UAE A Unique International

Business Destination

Chittagong University Center for Business Administration

Faculty of Business Administration University of Chittagong

Presented To

Presented By

Mr. Md. Mohiuddin ChowdhuryAssistant Professor,

Department of Finance, University of Chittagong.

Irfan Zahir 1304062

Mohammad Sayem Hossain 1406005

Mahfuj Hasan Chowdhury 1406020

Rezwanul Hasib 1406031

Abdul Ahad Mohammad Jaheen 1406012

Shuvarthi Paul 1406032

Tarim Islam 1406009

Presentation Objective

This presentation summarizes political, economical, legal and foreign policy environment for doing business in the United Arab Emirates. The first section presents the history and PESTLE analysis, the second part analyze the business culture and the third part analyze the foreign policy of UAE for doing business in UAE

Welcome To

Our Presentation

Content of Presentation

Introduction

History of the UAE

Demography of UAE

Business Etiquette around UAE

PESTLE Analysis

UAE Globalization Concerns

UAE Government: Foreign Policy

Major Challenges for UAE Businesses

UnitedArabEmirates

Introduction

Spread out over desert and coastland, the United Arab Emirates (UAE) is an oil-rich Middle East federation comprised of seven emirates (sheikdoms). It's located to the east of Saudi Arabia and to the south of Iran, separated by the Persian Gulf.

The UAE is a fascinating mix of old and new, where flashy shopping malls rise up alongside flavorful old-world souks (outdoor markets).

UAE

Dubai

Sharjah

Fujairah

Ra’s al-Khaimah

Umm al-Qaiwain

Ajman

Abu Dhabi

….Introduction

History of the UAE

Arrival of Islam

The Portuguese Era

• Islam arrived after the opening of

Mecca.

• Envoys from Prophet Mohammed

(PBUH) arrived in the UAE in

AD630

• The Portuguese the first Europeans to

arrive on the Arabian Peninsula.

• After Vasco de Gamma's successful

circumnavigation of the Cape of Good

Hope, the Portuguese arrived in the

Arabian Gulf in 1498.

The Al Badiyah Mosque, 5th century

European Powers in the Gulf

…..History of the UAE The British Era

Foundation of the UAE

• In 1720, The British got concerned about

their maritime passage to India.

• This led them to launch a series of attacks

against the Qawasims.

• By 1820, the British defeated the Qawasims.

• In 1968, the British decided to withdraw from the Arabian Gulf.

• H. H. Sheikh Zayed bin Sultan Al Nahyan, acted rapidly to establish closer ties with the emirates.

• Six emirates: Abu Dhabi, Dubai, Sharjah, Umm Al Quwain, Fujairah and Ajman agreed to become part of the federation that was to be called the United Arab Emirates.

• The UAE was formally established on 2 December

1971

The British in Gulf, Ras al-Khymah, c. 1820s.

UAE – FOUNDERS in 1971

Political– Federal Government

– Each Emirate has its own governmental

institution..

– Supreme Council consists of an elected

official from each Emirate

– the Judicial branch is much like those of

the west with a twist of Islamic culture

– Federal Government assumes control of

foreign affairs, national defense, aircraft

regulation, public health, education

PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

PRESIDENT: HH Sheikh Khalifa Bin Zayed Al Nahyan

Economic– Currency: Emirate dirham (Dh or AED)

– Exchange Rate: Dh3.67 per US dollar

– Oil exports: 2.2 million barrels of crude

oil/day,3rd largest exporter

– GDP per capita: 2015 GDP: $115.8 Billion,

30% GDP is Petroleum

– Total non- oil imports: 149 million (Dirham)

– Fiscal year: 1 January to 31 December.

– Free zone : strongest pillars of the country’s

diversification strategy

….PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

Economic

2008 2009 2011 2012 2013 2014 2015

-4

-2

0

2

4

6 UAE GDP Growth

Gross Domestic Product, constant price

% C

hang

e Ye

ar o

n Ye

ar

13%

15%

14%9%17%

32%

Sectors shared in UAE GDP Financial Project

Transportation

Real State

Construction

Manufacturing

Whole sale and Retail

….PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

Social– Emiratis are a tolerant, forward-looking

people with a strong sense of tradition.

– Official Religion: Islam; practice of all

religious beliefs is allowed.

….PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

– Male : Female = 2.2 : 1.

– Literacy rate: 93.83%

– Women are seen as equals and are

protected by rights and privileges laid

down by Islam.

Technological– Smart infrastructure being built based on the

latest and cutting edge technology

– Well connected through the most advanced

fiber optic network and high-speed wireless

internet, with speeds of up to 300mbps.

– Global innovation index to rank 35 in 2013

– Free zones specially designed for innovation

based companies, such as the dubai

innovation hub

….PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

Legal– Court proceedings in the UAE are time-

consuming.

– Secular courts to adjudicate criminal, civil

& commercial matters

– Islamic courts to review family and

religious disputes.

– Each of the seven emirates has its own

government with respective municipalities

and departments.

….PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

Environment

Tropical

Sandy / Desert

Coastal Areas

Arid

….PESTLE AnalysisPolitical – Economic – Social – Technological – Legal - Environment

Environment

Demography of UAE Official name Al-

Imarat Al-ʿArabiyyah Al-Muttaḥidah (United Arab

Emirates)

Diverse Population

11% local

Other Arabs 27%• Iranian make the

majority

Muslims 96%, 4% Christian/ Hindu

Business Language

Arabic, English,

Hindu/Urdu

100,000 British/Wes

tern Expatriates

Official Language

Arabic

Official Religion

Islam

Business Etiquette around UAE

Clothing Greetings

Dining Meeting and Negotiation

UAE Globalization Concerns

Laws are liberal compare to other Arabian countries

Central Location

Access to both Developed and Emerging market

Ease of hiring foreign labor

Political Stability

Intellectual property protection

Ranked top in the MENA region and 31st globally in the World Bank ranking of ease of doing business

….UAE Globalization Concerns

Nestle Dubai OfficeThe opening of P & G UAE

L’Oreal Office in Dubai Unilever Middle East HQ

UAE Government: Foreign Policy

Main principles of foreign policy include

negotiations, diplomacy and

compassion

The UAE currently entertains proactive diplomatic relations with more than 182

countries

Member of UN, World Bank, IMF, Arab

League, OPEC, OIC, OAPEC, WTO, GCC

Country’s total foreign aid donations in 2014 at over AED 18 billion

(US$4.89 billion), equivalent to 1.17 percent of gross national income

Major Challenges for UAE Businesses

• Prefer to do Business in Person

• Prefer to do Business with those who they know

• Customary greeting is “As-salam alikum” with reply “Wa alaikum as-salam

• Handshakes are the typical form of greeting

Communication Style

• Saturday – Wednesday (Traditional Working Week)

• Meetings should be scheduled advanced with extra time allocation

• Attitude to time is comparatively relaxed

….Major Challenges for UAE Businesses

Attitude To Time

• Strong vertical Hierarchy. Greet most senior person first

• Age Money & Family – Determining factors of Personal Status

• Status is important & must be recognized

Titles : Shaikh – Chief, Ustadh – Professor

….Major Challenges for UAE BusinessesStructure & Hierarchy Of Companies

THE ENDThanks For Your

Attention