In the midst of the current focus on Saudi Arabia, we’re noticing a rising trend among UK SMEs and businesses contemplating expansion into the Middle East. With that, we are being asked more often than ever by UK companies, if setting up presence in the region and having a UAE trade licence would still enable them to access and service markets including Saudi Arabia and other GGC countries?
Firstly, while having a UAE trade licence streamlines domestic operations for UK SMEs, its impact transcends beyond the borders of the Emirates. However, regarding Kingdom of Saudi Arabia, possessing a UAE trade licence is no longer enough to support companies are serious about doing business in KSA.
As part of Saudi Arabia’s newly implemented Regional Headquarters (RHQ) program effective from 1st January 2024, the Kingdom now mandates foreign companies to establish their regional headquarters within the country to qualify for bidding on government contracts. International companies that are participating, including UK businesses, stand to benefit from various incentives such as a zero percent corporate income tax and withholding tax rate for 30 years following the issuance of the RHQ license. Arguably, UK businesses without an RHQ in Saudi Arabia, may be restrictions in accessing certain Saudi incentives tailored for foreign companies operating through regional headquarters within the Kingdom.
As for the wider GCC countries, UK SMEs that are already set up in the Emirates and in possession of a UAE trade licence, are still able to use their licence to services markets including Qatar, Oman, Bahrain etc. For instance;
- Establishing a Branch or Subsidiary – where UK SMEs can set up a branch or subsidiary, leveraging their UAE trade license as a foundation. Apart from demonstrating commitment to the region, from a legal & compliance standpoint, this can streamline the process of establishing a presence and conducting business in different jurisdictions within the GCC region.
- Navigating Trade Agreements – the UAE and GCC member states have strong economic ties and various trade agreements. Through their UAE trade licence, UK SMEs can still leverage and use this as tool for cross-border transactions for instance.
- Securing Government Contracts – lastly, having a UAE trade license enhances a UK SME’s eligibility for government contracts and tenders in some GCC countries.
For UK SMEs and business looking to expand to the GCC, acquiring a UAE trade licence serves as a vital tool for doing business in the region. Beyond facilitating domestic operations, a UAE licence still opens doors to neighbouring countries and offering opportunities to UK SMEs and business looking to either establish branches or subsidiaries, leverage trade agreements and compete for government contracts across the region.