How to export to... the Middle East
Doing business with countries in the Middle East is a prospect attracting more and more UK businesses. While some areas of the region are undergoing turbulence and there is an export ban on Iran, Gulf countries such as Saudi Arabia, the UAE and Oman are global players that offer amazing opportunities for UK businesses.
In a nutshell
Let’s look at Saudi Arabia, for example. The Saudi economy is growing increasingly diverse, there’s heavy government investment in areas such as transport, infrastructure, healthcare and energy, and English is commonly used for business transactions – all things that make trading there comparatively straightforward.
In the UAE, the UK’s largest export market in the region, there is no taxation on personal income, and its largest city Dubai has a huge expat population, as well as a booming demand for luxury goods. 4,000 British companies already operate in the UAE and there has been massive ecommerce growth in particular, making it a particularly beneficial market for startups selling online.
“The Middle East accounts for a significant portion of the global economy, spanning over 20 economies depending how you define it. From a travel-industry perspective it is one of the larger contributors of inbound and outbound tourism in the region and globally,” advises Louis Skoutellas, founder of Tripmule, a company that helps people create their perfect holiday. Here are his tips on how you can get started exporting to the Middle East.
Understand your market
“To get started with the Middle East you need to first acknowledge that it is comprised of many different markets, cultures, and traditions. There is no “one-fits-all” product or service you can come up with for the Middle East, because it is so wide and diverse,” says Louis.
There are so many economies and countries within the Middle East that it’s even more vital to do solid research and figure out which countries you should choose to export to. Resources such as UKTI can give you valuable information. Consider things such as relationships with other countries in the region, demographics, language – and, of course, laws.
“Clients in the Middle East are not always “transactional” – i.e. offer ABC for £XYZ and that’s it!” advises Louis. “Establishing and maintaining a relationship is a key part of the business process and you will find that maintaining a “friendly” relationship with potential clients and partners will go a long way.”
Bear this in mind when trading – rather than a one off, think of it as the start of a long-term business relationship, investing time and energy into this. It will pay off! Doing business within one country in the Middle East can give you a foot in the door to others, as it will give you a track record – which brings us to…
“Don’t focus on short-term wins and transactions at the expense of long-term relationships,” says Louis. “Clients in the Middle East may want to see you “prove yourself” as an entrepreneur and a business. Sacrificing some of your short-term profits to prove you have what it takes in the long-term could work in your favour to get your business established in the market.”
Research culture & tradition:
“Saudi Arabia is the largest economy in the Middle East, but that doesn’t mean there is a big enough market for everything,” warns Louis. “Be weary of local cultures and tradition – for example, if you are looking to export alcohol, this might not be a particular market to do so. Understand that each market has different criteria for business operations, for example if you are looking to set-up a subsidiary or “satellite office” you may need to get a local partner by law.”
When it comes to how business is done, it’s important to remember that the working week is Sunday to Thursday. And while you might not think twice about sending an email, emails and phone calls can be seen as impersonal – face to face meetings are preferred. Ensuring you’re fully aware of things such as this can make the difference between a glowing impression and an irreversible faux-pas.
- While English is recognised as the language of business, documents and communications will also be done through Arabic, so picking up some of the basics is advised
- In the Gulf countries, if you’re not a national there are restrictions on company ownership - make sure you do your research beforehand
- Competition is fierce from European, American and Asian countries, all of which want to trade with the region
- In the UAE in particular, each Emirate has regulatory powers – so there can be federal laws, individual laws and ‘free zone laws’ interacting. Confusing!