Doing Business in

United Arab Emirates

International Sellings & Business Culture
Turku University of Applied Sciences (TUAS)




Alberto Arestizabal Gil
Index:
1. Introduction3

2. General overview of the country3

3. Why establishing a company in UAE?.........................................................................4

4. Culture4
a. Religion
b. Schedules
c. Meetings and Making business
d. Traditions and Manners
e. Society and Relationships
f. Family
g. Popular sports

5. Economy..8

6. Money issues............................................................................................................10
a. Getting Credit
b. Protecting Investors
c. Paying taxes

7. International relations..............................................................................................13
a. Government
b. Trading across borders
c. Visa issues

8. Creating your Business.............................................................................................16
a. Annual Requirements for Businesses
b. Legal structures for business
c. The following steps are required in establishing a company in UAE

9. Models......................................................................................................................18
a. The Geert Hofstede s analysis
b. Cultural differences high context-theory by Edward Hall
c. Time conception in accordance to Trompenaars model

10. References................................................................................................................22
1. Introduction
As a federation of seven separate Islamic entities, the UAE has historically been a
divided and sought after territory. Years of European involvement culminated in
several friendship treaties with the British Empire, particularly that in 1853 which
created the Trucial Sheikdoms. After several disputes over territory and borders with
Saudi Arabia and Oman, the UK ended their treaty and opened the door for formal
confederation into the UAE. In the early 1970s nine Sheikdoms attempted to come
together but in the end only the current seven agreed to join together in what is now
known as the United Arab Emirates. Since the discovery of oil in the 60s, the UAE has
used its oil wealth to fuel a construction boom previously unknown in the Middle East.

Emirati society is a unique blend of cultures and people. Traditionally focused on
maritime activities such as fishing and pearling, the discovery of oil in the mid 20th
century drastically changed the UAEs economy making it one of the wealthiest nations
in the Muslim world. With a large foreign expatriate population, it is the most socially
liberal country in the Middle East. Religious and historical influences combined with a
progressive outlook and extensive economic opportunities make the UAE a most
intriguing and unique place to do business. Understanding this distinct culture is
paramount for anyone wishing to successfully do business in the Emirates.
2. General overview of the country (Data)
Official name United Arab Emirates

Population 4,798,491

Official Language Arabic

Currency Emirati Dirham (AED)

Capital city Abu Dhabi

GDP (Billions) $ 301.9

GDP per Capita -- $ 59,717


The Middle East, especially the United Arab Emirates (UAE) is an interesting market
and economically beneficial production site for foreign companies. It possesses a
resource rich diversified economy, which has proved a heaven for the investors the
world over.


3. Why establishing a company in UAE?
UAE has easy access to the 1.5 billion consumer markets situated in Africa, West Asia, CIS
countries, and East Europe as well as the areas surrounding the Red Sea and the Gulf. UAE
possesses 10% of worlds proven crude oil reserves, which will last for more than 100 years.
UAE is one of the safest places for business in the world. UAE free trade zones are home to
more than 3000 companies with an estimated trade of around US$ 8 billion. Dubai Internet
City has gained the support of the Oracle, IBM, Cisco, Nokia, Ericsson, Hewlett-Packard and
Nortel. Dubai Media City would act as a bridge to the future, linking the GCC countries and to
the other nations of the world.

4. Culture


a. Religion


Religion has played an important and influential role in shaping the society and culture
of the UAE. Islam is the official and majority religion and pervades almost every aspect
of life. Laws, education, food, clothes, daily routines and even conversations are all
strongly influenced by Islam. The Islamic faith places great emphasis on behaviors such
as generosity, respect and modesty which most Emiratis will display. Understanding
Islam and the influence it has on everyday life and Emirati business culture is the first
step to conducting successful business in the UAE.


b. Schedules

The working week traditionally starts on Saturday and ends on Wednesday. Thursday
and Friday are the official days of rest, though in some cases, people will work
Thursday and take off Saturday instead. Office hours tend to be 09:00-13:00 and
16:30-20:00 though today work often goes even later as a result of the immense
construction boom. Attitudes to time in the UAE are much more relaxed than in many
Western cultures. People and relationships are more important than schedules and
The investment incentives promise you a prosperous future with advantages of zero personal
and corporate taxes. Other competitive advantages include no foreign exchange controls, no
trade barriers, modern infrastructure, 100% repatriation of capital and profits, and Freedom from
foreign exchange controls. UAE free trade zones are potential competitors world around. Over a
small period of 17 years the number of free trade zones in UAE has reached to 13, with more
new in developmental stage.
punctuality. It is not uncommon, therefore, for your Emirati counterparts to arrive late
but foreigners are expected to arrive on time. Dont schedule business meetings during
prayer times or any of the major Islamic holidays such as Ramadan or Eid. These are
extremely important periods for the majority of native Emiratis who are Muslims.
Business is usually put on hold during these occasions as it is a time for reflection and
celebration.


