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19/06/2017 - 07:00hs
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Brazilian enterprises look to set foot in the UAE

Respondents of a poll by Export and Investment Promotion Agency (Apex-Brasil) named the Arab country as one of the five most promising for investment in non-domestic operations in the next three years.



São Paulo – The United Arab Emirates are the fifth most mentioned prospective destination for investments in non-domestic operations in the next three years in a poll of Brazilian CEOs and corporate directors released recently by the Brazilian Export and Investment Promotion Agency (Apex-Brasil). The Arab country was named by 15.6% of respondents, trailing only the United States, Colombia, Mexico and Argentina.

Besides being the only non-American country in the top 5, the UAE bested locations such as China and Germany.

The result came as a surprise to Apex-Brasil internationalization coordinator Juarez Leal. “Most businesses begin their expansion with Latin America and the United States,” explains Leal, adding that he has been going to the UAE for over ten years now, for expos and business trips. According to him, the food industry is the primary driver of growing interest in the country. “Brazilian participation in Gulfood grows with each new year,” he asserts.

According to the poll, most businesses consider entering the UAE by opening commercial offices there. Other strategies named include setting up a distributing company or warehouse and finding franchisees in the Arab country.

Leal claims that the way Middle Eastern citizens approach deal-making encourages investment in local operations. “Arabs are keen on tight-knit relationships and eye-to-eye talks. This is why it’s important to have an actual office there,” he explains.

The poll covered 229 corporate decision-makers, 62% of them in large businesses and 20% in small-sized ones. All of the are exporters, and 64% already have commercial offices, warehouses, manufacturing units or other operations out of the country.

The businesses are aware that they may encounter obstacles in going international. When questioned about what the biggest issue is in the UAE, 76% said it’s finding partners. “When it comes to this, the UAE are more closed off than, say, the United States, where one can find potential partners at fairs or online. They are more hermetic, and they require that you have a local partner,” explains Leal.

The Apex-Brasil internationalization coordinator suggests investing in free zones, such as the Jebel Ali Free Zone, where local partners are not a requirement. Apex-Brasil has an office in the Dubai Free Zone.

Other problems mentioned included were knowledge of laws and procedures in the country (48%), financing for international operations (48%) and finding information on the local market (33%).

Leal notes that since the poll concerns an envisioned three-year scenario, the UAE stands out as a medium-term trend for Brazilian businesses. “Many executives regard Dubai as a hub connecting them with other Middle East markets,” he explains.

*Translated by Gabriel Pomerancblum

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