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Doing business in United Arab Emirates

by: Alan Walsh

 

The Three most important things for doing business in the United Arab Emirates

 

  1. Good manners and courtesy are prized attributes. Always arrive on time for a meeting, however, know that punctuality is not considered a virtue in the Arab world, and people are often kept waiting before, or during, a meeting. Do not be concerned if your meeting is interrupted by other guests or telephone conversations. Be patient, and do not take it as a lack of respect. Take the time to chat and drink the coffee, tea or soft drink and use it as an opportunity to establish relationships.
  2. The upfront, hard-hitting approach is generally not welcome, so once again, be patient. Be aware that what may seem like evasiveness on the part of your host is usually an unwillingness to say no to your face.
  3. Nevertheless, once a deal is made, orally or otherwise, an Arab businessperson’s word is his or her bond and you are also expected to perform accordingly, even if the agreement is a verbal one only.

 

 

What to look for in a good partner

 

It is crucial s important to target the right person in your contacts, the decision-maker. The United Arab Emirates thrives on social, political and family contacts as a means of opening doors for business. It is advisable that you have another third-party contact (or the Embassy) on the ground that can check the credentials of your potential partner first.
For most businesses that wish to trade locally within the UAE, a key requirement is that they must be at least 51% owned by a UAE national There are a few exceptions (Free Zones or license agreements) however this is the norm. It is important to note that profits are not shared along these percentage line.
As the local partner is often the first point of contact it is essential to ensure that they have the ability and willingness to be your contact on the ground or help you find a good one.

 

Conducting Meetings in the United Arab Emirates

 

Personal relationships are key to doing business in the United Arab Emirates. Face-to-face business dialogue is expected out of both curtesy and acknowledgement of the relationship formed between the partners. Such meetings are preferred as phone or emails are sometimes seen as impersonal. It is appropriate to allow the host to speak first and respond to his questions when invited to do so.
Meetings are often seen as closure of issues, and often a significant amount of work is undertaken, behind the scenes to ensure that the meeting objectives are formal closure of issues. Whilst punctuality is expected, appointments should be made no more than two weeks in advance and confirmed a few days before the actual meeting as priorities may change. Be well-prepared, anticipate needs and share all relevant information, in advance in case of upcoming meetings.
The working week within the private sector is Sunday-Thursday from 9am-5pm and within the public-sector Saturday-Wednesday from 8am-2.30pm (some offices are open until 4pm).

 

Communication

 

Most Arabs are fluent in both Arabic and English, however sometimes humour gets lost in translation and can result in a perceived insult. It is particularly important that when laughing at a situation, that the correct context of the joke is understood by all. 
As a high context culture Arabs are very astute and are aware of facial expressions and nonverbal communication. Communication should preferably be conducted in soft low tones as showing anger or frustration will disrupt the harmony and harm relationships with your business counterparts. Speaking your mind in public is also seen as disrespectful and thus the right protocol should be followed when communicating. This mainly includes being respectful, implicit and allowing silences between discussions to show that you have thought about what you are saying and giving time to respond without rushing them or interrupting their thinking. It is rare that important decisions are made without due consideration. Accordingly, it is polite to discuss major issues prior to formal communications.

 

Dining Etiquette

 

Dining in the United Arab Emirates is often more formal that in many parts of the world, particularly in business situations. The modern venues are often at 5-star (plus) hotels. It is common for buffet style platters to be presented. During these situations it is polite to be guided by the host and leave the table with him for each course. On some occasions in less formal establishments you may find yourself seated on the floor and having a communal meal. During such situations it is the norm to follow your host, who will normally offer his guests a communal platter. 
It is expected to arrive on time and don't ever order alcoholic beverages since most Muslims don't drink. It is advisable to order fresh juice/water from the outset and then take lead from your host. Take care with your cup when drinking Arabic coffee. It is customary to shake the cup from side to side to tell the host you do not want anymore, otherwise you will keep getting served.

 

 

A small case study from Living in the United Arab Emirates 

 

“Mr. Peter” was a vice – president of operations for a major Project Management Supervision Project operating in the United Arab Emirates. During a 20-member Design Team meeting, during which he was apparently frustrated by what he perceived as “lethargic” actions by one of the Arab project manager attendees, Peter loudly confronts him by announces that “nothing ever gets done around here”. The Arab manager replied by suggesting that he relaxes and that this will be done “inshallah”.

 

Inshallah is an Arabic expression which means “God Willing”. Sometimes this expression is interpreted as “it will be done whenever it is done….” Mr. Peter became infuriated with this attitude and slapped the table loudly proclaiming “ THIS IS  NOT HOW THINGS SHOULD BE DONE INSHALLAH.”

 

The very next day the Employer issued a letter terminating Mr. Peters services. During a follow-up meeting with the same Arab manager, several days later, he advised that he was left with no option but to remove Mr. Peter for his public outburst, his raised voice, and his disrespect for religion through his misuse of the term Inshallah. He also advised that he regretted the necessity for the removal, however such a public event could not go remanded. The Arab manager also commented that the situation would have been easily resolved in private, had he shown sufficient respect.