Presently Bahrain, Egypt, Iraq, Iran, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen are the 14 nations in the Middle East. The majority of Middle Easterners share in common the Arab culture, language and religion. It is especially important to take note of the Islamic belief. “Islam means the act of giving one’s self to God or Allah” (Harris & Moran, 2000, p. 385). Visitors and business people must understand the powerful religious and cultural force of Islam to appreciate or comprehend this country.
Although this paper focuses on establishing and doing business in the United Arab Emirates (UAE), the writers have also given attention to the demographics and culture of this intriguing country. The United Arab Emirates is bordered by Saudi Arabia and Oman. Abu Dhabi, Ajman, Dubai, Fujairah, Ras as-Khaimah, Sharjah and Umm al Qaiwain are the seven emirates. Most of the inside areas of the UAE are desert, and from May to September in Abu Ddhabi and Dubai, the humidity and daytime temperatures stay around 105 degrees Fahrenheit.
These high temperatures keep people inside during the daytime hours, and often leaving their homes in the evening to conduct business. Business hours in this region vary, but are generally from 8am to 1pm, reopening at either 3pm or 4pm and closing at 6pm or 7pm. Bank hours are generally 8am to midday. Markets and food stores are open at the later evening hours when it is much cooler (http://jafza. co. ae/ad1. htm). The population of the UAE is approximately two million people of whom only 500,000 are United Arab Emirates citizens; the others are from other Gulf countries, Pakistan, Iran and India.
Although English is widely understood, Arabic is the official language. Most Emirates, approximately 96%, are Sunni Muslims (the remaining 4% are considered Hindu), and their paramount virtues are considered to be dignity, honor and reputation. Although mostly hot and dry with little rain to speak of, the UAE has one important natural resource – petroleum. This marketed the transformation of the UAE’s economy in 1962 with the first export of oil from Abu Dhabi (Johnson, 1987). The UAE became one of the most stable and untroubled international business centers in the Arab world.
In an interview with Roger Biddle, a United States of America soldier who was stationed in the UAE for a short time prior to the liberation of Kuwait, he talked about what he described as the “three strikes and you’re out” law. For instance, if a person steals anything at all, the first time offense would be to cut off the person’s hand that took the item. If the same person stole a second time, then the person’s other hand would be cut off. On the third offense, the person would be beheaded. These punishments were always conducted in public.
Needless to say, the crime rate is extremely low. Arabs prefer close, personal relationships. In a conversation with friends and relatives, they will be close enough to smell the other’s breath and will breathe on the other when speaking. It is desirable for an Arab to smell a friend’s breath and would feel ashamed if denied. When dealing with strangers, Arab’s may not keep such a close distance, and in some social situations, may talk from across the room. Ironically enough, although Arabs are actively involved with others, they will resist crowds in enclosed spaces.
Arabs communicate both verbally and nonverbally, and in conversations, they will constantly gesture with their hands. Pointing at another person is considered to be impolite, and unlike the United States, the “thumbs up” sign is offensive. Also offensive is showing the bottom of your foot. Arabs, when sitting, never cross their legs. Gesturing with the left hand should be completely avoided, as Arabs believe the left hand to be unclean. The loose fitting clothes worn by men and women of the UAE are well adapted to the hot climate. The various layers provide insulation against the heat, and their movement gives a cooling effect.
Most of the local men wear a long white gown, called a dishdasha, and a head cloth called a ghutra. In the summer, the ghutra is normally a thin white cloth, while in the winter thicker, more colorful ones called shemaghs are worn. A skullcap is normally worn under the ghutra. A twisted black coil holds the ghutra in place. Sometimes a flowing white or brown cloak known as a bisht is worn. It is usually made from camels’ wool and it’s edged with gold braid. Women in the UAE wear loose baggy trousers called kandura. The dresses are often embroidered around the neck, sleeves and hem with gold or silver thread.
