Exporter guide

UNITED ARAB EMIRATES (UAE)

Country brief April 2011

This document is one of a series of free information tools for exporters produced by New Zealand Trade and Enterprise. New Zealand Trade and Enterprise provides a wide range of standard services and sophisticated solutions that assist businesses through every stage of the export process. For information or advice, phone New Zealand Trade and Enterprise on 0800 555 888, visit www.nzte.govt.nz, or contact your New Zealand Trade and Enterprise client manager.

CONTENTS
KEY INDICATORS OVERVIEW POLITICAL IMPORTS AND EXPORTS SECTOR OPPORTUNITIES REGULATORY ISSUES VISA REQUIREMENTS TAXATION FREIGHT DOING BUSINESS WITH THE UAE HOLIDAYS USEFUL WEBSITES CONTACTS 3 3 6 7 8 11 13 14 14 15 17 18 19

2/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

KEY INDICATORS
ECONOMIC INDICATOR Population GDP (official exchange rate) GDP Growth Rate GDP Per Capita (PPP) Inflation (consumer prices) Total Imports Total Exports Currency Exchange Rate UNITED ARAB EMIRATES 4.9 million (2010 est.) US$ 291 billion (2010 est.) 1.5% (2010 est.) US$ 36,973 (2010 est.) 2.0% (2010 est.) US$135 billion (2010 est.) US$182 billion (2010 est.) United Arab Emirates dirham (AED), officially pegged to the US dollar since 1997. 1 USD = 3.67 AED (fixed rate) 1 NZD = 2.80 AED (as at March 2011) (for updates, please check www.xe.com )

Source: World Bank, IMF, UAE Central Bank, ITC based on Comtrade calculations

OVERVIEW
The United Arab Emirates and New Zealand The United Arab Emirates (UAE) is New Zealands second largest trading partner in the Middle East and the most diversified market. New Zealands exports to the UAE have grown significantly over the past decade, reaching NZ$416 million in 2010. This represents an 8 percent increase from 2009, with increases coming in exports of dairy, meat, beverages, electrical equipment and marine products. Alongside the significant traditional dairy and meat trade, New Zealand is today exporting a wide range of manufactured goods and technology solutions, value added food and beverage products, and professional services. The UAE is also an important source for imports into New Zealand, falling just outside New Zealands top ten source countries in 2010. The UAE represents the primary entry point into the Middle East region for New Zealand, both in terms of people and goods. While the UAE represents an important market for certain sectors in its own right, a significant portion of the countrys trade volumes are subsequently re-exported. Excellent trade and logistics infrastructure support the hub function of the UAE, and particularly the Emirate of Dubai. Around 40 New Zealand companies have a physical presence in the UAE and many others work with local partners. The addition of New Zealand to the network of Emirates Airline, based out of Dubai, in 2003, played an important role in raising the profile of Dubai and opening the Middle East market to New Zealand. Emirates now fly 28 times per week to New Zealand, while in Air

3/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

New Zealand is code-sharing with Etihad Airways, the UAEs national carrier operating out of Abu Dhabi. Good air links attract visitors in both directions, with UAE nationals having long enjoyed visa free entry to New Zealand. New Zealanders are regular visitors to the UAE, whether for business or leisure, and there are an estimated 4,000 New Zealanders formally resident in the UAE. Expatriates, which make up 80 percent of the UAEs population, are attracted by a stable economy, good job opportunities, a generally attractive lifestyle and the absence of personal tax. New Zealands Fonterra uses the UAE as a base for its regional business, Pultron Composites recently set up a composite rebar manufacturing plant in Jebel Ali, and Burgerfuel has established outlets with a strong New Zealand theme. New Zealand companies are supplying professional services in areas of public sector reform, education and architecture, and a major New Zealand law firm opened an office in Abu Dhabi in 2010. A group of New Zealand companies is also co-located in the New Zealand Technology Oasis at Dubai Internet City, adding to the diversity of New Zealands footprint in the UAE. New Zealands relationship with the UAE was strengthened by the opening of an Embassy in Abu Dhabi in early 2011, adding to New Zealands presence of the Consulate General in Dubai, which is operated by New Zealand Trade and Enterprise. Immigration New Zealands regional branch office is also in Dubai and is located within the Consulate General. Economy The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP based on oil and gas output to 29 percent, down from 74 percent in 1980i. In recent decades, the UAE has undergone a profound transformation from a group of desert principalities focused on fishing and pearling, to a dynamic modern state with a high standard of living. The government has focused spending on job creation and infrastructure expansion. The country's Free Trade Zones, offering 100 percent foreign ownership and zero taxes, have helped to attract foreign companies. The oil and gas sector provides the mainstay of the economy and the funds to drive diversification efforts. The UAE has the worlds seventh largest proven reserves of crude oil and natural gas and these reserves are expected to last more than 100 years at current production rates. Abu Dhabi accounts for more than half the countrys GDP and over 90 percent of oil and gas production. The UAEs main industrial activities, apart from the oil and gas sector, are in construction, aluminum, chemicals and plastics, metals and heavy equipment, commercial ship repair, clothing and textiles, and food processing. Other key sectors, particularly in Dubai and increasingly in Abu Dhabi, are technology, education, tourism and financial services. The global financial crisis, tight international credit, volatile oil prices, and deflated asset prices caused GDP to drop in 2009 before recovering modestly in 2010. UAE authorities managed to blunt the crisis by increasing spending and boosting liquidity in the banking sector. The crisis hit Dubai hardest, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concern

