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: 2019-10-13
- Distributors/Agents: In most sectors, foreign firms seeking to establish themselves within the UAE market must have a local sponsor or agent and are limited to a minority ownership position. Finding the right local agent/distributor can be a critical first step for success.
- Free Trade Zones (FTZs): Companies may wish to establish a foothold in one of the dozens of Free Trade Zones in the UAE, which allow 100 percent foreign ownership, quick registration, good logistical support and are often organized along sectoral lines. For example, Dubai Media City caters to media companies. However, with few exceptions, companies in FTZs must have 51 percent UAE owned distributors “onshore,” or outside the FTZs, in order to sell into the local UAE market. Companies planning to use the UAE to sell regionally and not in the UAE can forgo this step. In July 2019, the UAE Cabinet approved outright foreign ownership across 13 additional economic sectors including space, agriculture, manufacturing, ICT, and renewable energy – representing additional opportunities for U.S. industry.
- Competitive Positioning: As a regional trade hub supporting intense international business activity, the UAE is a market where American firms can expect to face strong, multi-national competition. Many successful American firms rely on technological and qualitative advantages to compete with often less expensive foreign competition.
- Regional Approach: Until the partial blockade against Qatar was imposed in June 2017, Americans firms looking to do business in the Middle East often found that a regional approach to their marketing activities in the Gulf offered certain practical advantages. The members of the Gulf Cooperation Council (GGC), which consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, have taken steps to unify industrial standards and other measures to harmonize regulatory structures. The region is also one of the largest and fastest growing export markets for American goods and services. In January2015, the GCC customs union came into full effect, charging a 5 percent tariff on most goods across the member countries. However, the effects of partial blockade imposed on Qatar by the UAE, Saudi Arabia, and Bahrain will make a regional approach more challenging.
- Trade Shows: The UAE, as a regional commercial hub, hosts world-class trade exhibitions and conferences, where American firms can meet buyers from the Middle East, Africa and South and East Asia. The U.S. Commercial Service offices in Abu Dhabi and Dubai support a wide range of trade exhibitions and promotion events designed to aid American firms seeking to enter the UAE and regional markets. Details on many of these activities are available at: www.export.gov/uae.