c. Meetings and Making business

Meetings should be scheduled in advance with extra time allocated in case it should
go on longer or start later than anticipated. Often meetings are cancelled at the last
minute, so it is important to be flexible and come prepared with either a business
card or letter to let them know you were there. People in the UAE prefer to do business in
person. Relationships and mutual trust are paramount for any successful business
interaction and can only be developed through face-to-face meetings. It is important
to spend time with your Emirati business counterparts and ensure future meetings
take place to continue cultivating the relationship. Initial business meetings are often a
way to become acquainted with your prospective counterparts. They are generally
long in duration and discussions are conducted at a leisurely pace over tea and coffee.
Time should be allocated for such business meetings, as they are an essential part of
Emirati business culture. Business cards are common but not essential to Emirati
business culture. If you do intend to use business cards whilst in the UAE, ensure that
the information is printed in both English and Arabic. Dont expect a one-on-one
meeting to only include yourself and the other person. Often there will be other
people present in the office or meeting room waiting their turn to meet with that
person. When you arrive, it is polite to greet the person, take a seat and accept
any coffee served until it is your turn. Dont assume that the person who asks the most
questions in meetings holds the most responsibility. In the UAE, this person is
considered to be the least respected or least important. The decision maker is usually a
silent observer and will only speak when discussions come to a close.


d. Traditions and Manners

The Emirates are a considerably modern state in relation to the rest of the Middle
East. As such, many traditional attitudes and business practices are evolving
towards a more Westernized approach. Nevertheless, it is still important to be aware
and respectful of some of the differences that might exist. When first meeting a group
of people, it is important that you shake hands and greet the most senior person first.
Usually the oldest person in the room has the most seniority, but you might find there
is another person who has stepped in to make the decisions. Always try to find out
titles and status of the people you are meeting beforehand so as to show the right
amount of respect. The customary greeting is As-salam alaikum, (peace be upon you)
to which the reply is Wa alaikum as-salam, (and upon you be peace). When entering
a meeting, general introductions will begin with a handshake. You should greet each of
your Emirati counterparts individually. In line with Muslim customs, avoid shaking
hands with a woman unless they extend their hand first. Do dress conservatively.
While the UAE is more westernized than many other Middle Eastern countries and
therefore home to many Western style clothes, it is still important to dress modestly.
As a sign of respect, men should wear a conservative suit and women should ensure
their clothing covers their legs and arms.


e. Society and Relationships

Hospitality is an essential part of Emirati culture and applies to both social and
professional contexts. Guests will be received with enormous generosity. In the home
this usually comes in the form of a feast of traditional Emirati food, especially during
the holidays, while in a business context, meetings are almost always accompanied by
traditional Arab coffee and pastries. The emphasis placed on hospitality is closely
connected to the importance of relationships. Foreigners should show their gratitude
and dedicate time to cultivating relationships with their Emirati counterparts. There is
a strong vertical hierarchy in most Emirati companies. Many are owned and run by one
powerful person who makes all of the decisions. This person must be treated with
respect and deference, particularly if you hope to have a successful business
relationship. Age, money and family connections are all key determining factors of a
persons status. Who you are is usually more important than what you have achieved.
It is not uncommon to therefore find many members of one family working for the
same company. Status is important and must be recognized by using the correct title
such as Shaikh (chief), Mohandas (engineer) and Ustadh (professor). If you are unsure
of someones title, find out beforehand or ask the person who introduced you. It is
important to have connections to someone in the UAE who can introduce you before
attempting to do business there on your own. Emirati people prefer to do business
with those they know, so having someone to introduce you will be of immense benefit
to your business relationship. Family and friends come before anything else. As a
result, it is not uncommon for an Emirati to reschedule or cancel something to
accommodate their needs or wishes. Take the time to get to know your business
counterparts on a person level so that you can develop a friendship with that person
and therefore be in a better position of priority for business dealings. Do address your
Emirati counterparts with the appropriate titles followed by his or her first name. If
unsure, it is best to get the names and correct form of address of those you will be
doing business with beforehand. Do accept an invitation to a meal or social event.
Relationships are an integral part of doing business in the Emirates. Spending time
with your Emirati counterparts is the best way to build trust and mutual
understanding.