4/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

about its solvency. Restructuring of obligations and support from Abu Dhabi have helped Dubai through this period. The successful conclusion of the Dubai World restructuring, the reopening of capitalmarket access for Dubai-based entities and the upward trend in oil prices have all contributed to the improvement in the UAE's economic indicators. Recent IMF estimates anticipate 2011 growth of 3.2 percent. The main engines of Dubai's recovery will be trade and logistics, finance, and tourism, which are all displaying positive trends. The property sector will continue to be a drag and the rebalancing between supply and demand is expected to take at least two years, and likely longer. Dependence on oil and a large expatriate workforce remain significant long-term challenges. Abu Dhabi's strategic plan for the next few years focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment. The UAE is heavily reliant on expatriate labour (over 80 percent of UAE residents), which has led to "Emiratisation" employment policies to give preference to nationals. Bearing out the resilience of the Abu Dhabi market, in early 2010 the UAEs largest ever non-defense contract for the first nuclear power plant (US$20 billion) was awarded, and more than US$8 billion worth of oil and gas contracts were announced. The UAE has been ranked sixth in the world for the quality of its infrastructure according to the World Economic Forum (WEF). The country has advanced infrastructure in public premises, roads, ports, aviation and electricity. Investment and Foreign Trade Foreign investors do not receive the same treatment as national companies. Complete foreign ownership is restricted under the countrys laws. At least 51 percent of a business must be owned by a UAE national, and projects must be managed by a UAE national or have a board of directors with a majority of UAE nationals. Distribution of goods must also be conducted through a UAE national. Meanwhile, free trade zones are established in multiple locations, enabling companies to operate within more liberal trade laws and allow new markets to take hold. UAE free trade zones are home to around 10,000 companies. The Jebel Ali Free Zone was the first such zone in the country and provided the benchmark for regulations and incentives. Its rapid growth has also provided a powerful economic inspiration to the other Emirates, which set up their own Zones to attract investment. More than 6,400 companies, including over 120 of the Fortune Global 500 enterprises, operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100 percent duty exemptionii. A major power plant with associated water desalination units, an aluminum smelter, and a steel fabrication unit are prominent facilities near the complex.

5/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

POLITICAL
United Arab Emirates is a loose federation of seven emirates (Abu Dhabi, Dubai, Sharjah, Ras al-Khaimah, Ajman, Umm al-Quwain, and Fujairah), each with its own ruler. Since the UAE is governed by hereditary rule, there is ultimately little distinction between ruling families and the government, with the key leadership roles shared between the Al-Nahyan family of Abu Dhabi and the Al-Maktoum family of Dubai. His Highness (HH) Sheikh Khalifa bin Zayed Al-Nahyan is the President of the UAE. He succeeded his father, HH Sheikh Zayed bin Sultan Al-Nahyan, who was the ruler of Abu Dhabi from 1966 to 2004 and the chief of state from independence in 1971 up to his passing in November 2004. The Vice President and Prime Minister is HH Sheikh Mohammed bin Rashid Al-Maktoum, the ruler of Dubai. Abu Dhabi is by far the largest emirate and controls over 90 percent of all oil and gas reserves in the UAEi. Dubai has a long tradition as a trading hub for the region and, as such, has retained a large degree of autonomy within the federation. In the current economic climate, Dubais reliance on support from Abu Dhabi will result in a shift of power away from Dubai and back towards Abu Dhabi. The remaining five emirates are less influential, accounting for around 12 percent of the UAEs GDP. All emirates nonetheless retain some autonomy under the provisional constitution of 1971, including control over mineral rights (notably oil and gas) and revenues. The United Arab Emirates has no political parties, with the rulers holding power on the basis of their dynastic position and their legitimacy through a process of tribal consensus. The seven Emirs (rulers of the emirates) collectively form the Supreme Council, which appoints the Council of Ministers and half of the 40 seat advisory Federal National Council (FNC). The UAE held its first ever limited elections in December 2006 to elect the remaining members of the FNC. While voting was limited to less than 7,000 male voters selected by the government, this was seen as a significant step towards greater transparency and democratisation. On the international stage, the UAE maintains positive relationships with the US and Europe, which are key partners for trade, investment and tourism. Within the region, the UAE works hard to maintain cordial relationships with its immediate neighbours, with Saudi Arabia and Iran standing out as key trading partners and influencers of the Gulfs political landscape. Balancing these interests is not easy, with increased pressure mounting on the UAE (and particularly Dubai) to reduce its substantial trade with Iran. While relations with its neighbours are generally positive, a longstanding territorial dispute remains with Iran over three Iranian controlled Islands in the Gulf. The UAE became a member of the United Nations and the Arab League in 1971. It is a member of the International Monetary Fund (IMF), the Organization of Petroleum Exporting Countries (OPEC), the World Trade Organization (WTO), and other international and Aran Organisations, including the Arab Gulf Cooperation Council (GCC), whose other members are Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.

