1. Business climate survey
Team Sweden in the UAE
28 November 2018
UNITED ARAB EMIRATES 2018

2. FOREWORD
The United Arab Emirates (UAE) have experienced rapid modernization due to the wealth derived from oil revenues. Today, the country is Sweden’s second largest trading partner in the Middle East and North Africa (MENA) with more than 200 Swedish companies directly or indirectly represented in the market. In addition to the role as a trading partner, the UAE is also an important regional hub for Swedish companies. Many regional business opportunities are generated in the UAE and a significant part of trade with Swedish products goes through the country.
In an ever-changing world it is important to understand how the business environment affects the operations in order to adapt and stay competitive. Team Sweden in the UAE has therefore conducted a survey on how Swedish companies present in the UAE perceive the business climate to further understand market characteristics, challenges and key success factors and future outlook. We often read forecasts and reports based on statistics and macro indicators, this report offers an important complement with insights from those who knows it best – companies with local presence.
This presentation is a summary of the results of the study. We hope it will bring insights to both companies currently operating here as well as those who are planning to establish themselves here.
H.E. Mr. Henrik Landerholm
Ambassador of Sweden to the UAE
Mr. Massoud Biouki
Trade Commissioner of Sweden to the UAE
Business Sweden
4 February, 2019

3. The UAE and Sweden have an established trade relationship
THE UAE SNAPSHOT
SWEDEN & THE UAE
9.4
MILLION
FEDERATION OF SEVEN EMIRATES
6.3
BILLION SEK (2017)
POLITICAL SYSTEM
SWEDISH EXPORTS TO THE UAE
POPULATION
0.8%
$40 698
374
MILLION SEK (2017)
GDP GROWTH
(2017)
GDP PER CAPITA
IMPORTS FROM THE UAE TO SWEDEN
Bordering countries:
Land: Oman, Kingdom of Saudi Arabia (KSA)
Sea: Iran, Qatar
~ # 200
SWEDISH COMPANIES ARE PRESENT IN THE UAE*
Largest trading partners:
China
India
USA
KSA
Germany
The UAE is located in the south-eastern corner of the Arabian Peninsula
* BASED ON TEAM SWEDEN’S KNOWLEDGE AND DEFINITION OF SWEDISH COMPANY

4. EXECUTIVE SUMMARY
The uae is an attractive market for doing business and the future outlook is optimistic 1
82% of respondents find the UAE as an excellent, very good or good place to do business
Geographic location
Infrastructure investment and PPP projects
Ease of doing business
Market size
Expo 2020
Advantages
Current Situation – 2018
Growth of the UAE business operations
Growth of MENA business operations
Profitability increase
Increase of the number of employees
52%
55%
26%
38%
Challenges
Future Outlook – 2019
Growth of the UAE business operations
Growth of MENA business operations
Profitability increase
Increase of the number of employees
67%
Rough competition
Bureaucracy
Business environment
Trade complexity
69%
50%
Excellent
Very good
Good
55%
Business Sweden
4 February 2019

5. Healthcare & Life Science
ABOUT THE RESPONDENTS
THE RESPONDENTS ARE FROM MANY SECTORS AND are mainly established in free zones
MARKET
PRIMARY AND REGIONAL ACTIVITY
REVENUE
Q: Which is your most important market in the UAE?*
Q: What is your primary activity in the UAE?
Q: What is the total annual revenue from your office in the UAE?
Q: What is your type of establishment?
Q: What customer segment is your main customer group?
68%
B2B
Respondents are mainly active in the Emirate of Dubai (74%) and established in a free zone (74%)
Respondents are from various sectors, the top 3 sectors, except from “Other” are: construction (13%) followed by manufacturing sector and ICT (10% each)
The companies are mainly performing marketing and sales activities in the country (60%) with other businesses as their main customers (68%)
The UAE functions as a regional hub office for 90% of the respondents
45% of respondents have an annual revenue of around 6-45 million AED from the office
SECTORS
90%
Respondents indicate that the UAE office acts as a regional hub headquarter
13%
10%
10%
Top countries managed by the UAE office
Oman (87%)
Kuwait (81%)
Saudi Arabia (78%)
Qatar (67%)
Construction
Manufacturing
ICT 8% 8% 8%
Security & Defense
Engineering Products
Energy & Environment
Top markets indicated with most growth potential:
Saudi Arabia
UAE
Egypt
Kuwait 5% 5%
18%
Consumer Goods
Healthcare & Life Science
Other
*SUM SURPASSES 100% WHEN RESPONDENTS CHOSE MORE THAN ONE AVAILABLE OPTION
Business Sweden
4 February 2019

6. THE UAE HAS A FAVORABLE LIVING ENVIRONMENT AS COMPARED TO OTHER GCC COUNTRIES. THE MARKET IS EASILY ACCESSIBLE FROM ALL AROUND THE WORLD.
FOR REGIONAL OFFICE, TO COVER THE GCC COUNTRIES, IT IS AN IDEAL LOCATION.
- Respondent of the survey

