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How to Do Business in the United Arab Emirates

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DOING BUSINESS IN THE UNITED ARAB EMIRATES

…Means Recognizing the Similarities and the Differences

Doing business in the Middle East — at least doing it effectively — starts with recognizing the broad makeup of the region.

The geography and politics of the Middle East become easier to grasp if one views the region as having three broad blocs. Saudi Arabia, the United Arab Emirates and their allies form one bloc. Iran and its allies form the second bloc, and the remaining countries including Kuwait, Oman, Egypt, Algeria, Morocco and Jordan form a changeable third bloc.

The United Arab Emirates could more accurately be called a federation than a country in the customary sense. In December 1971, six emirates with a history of rivalries declared their independence from Great Britain and agreed to form the United Arab Emirates: Abu Dhabi, Ajman, Dubai, Fujayrah, Sharjah, and Umm al-Qawain.

Earlier in that year, Bahrain, Qatar and Ras al-Khaymah had withdrawn from participation in the federation.

In the following year. Ras al-Khaymah joined the UAE but Bahrain and Qatar never joined, clearly preferring to keep their sovereignty intact. Other differences separated these territories. In 1970, reportedly with British backing, the current ruler of Oman, Qaboos bin Said Al Said overthrew his father, Sultan Said bin Taimur and in 1971, declared its independence from Britain.

However, unlike the Emirates, Oman has kept close ties with the United Kingdom in the post-colonial era and also unlike the Emirates, it never joined the Organization of Petroleum Exporting Countries (OPEC).

Generally, a reference to the UAE immediately brings to mind Abu Dhabi and Dubai since in wealth and profile they overshadow the other five Emirates. All of the Emirates are monarchies. Each Emirate has its own Emir who rules the territory and controls major aspects within the territory such as the pace of reform.

Related: Saudi Arabia and Iran: A Tale of Two Countries

The UAE sides with the Kingdom of Saudi Arabia in military matters and its forces are fighting the Houthi fighters supported by Iran in Yemen. Saudi Arabia and its allies including the UAE, see victory in Yemen as one of several strategies necessary to counter Iran’s growing influence in the region.

Viewing the UAE as a smaller version of the Kingdom of Saudi Arabia produces a distorted picture. The people of the Emirates, especially Dubai and Sharjah, were traditionally traders, smugglers and pearl divers. As a result, they were open, tolerant, and spoke many regional languages such as Hindi, Urdu and Farsi and some even spoke Swahili. Even now, old timers there continue to speak these languages fluently. The territory now known as the United Arab Emirates, (originally called the Trucial States) was a hub of intense trading and that made it far more open than Saudi Arabia, which is basically made up of Bedouins, with the exception of Jeddah, also a trading outpost. Arguably, that difference goes a long way to explaining the difference in attitude between the UAE and Saudi Arabia even today.

Doing business with the United Arab Emirates becomes more understandable with the recognition that just as the countries in the region are different, the Emirates within the UAE are different. They differ in the aggressiveness with which they seek foreign direct investment, the reception that they accord foreign companies and the industries they most seek to develop within their boundaries. A venture that might be suitable for Dubai could stumble in Sharjah and the reverse is true.

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