All your queries about the Dubai business scene during the pandemic answered.
Have you been wondering how the business landscape of Dubai changed during the COVID-19 pandemic? Our CEO, Hisham Al Gurg, is here to discuss the situation in detail. A full transcript of the interview is below.
15 min 2 sec
There are always two ways to look at any major event that happens in our lives, either optimistically or pessimistically. We tend, here in Dubai, to always be optimistic, following the optimism of our leaders, Sheikh Mohammed Rashid Al Maktoum. We never change the strategy of Dubai in terms of always being bold, always being open to the world, always being innovative, whatever happens in the region, whether it’s political turmoil, economic turmoil, wars, Dubai has always stood firm and its strategy is always open. We’re always welcoming of any other nationality that wants to come here. And recently, as you know, with the peace treaty with Israel, the country is still open for tourism, even from Israel and other markets. There are more than 220 nationalities working and living here comfortably and happily. So when Covid hit, not just the UAE, the whole world, I think one of the things that helped us the most is to look at this as another adversity that had happened to the whole region before, and deal with it with a single message, which is, “This also will pass.” And with that optimism picture, I think the country was only closed for a few months. We opened back again in May. So the country has been open since May, welcoming businessmen, welcoming tourists, welcoming anyone who wants to basically come to a place where they can succeed and thrive. So, we’re looking at it as an opportunity, definitely. While other markets are closed, other economies are, I would say, suffering, we’re bouncing back and we’re thriving again. And the restaurants are almost full. It’s hard to find a reservation now. This traffic jam is back on the street, not always, but only during rush hours. So these are all indications that life is normal here in Dubai. Yes, we’re being very cautious. We do more tests than any other country in the world compared to our population. There are a lot of guidelines that restrict how you move around without masks, and so on. It’s illegal, obviously. So as long as people follow these guidelines, the economy will remain open. Our markets and countries and hotels and all tourist attractions will remain open. Exhibitions and conferences are also being held. So we’re still looking at it as business as usual, and that’s what makes Dubai unique. It’s always been business as usual, even during Covid.
I think it takes courage to have an exhibition during a Covid period, and that message clearly says that we are willing to adapt to whatever circumstances are happening in this world. Like I said, as long as the guidelines for health and safety are maintained, the social distancing, wearing of masks and gloves, you can have an event especially that the spaces of our exhibition centres here in Dubai are huge. So I think what the management of the exhibition centre has done has increased the space between the stands, kept enough distance where people can move in the corridors and hallways between these exhibitions, and made sure that thousands of people can attend an event without being worried about getting infected in case somebody has a Covid case. So that’s the way it’s been managed, basically. So the message that we tell the world that, yes, you’ve got to be careful, but it doesn’t mean that you have to cancel everything and restrict your annual event, especially GITEX, which is one of the largest, I would say, computer and networking and technology exhibition and conference in the world. So to cancel it would have been a very unpleasant experience for a lot of the annual exhibitors who come here and the annual visitors who come to GITEX to benefit from what’s happening in the world of technology and the innovation that happens every year. So I think the government has made a very correct move by continuing the exhibition and conference this year as well, and it’s a positive message that says nothing will stop us. We’re still open and you’re still welcome to Dubai.
Dubai has always been a hub. I mean, we are a small country. It’s a small market population-wise, marketwise. Yes, it’s probably the first or second regional market. Sometimes we are first, sometimes Saudi Arabia’s first, even though it’s three times the population of the UAE. But in certain markets, we are one of the largest markets in the Middle East. Having said that, Dubai becomes the main hub for the whole region. And if you see a lot of companies that have offices here, it’s a regional office for them. So when they think of Dubai, they don’t think of the Dubai market and the UAE market, they think of the region. The Middle East has a population of more than 330 million. There are trillions of dollars of wealth in this region, many untapped opportunities. It is a virgin market for a lot of innovative products and services. So if you do have an amazing product or amazing innovative product and your market has become saturated with it or there is a lot of competition, then Dubai would be the ideal and perfect location for you to set up to sell to this region and have a hub and regional offices, especially since the infrastructure in this city is second to none in the world. So even during Covid, a lot of companies have chosen Dubai to move to and digitize their regional company. So from here, with the airport still open, you can still do business with China, with India, with Russia. A lot of these major markets, people still do business with these markets from Dubai as a hub. So I would say, is Dubai still open for this type of business? Definitely, and it will remain open.
