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.
Distributors and Agents: In most sectors, foreign firms seeking to establish themselves within the UAE market must still have a local sponsor or agent and are 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. However, with few exceptions, companies in FTZs still must have 51% UAE-owned distributors “onshore” (outside the FTZ structure) 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 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 firms often rely on technological and qualitative advantages to compete with 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. Details on many of these activities are available at the export.gov website. Note that most trade shows have been canceled for 2020 due to the pandemic.