Dubai’s building industry is booming, and that means fantastic business opportunities for FM service providers willing to make the move. So how do you go about it?
by Celine Delabie
19 October 2007
Anyone who is involved with the building industry will be aware of the booming market in Dubai. With new buildings completing every day – housing businesses, industrial operations and accommodating expatriates who have made the city their home – there is a wealth of opportunities for FM organisations.
With so many high-profile projects in Dubai there is an obvious market for FM services. The challenges faced by global businesses, operating in an extreme climate, alongside a huge influx of expatriates – with their strong views on service levels and high expectations of accommodation and retail experiences – means that FM is already a well-established concept in the United Arab Emirates (UAE), and particularly in Dubai.
1 The business climate in Dubai
Despite a relatively small population Dubai’s total imports still exceed $14 billion (£7 billion). This is because the city is the major re-export centre for the region. Many of the economies in the region served by Dubai are still at a relatively early stage of development, so there is plenty of long-term scope for diversification and expansion, with the associated requirements for energy and FM services.
Another important consideration for FM firms looking to the Middle East is the wider implications of Dubai’s growing role as a supplier to the emerging markets of India, the former Soviet republics, central Asia and South Africa.
2 Opportunities for providers
With such a broad spread of opportunity for FM service providers in Dubai and the Middle East in general, it is important to enter this region with a clear focus. Environmental issues are a core concern, given the high levels of pollution already present in Dubai. With manufacturing and industrial activity on the increase, this is one area in which energy services companies can find their expertise employed at consultation stage – particularly in the design of new plant and the specification of equipment.
3 Making the move to free trading
Businesses are often persuaded
to move into the Dubai business market by the attractive free trading capabilities this allows. For example, there are no foreign exchange controls or trade barriers in Dubai, import duties are extremely low and many products are exempt from these levies.
Once FM firms have made the decision to set up an office, they need to think about the legal aspects of setting up a company, or division in Dubai itself.
4 The legalities and registration
All companies registered to trade and do business in Dubai need to be sponsored by a local organisation. This means that a resident business must have at least a 51 per cent shareholding in the company. The emphasis is on retaining a local workforce and expertise.
The basic requirement for all business activity in Dubai is one of three categories of licence, covering commercial, professional and industrial operations. These licences are issued by the Dubai Economic Department and registered with the Dubai Chamber of Commerce and Industry.
5 Applications for licences
In order to establish a branch or representative office in Dubai FM companies need to consider and allow time for the paperwork to be processed. This involves applying for a licence from the Ministry of Economy and Commerce and submitting an agency agreement with a UAE national or 100 per cent UAE-owned company.
Before issuing the licence the ministry will forward the application to the Economic Department for government approval and also to the Federal Foreign Companies Committee.
6 Using a mixed workforce
With stringent employment laws in Dubai it is surprising that HR does not pose more complications. However, with English as the main spoken and written language and an international approach to business relationships, there are very few issues with integrating a local and expatriate workforce here.
7 Establishing a local presence
Having a presence in Dubai when dealing with customers there can provide considerable business advantages. Traditionally, Middle Eastern businesses prefer to deal with someone they know and trust. Therefore, personal relationships are even more important here than when doing business in the UK and Europe.
Key points for your consideration
- Opportunities are ripe for doing business in Dubai – with both local organisations and international customers
- Energy and environment management is a clear consideration for all new businesses
- Consider the legal implications – there must be a 51 per cent local shareholding in all incoming companies to ensure the local workforce is retained
- Personal relationships form the
- Basis of good business in Dubai and UAE companies. Ensuring a local presence can establish and nurture these relationships
Celine Delabie is business development manager for MAF Dalkia Middle East
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