The business culture in the United Arab Emirates is probably different from what you would experience at home. However, it is easy to navigate, and this helpful guide explains how.
The most important thing to remember is that business etiquette in the UAE is all about respect. Furthermore, attitudes towards business are changing. For instance, corporate social responsibility is becoming an increasing concern. In addition, the government is taking measures to promote women in the workplace and discourage corporate crimes.
This guide includes the following information:
- Business in the UAE
- Business culture in the UAE
- Working hours and conditions
- Business etiquette in the UAE
- Organizational structure and hierarchy in the UAE
- Business strategy, planning, and decision-making in the UAE
- Meetings and negotiations
- Networking in the UAE
- Work socializing in the UAE
- Women in business in the UAE
- Businesses in the community in the UAE
- Social provision through businesses in the UAE
- Business corruption and fraud in the UAE
- Useful resources
Business in the UAE
Business is booming in the UAE. In fact, as of 2017, the country had 131,000 registered businesses; many of which had foreign owners or investors. The Emirates also saw US$10.3 billion in foreign direct investment in 2018. Coupled with the fact that there was a 15% increase in Greenfield Investments between 2017 and 2018, it is clear that foreign businesses see huge opportunities there.
In addition, the government is paving the way by opening opportunities for foreign investment. This includes lifting restrictions on foreign ownership and offering long-term visas for investors.
Oil and gas are one of the UAE’s main industries. After all, it was what transformed the country into the economic powerhouse it is today. However, other sectors are ripe for growth, too. For example, renewable energy is huge as the country looks to break its dependence on fossil fuels. Similarly, the automotive and aerospace industries are leading the way in innovation. With tourism to the Emirates constantly increasing, there are growth opportunities in hospitality, and food and beverage, too.
If you plan to capitalize in the country, then you will need to know the proper business etiquette in the United Arab Emirates.
Business culture in the UAE
It is important to remember that the UAE is an Islamic country. For that reason, the business culture there is more conservative than you might experience in Europe or the US. Additionally, weekends are on Friday and Saturday, instead of Saturday and Sunday.
Despite this, you will find that the business world in the UAE is a blending of two cultures. Furthermore, most Emiratis are forgiving to foreign business associates as they understand that the west has much more relaxed attitudes.
Personal relationships are the key to business in the Emirates. Because of this, local business culture demands that you pay attention to small talk and socializing, even at work meetings. Similarly, loyalty is greatly valued.
Working hours and conditions
Generally speaking, the UAE workday runs eight-hours, from 9 am to 5 pm. Additionally, the workweek runs from Sunday to Thursday. Conversely, during the holy month of Ramadan, most people only work six hours a day. Although timekeeping isn’t a priority, Emirates respect punctuality. As a result, it is important that you show up on time for work and meetings.
The UAE also has a good work-life balance. For instance, most employees get 30 days of annual leave in addition to public holidays. They can also get up to 90 days of sick leave. Women also get 45 days of maternity leave at full pay. They also receive special considerations when they return to work.
Traditionally, the UAE does not offer many flexible working arrangements. However, things may soon change. In 2019, the government introduced two new resolutions that may encourage flexi-work. The part-time working resolution is designed to help employers fill labor gaps, especially at odd hours. Similarly, the remote working resolution was created to help Emirati nationals gain more work-life balance.
Business etiquette in the UAE
Having the right communication skills is key to good business etiquette in the UAE. Because of its more conservative culture, communication is more formal here. For instance, you should address people as “Mr” or “Ms” when you first meet them. And while men can exchange a light handshake, when meeting with women, you should always wait for them to offer their hand. Furthermore, you should always greet the eldest person first, and work down through seniority.
In business meetings, compliments are normal. Because relationship-building is such an important part of the culture, it is common to flatter your hosts and their organization. Similarly, small talk and social conversation always kick off every meeting. Chatting about families, the country, and local food, for example, is a good way to go. However, you should avoid divisive topics such as politics and religion.