6/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

IMPORTS AND EXPORTS

NEW ZEALANDS TOP TEN EXPORTS TO THE UAE 2010 Dairy products Meat (sheep and beef) Machinery Wood Apples Electrical machinery Vehicles, including parts Beverages Jewellery Fish and seafood Total exports
Source: Statistics New Zealand (via World Trade Atlas)

NZ$ million 271.94 33.06 26.55 15.62 10.84 7.12 6.83 4.67 4.46 3.34 415.62

NEW ZEALANDS TOP TEN IMPORTS FROM THE UAE 2010 Mineral fuel, oil Glass and glassware Plastic Manmade filament, fabric Machinery Carpets Beverages Iron and steel Perfumery, cosmetics Ceramic products Total imports
Source: Statistics New Zealand (via World Trade Atlas)

NZ$ million 792.99 53.28 17.47 6.98 3.91 1.42 0.94 0.61 0.55 0.54 884.76

Key Trends Bilateral trade between New Zealand and the UAE grew by 57 percent between 2009 and 2010, to NZ$1,209 million. Export growth came primarily from an increase in dairy exports, while imports were dominated by increased sourcing of oil from the UAE. New Zealands exports to the UAE in 2010 totaled NZ$415.62 million. Dairy accounted for 65 percent of that total, with meat (beef and lamb), machinery and wood all making

7/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

significant contributions. Agricultural exports generally showed positive growth, although exports of wood went against the trend by declining by 46 percent from the previous year. New Zealands imports from the UAE totaled NZ$884.76 million in 2010, dominated by oil, glass, plastic man-made filaments and fabric. Imports of oil more than doubled compared with 2009. The UAEs trade balance is traditionally in strong surplus, and that remains the case driven by improved global economic conditions and rising returns from oil exports. In 2009, the main export partners were Japan, which represented 17.3 percent of total exports, South Korea 10.5 percent, India 10.0 percent, Iran 6.8 percent, and Thailand 5.1 percent. Main import partners in 2009 were China, with 15.0 percent of total imports, India 14.3 percent, US 8.4 percent, Germany 5.8 percent, and Japan 4.5 percent. Bilateral ties between the UAE and China have high potential for growth, with predications made at the Abu Dhabi and China Economic Forum in May 2010 that bilateral trade between the two countries could exceed US$100 billion by 2015. The UAE, and particularly Dubai, is a centre for re-exports to countries such as India, Iran and Iraq. Dubai's total re-exports rose by almost 20 percent in the first half of 2010, but this is mainly attributable to the sharp increase in gold prices, which pushed up the value of sales to India. In 2009, re-exports represented 40 percent of total exports from Dubai, based on EIU figures.

SECTOR OPPORTUNITIES
The UAE has significantly grown all sectors of its economy over the past decade and is a substantial net importer of most products and services. Fuelled by petrochemical revenues of its own, but combined with similar equity flowing in from around the region, the country made substantial investments in its infrastructure in an attempt to future-proof its economy for when the oil reserves go into decline. The scale, pace and diversity of developments attracted global attention and, as such, the market is very competitive. That said, the principles by which New Zealand companies compete internationally solutions based, quality product at the right (not necessarily cheapest) price, with service will serve them well in the UAE. Construction products Construction activity in the Middle East has centered on the UAE over the past decade. Construction is most visible in Dubai and Abu Dhabi, with projects focusing on cluster style developments. Dubai has led the boom in tourism infrastructure, developing attractions and supporting accommodation to pull in global and regional visitors. Abu Dhabi is now following suit, although the pace of development has slowed sharply in all Emirates as a result of the global financial crisis. The effect of the global economic slowdown on Dubais property sector has been significant and widely reported. Since then, many building projects have been cancelled or put on hold, with few new projects being announced. In response, companies are changing their focus from private to public sector developments and forming new alliances in a bid to win work in an increasingly competitive environment. There has been a shift