f. Family

Family and tribal connections form the basis of Emirati social structure. The family and
tribe are highly influential and play a role in shaping a persons values and behavior. It
serves to support its members both financially and emotionally and as such, the family
comes before anything else and its honor is protected by doing whatever necessary.
Loyalty between family and tribe members carries over into business where it is not
uncommon for companies to be run by and employ several members of one family or
tribe. Dont ask about a persons wife or daughters. It is polite to enquire about a
persons family or health, but never ask specifically about any female members. Family
life which involves female members is kept extremely private.


g. Popular sports

Being a country filled with desert, the past sports played in the United Arab Emirates
are still practiced today, which include camel and horse racing. The UAE has come a
long way since those days and with nationalities from all over the world, working and
living in the UAE, more and more sports become popular amongst UAE residence.
HorseRiding
Horse racing is more popular than camel racing these days and individuals interested in
learning can take lessons and find the necessary equipment easily accessible. Horse
racing facilities can be found in the Equestrian Clubs found in the major cities of the
UAE. Dubai also hosts the annual Dubai World Cuphorse race, which is the richest
horse race in the world.
CamelRacing
Camel racing takes place in the morning on the weekends of the winter season
(October to March) and is a unique sports, which is an integral part of the United Arab
Emirates (UAE) heritage. The racing takes place at special tracks around the country
and the atmosphere is electric, especially during public holidays when major races are
held for considerable prize money.
Football
Football (soccer) is the most popular sport in the world and is undoubtedly the
favourite sport in the United Arab Emirates. There are many stadiums in each of the
seven emirates, and the largest one is the Zayed Sports City, which also is the biggest
sports complex in the Middle East.
Cricket
With the UAE's major population coming from the Indian sub-continent, cricket is a
very popular sport and the emirate of Sharjah is most well known for the Sharjah
Cricket Stadium, which has annual matches played on its grounds for the cricket world
cup.
Golf
The sport of Golf is becoming more and more popular amongst UAE residence as the
UAE has over a dozen golf courses, and three of these courses are PGA championship
golf courses. These golf courses are spread out throughout the UAE and are governed
by the UAE Golf Association, and a number of them are found in major hotels. Dubai
hosts the annual Dubai Desert Classic, which is a European Tour event held in March
and features some of the world's best golfers competing for over US$1 Million.
Tennis
Similar to Golf, tennis' popularity in the UAE is continously increasing and you will find
tennis courts in hotels and private clubs throughout the UAE. Dubai hosts the
annual Dubai Tennis Championships, which is an ATP and WTA event, which attracts
the top-seeded players how compete at the Dubai Aviation Club in February.
Rugby
With the growing european population in the UAE, rugby fans can participate and
watch matches throughout the year. In April, the Irish Village (Dubai) holds the Six
Nations Rugby Tournament, while in November and December, the world-class Dubai
Rugby Sevens is held.