Do you that this is the best time to explore the UAE market?
There’s never a perfect time, right, for a good decision. Those who make decisions during tough times, during which I would say the unclear circumstances and take the risk, will always be paid off for them if they make the right decision. I’m not saying make a wild decision. I say make a calculated decision. But once you agree that all the criteria for your decision are there, you need to make a decision and move on. Right? Either yes, you will take that decision and move on or no, you won’t take it, but do not hesitate on a decision for the perfect time. It never comes. So with Covid-19, is this the perfect time to expand? What else or when would you choose to expand if you haven’t seen a threat to your business from being in one location? Many businesses have suffered. Many businesses that have been operational for decades have shut down and closed down simply because they have not diversified their income. They haven’t diversified their location from where they do business. They were stuck in one location, one market, one segment, and they say, “I’ve been doing this for decades, and I’m fine.” Covid came to prove to everyone that nothing is safe anymore. If you don’t have a diversified location where you do business, if you don’t have diversified customers generating revenue for me, for you, from all around the world, you’re paying the price for that right now. Should you wait longer until you see what will happen after Covid-19, whether the vaccine will work or not? I say the longer you wait, the more it’s going to hurt. I encourage all companies from all around the world, whether they come to Dubai or go to any other regional city in the world, just diversify your income and your location. Have multiple locations where you do business. Have different hubs around the world, so you can do business in Asia and South America, North America, Africa and Europe, if you’re not in these regions. So that’s my advice to them. If you want to do business in the Middle East or the region, Dubai is the perfect hub. And this is the perfect time when everything pricewise is low. The travel cost is low. I would say the rental costs are low, and to hire employees too, salaries are obviously lower. You can get very good talent here in Dubai, with 220 nationalities living and working in Dubai. The travel cost is low. I would say the rental cost is low and to hire employees also, salaries are down obviously. You can get very good talent here in Dubai with 220, I would say, nationalities living and working in Dubai. So you can find pretty much any talent you’re looking for from any country in the world. You’ll probably find them in Dubai. So I would say this is the perfect time to expand when the cost is low.
We have seen a shift to digitalisation as a result of Covid-19. What patterns are you seeing?
If your business is very traditional and Covid-19 has forced your business to become more digital, I think this creates an amazing opportunity for you to be able to relocate your business or expand your business to other markets very easily. And with Dubai and its superb infrastructure and technology and Wi-Fi and, as you know, with our telecom operator, Etisalat, having one of the fastest mobile networks in the world right now with 5G, this is an amazing place for anyone who has digitized their business or on the verge of digitizing their business to have a set-up here in Dubai, where you can have some of your stuff operating here. Considering the time zone between Asia and Europe, you can still serve the Asian market from Dubai because of the time zone. So your staff here can obviously come to the office before you even wake up if you’re in Europe. And when you wake up in Europe, they’re able to serve the European market as well. So I’ve seen a lot of companies, European companies specifically, move their digital business to Dubai after digitizing it, because the cost of hiring is lower here. Talent is available. The infrastructure, like I said, is amazing, and they are able to benefit from the tax benefit. So you can invoice from Dubai, and to Asia, you can invoice for the region, you can invoice even in Europe. And obviously, you need to consult with your legal counsel on how to make sure that you do not violate any tax rules when you do that. But a lot of companies have found that there are huge tax benefits when you operate from outside Europe, especially if you serve international clients. And with the time zone, like I said, Dubai is an amazing option and choice for these companies.
What is expected to happen at Dubai Expo 2021?
