Doing business in the UAE as a European industrial company

What the UAE is, and what it is not

Dubai and Abu Dhabi are trading and decision hubs for the wider region. Many regional distributors, contractors and project owners have offices here, so meetings that would take weeks to arrange elsewhere can happen in a few days.

The UAE is also a market of its own, but a smaller one than Saudi Arabia. A distributor based in Dubai will often promise the whole Gulf. Ask which countries they actually sell in today, and to whom.

Is there room for your technology?

Buyers in the UAE have access to equipment and technology from all over the world, and many of them buy on price. The question is not whether the market is growing, but where your offer creates enough extra value to justify its price.

• Who has the problem you solve here, and who pays for solving it.
• How your offer compares with Asian and other European alternatives on lifetime cost.
• Whether you have references from comparable conditions. Heat, humidity and dust change how equipment performs.

Agents and distributors under the 2023 law

The UAE Commercial Agencies Law (Federal Law No. 3 of 2022) came into force on 15 June 2023. Registered commercial agents must, as a rule, be UAE nationals or companies wholly owned by UAE nationals, with limited exceptions such as public joint stock companies with at least 51 percent UAE national ownership.

A registered agency gives the agent strong rights. Under the current law a fixed-term agreement can end at expiry with notice, but the agent can still claim compensation if it can show that its activities contributed to the principal’s success in the territory. Disputes go first to the Commercial Agencies Committee.

• Decide early whether you want a registered agency or an unregistered distribution agreement, and understand the difference before you sign.
• Avoid granting exclusivity for the whole Gulf to a UAE partner who has not sold in the other countries.
• Take advice from a UAE lawyer on the agreement itself. This guide is not legal advice.

Your own company: mainland or free zone

Since 2021, foreign investors can own 100 percent of most UAE mainland companies. Activities of strategic importance are an exception and may still require UAE national participation or approvals.

Free zone companies are the other common route. They are simple to set up but are generally limited in how they can trade directly with the mainland market, which matters if your customers are mainland contractors or government bodies. Many suppliers start with a partner and set up their own entity only once there is steady business.

Corporate tax applies to tax periods starting on or after 1 June 2023: 0 percent on taxable income up to AED 375,000 and 9 percent above that. Qualifying free zone persons can benefit from 0 percent on qualifying income if they meet the conditions.

Product conformity: ECAS and EQM

Regulated products sold in the UAE need a certificate under the Emirates Conformity Assessment Scheme (ECAS) or the Emirates Quality Mark (EQM), run by the Ministry of Industry and Advanced Technology (MoIAT). Regulated categories include machinery, electrical equipment and building and construction products.

Check the requirements for your product before you quote delivery times, so the first order is not held up at the border.

Relationships and follow-up

Business in the UAE moves quickly on the surface and slowly underneath. First meetings are easy to get. Turning them into orders takes repeated contact, a local person who follows up, and patience with approval chains on the customer side.