8/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

away from residential and commercial construction towards large infrastructure projects. Transport projects are taking centre stage and Abu Dhabi is building and rejuvenating a series of large ports. Companies are also becoming more regional in their outlook, using the UAE as a base from which to target construction related business in other relatively healthy regional markets, such as Qatar or Saudi Arabia. The building and construction sector remains the third largest sector of the economy after oil and trade, constituting US$23 billion or about six percent of GDP, even in the current post-financial crisis climate. In addition, the UAE is still the largest construction market in the Gulf and double the size of Saudi Arabia, with Zawya.com reporting in July 2010 that US$714.8 billion of projects are planned or underway. Food and beverages The UAE imports around 90 percent of its foodstuffs to cater for a resident population comparable to that of New Zealand. Due to the large expatriate population, a diverse range of food is available in the UAE. The market is well supplied and competitive, but differentiated or well priced supply solutions will find favour in retail and food service markets. Despite the global financial crisis that has particularly impacted Dubai, significant growth is expected between now and 2014 according to Business Monitor International, with food consumption expected to increase 2.3 percent in 2010 and 4.7 percent per annum between 2011 and 2014 as the UAEs population grows. While significant growth has come in the premium (four- and five-star) end of the market, current market sentiment is boosting opportunity in casual dining. Food service areas that have been showing strong growth include quick-serve restaurants, casual dining and airline catering. The food service market is larger than retail in most categories. In recent years, there has been a shift in food habits from traditional to Western-style convenience foods. New Zealand is a leading supplier of dairy products, including powders, proteins, butter and cheeses. Local consumption of dairy is high. New Zealand is also among the largest suppliers of meat to the retail and hotel markets and New Zealand fruit, vegetables and seafood are increasingly available. Beyond these more traditional exports, a growing range of value added food and beverage products from New Zealand is now gaining a foothold in the UAE market. Health technology Improving the quality of healthcare is a critical policy challenge for governments across the GCC (Gulf Cooperation Council) states and the wider Middle East, with heavy investment needed to build large, modern facilities after decades of underinvestment. New and renovated healthcare facilities present a great opportunity for suppliers of medical technologies and devices. In the UAE, Dubai and Abu Dhabi have led investment into new facilities and the training of staff. Demand is driven by a growing local and expatriate population. A recent McKinsey report forecast that demand in Dubai for hospital beds will double by 2025 to 165,000 beds and demand for treatment will increase by 240 percent. Meanwhile, Abu Dhabi has focused on expanding its network of clinics to areas outside the main urban

9/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

centres. Health is a major budget item for the UAE government and, as such, the sector continues to present opportunities to companies providing cost effective solutions that are relevant to local needs. While investment within the sector is occurring across the board, specific areas of opportunity include outpatient services, expansion of primary care, e-health, and addressing the diseases of affluence (e.g. diabetes, heart disease and high blood pressure). Similar to New Zealand, the UAE has a serious problem with diabetes, with around 20 percent of the population diabetic. Professional services The UAE is embarking on a period of significant reforms in many areas. With rapidly growing populations, relatively high spending power and structural changes within a diversified range of areas, there are significant market opportunities for New Zealand professional services companies. Opportunities range from the supply of high value education training and research through to public sector consultancy services. Commercial opportunities are emerging in this region as a result of significant fiscal packages targeted towards improving sector capability and building capacity. There are unique issues in government around transformation and performance innovation. New Zealand has been targeted as a benchmark country in these areas, particularly in the education, health, administration, finance and tourism sectors, as a result of which New Zealand has raised its consultancy capability profile within the public sector in the UAE. New Zealands reputation is continuing to grow, with knowledge, expertise and demonstrable attitudes and approach. The demand for informed, innovative and skill based solutions with the ability to fund reform projects are seen as advantages to benefit focused providers. Telecommunications and IT products and services The UAE government has invested heavily in building an economy based on future knowledge industries, as a result benefiting the technology sector. Dubai has led the way as it positions itself as the regional hub for technology related companies. Since 2001, it has driven a strategy that has seen the development of technology free zones such as Dubai Internet City, Dubai Media City, Silicon Oasis, and Dubai Outsource Zone, fulfilling the UAEs e-Government agenda. The presence of this infrastructure, along with the diversity of transport links from Asia through to Europe and Africa, makes Dubai an ideal regional base for technology related exporters. While the domestic Dubai and wider UAE market is important for some New Zealand technology exporters, the key role of the UAE is typically as a base to target business in the neighbouring GCC states and beyond to secondary markets in the wider Middle East and Africa. The importance of Dubai as a regional base is demonstrated by the presence of many large multinationals servicing the region out of Dubai Internet City, the first complete Information Technology and Telecommunications centre in the world to have been built inside a free trade zone. NZTE has operated the New Zealand Technology Oasis from Dubai Internet City since 2005, where a number of New Zealand companies are colocated.

