Lessons on doing business in the Middle East (and still getting paid)

ONE MINUTE BRIEFING: Halian's Levon Antonian. If you think late payments are a problem here, try doing business in Dubai.

by Adam Gale
Last Updated: 15 Jan 2020

You don’t have to be in oil – or armaments – to do business in the Middle East. The regional economy is blooming with opportunities for British companies willing to find them.

Levon Antonian took his IT services company Halian to Dubai in 2009; the region now accounts for over half the company’s £30m turnover. Here are the pitfalls he encountered, and his advice for avoiding them.

"To do business with the locals here you need to have three meetings: a cup of coffee to get introduced, a cup of coffee to discuss family and the wider world and a cup of coffee when you start talking business.

"The Brits are still highly regarded in Middle East business circles, and it’s a good place to come and look for opportunities – the UAE in particular is a very friendly business environment – but buyer beware.

"Sometimes people assume that because you’ve delivered a service you’ll get paid for it. That doesn’t always happen as quickly here as you’d like and it’s not very easy to do credit checks as the regulatory reporting systems aren’t very mature, so you need deep pockets. We didn’t realise quite how deep until we were a couple of years in with not much return from it.

"We had to wait 10 months for a large debt to be paid by a government agency. Legal redress is the last resort and unlikely to be successful in our opinion. Persistence followed by direct communication with business decision makers works best.

"If you can offset the cashflow risk of late payments, then it’s all well and good. We partnered with some less risky organisations, other western vendors in our industry: you’ll feel confident that the Microsofts and HPs of this world will pay you on time than when dealing with some of the government agencies or local holding companies.

"Timing is quite important. When we arrived in 2009, the global financial crisis was really dawning on the region.  At the moment there’s also a feeling of a downturn – you can see it in all the cars covered in dust and the number of company registrations being down so much – but it’s not a bad time to move in when everyone else is leaving.

"It means there’s less competition, and people really appreciate you a little more than when they’ve got no end of choices. Fortune favours the brave sometimes."

Key takeaways

--Don’t trade on open account. This isn’t Europe - the risks are high without lines of credit.

--Start with multinationals. They bring Western norms with them.

--Remember, business is about relationships not corporate transaction. It takes time, but it pays off.

For more information

To learn more about doing business in the Middle East, there’s an informative guide by PwC, plus a book, Doing Business in the Middle East: A Cultural and Practical Guide for all Business Professionals, by Donna Marsh. Levon Antonian also offered his thoughts on expanding abroad more generally here.

Image credit: Pixabay


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