Dubai’s successful bid for Expo 2020 led to the UAE Government budgeting $8bn worth of new projects. Further growth is being driven by new real estate and tourism investment.
In addition, the Government has set ambitious renewable energy targets for 2020, which could see more than $50bn worth of investment made in the Middle East and North Africa (MENA) solar power sector. Construction and property remain the main drivers of the UAE economy, with the hotel and leisure sector remaining successful.
South African businesses do not want to miss out on this lucrative opportunity. There has never been a better time for foreign firms to setup or expand their business to the UAE.
New report conducted by The Talent Enterprise, studying capital opportunities reveal that the main business industries that will benefit from Dubai hosting Expo 2020, are hospitality, transportation, retail, banking and finance as well as real estate and infrastructure.
United Arab Emirates and South Africa continue a good economic bond. Currently the UAE is the 24th largest market for South African products. Recent statistics convey there are around 210 South African companies that have representative offices in the UAE and several SA businesses have been involved in key projects in the Middle East region.
Within the UAE there is a large South African expat community consisting of entrepreneurs, teachers, medical professionals and business professionals in mid-high management roles.
The UAE fills an exceptional geo-political position in the tri-continental hub of Europe, Asia and Africa. With excellent air connections between the two countries, Etihad and Emirates airlines have more than 50 direct flights per week from Abu Dhabi and Dubai to South Africa’s main cities – Johannesburg, Cape Town and Durban. The main shipping routes consist of The Arabian Gulf and the Red Sea.
Import and Export
Since 1994 the UAE and South Africa have a close commercial trade relationship which is increasing yearly.
Major South African exports to the UAE include base metals, food items such as: fruit and vegetables, steel for construction and general engineering, machinery, electronics, minerals, defence equipment, chemicals and plastic goods, whereas 70% of South Africa’s imports from the UAE are made up of crude oil.
Additional exports to South Africa contain machinery, transportation equipment, consumer electronics, home appliances, computer accessories and textiles. South African’s construction, consultancy and service sectors are playing a major role in the rapid development of the UAE.
Developing and strengthening trade relations between the UAE and South Africa have led to the founding of South African Business Council (SABCO) in the UAE.
SABCO mission is to serve as a resource and catalyst for its members and for companies in general to develop their business interests with South Africa and the UAE. SABCO’s aim is to assist people with a South African affiliation by facilitating corporate interaction and being a focal point for establishing business contacts and networking opportunities.
Currently South Africa is the UAE’s 35th largest trade partner, with total imports, exports and re-exports last year worth AED 5.47 billion.
Another pull factor for South African entrepreneurs and businessmen is UAE’s vast domestic market and its link to the wider-GCC markets.
With the led up to Expo 2020 there are massive opportunities for South African businesses to gain project contracts. The UAE market is not only a regional hub of trade and commerce but also as the biggest re-export centre in the Middle East. UAE’s economy is flourishing, well-established infrastructural, strong efficient banking system, stable political system, tax-free income are the main pull factors. Along with ongoing new developments to prepare the country for Expo 2020 (some projects have been given government funding).
UAE remains South Africa’s largest trade partner in the region. Fast moving consumer goods (FMCGs) to the UAE dominate South Africa’s exports, with machinery and metal related products increasing in exports to this region.
With such a positive climate, the joint efforts of the UAE and South African Governments and private sector organisations continue to create an ever-greater economic bond between the two countries.
Diplomat Mpetjane Kgaogelo Lekgoro, Ambassador of South Africa to the UAE highlights in a recent interview with Khaleej Times “The collaboration between South Africa and the UAE in trade and investment is the cornerstone of the bilateral relationship. The cross-investment culture between South Africa and the UAE is gaining momentum and must be encouraged.”
South Africa is a significant investor in the UAE. Recent records display that there are 27 FDI projects from South Africa to the UAE, representing a total capital investment of Dh1 billion.
In February 15, 2016, a major development was the takeover of Al Noor Hospital Group by Mediclinic of South Africa. As a result of this merger Mediclinic International became the largest private healthcare organisation in the UAE (running approx. 55% of total private health care in the region).
Tourism in the UAE is an important part of the government’s strategy to maintain the flow of foreign cash into the Emirates.
With a diverse, multicultural population, the UAE offers its tourists, residents and businesses a unique environment, enriched with the cultures of more than 200 nationalities and a quality of life and work unrivalled in the Middle East. It is a bustling metropolis with a mixture of Emirati heritage and Arabic vitality.
The tourism industry will continue to grow annually over the next 10 years at a rate of 5.4% which estimates to reach AED236.8 billion by year 2026.
The award of Expo 2020 to Dubai is forecast to boost the economy by $23 billion. This will result in business opportunities across many sectors particularly hospitality and construction.
With UAE’s cultural heritage, natural diversity and developed infrastructure it has become a strong contender in the world of tourism.
Part of UAE’s vision for the tourism industry is to make the UAE one of the most attractive tourist destinations in the world.
What does this mean for South African businesses?
From hotels, events, tour guide service, retail stores, water-parks, restaurants and much more there is many lucrative business opportunities in the led up to Expo 2020.
Whether you are an individual or a company looking to establish or restructure a commercial presence in Dubai, Abu Dhabi or the wider-GCC, Synergy Group offers a complete company formation and business support service in the region.
Synergy’s expertise includes company formation services, UAE/Qatar/Oman partnerships, government liaison and consultancy services as well as office space solutions for individuals, SME’s, mid-size Corporates and MNC’s. From initial application to commercial registration, we offer a flexible, streamlined and cost effective approach to business set-up.
We also offer consultancy on business planning, growth strategies, route-to-market, business process modelling and regulatory compliance.
Please contact us today to explore the opportunities for your business expansion into the UAE.
E-mail us email@example.com or call +971 4 563 7302 and we look forward to speaking with you.