I think the Expo is an amazing opportunity for anyone who has a new product or an innovative product to show to the whole world. We’re expecting about 20 million business tourists to come to the Expo. And their objective is one thing – to find the new, find the unique product or service that they can take back to their country or partner with the company that’s producing that innovative product and service. So if you, a company that produces something you want the whole world to see, you have an opportunity to come to Dubai and showcase it. So for a period of six months, you have 20 million people who will be visiting. I don’t know of any other event in the world in the next few months that will give any company that kind of opportunity. And if you don’t know much about it, I highly advise and recommend that you visit the Expo website to find out everything about the event, how you can exhibit and be present even on a small scale. But don’t miss this opportunity to showcase your product to the whole world for a period of six months. And it’s one of the longest exhibitions and conferences that doesn’t happen every year. So this is the right opportunity for it. And the UAE government, Dubai government specifically, has invested a lot to make this expo the best expo and the largest expo in the world, and to make it a successful event in Dubai. And, as you know, Dubai is not a stranger to successful events. This is going to be one of the largest one that we’ve hosted, and I think the city is very proud to have all the infrastructure for such a large event, starting from the airport, where it can handle, I think, last year, we had more than 80 million passengers or 88 million passengers. It’s one of the few airports in the world that’s open. So capacity-wise right now, the city is very much capable of handling this event. There are no other cities in the Middle East that have, I would say, the hotel infrastructure, tourism infrastructure to handle such an event. So I think it’s going to be a very successful event. A lot of people are going to attend. And I think you should be there if you have an innovative product or service that you want to show to the whole world.
How easy is it to operate and do business in the UAE?
A lot of people have the perception that it is difficult to move to a new market and do business or set up a company or hire a team or operate from a foreign market. The reality is, with our digital government now, everything is very fast. In no time, in a few days, you could probably set up a company here, whether it’s a free zone or onshore in Dubai and have an operational team on the ground. And you could be running in no time. In probably less than a month, you could have a full-fledged office. I’ve seen a lot of companies. They come and work on a fully furnished serviced office until their full-fledged office is ready. Part of Seed Group also, a lot of our partners, we offer our partners the capability to simply plug and play. They work from our offices, where they are ready to start operating on the market in no time basically. There are so many different free zones in the country where they can set up. They are specialized in different sectors. But if they wish to do business with the government, it is obviously better for them not to be in a free zone and to be onshore. We are always, as Seed Group, on the lookout for good companies with innovative products and services that we can, I would say, partner with strategically, sometimes invest in as well. So if you have something unique or different, definitely check out Dubai. Check out these free zones and speak to our team. Maybe they can assist you with this target goal that you have of setting up. So to answer your question in one word, it’s very easy.
How do you see Dubai for the next ten years?
You know, that’s a very difficult question to answer. And the reason why, as citizens of this country, we are used to the amazing vision of our leaders, especially Sheikh Mohammed Bin Rashid, that you never know what to expect in Dubai. Sometimes we drive around the city and we see new buildings. The shape of the city is always changing. The innovative project that His Highness keeps coming up with, and that the government of Dubai keeps coming up with, always amazes us. The speed of not just envisioning something, but the speed of planning and executing it. Sheikh Mohammed and his team are known not only for planning things, but they are known for delivering what they say they will deliver. And the royal family of Dubai has always been visionary in planning for the future. So if you ask me how Dubai is going to look in one year, I’ll probably answer that. But in ten years, I think it’s very challenging to answer. But I will tell you, if you come and visit Dubai three years from now, you’ll probably won’t recognize a lot of areas, the developing areas. So let alone in ten years, that’s a very difficult question to answer. But I think if you really want to know, the best thing to do is just come, work in the city, live in the city, and you’ll see the city growing and changing shape right in front of your eyes.
What next step would you take if you were to consider running a business on the UAE market?
