Israel and the UAE have much in common. Both Israeli and Emirati entrepreneurs have a global first approach because of the small size of their markets (respectively nine million and ten million people). The UAE and Israel share expertise in key areas such as logistics, agritech, transportation, airlines, and technology, and these will create great synergies for the public sector as well as for entrepreneurs.The two ecosystems are also a natural fit: the UAE has natural resources and a tiny population; its financial capital exceeds its human capital. Israel, on the other hand, has human capital exceeding local financial capital. Israeli entrepreneurs are excited about the opportunities, but have many questions.
The recent agreement between Israel and the UAE will bring many new opportunities for the two countries' technology ecosystems to grow together. We offer ten tips for Israeli entrepreneurs seeking to enter the UAE market.
1 Start building a network in the UAE early. Entering overseas markets is money and time consuming regardless of a company's size, and the process can take resources away from other opportunities. Don’t underestimate the time it takes and start to get organized and informed at least 8-12 months before your departure.
2 Use a sustainable and global network to connect with the local ecosystem and create "safe" access to this new market (global networks, Incubators, international conferences)..
3 Choose markets by suitability not by size nor proximity. Do market research, include local laws and how your company will fit into the current market landscape. Don’t go blind, and do the required homework beforehand. Research and find insights on the Gulf markets before expanding there. This will help you to understand business conditions and the potential fit with local needs and usages.
4 Don’t go there alone. Team up with local players. This will allow you to benefit from their knowledge and easily adapt. Additionally, government paperwork in the UAE is in Arabic, so hiring the right person locally with in-house translation and efficient turnaround times can also save you many hurdles when setting up in the UAE. Ensure that your provider can offer a one-stop shop when it comes to opening a bank account and other administrative tasks. Appoint an individual or a team of experts to oversee and manage monitoring of important operational activities, as well as following up on developments to keep the provision of your services compatible with market and customers’ requirements.
5 Understand your trade license. It is illegal to conduct business in the UAE without registering for a license first. The most common form of corporate vehicles in the UAE are Limited Liability Company (LLC) and Joint Stock Company (public and private). LLC is the more commonly used vehicle for international investors establishing joint venture operations. Costs can vary. For instance, an LLC would range from AED30,000 to AED60,000. To save time and legwork, a consulting company can advise you on the type of trade license that is ideal for your type of business in the UAE.
6 Find out about visa procedures for your Israeli employees whom you want to relocate. Almost all businesses can apply for visas for their employees. However, their number depends on several criteria such as the size of the office, type of business, the category of the employee, and the investor. It is important for you to have in mind the number of employees that you can retain and sponsor with a work visa.
7 Take advantage of similar past innovations. Study previous and similar innovations in the UAE within the same sector to start assessing the feasibility of the project, to make sure you know the needs of the market and users, and to know from where to start as a business. This step includes analyzing competitors to determine strengths and weaknesses.
8 Whatever budget and time-frame you had, double them There are many different start-up costs in the UAE, which are not always clear when you start the process. This is especially true if things don’t go as planned (which they of course never do in the start-up world). Be prepared for these costs when budgeting. Also be ready for things to take longer than expected. If the expected timing is ‘approximately two weeks’ - this can actually mean ‘at least a month.’ So, plan accordingly and multiple by two!
9 Visit the UAE often.. Explore the culture and immerse yourself in unfamiliar traditions. Get into the heat, learn to live with it, and embrace its many positive aspects. Find out about the region, show interest in the well-being of local populations, and try to learn a few words in Arabic- it is always appreciated.
10 Be resilient. Don’t expect meetings and negotiations to go as planned. Patience is the most valuable virtue you can build in your life and work in the region.
Vijay Tirathrai is Managing Director at the Techstars Abu Dhabi Hub71 Accelerator.
Hilla Ovil-Brenneris is Managing Director at the Techstars Tel Aviv Accelerator.
Published by Globes, Israel business news - en.globes.co.il - on January 24, 2021
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