The United Arab Emirates is made up of seven different emirates. These are Abu Dhabi, Dubai, Sharjah,Ras al-Khaimah, Ajman, Umm al-Quwain and Fujairah. Dubai and Abu Dhabi have about six million of the 9.5 million population in those areas. These are popular areas for business and trade.
The UAE has become a financial powerhouse with a favorable tax system and liberal trade regimes. UAE is also an attractive investment hub and they have a ‘2021 vision.’ The UAE Vision 2021 was launched by H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The Vision aims to make the UAE among the best countries in the world by the Golden Jubilee of the Union. Their goals help to facilitate a well-regulated and secure business ecosystem ideal also for foreign investors and businesses to trade there.
These tips and considerations are based on transacting in the UAE, if you’re a non-UAE business.
Let’s firstly look at some stats:
- Smartphone penetration – Just over73%
- Internet penetration – Just over 93%
How do people pay for goods and services in the UAE?
- 59% Credit cards
- 27% Mobiles
- 7% E-wallets
- 6% Prepaid cards
- 1% Bank transfer
The use of e-wallets is on the rise and the majority transact with credit cards using mobile devices to make payments. Ensure that you accept these payment methods so that you don’t lose potential customers
1. Due diligence, research and partnerships: Some of the practices and regulations in the UAE relating to business and trade may be different to what you are used to, so do your due diligence on all of this. There is an Authorised Economic Operator in the UAE. The UAE Authorised Economic Operator (AEO) program also provides an opportunity for businesses engaged in international trade activities to partner with Dubai Customs through a mutually trusted relationship. The AEO program can be valuable for businesses engaged in international trade activities in the UAE. They may also be able to give you valuable advice.
2. Understand the risks: Understand the risks and opportunities around foreign exchange and changes to currency such as currency fluctuations. This could affect your business. Also, understand if there are any buyer risks, and know what they are. This could mean checking if a potential business client is in insolvency, before transacting with them
3. Legal agreements & payment terms: Make sure that you have a legal agreement in place relating to your payment terms, specifically relating to non-payment of goods for example.
4. Insurance: Look into insurance options for doing business in the UAE.
5. Payment methods: Fast payments are crucial in the UAE. Ensure you have a secure payment option to accept payments in the UAE. As many people in the UAE use mobiles to pay for goods you need to make sure you offer a simple and secure mobile payment option. You may need to partner with a provider for this. You should also make sure you have a good payment gateway in place, which is a merchant service that authorises payments. Payfuture can help with your payment solution needs. You also need to have efficient credit control procedures when selling overseas.
Payfuture, the local Payments connector opens a world of opportunities for global expansion including in the UAE. Contact us to find out how we can help you make expanding your business to the UAE a success.