10/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

Within the UAE itself, the telecom segment has grown significantly in the past decade, with more than US$6 billion in revenues generated in 2009. According to Datamonitor estimates, the UAE has a high mobile penetration rate of more than 212 mobiles for 100 people. The UAE's telecom market was still a monopoly until 2006, with the governmentowned operator Etisalat being the lone player. Telecom operator Du subsequently entered the market and has since captured 37 percent of the mobile telecom market.iii

REGULATORY ISSUES
For most products and services, the UAE market is a very open and liberal import market. There are few barriers to trade. There are no quantitative restrictions or import licenses, tariffs are low and there are relatively few regulatory requirements. However, there are restrictions on foreign firms conducting direct business and setting up offices in the UAE. E-business Dubai is known as the Middle Easts e-business capital and has the largest per capita number of internet users in the Arab world. Dubai Internet City has further strengthened Dubais position as an e-business leader. In Dubai, most government services (or at least the paperwork involved to submit applications) can be accessed online, although there are commonly teething problems as new services are brought in. Other emirates are also making good progress in this area. Import barriers No alcohol can be used as an ingredient or additive. Import of pork and pork products are permitted but are very strictly regulated. Investment barriers With the exception of companies located in one of the UAEs free trade zones, companies established in the UAE require at least 51 percent to be owned by a UAE national. A company engaged in importing and distributing a product must be either a 100 percent UAE-owned agency/distributorship or a 51 percent UAE-owned limited liability company. The UAE government is considering liberalising specific sectors where there is a need for foreign expertise or where local investments are insufficient to sustain 100 percent local ownership. Some of the sectors which may be liberalised include those in which foreign investment is likely to contribute high added value or facilitate technology transfer, such as education, health, professional services, and computer-related services. Non-GCC nationals have the right to own buildings, but not the land, in certain geographical zones within the UAE. Non-GCC nationals may also be permitted to hold socalled freehold real estate within specified geographic areas. Agent and distributor rules The UAE made important changes to the Commercial Agencies Law (Agencies Law) in 2006, which previously had required that all commercial agents be either UAE nationals or companies wholly owned by UAE nationals, and had restricted the number of agents a foreign principal could appoint as well as the terms of the agency relationship.

11/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

The 2006 amendments: (1) limited an agency contract to a fixed time period; (2) required mutual consent to renew an agency agreement; (3) allowed either party to file for damages; (4) eliminated the Ministry of Economys Trade Agencies Committee, which handled agency disputes; and (5) allowed the import of liberalised goods without the agent's approval. Nonetheless, foreign companies still find it difficult to dismiss a non-performing local agent without protracted litigation in the local courts and experience has shown that the authorities application of the new law has not always eased the way for the termination of agents as expected. It also remains difficult, if not impossible, to sell in UAE markets without a local agent. Government procurement The UAE is not a signatory to the WTO Agreement on Government Procurement. The UAE grants a 10 percent price preference for local firms in government procurement and requires companies to register with the government before they can participate in government procurements. To be eligible for registration, a company must have at least 51 percent UAE ownership. This requirement does not apply to major projects or defence contracts where there is no local company able to provide the goods or services required. The UAEs offset programme requires defence contractors which are awarded contracts valued at more than $10 million to establish a commercially viable joint venture with local business partners that is projected to yield profits equivalent to 60 percent of the contract value within a specified period (usually 7 years). Health and safety regulations The UAE has a two-tier system. Federal law applies to all seven emirates, while local laws are confined to the emirate in which they are enacted. No single piece of federal legislation is dedicated specifically to health and safety. There are various laws that address aspects of health and safety, albeit in general terms. The labour law, which oversees the rights of employees, includes guidelines on protective equipment, first aid and medical facilities. The guidelines are generic and apply equally to a variety of workplaces, so the provision for first aid supplies states: Each employer shall provide one or more first aid boxes containing medicines. The Ministry of Labour and Social Affairs may prescribe bandages, antiseptics and other first aid materials. There is no statutory body in the UAE to oversee health and safety. Among its many roles, the Ministry of Labour is the authority charged with enforcing most health and safety laws Marking and bar codes Bar codes are used for most consumer items. Packing and labeling Regulations can vary between individual emirates but the liberal approach of the main import emirate of Dubai is generally accepted by the other emirates. Arabic labeling is mandatory and can be printed on a sticker. Production and expiry dates for perishables are required, which needs to be printed on the original package or label. The origins of all animal fats must also be stated.

