The Emirates are very open to international trade. The country is part of the Greater Arab Free Trade Area (GAFTA), a pact of the Arab League entered into force in January 2005 which aims to form an Arabic free trade area. In June 2009, the GCC concluded a Free Trade Agreement with Iceland, Liechtenstein, Norway and Switzerland (the European Free Trade Association).
Non Tariff Barriers
It is prohibited to import foods exposed to radiation and import of alcohol and pork is strictly restricted to fixed quotas. It should also be known that any beef or poultry based product should be accompanied by a Health certificate from the country of origin. The UAE is part of the Gulf Cooperation Council (GCC). In 1981, GCC had established an agreement (Unified Economic Agreement) according to which all farm, animal, industrial products or natural resources of the member States should be exempt from customs duties or any other tax when they conduct intra-GCC trade. GCC is presently in talks with the European Union, Japan and USA for future free-trade agreements.
Customs Duties and Taxes on Imports
Since the adoption of a common tariff for the GCC countries, the customs duty is 5% of the CIF value of the product.
Since 2003 and the setting-up of the free trade area between the GCC countries, the system has been harmonized.
You must furnish:
- Delivery order from a shipping agent addressed to a licensed company by licensing agencies in UAE; - Original bill of lading (for seaports); - Original invoice from the exporter addressed to a licensed importer in the country detailing total quantity, goods description and total value for each item (3 exemplaires); * - Copy of the trade license of buyer and seller; - Certificate of origin approved by the chamber of commerce at the country of origin detailing the origin of goods; * - Transport certificate; * - The Customs entry declaration; - A form or letter of exemption from customs duties in case the exemption requirements are fulfilled including Local Purchase Order (LPO); - Detailed packing list as per weight, method of packing and HS code for each individual article contained in the shipment; * - Import permit from the competent agencies in the event of importing restricted goods; * - Health or Phytosanitary certificate or an export certificate for the processed products attested by the concerned national department office, confirming that the product is fit for human consumption - A halal certificate for the meat ingredients; * - A non-radiation certificate for some products (optional for European products); * - Transport documents that are required for import clearance.
Documents with a * must be attested by the Embassy of United Arab Emirats and the Chamber of Commerce in the country of origin of products.
The Emirates consumers are above all guided by the price in their purchase decisions. Today, the nationals are more and more sensitive to other considerations like product quality, existence of after-sales service or even the degree of innovation in the product. They are also sensitive in following their customs and traditions and in view of this perspective an Arabic packaging is recommended. Sensitivity to local traditions and Islamic beliefs is also essential. An important difference exists between high and low income populations. The consumer behavior will rely stongly on this factor.
Consumer Profile and Purchasing Power
People from Emirates are a young population. They have very high standard of living. They are curious vis-a-vis new technologies and products. They are always looking for the most modern equipment particularly in the field of mobile telephony and information technology. From another point of view, they are very conscious of brand image for luxury products and everything.
There are a number of selling methods possible in Emirates and among them direct selling can be pointed out. However this mode remains very less widespread. The most widespread custom is to market your products through local commercial agent. It is recommended to choose from different distributors or commercial agents in each Emirate. Imports and exports of food products are typically entrusted to companies specialized in this field. This market is dominated by 5 or 6 companies. However, a growing number of food distributors import directly themselves become a distributor and a wholesaler for other more modest establishments. Finally, the companies have the tendency to use the geographical position of Dubai, which is in fact a regional hub, for stocking their goods in this Emirate before re-export to other markets as those of India or Iran. Moreover, the use of franchise has witnesses a significant expansion.
Supermarkets concentrate on the largest part of the market in the field of distribution with 49.2% of sales. The market leaders are the Groups Carrefour , Emke and Spinney to a lesser extent. They are followed by bulk sales which realizes 28.3% of the market share. In the third position are the shopping centers with 6%, then fairs and exhibitions with 1.5% finally followed by specialized stores with 0.2%.
Maritime transport remains the principal means to goods transport. There are 15 ports in Emirates which experience an average traffic of 3 billion containers in a year. The port Jebel El Ali is one of the largest artificial ports in the world. The air or surface transport freight remains less important than the maritime transport. According to them, rail transport is non-existant.
Industrial production has witnessed an unprecedented growth in Emirates by contributing today 14% of the GDP. In Abu Dhabi the dominant industries are petroleum and petrochemicals, gas processing, desalinisation of sea water and electricity production. In Dubai and Sharjah, the industrial production is more diversified. Petrochemical and chemicals, metallurgy (aluminum), agro products, paper and textile industries are found. Ras el Khaimah has cement plant, marble works and a pharmaceutical plant. The small scale industry has developed.