Business Culture of the UAE

Introduction

The UAE has a diverse and multi-cultural society, and 80% of the UAE population are expatriates. As a result, the UAE is regarded as relatively liberal within the region and provides schools, cultural centres and restaurants catering for international cultures. While
the population is incredibly diverse, it is important that you understand the UAE culture as many businesses will be owned by Emiratis.

The UAE is a Muslim country. You should respect and be aware of local traditions and sensitivities and always behave and dress modestly, particularly when visiting religious sites. However, although the national culture revolves around the religion of Islam, other religions are also respected, and churches and temples can be found alongside mosques.

The Islamic dress code is not compulsory. Most UAE Emirati males wear a kandura, an ankle length white shirt and most Emirati women wear an abaya, a black flowing-over garment covering most of the body.

Corporate Social Responsibility

Corporate social responsibility (CSR) is becoming an increasingly big part of business culture in the United Arab Emirates. In February 2018, the government introduced a CSR law, which forced companies to report all CSR activities and offered incentives for CSR initiatives. Similarly, financial privileges and exemptions are awarded to companies that demonstrate outstanding social responsibility. In fact, CSR is now mandatory for most UAE companies.

Many companies adopt different strategies to fulfill their CSR requirements. Some invest in development projects, while others adopt environmentally friendly policies relating to production. Some even encourage volunteering in local communities with paid time off. Although still in its infancy, CSR is set to make its mark on business in the UAE in the coming years.

Corruption in the UAE

The UAE penal code criminalizes bribery, embezzlement, and abuse of function. Because of this, these types of corporate crimes do not happen that often. In fact, Transparency International rated the UAE as the least corrupt country in the Middle East and North Africa in 2018.

However, money laundering can be an issue. In the same report, Transparency International noted that millions of dollars of real estate can be bought in Dubai in exchange for cash, and few questions are ever asked.

Additionally, it is more common to see labor and visa fraud. This can take the form of contract substitutions and improper visa details. To avoid this, you should familiarize yourself with local employment contract laws and visa processes. Should you find any irregularities, you can go to your local UAE embassy or the Ministry of Human Resources and Emiratisation (MHRE).

Hierarchy and Decision-Making

The United Arab Emirates is a very hierarchical society, which is why the local business culture is very stratified. Most companies have a very solid vertical hierarchy. Older, more experienced employees get the top positions in most companies. Moreover, they are the key decision- makers.

On the other end of the spectrum, lower-level employees do not generally have much input in the decision-making process. They tend to remain subordinate and follow whatever dictates come from above. As a result, you will need to win the top players over to do business with them.

Age, money, and family connections all play a role in where someone is positioned within a company. The more of these someone has, the
higher up they are. There is also a strong preference for males over females, especially at higher levels.

Language

Arabic is the most spoken language, followed by English, French, Russian, Hindi and more. Almost all official documents, forms, laws, and decrees are in Arabic. Therefore, it helps to have a working knowledge of the language.

English is widely spoken throughout the country. Although it is common for written correspondence to be in English, Arabic is often preferred within some public sector organisations. It is preferable to have one side of your business card printed in Arabic.

Networking in the UAE

Social networks are a big part of the business culture in the United Arab Emirates. Because of this, you could find plenty of business opportunities through people you meet socially. You never know who may be able to connect you with a decision-maker at a big company.

The UAE also hosts plenty of different networking events. If you are new to the country, start attending some of these to grow your business network. Similarly, you could try groups such as the Dubai Chamber of Commerce, the British Business Group, or the Dubai Business Women Council. Expo 2020 in Dubai underscores the UAE’s role as a financial and technology hub and meeting center for the region.

Relationships

People in the UAE prefer to do business in person. Relationships and mutual trust are paramount for any successful business interaction and can only be fully developed through face-to-face meetings. It is important to spend time with Emirati business counterparts and ensure future meetings take place to continue cultivating the relationship. It is also important to have connections with people in the UAE who can facilitate introductions before attempting to do business in the country. Emiratis prefer to do business with those they know, so appropriate introductions are important to establish a successful business relationship.

Religion in the UAE

Over the past few decades, the UAE has established itself as a leading international business hub. Most foreign multinationals settling in the region will either choose Dubai or the capital, Abu Dhabi, for their regional headquarters. A western-based management approach is prevalent across the UAE, which has embraced foreign management techniques in the quest to achieve global status.

This westernisation of business and management practices, however widespread, exists in parallel to the fundamental teachings of Islam. The UAE operates on sharia law, the moral code of Islam, with an estimated 80% of the population belonging to the Muslim faith. This consolidation of western business practices with deeply rooted cultural and religious traditions make up the UAE’s business landscape.
The religion of Islam rests on five central pillars of practice. The pillars guide people in their everyday lives – including their business acumen – by helping them develop a righteous existence. As such, in the UAE, culture and religion are very much intertwined.

Fatih Mehmet Gul, chief executive of csrmiddleeast.org, the first website dedicated to corporate responsibility news and opportunities in the region, agrees that the moral teachings of Islam extend well beyond the individual’s private life to encompass business activities.

Gul says: “In personal life or business life, Islam always instructs Muslims to behave responsibly. Customer relationships, employee rights, environmental concerns and responsibility to the community have all been well defined by Islamic rules.” He adds that there is almost “a full match between Islamic rules and corporate responsibility principles”.

Three out of the five pillars of Islam – praying, fasting and the practice of zakat (charitable giving) – focus on strengthening the sense of community, improving collective welfare, and encourage generosity and solidarity.

As the teachings of Islam influence everyday life, including business practices, they de facto impact corporate responsibility practices

Social Provisions

Business culture in the UAE is largely familial and as such, companies tend to look after their employees. As a result, most businesses provide a range of social provisions.

The law mandates contributions to a pension fund with a percentage of the funds coming from the employee’s salary, the employer, and the government. Similarly, social security is part of the benefits package. Employers and employees share in the funding for these benefits. However, expats do not have to contribute to social security. Companies also must provide health insurance for all employees. Often, these benefits are extended to the employees’ families, too.

Women in Business

With changing times women are getting more involved in business in the UAE. This is also because there are many women who are highly educated and are choosing to follow careers rather than an early married life. According to 2018 statistics, 71% of Emirati graduates were women and many expat women are moving there due to better career opportunities. The government is also supporting women with part-time and flexi-work solutions.

There are a few rules that are strictly followed, like women cannot be employed for any hazardous jobs and cannot be employed between 10 pm to 7 am (with exceptions to technical and health care jobs).

Even after all this, only 5% of leadership roles in the UAE’s private sector are held by women. The government, however, appears more inclusive. Women make up 66% of the public sector workforce. Moreover, 30% of those are in decision-making roles and a further 27% are in the UAE cabinet.

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