7. FACTORS HAVING POSITIVE IMPACT ON BUSINESSES IN THE UAE
82% OF RESPONDENTS VIEW uae as AN EXCELLENT, VERY GOOD OR GOOD PLACE TO DO BUSINESS
INFRASTRUCTURE, MARKET SIZE AND EASE OF DOING BUSINESS ARE KEY FACTORS
Q: Generally, is the UAE a good place to do business?
OVERVIEW OF BUSINESS ENVIRONMENT
40% of respondents found it easy to establish a company in the UAE, whereas 26% of survey participants have indicated that this process was difficult or very difficult
The highest availability of competent local staff was indicated for positions within administration (57% respondents indicated very high or high), logistics (52%) and service (54%) fields, the lowest – within the production (24%) segment. Generally, availability of competent local staff is seen as moderate within most of the indicated fields
82% of respondents believe that the UAE is an excellent, very good or good place to do business. None of the survey participants have indicated that it was a bad or a very bad place for business.
Q: What factors have a very positive or positive impact on your business operations in the UAE?
VOICES OF THE MARKET
Dubai is a hub and suits well to cover other markets from. But it starts to be expensive to operate from and the location will be questioned in the future if this trend does not change. As revenues are failing its difficult to defend Dubai as a location for our business unit.
Very easy place to live and do business across the region. Half way between regional headquarters in Singapore and headquarters in Sweden.
Many global clients have operations in Dubai and this is increasing.
Business Sweden
Infrastructure investment and PPP projects (65%), market size (54%) and ease of doing business (53%) were indicated as the key factors having very positive or positive impact on business operations in the UAE

8. CURRENT SITUATION AND FUTURE OUTLOOK
MAJORITY OF RESPONDANTS HAD A POSITIVE YEAR 2018 AND ALSO FORECAST 2019 AS A YEAR OF GROWTH
Current AND FUTURE REVENUE AND PROFITABILITY GROWTH ARE INDICATED
CURRENT SITUATION
FUTURE OUTLOOK
Revenue growth
67% of companies anticipate that their business operations in the UAE in 2019 will grow at the rate of 5–20% as compared to this year. The same growth rate of their operations in MENA is anticipated by 69% of respondents.
9% of survey participants foresee negative growth rate between - 5% and -20% of their operations in the UAE next year. The same view is shared by 11% of respondents in terms of their operations in MENA in 2019.
Profitability
Companies are optimistic in terms of profitability in the UAE in 2019: Half of the respondents – 50% – expect their companies’ profitability next year to increase and a third - 36% - believe that the profitability will stay stable
Investments
Investments are foreseen in 2019, however on a slightly smaller scale comparing to 2018: next year 40% of respondents plan investments, majority of them will also invest in OPEX
In 2019 companies plan to invest from 200 kAED to 12 mUSD
Revenue growth
52% of survey participants have recorded revenue growth between 5–20% in the UAE as compared to The same revenue growth rate in MENA was indicated by 55% of respondents
26% of companies have indicated negative growth rate of operations in the UAE this year as compared to last year. The same negative growth rate in MENA was indicated by 23% of survey participants
Profitability
Almost half of the survey participants – 46% – are anticipating stable profitability in 2018
26% of respondents have indicated expectations on the increase of their companies’ profitability this year
Whereas 28% said that their profitability in 2018 will decrease
Investments
42% of respondents have indicated investments in the UAE this year. Most of them – 63% – have invested in OPEX
Companies have indicated investments from 300 kAED to 10 mUSD
Business Sweden

9. CONCLUSION & FINAL WORDS
Swedish companies active in the UAE perceive this market as a good place to do business. The country is mainly valued for its strategic location in the region but also for the ease of doing business, access to skilled local employees, infrastructure investment and private public partnership projects, among other reasons. Although there are obvious challenges the Swedish companies are facing, among which – fierce competition, bureaucracy, trade complexity, payment terms – we are pleased to see the positive view the Swedish companies share on the future outlook. As illustrated in this study, half of the respondents anticipate growth of their business operations in the UAE, foresee profitability growth in 2019.
Sweden has a good reputation in the UAE, is associated with quality, trust and innovation and the Swedish companies find it beneficial for their businesses to highlight Swedish origin. The footprint of Swedish companies will hopefully increase as the UAE continues to grow and more companies start realizing the country’s and the region’s potential.
We would like to thank the companies and people that took their time to participate in the study and share their insights from doing business here. We hope the study is interesting and the insights will help Swedish companies in the UAE to grow further.
H.E. Mr. Henrik Landerholm
Ambassador of Sweden to the UAE
Mr. Massoud Biouki
Trade Commissioner of Sweden to the UAE
Business Sweden
4 February, 2019

10. Contact us Business Sweden – The Swedish Trade & Invest Council
Concord Tower, 26th floor, Office 2607, Media City
P.O. Box 25906, Dubai, UAE T E