5. Economy and Business opportunities
With 11 state-of-the-art ports, 6 airports and satellite links with 230 countries, the
UAE has become one of the leading entreport centers of the world, rivaling the
emerging tigers of South East Asia, having long since consolidated its position among
the top oil producing nations, the visionary leadership of the UAE is concentrating its
efforts on industrial development in the country.
A fast intercontinental road network connects the UAE to Oman, Qatar, Bahrain,
Saudi Arabia, Iran, Kuwait and beyond to Europe. By sea, feeder operators provide
regular scheduled sailings from the UAE terminals to the Indian subcontinent, Yemen,
South and East Africa. Dubai International Airport offers 300 flights daily to and from
some 100 destinations.
Despite having abundant oil reserves, the country has always made efforts to broaden
its economic base and reduce its exposure to volatile oil price fluctuations. Since
inception, UAE has undergone a continuous and sustained process of transformation
from small poor principalities to a modern state with a high standard of living. The
sound and effective economic policies have reduced its dependence on oil and natural
gas revenues. Recognizing the private sectors potential, the business environment in
the country encourages the local as well as foreign investors. The government
provides all industrial facilities, and has enacted several liberal commercial laws and
regulations to meet international obligations and protection for investors.
The economy of the UAE is doing well and it has swelled by more than six times over
the past 26 years to become the fourth biggest economy in the Arab world. The
recent years has witnessed the emergence of pioneer industries in view of the
generous advantage and incentives granted to the investors along with the simplicity
of procedures for practicing business in UAE. During the last decade, government has
increased its investment in the local market from $3.47 billion to $4.93 billion,
whereas, the investment in the business sector reached to $5.41 billion from $2.89
billion.
In general, establishing a business presence in UAE is relatively easier and
straightforward. The foreigners can participate in most of the available business
activities in UAE. The Companies Law recognizes seven kinds of legal structures for
formation under its provision with equity participation to foreigners in all except
General Partnership. The Law further sets forth the general rule that participation of
foreigners should never be more than 49 percent in any company. Despite the
The country offers lucrative investment incentives and opportunities to local as well as
international investors that are not generally available internationally. Significant
among these are absence of corporate and income tax, no personal income taxes, no
foreign exchange controls, 100% repatriation of capital and profits.
The free trade zones with a variety of incentives are also playing an important role in
attracting investment. The share of free zones in non-oil exports increased to 57% in
2000 from 22% in 1999 and the net exports from these zones have reached to US $ 1.4
billion in 2000. By 2002, these zones were home of more than 3000 companies with an
estimated trade of around US$ 8 billion. The most important attraction of these free
zones is that a foreign investor can establish a legal activity fully owned by him. Other
incentives are 100% repatriation of capital and profits, no corporate taxes for 15 years,
which is renewable for further 15 years and no personal income taxes. Presently, there
are 13 free trade zones in UAE and some new are at developmental stage. Although all
the free zones offer more or less same incentives, but each zone has several
distinguishing features giving investors multiple choices of selection in view of their
activity to be established.
The industrial growth and investment policies of the government ensure that UAE will be
in the forefront of global economy. Significant among these are: governments allotment
of $13.4 billion towards the development of the non-oil sector, much of which will be
spent on telecommunications and information technology; Dubai Internet City is a great
move towards e-commerce and the vision of UAEs future internet economy; and Dubai
Media City would act as a bridge to the future, linking the GCC countries and to the other
nations of the world. The mega projects that will open new avenues for investment are:
Dolphin Project of $10 billion to pipe gas from Qatar to the UAE, Oman and Pakistan;
Taweelah A2 Power Plant project (Abu Dhabi); and a proposed project of $ 3.3 billion
Saadiyat Island Project - comprising a free zone, offshore stock exchange and
commodities.
limitations of shares available to foreign investors, it is still believed by some to be the
easiest solution to carry out business in the UAE with management of the company in
foreigners hand.

6. Money issues

a. Banks

A total of 51 banks with over 768 branches, including 28 locally incorporated foreign
banks, have substantially increased aggregate assets, total assets and unclassified
assets. Significant growth has also come about in domestic credit and investments,
foreign assets, cash and deposits.


The UAE Central Bank

Established in 1980, the UAE Central bank is the main regulatory and supervisory body
in the banking industry. It has the power to implement banking policy with regard to
directing monetary credits taking into account the UAEs general policy.

The UAEs banking and monetary system has made significant progress in recent years
due to the Central Banks increasingly strict control of financial institutions. In
particular, 1998 was a year of impressive growth in the banking sector, attributable to
some extent to adherence to the guidelines laid down by the Central Bank. In the last
ten years, the Central Bank has played an important role in supervising the banking
industry and has contributed in a measurable way to improving the quality of services
and performance of a number of banks.

The Central Bank commitment to creating a stable economic framework ensures that
prosperity reaches all the residents in the country. Its relentless efforts are largely Oil
and Gas responsible for the emergence of UAE banks as forces to reckon with in the
Gulf Region.





Entrepreneurs the worlds over are looking for favorable business climate to establish or
expand their business ventures, then United Arab Emirates may be the one place where they
can sure to find an open economy, offering great incentives to meet your requirements. The
Middle East, especially the United Arab Emirates (UAE) is an interesting market and
economically beneficial production site for foreign companies. It possesses a resource rich
diversified economy, which has proved a heaven for the investors the world over.
b. Accounting


Books of Account

The commercial transactions law (federal Law No. 18 of 1993) provides that a business
enterprise must keep such commercial books as the nature and scope of its business
requires this. The books of account are to give a true and fair view of the state of
affairs of the company.

Method of Accounting

UAE companies are required to maintain their books of account on an accrual basis.

Financial Statements

The following businesses must have their accounts audited annually:
Banks (local banks and branches of foreign banks)
Insurance companies and agencies
Public and private shareholding companies
Limited liability companies
Branches of foreign companies
Partnerships limited by shares
Other companies whose articles require annual audits

For public shareholding companies, the board of directors is responsible for preparing
annual accounts and reports on the activities of the companies during the financial
year.

A companys accounts and report on activities must be signed by the chairman and
presented by the board of directors to the general meeting. The general meeting must
be held within four months after the end of the companys financial year.
A companys financial year must be specified in its articles of association.

Accounting Principles

The fundamental accounting concepts include going concern, consistency, prudence,
matching and the historical convention. Accounting practices and principles are not
codified in the UAE. Companies generally follow the International Financial Reporting
Standards (IFRS) and best industry practices for financial reporting.