I think one of the first things you need to do is identify what you want to do exactly when you come here. Do you want to operate to target this market? Do you want to operate to target the region as a hub? And once you agree and finalize that strategy, you need to allocate a certain budget for expansion, obviously going into a new market cost. It doesn’t have to be a major cost. You can start lean and start with the right partner. That’s very important to find the right partner. Even when we expand, we’re operating in 12 offices around the world. When we expand to any new market, we always find a local partner. We tried in some markets to operate alone and, to be honest, it was challenging, especially in a market that has a different culture and so on. So if you’re planning to operate in the Middle East, I always advise you to find the right partner who has the right connections, the right experience, the right team that you can capitalize on in expediting your market entry. And you know the Middle East is built on relationship and trust. So if you can also benefit from the relationship and trust that your local partner has, that will give you a great advantage while you’re entering the market. That doesn’t mean that you can’t operate on your own in Dubai. Like I said, there are a lot of many free zones that you can choose and operate from, but I wouldn’t advise it. I wouldn’t advise it. So my recommendation is to make a decision, or if the parameters of the decisions are not clear to you, find someone who could help you answer some of the questions that you have. And we’re more than happy at Seed Group to assist you, answering any questions you might want to ask about. Should I come to Dubai now? Is this the right time? If I do, what are my next steps? What are the next things that I have to do before finalizing my decision? Just reach out to us and we’re more than happy to help. But whether you work with us or not, I think it’s the right time. Just make sure you find the right partner first.
What attributes must a company have before it explores the UAE market?
You know, moving your business or setting up or expanding your business to a new market is not an easy decision obviously. There are a lot of things to consider. There’s always that fear of, “Am I making the right decision?” And, I think, in anything you do in business, you have to take some kind of calculated risk. So when we decide, for example, to give an example of how we decide to go to the market, we look at the market, and we see if there are opportunities for us there. Is this the right time and do we have the right partner in order to go into that market? And we also look at how committed we are to this market. We tried to go into markets in a very light way, but it didn’t work. So I think whenever you decide to go to a market, you have to give it your full commitment to give it enough time and resources in terms of financial resources and human resources. But once you decide, you have to give a 100% commitment. And I think testing the waters doesn’t work in a new market, especially if it’s a foreign market with a different culture, and so on. In order to know how effective this market is for you and how lucrative it is, you need to be there for at least two to three years. Like I said, if you want to build the relationship, you want to build trust. All these things take time to have the right contacts, to build a relationship, to build trust. And the Middle East is a very trust-based market, right? You have to know people who can simply trust you, and then they’ll do business with you. Now, you can expedite that. Like I said, by having the right partner to shorten that sales cycle and lend you the trust that they have with their customers so that you don’t have to wait years to build that trust. But this is my advice, it’s to be 100% committed and allocate the right budget for it, give it enough time and be serious about it.
You know, the Arabs have been traders for a very, very long time, thousands of years. So we’re used to doing business with different countries and nationalities as traders. So Dubai is very unique because it’s not just the Arabs who live and work here. Like I said, 220 nationalities live and work here. A lot of foreign business. As a matter of fact, one of the largest segments of businessmen here are from India. So, a lot of people have the perception that it’s all Arabs who own businesses. It’s not true. And that’s an indication that we are open to other nationalities to come here and prosper and become even richer than the local families here. It’s fine with us because the royal family has built the city to be a place where anyone can come and succeed. Now, if you’re going to be dealing with an Arab decision maker, be it in the government or the private sector, obviously, they are international-minded. They are used to it because they’ve been doing business for decades. A lot of them have been educated. They have been educated in foreign countries. So, they are used to doing business with international companies. They are used to living outside, in the foreign western world, I would say, in the US and in Europe. So, they are used to doing business with international companies. They’re used to living outside, in the foreign Western world, I would say, in the US and Europe. So, dealing with international companies is not difficult for them. It’s very easy. It’s expected, whether it’s the government sector or the private sectors. So, I don’t think you have anything to worry about in terms of being able to fit. Now, if you have a local partner, obviously, it makes it a lot easier to enter this organization and reach the decision makers.
Does my product need to be in the local language to enter the market?
Definitely, without a doubt. Arabic is, I would say, the formal language of the country, but if you don’t speak the language, it’s a cosmopolitan city. Many people have been living here for decades, and they still don’t speak the language, and they are very successful in their business. Everything pretty much in this country is bilingual, Arabic and English. You see Hindi in many places, too, because one of our largest segments of population is India and Pakistan, and so on. So, we are very open and flexible when it comes to adjusting the way we do business to other nationalities and languages. So, not knowing the Arabic language is not a barrier at all.
Don’t forget to share this post!
Copyright © 2021 Seed Group. All Rights Reserved.