12/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

The UAE and other members of the GCC (Bahrain, Kuwait, Oman, Qatar and Saudi Arabia) are attempting to put together uniform laws relating to labelling, shelf life and food safety for the region. Product liability The general provisions imposing liability for harm done to another are covered by the UAE Federal Law No. 5 of 1985 regarding Civil Transactions (Civil Code), the provisions of which could apply to product liability claims. A distinction is made in the Civil Code between direct and indirect harm, but these terms are not defined. Liability for causing direct harm cannot be contracted out. Tariffs and duties The general rate of import duty is 5 percent, but this is waived for basic foodstuffs, pharmaceuticals and some industrial inputs. Only alcohol, pork and tobacco products attract higher duty rates. Make sure you check the Federal Customs Authority website before trading with the UAE: www.customs.ae.

VISA REQUIREMENTS
Citizens of a number of countries, including New Zealand passport holders, will be issued entry permits, or free visit visas, on arrival in the UAE. This is valid for 30 days on arrival and can be extended for a further 30 days. There is a fee for the extension. Passports must have a minimum validity of 6 months. Entry to most Arab countries is forbidden to travelers whose passports bear Israeli stamps, however the UAE is less stringent on this issue. Visa requirements for entering the UAE vary greatly between different nationalities. Visa regulations and any costs involved are always subject to change and should, therefore, be checked with the airline, travel agency or nearest UAE embassy prior to travel. The Embassy of the United Arab Emirates in Canberra is accredited to New Zealand. Embassy of the United Arab Emirates, Canberra Address Physical: 12 Bulwarra Close, O'Malley, ACT 2606 Post: PO Box 5173 Garran, ACT 2605 Australia +61 2 6286 8802 +61 2 6286 8804
[email protected] www.uaeembassy.org.au

Phone Fax Email Website

13/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

TAXATION
The UAE as a federation does not have any income tax legislation, with each emirate enforcing its own income tax rate for oil companies and foreign banks. As it relies primarily on immigrant workers, the UAE has worked to present itself as an employee-friendly nation. There is no tax levied on any personal income, including all types of salaries and capital gains. The only sales tax currently levied is on the purchase of alcohol from a licensed liquor store, which is charged at 30 percent. Plans to introduce VAT have been delayed and a decision to introduce income tax would be unpopular with expatriates, who make up around 80 percent of the UAEs population, potentially weakening the UAEs competitive position. In the meantime, governments across the emirates have been generating income by extending fees and charges for services. Examples include charging tenants in Dubai 5 percent of their annual rent, the introduction of a toll system (Salik) on major Dubai roads, or some UAE firms having to pay an Islamic tax (zakat) of 2.5 percent of their net operating capital. Should oil revenues decline or a slow world economy continue to hold back a recovery in the UAE, those governing the emirates are likely to reconsider their VAT and income tax options. Hotel and service taxes are applied to accommodation and services from hotel premises. These amount to 20 percent on the final bill and it is advisable to check whether they are included in menus or on accommodation bookings.

FREIGHT
Goods enter the UAE primarily via seaports with free trade zones situated in the larger emirates. The Jebel Ali port in Dubai is the world's largest man-made port, highly regarded for its expertise and precision in cargo handling. There are also cargo handling facilities attached to the international airports in Dubai and Abu Dhabi. Air freight The most convenient air freight routes from New Zealand are flying with Emirates Airlines from Auckland or Christchurch via Melbourne or Sydney or Brisbane, to Dubai. Emirates Airlines operates 28 flights per week to New Zealand and retains strong links through its sponsorship of the Rugby World Cup 2011 and Emirates Team New Zealand in various yachting competitions, including past Americas Cup campaigns. Attached to Dubai International Airport, Dubai Cargo Village handles more air cargo than any other airport in the region, much of it coming into Dubai by sea and going out by air, mainly to Europe. A second airport was opened in Dubai in 2010, the Al Maktoum International Airport. This airport is in close proximity to Jebel Ali Port and is expected to grow in significance in the coming years as a cargo and passenger hub. In the meantime, most services continue to operate through Dubai International Airport.

14/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

Sea freight DP Worlds flagship Jebel Ali Port is the largest container port between Rotterdam and Singapore and Dubais primary terminal. Jebel Ali was awarded the title of 'Best Seaport Middle East' for the 16 consecutive year at the Asian Freight and Supply Chain Awards (AFSCA) 2010. Mina Zayed is Abu Dhabis main port, although Khalifa Port (being constructed between Abu Dhabi and Dubai) is due to gradually replace it as the Emirate of Abu Dhabis main shipping gateway, when it opens in late 2012.

