The Middle East is undergoing a transformation as economies in the region look to diversify away from an enduring reliance on oil exports.
According to a recent report from the International Monetary Fund, non-oil growth has been outpacing oil growth at around 4.1% since 2016. Innovation also abounds in the region, with the Global Startup Ecosystem Report 2022 highlighting a 60% year-over-year increase in early-stage funding.
Multinational companies (MNCs) are taking notice and flocking to the Middle East to capitalize on the thriving consumer market, improving infrastructure, advanced talent pools, favorable business environment, vibrant startup ecosystem and strategic location.
We recently caught up with Patricia Tan, our Senior Manager of Client Solutions in the Middle East, to learn more about why the ‘Crossroads of Civilization’ is luring in international businesses for investment, expansion and hiring.
How would you describe the Middle East as an emerging market?
The Middle East region holds an immense reputation in the world economy given its wealth of two natural reserves: oil and natural gas. However, many countries in the region have started venturing into different initiatives to reduce dependency on oil and gas.
In the UAE, for example, several free zones have been established to attract foreign investment and encourage entrepreneurship. As part of the free zone strategy, the Dubai Multi Commodities Centre (DMCC) specializes in commodities trading while the Abu Dhabi Global Market (ADGM) offers a range of incentives, including 100% foreign ownership, zero taxes and streamlined regulatory procedures.
The success of such economic diversification initiatives has been evidenced by various indexes indicating growth in GDP levels, especially in the United Arab Emirates (UAE), Saudi Arabia and Qatar to name a few.
Why should organizations consider the Middle East as a part of their global expansion plans?
The Middle East is a well-diverse region. Overall, the region is a natural business hub, ideally positioned between Europe, Africa and Asia.
Due to world-class infrastructure, lower taxes and availability of a highly qualified workforce, the region is among the best places in the world to do business. According to the latest World Bank’s Doing Business Report, several countries in the Middle East have made significant strides in attracting MNCs as well as startup enterprises
What will surprise companies looking to expand to the Middle East?
International businesses may be pleasantly surprised by the visionary leaders across the region, especially in the UAE, Saudi Arabia and Qatar, who are doubling down on their missions to build world leading infrastructure and attract the most talented people on the planet
Significant events that speak to the region’s visibility on the world stage are the UAE hosting Expo 2020, Qatar hosting FIFA 2022 and Saudi Arabia’s giga-projects now underway as part of its ambitious 2030 vision. There are opportunities that abound across multitude of sectors.
It’s worth noting that many countries in the region follow a monarch government, making it a relatively safe place to live and work with very low crime rates.
Are there any countries and industries that stand out for investment?
In general, all countries in the Middle East are developing and ripe for foreign direct investment (FDI). This means a myriad of Middle East countries can be ideal locations, depending on a company’s objectives and needs.
Nonetheless, the UAE and Saudi Arabia are, at the moment, top choices for investors to deploy capital, open subsidiaries or expand a business and hire remote based employees. Various roles in the information technology (IT) and engineering industries are continuing to grow within this region.
What are a few of the challenges of expanding into the Middle East and how can an Employer of Record help?
One of the main challenges in expanding in the Middle East is the process of setting up a business and the need for local partners in many cases. There are also complexities in obtaining work permits for foreign nationals.
These challenges are where GoGlobal comes into the picture with our Employer of Record (EOR) solution. We offer a fully compliant way for clients to hire anyone anywhere – without them going through the hassle of all in-country bureaucracies. Our experts on the ground provide business end-to-end support for cross-border hiring.
Many companies choose to pair EOR solutions with GoGlobal’s recently launched Recruit & Hire solution to fill hard-to-fill roles, like technology, sales and client services. This covers the end-to-end hiring process, including talent sourcing, onboarding, benefits and even offboarding.
What advice do you have for companies looking to expand to the Middle East?
The Middle East is an incredible region, rich in culture as well as economic opportunities.
With a multitude of options for expansion, I advise companies to seek out local expert partners that can equip them with the right knowledge, tools and resources to operate efficiently and compliantly.
When the right partner is by your side, you can build your team in the Middle East with ease – and take advantage of all the exciting opportunities the flourishing region has to offer!