Local Time in UAE: Print

The United Arab Emirates (U.A.E.) represents a major market for U.S. exports and serves as an important regional hub for American companies conducting business throughout the Middle East, Africa and South Asia. The U.A.E. is the largest market for American product exports in the Middle East; in 2014, U.S. exports to the U.A.E. totaled $22.1 billion, a 10% decrease from 2013. U.A.E. exports to the United States grew by 22% in 2014 to $2.8 billion. Overall U.S. - U.A.E. bilateral trade was $24.9 billion in 2014.

Leading export sectors for American firms include commercial aircraft, power generating equipment, defense equipment, computers and electronic equipment, and transportation and infrastructure related goods and services. Demand for imported goods is currently being fueled by a number of factors including a rapidly expanding U.A.E. civil aviation sector, implementation of major infrastructure and transportation projects, and oil and gas industry modernization and expansion.

Oil and gas production remains critical to the U.A.E. economy, contributing about one-third of GDP and generating $126.3 billion in export revenues in 2013.  The industry is set for expansion as the U.A.E. seeks to increase daily production from approximately 2.7 million to 3.5 million barrels a day by 2017.  Major downstream projects are also planned including petrochemicals and plastics. American firms are major players in new onshore and offshore projects currently being implemented including the $10 billion Shah Gas Field project and modernization of production at the Upper Zakum offshore field where daily production of 750,000 barrels of oil is targeted.  U.S. firms are also vying for a major petroleum concession that expires after 75 years and is set to be renewed in 2015.   

Despite the continued importance of the petroleum sector, the U.A.E. is aggressively seeking to diversify its economy and develop new industrial and commercial sectors. The U.A.E. has already become a major international producer of aluminum and has begun ventures in the aviation and defense sectors.

Despite a modest population of just under 9 million, with expatriates comprising about 85% of this total, the U.A.E. is a leading commercial center serving the Middle East, Africa, and South Asia. Reflecting the country’s role as a major regional commercial center, a significant portion of the U.A.E.’s import volume is ultimately re-exported. Dubai in particular plays a central role as a regional trade facilitation, logistics and tourism hub.

Dubai has emerged successfully from the 2007-2008 financial crises, and is reaching pre-crises levels with regard to real estate prices, which have steadily increased in the past three years. Dubai has also enjoyed another strong year of growth in the trade and tourism sectors, and has benefitted from some of the recent tumult in the region, as tourists shy away from other traditional, regional destinations. High hotel occupancy rates have spurred development of new hotel projects, including several high-end luxury resort, shopping centers, and amusement parks. Likewise, the Emirate of Abu Dhabi has significantly expanded its hotel and tourism offerings.

Market Challenges

In most sectors, foreign firms seeking to establish themselves within the U.A.E. market must have a local sponsor or agent and are limited to a minority ownership position. While the U.A.E. has established itself as a major international commercial hub, firms doing business there can confront a number of challenges. The U.A.E. improved its position on the World Bank’s 2015 Ease of Doing Business ranking, moving up one spot from 23rd to 22nd place, and is among the world leaders in some elements of the ranking: taxes (1); trading across borders (8); electricity (4); registering property (4); and dealing with construction permits (5). However, there are some areas of the ranking where the U.A.E. continues to lag. These include protecting investors (92); enforcing contracts (100); and resolving insolvency (101). These lower rankings reflective of common problems foreign firms can confront, including long delays in receiving payment for completed work, efforts by some U.A.E. entities to modify scopes of work or otherwise alter contracts after signing, and difficulties in terminating commercial agent agreements even in cases of nonperformance by the local agent. In certain sectors these issues can result in significant cost burdens and absorb valuable management time and resources. Dispute resolution mechanisms vary in effectiveness among the seven emirates and can be cumbersome.

Market Opportunities

Despite its modest population, the U.A.E. offers a sophisticated, diverse market for U.S. firms in many industries. Dubai’s position as a regional commercial hub supports world-class trade exhibitions and conferences, presenting venues for American firms to reach buyers from throughout the Middle East, Africa and South and East Asia.

Market Entry Strategy

Because foreign firms seeking to sell products and services in the U.A.E. market must have a local agent/distributor, selecting a local partner can be a critical first step for operating in the U.A.E.. As a regional trade hub supporting intense international business activity, the U.A.E. 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. The U.S. Commercial Service offices at the U.S. Embassy in Abu Dhabi and the U.S. Consulate in Dubai support a wide range of trade exhibitions and promotion events designed to aid American firms seeking to enter the U.A.E. and regional markets. Details on many of these activities are available on the following website: http://2016.export.gov/unitedarabemirates/

Americans firms looking to do business in the Middle East may find that a regional approach to their marketing activities in the Gulf will offer certain practical advantages. The members of the Gulf Cooperation Council (the GGC), which is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, have taken steps to unify some 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 both 2013 and 2014 American exports to the Gulf totaled roughly $53 billion annually. On January 1, 2015, the GCC customs union came into full effect, charging a 5% tariff on most goods across the member countries.

With a population approaching 30 million, Saudi Arabia is the Gulf’s largest consumer market. The country is investing hundreds of billions of dollars to expand infrastructure, diversify its industry and improve social services delivery through major healthcare and housing construction programs. Similar to Saudi Arabia, the U.A.E. is a major petroleum producer seeking to diversify its economy, with recent initiatives to expand development of industrial production, healthcare, aviation and tourism. Dubai in particular has become a regional hub for trade exhibitions and offers an excellent entry point for many firms seeking to expand into the wider Gulf region. Qatar, the world’s largest producer of natural gas and possessing the highest per capita income in the world, is seeing an infrastructure and transportation boom as it prepares to host the 2022 Soccer World Cup. As with others in the region, Kuwait is also focusing major investments in housing, infrastructure and transportation projects. Though more modest in size, both Bahrain and Oman have signed Free Trade Agreements with the United States that facilitate market access for American goods, services and investment. Like many of its neighbors, Oman is investing in social services and infrastructure as a means to diversify its economy and create employment opportunities for Omanis.

Our Country Commercial Guide (CCG) presents a comprehensive look at UAE’s commercial environment, using economic, political and market analysis. CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. CCGs are prepared annually at U.S. embassies through the combined efforts of several U.S. government agencies.

  Notice to Visitors!

  The link you have chosen will take you to a non-U.S. Government website.

  If the page does not appear in 5 seconds, please click this: outside web site

  Export.gov is managed by the International Trade Administration and external links are covered by its website  disclaimer statement.

  Notice to Visitors!

  The link you have chosen will take you to a non-U.S. Government website.

  If the page does not appear in 5 seconds, please click this: outside web site

  BuyUSA.gov is managed by the International Trade Administration and external links are covered by its website disclaimer statement.