DOING BUSINESS WITH THE UAE

It is important for New Zealanders doing business in the UAE to understand etiquette and the manner in which business is conducted. Preparation and some basic knowledge of the business culture can go a long way in business meetings. The following are some aspects you should consider when doing business in the UAE. The people of the UAE are friendly and hospitable, and visitors are welcomed. Muslims are forbidden by their religion to drink alcohol. Alcohol should not be offered to Muslims and pork products should not be eaten in their presence. However, alcohol is available in many hotels and restaurants. New Zealand visitors should consult with their host before ordering alcohol during meals or social functions. Smoking in offices is quite common. The official language in the UAE is Arabic. Other widely used languages are English, Urdu, Hindi, Malay and Farsi. Most business people either speak English or have an English-speaking person on their staff. The services of an interpreter are rarely required. The UAE is an Islamic country and adherents generally pray five times a day, but in the relatively pragmatic UAE, this rarely interrupts a business meeting. Most of the indigenous population of the UAE are Sunni Muslims. The UAE has, relative to other Middle Eastern countries, a liberal attitude towards western customs and behavior although by New Zealand standards it is a conservative society. It is recommended that you do not come to the region on business in summer (July/August), as many senior decision makers are inclined to take holidays over the period. Similarly, coming to the region during Ramadan is not advisable as business schedules are shortened and disrupted. Muslims who fast are not permitted to eat, drink or smoke between dawn and dusk during the month of Ramadan. Furthermore, it is illegal for anyone Muslims and non-Muslims alike to eat, drink or smoke in public during this month. If New Zealand business people simply adopt their usual polite patterns of business behavior, they should be accepted.

15/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

Dress in public should be modest. Normal business dress for men is a cotton shirt and tie. Suits should be worn to meetings with high-ranking officials and senior business people. Businesswomen should wear a conservative two-piece suit, preferably a skirt and jacket. Women face no discrimination and are allowed to drive and move around freely. Women are not required to cover their faces in public and are able to wear western swimwear to beaches and at hotel swimming pools. They are, however, still expected to dress modestly in public. In business, it is customary for visitors to be offered refreshments, usually coffee or tea. It is polite to accept at least one, but preferably two cups, before refusing a refill. Asking for water only is acceptable. The normal working week is Sunday to Thursday (weekend is Friday and Saturday), although some private sector businesses will operate on Saturdays. Business visitors can expect to schedule up to three meetings per day, two in the morning and one in the afternoon. That said, an allowance needs to be made for the growing impediment of traffic jams, particularly in central Dubai and Abu Dhabi. Taxis are generally available, but car parking is limited in some parts of the city. When travelling to business meetings in an unfamiliar location, it is a good idea to request a map in advance and hold a contact number for the office. Taxi drivers cannot always be relied upon to find the location. As elsewhere in the Middle East, it is usual to expect to be kept waiting and for meetings to be interrupted by incoming telephone calls, visitors, etc. It is essential for business visitors to arrange appointments well in advance and to be punctual. Be patient if your host is delayed, as this can easily be due to an unexpected (and possibly more important) other visitor. Early morning appointments are not a good idea. If you are late for an appointment ring and tell them you are held up. Generally they will wait for you. Business cards are given out readily, so ensure you have a sufficient supply. If visiting the region regularly, it is useful to have business cards printed in Arabic and English. In Arabic an individual is addressed by his or her first name, and any title they possess. For example, a Dr Ahmed Bin Al-Rahman would be addressed as Dr Ahmed. The words bin or ibn in Arabic mean son of and may be used a number of times in a persons name, as Arabic names are often indicators of genealogy. Another common name structure is having the word Abd followed by an attribute of God with the definite article al. As a result, Dr Abd Al-Rahman AlHajj would be addressed as Dr Abd Al-Rahman, and not as Dr Abd or Dr Abd Al. Ministers are addressed as Your Excellency, and members of the ruling family are addressed as Your Highness.

16/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

Gulf businesses tend to be more hierarchical than those of New Zealand. Buying decisions tend to be made at the top. The decision process may be slower than in New Zealand. Gulf Arabs are generally not early adapters and tend to make conservative choices, although this is changing as younger generations start to move into positions of leadership. They are socially oriented and product benefits should be directed towards their needs in this regard. Gulf Arabs don't like to embarrass people by giving direct negative answers. Contracts can be difficult to negotiate, with relationship building the key to marketing success. Be aware that schedules and deadlines are less important than in New Zealand. Dont use your left hand when receiving or offering items as it is considered unclean. Dont sit with the soles of your feet facing other members of a group, as this is considered offensive. Refrain from expressing extreme views and try to avoid controversial conversations about political issues or religion.

