Doing Business in
the Middle East
- ExportAmerica
- November 2002
by Maria Mussler
Trade Information
Center
-
- With added
information by
ExportMichigan
webmaster Paul E.
Litton
-
The countries that
make up the Middle
East and North Africa
have a combined
population of over 321
million and form an
area of tremendous
strategic and economic
importance to the
United States. Most of
these countries are
WTO members or are
seeking membership.
Although doing
business in the Middle
East can present some
unique challenges,
many U.S. companies
have found a lucrative
market for their goods
and services in the
region. Many American
products are widely
used throughout the
Middle East. Last
year, the United
States exported over
$24 billion worth of
merchandise to the
region. During the
first eight months of
this year, U.S.
businesses exported
goods and services
valued at over $12.1
billion to the region,
with Saudi Arabia and
Israel serving
consistently as the
largest Middle Eastern
buyers of American
goods. In fact,
exports from the U.S.
have become a part of
daily life in the
Middle East.
Moreover, the United
States’ free trade
agreements (FTAs) with
Israel and Jordan have
further opened the way
for American companies
seeking to trade with
Middle Eastern
partners. When doing
business in the Middle
East, American
businesses benefit
greatly from basic
knowledge of
conditions and
customs.
Are there Unique
business customs?
- Most of the
countries are
Westernized and
familiar with the
American system of
doing business.
However, a basic
knowledge and
understanding of
general Middle
Eastern customs
and business
practices can
increase the
likelihood of
successful
business
negotiations and
help avoid
misunderstandings.
The following is a
brief list of some
common customs
that may make your
meetings with a
Middle Eastern
partner more
productive.
Greetings and
Hospitality
- Handshakes are a
typical greeting
in the Middle East
and are not only
used during the
first
introduction, but
also may be used
each time two
people meet, even
numerous times in
a single day. For
example, the
common practice in
Saudi Arabia is to
shake hands at
first meeting and
again upon
leaving.
Typically, people
throughout the
Middle East
maintain closer
physical proximity
while talking, and
conversations
often involve more
physical contact
than is common in
the United States.
Backing up to
increase personal
space may feel
natural to an
American, but this
will likely be
seen as impolite
or rude by an Arab
or Israeli
partner. However,
when speaking with
a person of the
opposite sex, a
respectful
distance is best.
Also, avoid
sitting or
crossing your legs
in such a way that
the bottom of your
foot faces anyone.
This is considered
rude.
Middle Eastern
hosts tend to be
very hospitable
and regard
treating guests
with generosity
and warmth as a
point of personal
honor. In Arab
countries, lengthy
small talk and
ritualized
greetings serve an
important
function,
establishing
friendly relations
at the beginning
of a meeting. Tea
or coffee is
typically offered
by the host and
should be accepted
by the guest; to
reject the offer
may be seen as an
affront.
When a guest in an
Arab person’s
home, avoid giving
gifts of food or
drink. Though this
may be common
practice in the
United States, in
the Middle East
such gifts imply
that the host is
inadequate. Gifts
of liquor should
definitely be
avoided in Islamic
countries, as
alcohol is
prohibited by the
Muslim faith. In
Israel, gifts of
food or drink are
acceptable, but
one should ensure
that the items are
kosher,
particularly in
the case of
Orthodox Jews.
Punctuality and
Scheduling
- Punctuality is
not rigidly
observed in many
Middle Eastern
countries.
However, though
Middle Eastern
associates may be
late, foreigners
are expected to be
punctual.
Businesspeople
should avoid the
appearance of
being in a hurry
or impatient.
Checking one’s
watch in a meeting
can be deemed
offensive.
Business hours
differ from
country to country
and, in some
cases, from city
to city. You can
find more
information about
business hours
around the Middle
East in the
Country Commercial
Guide for each
country. You can
access these
sources of market
research, prepared
by U.S. Commercial
Service staff
abroad, at www.export.gov.
Choose “Country
and Industry
Market Research”
from the menu on
the left side of
the page, and
follow the prompts
for “Country
Commercial
Guide.”
Language
Though English is
widely spoken in the
business community,
and many are educated
in the United States,
it is wise to have
business cards printed
both in English and in
Arabic, or in the case
of Israel, in English
and Hebrew.
Where can I find
out about business
holidays?
- Information
about business
holidays can be
found on the Trade
Information Center
site at www.export.gov/tic.
Select “Country
Information” and
then choose
“Business
Holidays” from
the list on the
left. Business
travel to Israel
during the 10-day
period between
Rosh Hashanah and
Yom Kippur is best
avoided. These are
the “high
holidays,” the
most important
Jewish holidays,
typically falling
within the month
of September.
Travel to Muslim
countries during
the holy month of
Ramadan may also
pose a unique
challenge. To
observe this
holiday, Muslims
fast for a full
month, refraining
from eating or
drinking from
sunrise to sunset
every day, and
focusing on
contemplation and
worship. Office
hours are
typically
shortened and
shifted to the
evening, and
people may be
affected by the
fasting and
customary
late-night social
gatherings.
Are there special
documents required to
export to the Middle
East?
