In the United Arab Emirates (UAE) there are thousands of enterprises from over 80 countries. For German companies the UAE is an interesting and low-cost business market. In fact, majority of top-tier German companies are represented. Furthermore the quality brand mark “Made in Germany” is increasingly desired in the whole Gulf region.
The UAE is an ideal starting point for companies from several sectors. The liberal business structure means low barriers to entry and access to a regional market of 1.8 billion people. By establishing a local branch in the UAE foreign enterprises are able to boost profits via the local tax exemptions: in the UAE there is no income, corporate, or sales tax, however the value added tax (VAT) of 5 percent will be implemented in 2018.
However, it can sometimes be difficult to get the right access to the Gulf market during the initial phases. Foreign enterprises tend to form cooperation’s with a local a representative in order to learn from regional experience. This allows companies to eliminate these burdens; the Bavarian Foreign Trade Center (AWZ) offers the “Cooperation project Qatar and UAE” which includes financial support from the Bavarian Ministry of Economic Affairs and Media, Energy and Technology. This project aims to help small and medium-sized companies in finding market structures and access points in the UAE.
Another milestone in the diversification process is the setup of the regional hub in the healthcare sector. Abu Dhabi has a leading role, a couple of internationally known clinics have settled down in Abu Dhabi such as the John Hopkins University Hospital and the Cleveland Clinic. Cleveland Clinic manages the biggest state hospital since 2007. Other planned hospital projects in Dubai, Abu Dhabi and the Northern Emirates offer new space for medical services and medical technology.
The United Arab Emirates is importing about 90 percent of their foodstuff, while as the per capita food consumption in the UAE is 1.486 kg. Since 2009 the food retail trade is growing yearly by 4.7 percent (2015). There is a growing consumption due to the growing number of inhabitants (+2.6 percent in 2016), the increasing living standard and a steady income (approximately 36.000 USD per capita). The increasing development in the tourism sector, particularly with regard to the Expo 2020, and having positioned itself as one of the most important trade hubs leads to a boost in the projection of further growth. Several Bavarian suppliers are interested in the market or have already successfully positioned themselves in the market, specifically in the field of organic grown products.
In addition to good business opportunities in the solar sector there is an increasing potential in energy efficiency which can be explained by declining water and electricity subsidies. The implementation of energy efficient building standards like Estimada is showing new trends. Leading to this the establishment of an agency; the Etihad Energy Service Company (Etihad ESCO), which licenses energy efficient management companies for the local market. The lightning market also relies on energy efficient technology. Many German companies make use of the regulation that was implemented in 2005 by saying that conventional light bulbs have to be exchanged with LED light bulbs.