We examine how business is conducted in cities around the world, with local experts acting as guides
Abu Dhabi is one of the world’s richest economies: the emirate’s per-capita GDP was estimated at $106,000 last year, reports Suresh Panwar ACMA, CGMA, vice-president and manager, financial control, at Union National Bank.
According to Statistics Centre Abu Dhabi, the emirate’s output increased by 4.8 per cent during 2013. “Economic growth has strengthened here since 2010, mainly because of an increase in oil production, high public spending and a broadening of the production base,” he says. “The oil sector and related activities have historically formed the bulk of Abu Dhabi’s economic activity. Although the emirate has a healthy overall trade surplus, it has a deep non-oil trade deficit.”
The price of oil affects the economy of Abu Dhabi city, the emirate, the UAE – and indeed the region as a whole. Although prices have not returned to the heights seen in 2008, they remain strong, which helps to attract investment in other local industries.
“Abu Dhabi is focusing on the development of other sectors – for example, manufacturing, nuclear and renewable energy, railways, ports, aviation and defence,” Panwar says. “This has added a new dimension to the economy, which should help the emirate to achieve a neutral non-oil trade balance.”
The government has always sought to adopt best practices to improve Abu Dhabi’s commercial competitiveness, according to Panwar. “It provides fair opportunities for foreign players to conduct business here by establishing a branch office, a limited-liability company or a partnership firm.”
Overseas firms can set up branches in Abu Dhabi after obtaining approvals from the Executive Council and the Federal Ministry of Economy and Commerce, plus a licence from the Department of Municipal Affairs, Panwar says.
“Limited-liability companies can be established here by foreign organisations to conduct most types of business, providing that the foreign investor holds no more than 49 per cent of the stock,” he adds. “At least 51 per cent of its share capital must be held by one or more UAE nationals, or by a company wholly owned by UAE nationals.
A general or limited partnership can be formed with a UAE national or firm owned by UAE nationals.”
There is a “results-driven ethos” in Abu Dhabi, according to Gavin Maxwell FCMA, CGMA, managing director for Accenture Strategy in the Middle East. For firms working on big transformative projects here, there’s a desire to be clear about what can be delivered by when and for how much – and then to focus on achieving these goals, he says.
“The pace of change is significant – and that brings with it an energy for tangible progress,” says Maxwell, who adds: “Another key aspect of management here, which is not prevalent in a number of countries, is a focus on ensuring that Emiratis are given opportunities to develop themselves through rewarding careers and become part of the future success of Abu Dhabi and the UAE.”
Panwar warns that, although Abu Dhabi’s “professional environment has embraced western business culture, some social expectations in the UAE may surprise and alienate the unprepared traveller. Effective and appropriate communication is a key factor in the development of productive business strategies and successful working relationships here.”
Abu Dhabi’s captains of industry tend to exude confidence and optimism, according to Maxwell, who says: “Business leaders here have a clear vision of transformational growth aligned with government initiatives. This translates into a cultural desire for programmes that will lead to a step-change in the commercial landscape.”
He points to the city’s large building projects nearing completion in a distinct cultural zone and the establishment of state-of-the-art medical centres such as Cleveland Clinic Abu Dhabi. “Then there are programmes such as Masdar (a planned city in the emirate that’s focused on clean energy), the development of industrial zones and a new seaport, plus the expansion of Abu Dhabi’s airport, which is one of the fastest-growing hubs in the world.”
Expatriate business people need to share the vision of Abu Dhabi’s commercial leaders – and, more crucially, translate this into action, Maxwell argues. “Delivery excellence is fundamental, because your reputation in this region can take time to build and seconds to destroy. Lastly, there is a need to show openness, flexibility and the desire to work as a partner in the transformation of Abu Dhabi. Leaders still believe strongly in having a personal connection with their business partners, so time spent building relationships is critical for your success.”