- The documentary
requirements for
exports to the
Middle East vary
by country. Arab
countries require
that commercial
invoices be
certified either
by the National
U.S.-Arab Chamber
of Commerce (http://www.nusacc.org
or tel: (202)
289-5920) or, in
the case of the
United Arab
Emirates, by the
Arab American
Chamber of
Commerce (www.arabchamber.org/uae/index.htm)
and legalized by
each respective
country’s
consulate. A list
of foreign
embassies and
consulates in the
United States is
available on the
Trade Information
Center Web site at
www.export.gov/tic.
Choose the link
titled “Trade
Offices
Nationwide.”
In order to take
advantage of the
free trade
agreements with
Israel and Jordan,
a unique
certificate of
origin must be
completed. For
goods to meet
these FTAs’
standards, they
must have been
made entirely in
the United States,
and any
third-country
materials must
have undergone a
“substantial
transformation”
in the
manufacturing
process. In
addition, at least
35 percent of the
customs value of
the product must
be attributed to
U.S.-origin
materials.
Finally, the good
must be shipped
directly from the
United States to
its partner
country. The
certificate of
origin for Israel
can be obtained
from the
America-Israel
Chamber of
Commerce (www.americaisrael.org).
The chamber of
commerce in the
exporter’s area
must notarize the
certificate of
origin for Jordan.
To learn more
about these
certificates of
origin or about
the specific
documents required
for each Middle
Eastern country,
call the Trade
Information
Center. Finally,
some Middle
Eastern countries
require that
documents used in
international
transactions be
authenticated (www.state.gov/m/a/auth).
How can I monitor
travel advisories for
a specific country?
- The U.S.
Department of
State maintains
information about
country conditions
around the world.
For information
concerning travel
advisories,
medical
facilities,
traffic
safety/road
conditions, crime,
and other related
issues, as well as
entry requirements
and visa
information, see
the Consular
Information Sheet
for individual
countries at http://www.travel.state.gov
or by autofax at
(202) 647-3000.
Are there any
special considerations
for marketing products
in the Middle East?
- When marketing
products overseas,
regardless of the
location,
businesses should
keep their target
audiences in mind
and be sensitive
to local
conditions. The
countries of the
Middle East and
North Africa are
not a monolith;
there are, of
course,
significant
differences
between countries.
Racy
advertisements may
be deemed
offensive in
Islamic countries
given their more
traditional
standards of dress
and behavior,
particularly for
women.
Advertisements
featuring alcohol
or pork products
are also likely to
be poorly
received. Use of
Arabic and Hebrew
script should be
done carefully to
avoid situations
like that, which
befell a company
that printed an
Arabic phrase on
bath towels, not
realizing that the
phrase had
religious
connotations.
Are there
particular security
considerations or
restrictions?
- American
companies are
generally
prohibited from
trading with Iran,
Libya, Sudan, and
Iraq. There are
limited exceptions
to these
sanctions,
primarily
involving the
export of food,
medicine and
medical supplies,
as well as trade
in informational
materials. The
export to Iraq of
some oil field
equipment may
qualify for a
license under the
terms of the U.N.
Oil-For-Food
Program. To learn
more about U.S.
sanctions, contact
the U.S. Treasury
Department’s
Office of Foreign
Assets Control at
(800) 540-6322 or
visit http://www.treas.gov/ofac.
Commerce Under
Secretary for
Industry and
Security Kenneth
I. Juster recently
reminded U.S.
companies of the
need to comply
with laws and
regulations
prohibiting U.S.
persons from
taking actions in
support of foreign
government
boycotts against
Israel. Questions
concerning the
Commerce
Department’s
antiboycott
regulations can be
directed to its
Office of
Antiboycott
Compliance at
(202) 482-2381.
American companies
are obligated to
conduct due
diligence to
ensure that they
comply with all
U.S. regulations,
including country
embargoes, license
requirements, and
prohibited party
bans. For more
information about
these lists and
other export
controls, see the
article titled,
“Export
Controls,” at http://www.export.gov/tic,
under the
“Answers to Your
Export
Questions” link.
For more
information about
any of the topics
addressed in this
article, or other
export-related
questions, contact
the Trade
Information
Center.
The Trade
Information Center
(TIC) is operated
by the
International
Trade
Administration of
the U.S.
Department of
Commerce for the
19 federal
agencies
comprising the
Trade Promotion
Coordinating
Committee. These
agencies are
responsible for
managing the U.S.
government’s
export promotion
programs and
activities. You,
too, can “Ask
the TIC” by
calling (800) USA-TRAD(E)
toll free, Monday
through Friday,
8:30–5:30 EST.
Or visit the
TIC’s Web site
at http://www.export.gov/tic.
WebGuides
ExportMichigan
publishes a series of
informative WebGuides
on specific export
markets designed to
help US Exporters
evaluate business
opportunities and
procedures.
WebGuides available
for the Mideast are:
Egypt
is Michigan's largest
market in North
Africa.
Israel
has joint R&D
programs with
Michigan.
Kuwait
is a growing market
for Michigan's
products.
Saudi
Arabia is the
MidEast's largest
market.
Date Updated: March 27, 2007
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