Russian business speaks Arabic – Kommersant FM
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Russian business is gaining a foothold on the Persian Gulf coast. Since the beginning of 2022, the number of brands from Russia in the United Arab Emirates has grown almost 4.5 times, according to the consulting company Nikoliers. Now there are more than 30 of them, and soon the figure may reach 55. As market players note, almost every week at least one of the Russian chains opens establishments in Dubai. However, the costs of such a store or restaurant, according to experts, are on average 2-3 times higher than in Moscow. What other difficulties may relocants from Russia encounter when launching a project in the UAE? Alexander Mezentsev will tell you.
Vladimir Derevyagin opened a branch of the Rocky Road Dubai boxing club in the United Arab Emirates in September 2023. According to him, the sports niche here is formally occupied, but only a few companies provide high-quality services. According to the Dubai Statistics Center, from the end of 2020 to April 2022, about 100 thousand people moved to the city. And they are all potential clients.
As the interviewed businessmen said, locals have a positive attitude towards guests from Russia, and the very structure of the country is simple and clear. For example, the dirham exchange rate has remained stable for 10 years. But the situation with taxes is less transparent. In addition to VAT, which is only 5%, businessmen should take into account indirect taxes, emphasizes Vladimir Derevyagin: “A simple gym license costs about 29 thousand dirhams, which is approximately 800 thousand rubles. in year. I think the amount is quite significant. Moreover, to officially obtain a building permit, you pay the planning department – that’s another 25 thousand dirhams. Connecting a mandatory fire alarm is also paid. That is, there are quite a lot of indirect taxes.”
Entrepreneurs note that several main areas are developing in Dubai: real estate, finance, logistics, tourism and B2C services. True, Russians are having difficulties renting premises. Entrepreneurs literally have to prove that their business is worthy of being located next to local companies. But if a businessman manages to rent space, for example, in Dubai Hills Mall, then his project will certainly enjoy the trust of clients, interlocutors told Kommersant FM.
It is necessary to find an approach to competitors from the Emirates, warns the Secretary General of the Russian Council of Entrepreneurs in Dubai, Sergei Tokarev: “The language barrier often gets in the way. In addition, people do not always understand a certain mentality inherent in businessmen in this market. Because here there is, I’ll call it Babylon, a mixture of nationalities and races.
It should also be taken into account that there are certain restrictions for non-local residents. In Russia, for example, I can easily become a banker, but here this is only possible with a UAE passport.”
There are about 40 economic zones in the Emirates, with half of them located in Dubai. Despite this, it can be difficult for entrepreneurs from Russia to create a business on their territory; it takes a lot of time to open a current account. In November, Bloomberg wrote that local banks began to require more and more documents for money transfers. Sometimes they block the transaction and ask you to indicate the purpose of the operation.
Only certain specialists will be able to find employment in the Emirates, says Roman Makarov, lawyer and partner of the NSP law office, which opened an office in Dubai: “These are IT specialists, high-level managers, lawyers, family offices. Since the UAE is truly neutral in relation to Russia, this country performs the same function that, for example, Switzerland or Sweden performed in the First World War. Thanks to their neutrality, they earned good money from all participants in that conflict. But due to some limitations of Dubai as an enclave in the desert, not all people can apply themselves there.”
In 2023, at least 1 thousand Russian businesses appeared in the country, the recruiting company ProPersonnel told Kommersant. According to the businessmen themselves, despite some difficulties, compatriots will still continue their expansion in this Arab country.
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