Most locals wear traditional clothing in business situations. That means a dishdasha for men (the long white shift) and an abaya for women (a floor-length robe). While expats should not adopt the local dress, they should wear formal attire that is modest and not revealing. Men should choose suits and dress shoes. Meanwhile, women should pay close attention to their outfits. Make sure to cover your shoulders, chest, upper arms, and knees at all times. Long skirts and dresses are a good option. You could also wear a light blazer and shirt over loose, flowing trousers. In any case, it is best to avoid wearing flashy jewelry and heavy perfume.
When meeting potential clients for the first time, it is a nice gesture to give a token gift. Similarly, it is always appropriate to give a gift when closing a deal. Gifts are also appropriate to mark big religious festivals, such as Ramadan. If you can buy it from overseas, so much the better. Locals appreciate receiving gifts from different cultures.
For a first meeting, snacks such as high-quality dates or chocolates are a good choice. For more long-term relationships, you can choose higher-quality or more expensive gifts. Carefully chosen coffee table books can also make a good present. At the highest levels, you might even choose pens or cufflinks from upscale brands.
It is best to avoid exchanging gifts across genders. If you have to give a gift to a woman, however, it is best to have a woman on your team present it. At the very least, you could say it’s from a female relative. The same applies to a woman having to present a gift to a male business associate.
There are certain items you should avoid giving as gifts, too, as they can cause offense to Muslim associates. For instance, don’t give alcohol, pigskin products, personal items, anything with pork, or anything related to dogs.
Attitudes towards business cards are quite relaxed in the UAE. This is a result of the country’s international persona. In a meeting, you will typically exchange cards at the beginning. When giving your card, always make sure to do so with your right hand, as it is impolite to use your left.
All company employees should have a business card. Your card should include your company name, name, designation, phone number, e-mail, and website. Moreover, the card should be in both Arabic (the official local language of the UAE) and English (the local business language).
Organizational structure and hierarchy in the UAE
The United Arab Emirates is a very hierarchical society, which is why the local business culture is very stratified. Most companies have a very solid vertical hierarchy. Older, more experienced employees get the top positions in most companies. Moreover, they are the key decision-makers.
On the other end of the spectrum, lower-level employees do not generally have much input in the decision-making process. They tend to remain subordinate and follow whatever dictates come from above. As a result, you will need to win the top players over to do business with them.
Age, money, and family connections all play a role in where someone is positioned within a company. The more of these someone has, the higher up they are. There is also a strong preference for males over females, especially at higher levels.
Business strategy, planning, and decision-making in the UAE
Although the business culture in the United Arab Emirates can appear quite relaxed, that doesn’t mean Emiratis aren’t strategic thinkers. A lot of research goes into planning, and it is common to create several proposals and go back and forth over these until you find something that works.
The decision-making process is usually a long one, therefore it is important to remain patient. While many employees can be involved in research and planning, the decisions are ultimately made by senior players.
All companies must present a formal business plan when setting up a business in the UAE. At the lower level, regular meetings are common to check progress and decide the next steps. However, higher-level business reviews occur mostly on a yearly basis.
Meetings and negotiations
Meetings are key to business culture in the United Arab Emirates. However, these can take many forms. You might have to attend formal meetings where the most senior people present, discuss, and negotiate. Alternatively, you may find yourself attending more casual lunches or coffees. In some cases, you may even be asked to go to someone’s house for dinner.
Since personal relationships are important to business, it is important to create ties with business associates. At any meeting, you can expect to spend at least 30 minutes making small talk before moving onto the business at hand. It is considered rude to be rushed and pushy, so expect the meeting to take awhile. Answering your phone or responding to messages is acceptable, however. Just don’t be too long about it.
Haggling is a big part of the shopping culture in the UAE, therefore you can expect that business will involve a lot of negotiating. That said, you will get nowhere if you can’t create a sense of trust.
Emiratis are not direct in their negotiations, so you will have to learn to get around this. Ask open but unobtrusive questions to figure out their mindset. Alternatively, suggest a range of ideas to see what seems to appeal to them most. There will be a lot of dancing around the issue, so you should avoid giving decisive “yes” or “no” answers immediately. Think of it like playing poker – you want to try and find your opponent’s tells to win the game. Even if negotiations do not go well and the deal falls through, Emiratis will remain friendly. So bear this in mind when you respond.
