Category Archives: Business Environment

The Middle East includes newly popular tourist destinations such as the Dubai but it is known worldwide as a place for investment. There has been a long history of investment and business growth for governments, multinational corporations and family businesses in the region despite the fact that many of its countries became independent or had their independence restored between the 1940s and 1960s (the UAE, founded following the oil boom in 1971, is one of the youngest countries in the world).

The discovery of significant oil reserves in the Middle East, combined with increasing global oil prices, has meant that companies received significant budget surpluses to diversify their investment portfolios. (If you’re interested in doing business in the Middle East and the UAE, investigate the packages available in corporate finance with HSBC in the UAE ). As a result, the business environment in the Middle East has expanded over the past 50 years to include other sectors like construction, chemicals, real estate, hospitality and metals and mining.

According to a survey hosted in 2012 by accounting firm Ernst & Young, the Middle East continues to be an attractive destination for the majority of investors due to its large populations, strong demographics and proactive governments.

Like other young countries, though, there is room for improvement particularly in research and development and entrepreneurship. Countries that receive the most foreign direct investment are those among the Gulf Cooperation Council (a political and economic union of Arab states), including Qatar, Saudi Arabia and the UAE, as these have the most stable political environments. Intra-regional investment is another important factor considering last year the Middle East became its own largest investor in terms of new ventures and job creation.

Like with most investment opportunities, the ‘view on the ground’ is much more comprehensive for those who actually live and operate in the region. Companies who trade in the Middle East tend to have a better grasp of its business environment with respect to Shariah law, internal processes, etiquette and protocol. These business leaders are optimistic that investment in the Middle East will continue to improve in the foreseeable future.

Investment Opportunities in Middle East

Considerations regarding Middle Eastern business culture are to do with the importance of the spoken word over the written agreement, that is, binding a person’s word with honour. Greeting and entertaining also play a central role in the business world and initially are about relationship building, building trust and establishing compatibility rather than necessarily brokering a deal.

Countries particularly in the Arabian Peninsula (Saudi Arabia, the UAE, Bahrain, Qatar, Kuwait, Oman and Yemen) and Iran present attractive trade and investment opportunities for exporters and investors. Having diversified from oil to non-oil growth, these countries have a need to generate employment for their young, rapidly growing populations and upgrade infrastructure to drive reform.

business in Middle East

Investors, particularly those stationed within the region, remain positive of its attractiveness and potential to improve but there are areas that still require improvement, for example, research and development and technological readiness. That said, the Middle East is a large and relatively young region that also ranks among the most affluent in the world.

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