Before doing business in the United Arab Emirates (UAE), companies should undertake due diligence activities to ensure that they are fully informed about the country’s laws, regulations, and cultural norms. Unlike the UK where government agencies including Companies House exist (where individuals can verify details of any registered entity in the country), such systems do not exist in the UAE; thus, presenting a set of challenges to conducting a company verification.
With that, here are some of the key due diligence activities that companies should consider when expanding to the UAE market:
- Research the legal and regulatory environment: Companies should research the legal and regulatory environment in the UAE, including local laws and regulations that may apply to their business activities. This may include labour laws, immigration laws, tax laws, and commercial laws.
- Understand the cultural and business norms: Companies should also understand the cultural and business norms in the UAE, including the importance of personal relationships and networking in business dealings. It is also important to be aware of cultural sensitivities and practices, such as dress codes and religious customs.
- Conduct background checks on potential partners: Before entering into any business partnerships or collaborations, companies should conduct thorough background checks on their potential partners to ensure that they have a good reputation and are financially stable.
- Check for sanctions and export control restrictions: Companies should also check for any sanctions or export control restrictions that may apply to their business activities in the UAE, including restrictions on certain goods and technologies.
- Assess the local market and competition: Companies should assess the local market and competition in the UAE to determine whether there is a demand for their products or services and to understand the competitive landscape.
- Understand the local banking and finance system: Companies should also look to understand the local banking and finance system in the UAE, including the availability of credit and the requirements for opening bank accounts and conducting financial transactions.
By undertaking these due diligence activities, companies can reduce their risk of encountering legal or regulatory issues and ensure that they are well-prepared to do business in the UAE. Get in touch and engage with our team of experts to learn more on the additional things to be on the lookout for when planning on expanding to the region.