HOLIDAYS
The UAE has some holidays tied to the Gregorian calendar (Western calendar) and some that are tied to the Muslim Lunar calendar (Hijri Calendar). Islamic holidays are granted in accordance with the latest decree or ministerial decision by the Government and announcements are usually published in the press, to give exact public and private holidays. The Muslim calendar is twelve days shorter than the Gregorian calendar, meaning that the dates for Ramadan change every year. In the next two years, Ramadan begins on approximately 1 August 2011 and 20 July 2012. It is not the ideal time to do business in the UAE during Ramadan, as the business hours are shorter. Over the next few years, Ramadan will coincide with the summer holiday period (July and August), further affecting business. Muslim holidays are timed according to local sightings of the moon. Aside from New Years Day and National Day, the dates given below are, therefore, approximations. PUBLIC HOLIDAY New Years Day Mouloud (birth of the Prophet) Leilat al-Meiraj (ascension of the Prophet) Eid al-Fitr (end of Ramadan) Eid al-Adha (Feast of the Sacrifice) Al-Hijra (Islamic New Year) National Day
Source: World Travel Guide

2011 1 Jan 15 Feb 28 Jun 30 and 31 Aug 6 and 7 Nov 26 Nov 2 Dec

17/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

Time difference The UAE is eight hours behind New Zealand, except during daylight saving (OctoberMarch), when it is nine hours behind. For the current time in the UAE, go to www.timeanddate.com.

USEFUL WEBSITES
ORGANISATIONS Government of UAE UAE Interact sponsored by the National Media Council, including comprehensive UAE Yearbook Abu Dhabi Department of Economic Development, including AD Economic Vision 2030 Abu Dhabi Tourism Authority Dubai Department of Tourism and Commerce Marketing Dubai Customs Abu Dhabi Chamber of Commerce and Industry Dubai Chamber of Commerce and Industry Dubai Export Development Cooperation Global Resources, UAE Free Zones MEED - Middle East Business Intelligence Zawya - Middle East Business Information AME Info (business directory and news) UAE Yellow Pages Trade Shows Classifieds - to buy and sell Emirates Airline Etihad Airways Dubai Rugby Sevens Kiwi Ball, Dubai New Zealand Ministry of Foreign Affairs (MFAT) travel advice and registration of citizens abroad WEBSITE www.government.ae www.uaeinteract.com www.adeconomy.ae www.visitabudhabi.ae www.dubaitourism.ae www.dxbcustoms.gov.ae www.abudhabichamber.ae www.dcci.ae www.dedc.gov.ae www.uaefreezones.com www.meed.com www.zawya.com www.ameinfo.com www.yellowpages.ae www.biztradeshows.com www.dubizzle.com www.emirates.co.nz www.etihadairways.com www.dubairugby7s.com www.kiwiball.com www.safetravel.govt.nz

18/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011

CONTACTS
New Zealand Trade and Enterprise
Phone Website Email 0800 555 888 www.nzte.govt.nz [email protected]

New Zealand Trade and Enterprise / New Zealand Consulate-General, Dubai

Postal address PO Box 23156 Dubai United Arab Emirates Suite 1502 API World Tower Sheikh Zayed Road Dubai United Arab Emirates Trade: 08:30 to 12:00, and 13:00 to 17:00 Sunday to Thursday Consular: 09:00 to 12:00 Sunday, Tuesday, and Thursday +971 4 3317 500 +971 4 3317 501 [email protected]

Physical address

Opening hours Phone Fax Email

New Zealand established an Embassy in Abu Dhabi in early 2011, with the New Zealand Embassy in Riyadh having previously been accredited to the UAE. Details are available at www.mfat.govt.nz.

Disclaimer: This publication is provided to you as a free service and is intended to flag to you market opportunities and possibilities. Use of and reliance on the information/products/technology/concepts discussed in this publication, and the suitability of these for your business is entirely at your own risk. You are advised to carry out your own independent assessment of this opportunity. The information in this publication is general; it was prepared by New Zealand Trade and Enterprise (NZTE) from publicly available and/or subscription database sources. NZTE; its officers, employees and agents accept no liability for any errors or omissions or any opinion/s expressed, and no responsibility is accepted with respect to the standing of any firm/s, company/ies or individual/s mentioned. New Zealand Trade and Enterprise is not responsible for any adverse consequences arising out of such use. You release New Zealand Trade and Enterprise from all claims arising from this publication. New Zealand Trade and Enterprise reserves the right to reuse any general market information contained in its reports.

ii iii

Source: UAE Ministry of Foreign Trade. Trade Policy Review 2010. (www.moft.gov.ae/images/releasesen/180.pdf). Source: Jebel Ali Free Zone (www.jafza.ae). Source: www.du.ae

19/

Exporter guide | UNITED ARAB EMIRATES | Country brief | April 2011