Financial Reporting

Federal Commercial Companies Law No. 8 of 1984, together with certain ministerial
decisions, requires that public and private shareholding companies, limited liability
companies and branches of foreign companies file annual audited financial statements
with the Ministry of Economy and Commerce. In certain Emirates, limited liability
companies and branches of foreign companies may be required to file audited
accounts to renew their trade licenses.Within three months of their year-end, banks
must file with the Central Bank their audited accounts, together with certain other
forms and returns as specified by the Central Bank. Insurance companies and agencies
must file their audited accounts with the Commissioner of Insurance at the Ministry of
Economy and Commerce within four months from the end of their financial year.
The local authorities prescribe that all companies must present their financial
statements in accordance with the International Financial Reporting Standards (IFRS).

Accounting Profession

The accounting profession is well represented in the UAE, with most of the large
international accounting firms being present in the major centers. The registration
of accountants and auditors is governed by Federal Law No. 22 of 1995. The audits
required by statute may be undertaken only by auditors who are registered in the
Federal Register of Accountants and Auditors. The Accountants & Auditors Association
was established to cope with the overall economic development in the UAE;
particularly in the field of commerce and industry which is manifested in the issuance
of all economic legislations. The main objective of the association is to undertake the
necessary measures for developing and consolidating the rules and standards for the
practice of the profession of accounting and auditing in the country in general.


c. Taxation

Taxation of Corporates

Each Emirate has its own decrees on corporate taxation.
With the exception of banks and oil companies no corporate income tax is payable
by businesses in the UAE. Oil companies pay up to 55% tax on UAE sourced taxable
income whereas banks pay 20% tax on taxable income. The taxable income of banks
is as per the audited financial statements whereas that of oil companies is as per the
concession agreement. Oil companies also pay royalties on production.

Taxation of Individuals

Individual Income tax is not levied in the UAE.

Withholding Taxes

Withholding taxes are not levied in the UAE.


Municipal Taxes

Municipal taxes are imposed on hotel services at rates ranging from 5% to 10%.

Tax Treaties

In order to increase economic development of the country by encouraging cross
border transactions, the Government of the UAE has entered into Tax treaties with
several countries including Canada, China, Egypt, France, Germany, India, Pakistan,
Poland, Turkey and New Zealand. This would enable the foreign entities to reduce the
tax incidence on the UAE sourced income. UAE has entered into double taxation
avoidance agreements (DTAAs) with 47 countries and is in negotiations with at least 15
more countries.


7. International relations

a. Government

The politics of the United Arab Emirates take place in a framework of
a federal, presidential, elective monarchy. The UAE is a federation of seven absolute
monarchies: the emirates of Abu Dhabi, Ajman, Fujairah, Sharjah, Dubai, Ras al-
Khaimah and Umm al-Qaiwain. The President of the United Arab Emirates is its head of
state, and the Prime Minister of the United Arab Emirates is its head of
government, including foreign affairs, security and defense, nationality and
immigration issues, education, public health, currency, postal, telephone and other
communications services, air traffic control, licensing of aircraft, labor relations,
banking, delimitation of territorial waters and extradition of criminals. All
responsibilities not granted to the national government are reserved to the emirates.

The UAE government comprises three branches: the executive, legislature,
and judiciary. The executive branch consists of the President, Vice President, Prime
Minister, Federal Supreme Council, and a Council of Ministers (the cabinet). The
Federal Supreme Council is composed of the emirs of the seven emirates. It elects the
president, vice president, members of the Council of Ministers, and judges of the
Federal Supreme Court. The Supreme Council also formulates government policy,
proposes and ratifies national laws, and ratifies treaties.

Although elected by the Supreme Council, the president and prime minister are
essentially hereditary. The emir of Abu Dhabi holds the presidency, and the emir of
Dubai is prime minister. All but one prime minister served concurrently as vice
president. The political influences and financial obligations of the emirates are
reflected by their respective positions in the federal government. While each emirate
still retains autonomy over its own territory, a percentage of its revenue is allocated to
the UAEs central budget.


Sheikh Zayed bin Sultan Al Nahyan was the UAE's president from the nation's founding
until his death on November 2, 2004. On the following day the Federal Supreme
Council elected his son, Sheikh Khalifa bin Zayed Al Nahyan, to the post. Abu Dhabi's
crown prince, Mohammed bin Zayed Al Nahyan, is the heir apparent.


