35.
  • The weekend for office workers was traditionally Thursday afternoon and Friday, but a number of organizations have changed over to a five-day week with Friday and Saturday as the weekend.
  • During the Muslim holy month of Ramadan, normal working hours are reduced by two hours per day.
Fact Facts
Population
2,369,153
Capital
Abu Dhabi   
Area
82,880 sq km
Ethnic Groups
Emiri 19%, other Arab and Iranian 23%, South Asian 50%, other expatriates (includes Westerners and East Asians) 8% (1982)
note: less than 20% are UAE citizens (1982)
Religions
Muslim 96% (Shi'a 16%), Christian, Hindu, and other 4%
Major Language
Arabic (official), Persian, English, Hindi, Urdu
Monetary Unit
1 Emirian dirham (Dh) = 100 fils 
Major Industries
petroleum, fishing, petrochemicals, construction materials, some boat building, handicrafts, pearling
Major Export
crude oil 45%, natural gas, reexports, dried fish, dates
Major Imports
machinery and transport equipment, chemicals, food
GDP
2.5% (1999 est.)
GDP per capita
purchasing power parity - $17,700 (1999 est.)






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Posted by stellargames at 11:07
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