Over the kandura is the thaub, a rectangular piece of cloth with holes for the arms and head. When women go out they wear a black cloak called an abaya which covers them from head to foot. The Islamic religion requires women to cover their hair in public. Most women wear veils, and some wear masks called burqas. Since the right hand is always preferred over the left, eating is always done with the right hand, even if a person is left-handed. The left hand should only be used when handling something that is considered unclean. Utensils are only found in the most westernized of Saudi homes.
According to the Lonely Planet’s Guide to United Arab Emirates, The UAE’s cuisine is the staple Middle Eastern fare of fuul (paste made from fava beans, garlic and lemon), felafel (deep fried balls of chickpea paste served in a piece of Arabic flat bread), houmos (cooked chickpea paste served with garlic and lemon), and shwarma (usually lamb or chicken served on a flat bread or pita) (Lonely Planet’s, 2000). Alcohol can be purchased in restaurants or bars that are attached to three-star hotels or better, but the prices are very expensive.
During the religious holiday Ramadan (the Muslim month of fasting), no eating, drinking or smoking in public is allowed from sunrise to sunset. In the United Arab Emirates, this is strictly enforced. If a restaurant is open during this time, the government will shut it down. The Islamic calendar uses lunar months of 28 days, so an Islamic year of 12 months is 354 days long instead of 365. When scheduling appointments, it is wise to only schedule one in a day as an Arab could possibly show up late or not at all, as punctuality is not an important issue.
The United Arab Emirates is a male dominating society. Boys and girls remain segregated throughout their childhood, even attending separate schools. Women, while in public, must keep most of their body covered by wearing a veil and a black robe that covers them from head to feet. In an interview conducted with Mustafa Qreshi, a college student at Polk Community College who is from the United Arab Emirates, he stated that there are no women in power, although it is acceptable for women to work in teaching or nursing professions.
When Mustafa was asked about whether it was encouraged to have large or small families, he stated that is was taboo to talk about anything sexual related (Mustafa interview). After careful examination of the demographics, culture, work ethics, and local laws, the writers propose taking INS Integrated Products and Services to the United Arab Emirates to engage in open commerce inside of the Jebel Ali Free Trade Zone. INS will operate under a service license issued and renewed annually by the UAE government. Under this type of license, 100% ownership of the company is allowed, however, the property remains under lease by the government.
INS is a computer product and service company that specializes in document imaging, data capture, and document/data conversion. Using Document Imaging or Data Capture, and Electronic Forms or Document/Data Conversion, INS turns stacks of paper and proprietary data into digital or image formats. INS integrates these technologies with converted data in existing computer systems and work processes. Converted files are delivered on CDR optical disc and/or uploaded to the clients’ computer network where data can be retrieved in an instant.
The following text will provide some of the information that is used to evaluate the process of starting a business in the United Arab Emirates. Laws of the United Arab Emirates allows for the establishment of seven types of businesses. They are: private shareholding companies, public shareholding companies, limited liability companies, general partnerships, limited partnerships, partnerships limited by shares, and companies which operate inside a free trade zone. This paper will focus primarily on operating a business under provisions made by Free Trade Zone licensing.
As an incentive for businesses to operate inside of the UAE, free trade zones have been established to allow foreign businesses to operate with fewer restrictions. There are seven free trade zones in the UAE under which to operate: Jebel Ali Free Zone, Hamiriyah Free Zone, Ajman Free Zone, Umm Al Quwain Free Zone, Fujairah Free Zone, Ras Al Khaimah Free Zone, and Sharjah Free Zone. The Free Trade Zones in the UAE are well equipped with all the amenities, facilities and communication infrastructure required to set up a business. 0% of foreign ownership is allowed with no recruitment or sponsorship problems.
Other benefits include corporate tax and customs duty exemption on imported raw materials and equipment and no levy on exports and imports. When a company is approved for the Free Trade Zone, it is given one of the following licenses by the Free Zone Authority: Companies holding a valid service license from the respective government body in the UAE can offer banking, contracting services etc. but have to abide by any requirements of the governing body.