The legislature is the Federal National Council (FNC), which consists of 40 members
drawn from all the emirates. Half are appointed by the rulers of the constituent
emirates, and the other half are indirectly elected to serve two-year terms. The first
indirect elections took place in 2006, and the goal is a wholly elected council. The
council carries out the countrys main consultative duties and has both a legislative
and supervisory role provided by the constitution. The council scrutinizes and amends
proposed legislation, but cannot prevent it from becoming law. The main tasks of the
FNC are:

Discussing constitutional amendments and draft laws, which may be approved,
amended or rejected
Reviewing the annual draft budget of the federation
Debating international treaties and conventions
Influencing the Governments work through the channels of discussion, question
and answer sessions, recommendations and following up on complaints
A constitutionally independent judiciary includes the Federal Supreme
Court. However, Dubai and Ras al-Khaimah do not belong to the national judiciary.
All emirates have their own secular andIslamic law for civil, criminal, and high
courts.


In parallel to the economic developments of the UAE, the country's leaders have also
initiated political reforms in order to further develop the political institutions. The
political modernization process was envisaged in three stages: first, conduct elections
to elect half the FNC members through an Electoral College; second expand the
powers of the FNC and increase the number of FNC members, which would require
extensive constitutional studies and possible modifications, at the end of which the
political institution would be a more enabled body; and finally, an open election for
half the council.

The purpose of the elections was to expand political participation and develop a
culture of government reform. The limited scope of participation was conditioned by
three reasons: (1) the country not having an electoral tradition, (2) the prevailing
political tension and instability in the region meaning that there was no scope for
error, and (3) elections in the region having proved to potentially be divisive affairs,
based on sectarian and religious issues, which the UAE wanted to avoid.
In December 2008, the Supreme Council approved constitutional amendments both to
empower the FNC and to enhance government transparency and accountability.


United Arab Emirates Government

The United Arab Emirates (UAE) eGovernment is the extension of the UAE Federal
Government in its electronic form. The UAE eGovernment enables convenient access
to government information and services through innovative and customer-friendly
delivery channels and streamlines the processes for quality and timely government
service delivery. The UAE eGovernment engages modern tools in Information and
Communication Technology to actively connect with its wide base of users from within
the UAE and beyond. The setting up of the UAE eGovernment is a major step towards
modernisation and upgradation of government functioning as it brings about a cost-
effective, eco-friendly, transparent and participative government.


b. Business Hours

The official weekend is on Thursdays and Fridays. Some multinationals close on Fridays
and Saturdays, to overlap with companies doing business outside of the Arab world.
However, most of the smaller private companies only close on Friday, although
Thursday may be a half-day.Government offices open at 7.30 a.m. and close at 2.30
p.m. Private offices tend to keep longer hours, many coming back to work in the
evening after an extended mid-day break whilst others are open from 8 a.m. to 6 p.m.
Shop hours are similar in their opening times, but remain open until 9-10 pm.
Department stores, boutiques, the souks and many food shops remain open on a
Friday, apart from Prayer Times (11.30-1.30), while larger shops re-open on a Friday
afternoon around 4pm.During Ramadan most work is accomplished in the early hours
of the morning or much later in the evening after the days fast is broken (at sunset).


c. Visa issues

The laws governing immigration requirements are mainly contained in Federal Law No.
6 of 1973 regarding the Entry and Residence of Expatriates as amended by Federal Law
No. 13 of 1996, the immigration Law. The general rule regarding foreign visitors to the
UAE is that all visitors, except transit passengers who do not leave the airport, citizens
of the GCC countries (Qatar, Kuwait, Saudi Arabia, Bahrain and Oman) and British
citizens, need to obtain a visa in order to enter the UAE. In order to apply for any visa
or permit, it is necessary to obtain the sponsorship of either a UAE resident (who
maybe a foreigner) or other legal entities in Dubai such as companies or hotels. If the
visa or permit is being arranged by a hotel or local sponsor, it is usually deposited at
the airport for collection by the visitor on arrival. There are several types of visas and
permits one may apply for. The type that a person will need will primarily depend on
the individuals purpose of entry into the UAE. Each permit or visa has its own
requirements and procedures. However, there are general conditions which all
applicants must satisfy in order to obtain a visa or permit, as listed below:
The applicant must hold a valid passport or document allowing him to enter
the country and return to his country of residence
The official authorities have approved his entry for the purpose sought
The applicant has a foreign or local sponsor who is resident in the UAE
The applicant is not banned from entering the UAE
The applicant has not previously been deported from the UAE, unless special
permission has been obtained for his entry.

