Mastering B2B relationships in the UAE

The ability to form strong relationships is essential in the B2B credit world, as it facilitates business with customers and minimizes potential risk. But business relationships have many layers, all which credit professionals must master. In global trade, credit professionals should be knowledgeable about the cultural differences of their customers overseas to ensure a successful relationship. By doing your due diligence in learning about the region’s business style, culture and customs, you are one step closer to not only understanding them but becoming a long-time business partner.?

Business in the United Arab Emirates (UAE) is multicultural. Most Emiratis are not from the Emirates, so you will likely be doing business with expatriates or Americans. However, whatever your counterpart's nationality, he or she may report to someone who is a native of the Emirates—the expatriate and native-born communities are intertwined in professional life.?

Understanding and respecting the cultural nuances, business styles and religious sensitivities of the UAE is crucial for successful B2B relationships in this region, with emphasis on personal connections, mutual trust and flexibility during negotiations.?

If you are dealing with a local company, it will most likely be family-owned and strictly hierarchical, with decisions being made at the top by senior family members.??

• If you're dealing with a subsidiary of an international corporation, key staff members are likely to be expatriates and influenced by the business style of the parent company.??
• Therefore, it is highly recommended that you research beforehand the company you wish to do business with to know what to expect.?

Always show respect to religious sensitivities as the UAE are heavily influenced by Islam and not doing so can cause irreparable damage to business relationships. For example, it is custom for Muslims to pray five times a day, so a meeting can and will be interrupted for prayer if the meeting coincides with a designated prayer time.?

Relationship Building?

In the Emirates, business revolves around family, trust and personal relationships, so it is crucial that the foreign businessperson establishes a relationship that is more than just business. You need to establish connections based on mutual friendship and trust.???

The relationship-building process will begin at the initial meeting, which will mostly be spent in conversation with them getting to know you. Anyone could be a favored relative of someone at the top.?

Flattery is an expected part of the UAE business culture. Make sure to compliment your counterparts, their organization and the Muslim world in general.??

Top Export Partners?

The UAE’s main export partners include Japan, with 15% of sales; India, with 13%; Iran, with 11%; and Thailand, Singapore, and South Korea, each with 5%. The nation is an important center for re-exports to India, Iran and Iraq.?

Major Export Products and Services?

The UAE’s main exported commodities are natural gas; dried fish; re-exports; dates; and crude oil, which comprises 45% of exports. Crude oil exports flow mostly to Japan, Chinese Taipei, and other East-Asian countries.?

Top Import Partners?

The UAE’s principal import partners are India, with 17% of purchases; China, with 14%; the U.S., with 10 percent; Germany, with 5%; and Japan, with 4%. Imports purchased from members of the Greater Arab Free Trade Area enter the country duty-free, except for tobacco and alcohol.?

Major Import Products and Services?

The UAE’s principal import commodities are food, machinery and transport equipment, and chemicals. Large raw material imports, such as tobacco leaves, are processed in the free trade zones and re-exported after processing.?

Negotiation?

Businesspeople in the UAE tend to be shrewd bargainers. Initial offers or prices are most likely exaggerated and should be seen as a starting point from which concessions can be made. Similarly, you should start negotiations prepared to compromise or back down. Doing so is a sign of respect for your counterparts. The best outcome is one in which everyone feels they have gained.?

In the end, your relationship with your Emirati counterparts is of greater importance than any contract you sign with them. The daily majlis (seated receptions) that the local rulers hold are good opportunities to network and connect with prominent locals.?

Emirati business meetings are quite informal. Appointments, schedules and agendas are rarely adhered to in a strict manner and impromptu visits are common. Don’t be surprised to be asked to drop in for a social call whenever you are in the area, and your UAE counterparts may well turn up at your office unannounced.?

Business Etiquette?

When exchanging greetings in the UAE, it is appropriate when men greet other men to shake hands. Be aware that handshakes can be prolonged, and etiquette dictates that you wait for the other person to withdraw his hand first.???

? If a man is greeting a woman, he should wait for her to extend her hand first; if she does not, a polite bow or nod of the head will suffice. For foreign businesswomen, it is also advisable to wait for a man to extend his hand first before shaking hands.??

? Foreign businessmen should not be taken aback if their male Emirati counterparts holds their hands while walking to a meeting, as holding hands among men is common, and does not have the same connotation as it does in Western countries.??

? But whatever your gender or the gender of the person holding or shaking your hand, make sure to only use your right hand for greetings, as they will, because in the Emirates the left hand is considered unclean.??

? If your counterpart is a non-Muslim foreign national, etiquette will differ, so it is best to follow your counterpart's lead in the greeting process.?

? Men are to maintain direct eye contact with other men as it shows openness and trustworthiness. However, men should maintain minimum eye contact with women.??

Although Western attire is popular in the United Arab Emirates, many people wear traditional clothing, in business situations and otherwise. Foreign businessmen should stick to the classic Western business ensemble: dark-colored (gray, black or blue) business suit, white shirt, unpretentious tie, and dress shoes. Businesswomen should wear finely tailored, dark-colored business suits.??

?Consider joining?FCIB?to have unlimited members only access to the World Trade Ref, which also features information on travel security and restrictions in place for the specific country.?