Networking in the UAE
Social networks are a big part of the business culture in the United Arab Emirates. Because of this, you could find plenty of business opportunities through people you meet socially. You never know who may be in a position to connect you with a decision-maker at a big company.
The UAE also hosts plenty of different networking events. If you are new to the country, start attending some of these to grow your business network. Similarly, you could try groups such as the Dubai Chamber of Commerce, the British Business Group, or the Dubai Business Women Council.
Work socializing in the UAE
Socializing is a huge part of doing business in the UAE, and your business associates will invite you to a lot of lunches and dinners. While it is important to accept these invitations, there are a few things to keep in mind. For example, because you are in an Islamic country, you should avoid drinking alcohol or eating pork and shellfish with Emirati business associates. Furthermore, you will generally make small talk and conversation over a meal, so save the shop talk for afterward.
Women in business in the UAE
Women are getting more involved in business in the UAE. This is because many Emirati women are becoming more highly educated and choosing to work rather than marry early.
In fact, in 2018, 71% of Emirati university graduates were women. In addition, many expat women move to the UAE for work or to start a business there. The UAE government supports women in the workforce with part-time and flexi-work resolutions and paid maternity leave, too.
The government is also encouraging equality in the workplace. In 2018, it passed an equal wage law to begin closing the gender pay gap. Articles 27-24 of the UAE’s labor laws are also designed to protect women. Among these regulations, women cannot be employed between 10 pm and 7 am (with exceptions for technical and health services). Similarly, women cannot be employed in hazardous jobs and they are entitled to maternity benefits.
Nevertheless, only 5% of leadership roles in the UAE’s private sector are held by women. The government, however, appears more inclusive. Women make up 66% of the public sector workforce. Moreover, 30% of those are in decision-making roles and a further 27% are in the UAE cabinet.
Attitudes are certainly more tolerant of women in business. This is especially true for western women. Among the older generation, however, some sexist norms and stereotypes still continue.
Businesses in the community in the UAE
Corporate social responsibility (CSR) is becoming an increasingly big part of business culture in the United Arab Emirates. In February 2018, the government introduced a CSR law, which forced companies to report all CSR activities and offered incentives for CSR initiatives. Similarly, financial privileges and exemptions are awarded to companies that demonstrate outstanding social responsibility. In fact, CSR is now mandatory for most UAE companies.
Many companies adopt different strategies to fulfill their CSR requirements. Some invest in development projects, while others adopt environmentally-friendly policies relating to production. Some even encourage volunteering in local communities with paid time off. Although still in its infancy, CSR is set to make its mark on business in the UAE in the coming years.
Social provision through businesses in the UAE
Business culture in the UAE is largely familial and as such, companies tend to look after their employees. As a result, most businesses provide a range of social provisions.
The law mandates a total of 26% contribution to a pension fund; 15% comes from the employee’s salary, 5% comes from the employer, and the remaining 5% is paid by the government. Similarly, social security is part of the benefits package. Employers contribute 12.5% (or 15% in Abu Dhabi) while employees pay 5%. However, expats do not have to contribute to social security.
Companies also have to provide health insurance for all employees. Often, these benefits are extended to the employees’ families, too.
Business corruption and fraud in the UAE
The UAE penal code criminalizes bribery, embezzlement, and abuse of function. Because of this, these types of corporate crimes do not happen that often. In fact, Transparency International rated the UAE as the least corrupt country in the Middle East and North Africa in 2018.
However, money laundering can be an issue. In the same report, Transparency International noted that millions of dollars of real estate can be bought in Dubai in exchange for cash, and few questions are ever asked.
Additionally, it is more common to see labor and visa fraud. This can take the form of contract substitutions and improper visa details. To avoid this, you should familiarize yourself with local employment contract laws and visa processes. Should you find any irregularities, you can go to your local UAE embassy or the MHRE.