8. Creating your Business

a. Annual Requirements for Businesses

All companies must renew their registration with the Ministry of Economy,
Municipality or Economic Department and the Chamber of Commerce annually.
Registration fees are levied and vary according to the type of entity being registered
and the government authority concerned. Companies engaged in the oil, gas and
petrochemical sector and banks are the only entities required to file tax returns.
However, the following businesses must have their accounts audited annually:

Banks (local banks and branches of foreign banks)
Insurance companies and agencies
Public and private shareholding companies
Limited liability companies
Branches of foreign companies
Partnerships limited by shares
Other companies whose articles require annual audits

b. Legal structures for business

Foreigners of any nationalities can actively participate in various available business
activities in the UAE. Under the Federal Law No.8, business organizations may take any
one of the seven mentioned forms:
Limited Liability companies
Public shareholding companies
Private shareholding companies
Partnerships limited by shares
General partnerships
Limited partnerships
Shareholding companies
The company which does take any of these forms is considered as an illegal company
and the person running it will severally liable for the obligations arising from these kind
of contracts. An exception applies only to the companies that are operating in a Free
Trade Zone. Dubai is favored for its liberal approach to business and commerce as the
liberal regulations and laws attract millions. Each business entity big or small must be
registered and licensed with the Federal Ministry of Economy and Commerce of the
country. Moreover, there is a law set that the participation of the UAE nationals should
never be less than 51 percent in any of the commercial enterprises.
Private Shareholding Companies: This company must have at least three shareholders
and the minimum capital which one has to invest in Dh 2 million. The shares of the
company may not be offered to the public. The incorporating documents of these
companies must preclude public offering of shares.
Limited Partnership: This kind of partnership may comprise of one or more general
partners who are severally and jointly liable to all its debts. A limited partner may not
participate in the management and his name may not appear in the name of
partnership. Moreover, all the general partners must be UAE nationals.
Joint Ventures: If we talk about joint ventures, these are formed by the agreement
between two or more legal entities or natural persons. Moreover, the terms and
objectives of these ventures are governed by the joint venture contract. It may be
carried out in private name of one of the UAE national partners.


c. The following steps are required in establishing a company in UAE
A business must be registered with the municipality or the relevant Economic
Department and the Chamber of Commerce of each Emirate in which activities of the
business are conducted, and with the ministry of Economy and Commerce. In addition,
the following businesses require approval from the specified federal ministries and
agencies:
Banks, financial institutions and exchange companies must obtain approval
from the Central Bank
Insurance Companies and related agencies must obtain approval from the
Commissioner of Insurance at the Ministry of Economy and Commerce
Manufacturing businesses must be approved by the Ministry of Finance and
Industry
Medicinal products must be approved by the Ministry of Health
Printing, Publishing & Broadcasting activities must be approved by the
Ministry of Information & Culture
Educational activities are governed by the Ministry of Education
Special procedures apply in each Emirate regarding registration of businesses engaged
in oil and gas production and related industries. The requirements for registering a
company, including the time required fees payable, number of shareholders and
minimum capital depend on the particular type of business entity being established.

9. Models

a. The Geert Hofstede s analysis

The Geert Hofstede analysis for the United Arab Emirates is almost identical to other
Arab countries their Muslim faith plays a large role in the peoples lives. Large power
distance and uncertainty avoidance are the predominant characteristics for this region.
This indicates that it is expected and accepted that leaders separate themselves from
the group and issue complete and specific directives.
The Geert Hofstede analysis for the Arab World, that includes the countries of Egypt,
Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, and the United Arab Emirates,
demonstrates the Muslim faith plays a significant role in the peoples lives.

Large Power Distance (PDI) (80) and Uncertainty Avoidance (UAI) (68) are predominant
Hofstede Dimension characteristics for the countries in this region. These societies are
more likely to follow a caste system that does not allow significant upward mobility of
its citizens. They are also highly rule-oriented with laws, rules, regulations, and
controls in order to reduce the amount of uncertainty, while inequalities of power and
wealth have been allowed to grow within the society.

When these two Dimensions are combined, it creates a situation where leaders have
virtually ultimate power and authority, and the rules, laws and regulations developed
by those in power reinforce their own leadership and control. It is not unusual for new
leadership to arise from armed insurrection the ultimate power, rather than from
diplomatic or democratic change.

The high Power Distance (PDI) ranking is indicative of a high level of inequality of
power and wealth within the society. These populations have an expectation and
acceptance that leaders will separate themselves from the group and this condition is
not necessarily subverted upon the population, but rather accepted by the society as
their cultural heritage.

The high Uncertainty Avoidance Index (UAI) ranking of 68, indicates the societys low
level of tolerance for uncertainty. In an effort to minimize or reduce this level of
uncertainty, strict rules, laws, policies, and regulations are adopted and implemented.
The ultimate goal of these populations is to control everything in order to eliminate or
avoid the unexpected. As a result of this high Uncertainty Avoidance characteristic, the
society does not readily accept change and is very risk adverse.

