Market Entry Strategy

Generalizes on the best strategy to enter the market, e.g., visiting the country; importance of relationships to finding a good partner; use of agents.

Last published date: 2022-01-08

Distributors and Agents: In some sectors, foreign firms seeking to establish themselves within the UAE market must still have a local sponsor or agent and may be limited to a minority ownership position. Finding the right local agent or distributor can be a critical first step for success.

Free Trade Zones (FTZs): Free Trade Zones allow 100% foreign ownership, quick registration, advanced logistical support, and are often organized along sectoral lines. For example, the Dubai Multicommodities Centre (DMCC) caters to firms in the financial services sector.

Foreign companies operating ‘onshore’ in an Emirate of the UAE through a branch office will, in principle, not be required to appoint a UAE national service agent. While further detail is to be confirmed, the developments present an interesting opportunity for cost-saving for foreign companies which currently operate through a branch office ‘onshore’ in the UAE. In July 2019, the UAE Cabinet approved outright foreign ownership across 13 additional economic sectors including information technology, manufacturing, renewable energy, space, and agriculture.

Competitive Positioning: As a regional trade hub supporting significant international business activity, the UAE is a market where American firms can expect to face strong multinational competition. Successful American companies often rely on technological and qualitative advantages, customer service, and after-sales service to compete with the foreign competition that may have lower price points. 

Regional Approach: Many American firms looking to do business in the Middle East often find practical advantages in a regional approach to their marketing activities in the Gulf. The members of the Gulf Cooperation Council (GGC - UAE, Kuwait, Qatar, Oman, Saudi Arabia, and Bahrain) have taken steps to harmonize standards and regulatory measures. The region is also one of the largest and fastest-growing export markets for American goods and services. In January 2015, the GCC customs union came into full effect, charging a 5% tariff on most goods across the member countries. However, the effects of the Qatar dispute with the UAE, Saudi Arabia, and Bahrain may make a regional approach more challenging.

Trade Shows: The UAE is a regional commercial hub and hosts world-class trade exhibitions and conferences where American firms can meet buyers from the Middle East, Africa, South Asia, and around the world. The U.S. Commercial Service offices in Abu Dhabi and Dubai support a wide range of trade exhibitions and promotion events designed to help American firms seeking to enter and expand in the UAE and regional markets.