The Masculinity index (MAS), the third highest Hofstede Dimension is 52, only slightly
higher than the 50.2 average for all the countries included in the Hofstede MAS
Dimension. This would indicate that while women in the Arab World are limited in
their rights, it may be due more to Muslim religion rather than a cultural paradigm.
The lowest Hofstede Dimension for the Arab World is the Individualism (IDV) ranking
at 38, compared to a world average ranking of 64. This translates into a Collectivist
society as compared to Individualist culture and is manifested in a close long-term
commitment to the member 'group', that being a family, extended family, or extended
relationships. Loyalty in a collectivist culture is paramount, and over-rides most other
societal rules.
The predominant religion for these countries is Islam, the practice of the Muslim faith.
The combination of these two high scores (UAI) and (PDI) create societies that are
highly rule-oriented with laws, rules, regulations, and controls in order to reduce the
amount of uncertainty, while inequalities of power and wealth have been allowed to
grow within the society. These cultures are more likely to follow a caste system that
does not allow significant upward mobility of its citizens.
When these two Dimensions are combined, it creates a situation where leaders have
virtually ultimate power and authority, and the rules, laws and regulations developed
by those in power, reinforce their own leadership and control. It is not unusual for new
leadership to arise from armed insurrection the ultimate power, rather than from
diplomatic or democratic change.


b. Cultural differences high and low-context theory by Edward Hall

The high- versus low-context dimension of culture relates to norms of communication.
In low-context countries, communication relies more heavily on the literal meaning of
the words used. Meanings of written and spoken communication are more explicit.
To people from high-context cultures, the bluntness and directness of low-context
communication styles can seem insulting or aggressive. In high-context cultures, much
more of the context surrounding the written or spoken communication is involved in
conveying the message. Factors such as the social status of the communicators and
the nature of the relationship between them are key. The meaning of everything said
in high-context communication has to be interpreted in the context of the social
relationship between the individuals. Interpersonal space is also related to the high-
context versus low-context dimension of national cultures. In low-context cultures,
people tend to be uncomfortable standing closer than three feet from each other
when conversing. In high-context cultures, people tend to stand relatively close when
conversing. They perceive a distance of three feet between communicators as
something that interferes with their communication, and they will tend to step closer
in order to be more comfortable. People from UAE have definitely a high-context
culture.

c. Time conception in accordance to Trompenaars model

While similar to Hofstede's findings in many ways, the dimensions of culture identified
by Fons Trompenaars provide additional insights into cultural differences.
Trompenaars found that cultures also differed on universalism versus particularism,
neutral versus affective, and achievement versus ascription dimensions.

Universalism versus particularism. Universalism is the degree to which people
believe that various ideas and practices can be effective in all circumstances.
People who are high in universalism believe they can develop rules and standards
that can be reasonably applied to everyone in every situation. They tend to use
contracts, formal systems, and procedures to convey what they expect from
others. People who are low in universalism (i.e., high in particularism) develop
their expectations of others based on their personal relationships with them and
their trust in them rather than on rules. When negotiating deals, people from
highly particularistic cultures will want to develop a relationship with the other
party before having substantive discussions toward making an agreement. People
from highly universalistic cultures are prepared to proceed with substantive
discussions much more quickly, but then expect to document their agreement with
an enforceable contract. People from UAE are particularism.


Affective versus neutral. In highly affective cultures, people tend to openly
express their feelings. In highly neutral cultures, emotions are not expressed as
openly and naturally. People from highly affective cultures are more likely to
smile, talk loudly when excited, and greet each other enthusiastically. People from
highly neutral cultures experience the same emotions, but are less inclined to
express them, and they express them more subtly. Implications for behavior in the
workplace include how demonstrative people are when showing appreciation and
affection for each other and when celebrating successes. UAE has an affective
cuture.

Achievement versus ascription. In highly achievement-oriented cultures, social
status is largely derived from a person's achievements. In highly ascription-
oriented cultures, social status is largely derived from personal attributes such as
age, experience, social connections, or gender. In organizations, a person's status
is reflected in his or her privileges such as access to resources and perks,
deferential treatment, and input in decision making. UAE is a country with a highly
ascription.







10. References

- http://www.wright.edu.
- eeBizGuides.
- Doing Business in UAE 2011: Making a Difference for Entrepreneurs.
- Doing Business in the UAE | UAE Social and Business Culture. Comunicaid.
- Doing Business in UAE. PKF Accountants & business advisers.
- Strategic Planning for Doing Business in the United Arab Emirates. Russi J. Patel,
FCA.