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Bridging the Gap Between East & West: Challenges & Opportunities of Middle Eastern + US Business Collaboration

On Behalf of | Apr 10, 2024 | Business, Business and Commercial Law, Dubai, International Business Contracts |

The Middle East has flourished into a major business and technology hub over the past few years, enabled by a wave of new regulatory initiatives and competitive incentives for international businesses and workers. This is especially true of Dubai and other countries within the United Arab Emirates (UAE), as their government has actively encouraged and supported entrepreneurship and innovation. With the Dubai Integrated Economic Zones Authority’s (DIEZ’s) recent announcement of a venture capital fund for finance technology startups worth US$136 million, it is clear that the region has ample opportunities for persistent growth.

This growth trend extends beyond the Middle East region itself, as many companies in the area are looking to expand into international markets, including the United States. The UAE and the United States have been strong economic partners for many years now, enjoying a robust trade and investment relationship. With the region’s openness to international investment, many US-based companies have expressed interest in collaborating with Middle Eastern & Dubai-centered businesses.

Of course, these types of international business arrangements come with their fair share of challenges. For one, there are always cross-cultural hurdles to navigate with foreign business deals, and this is no exception when it comes to interactions between the Middle East and the United States. The US is typified by informality, fast-paced work environments, and an emphasis on equal opportunity, while the UAE often showcases a more formal business atmosphere and stricter hierarchies. To bridge these cultural divides, it is important to avoid stereotyping, demonstrating a willingness to learn and understand how the other side approaches matters.

There are also several legal considerations for operating both in the United States and the Middle East, as business and tax laws are often drastically different. For example, the UAE has a 9% corporate tax on business profits, while US corporations pay federal corporate income taxes levied at 21%. There’s also the issue of foreign earnings, which can often be quite complex. With US-based businesses, whether their foreign earnings are taxed depends on how they are handled: if these earnings are brought back to the United States, they are taxed at 35%, but are not taxed at all by the US at all if the earnings are kept abroad.

The Middle East is steadily rising to become an economic connector between the East and the West, and while global business partnerships can be complicated, the rewards are plentiful. We at Urban Thier & Federer have long recognized this potential and have worked diligently with clients in Dubai and the United States to foster mutually beneficial business relationships. By helping Middle Eastern businesses navigate the cultural and regulatory differences between their home region and that of the US (and vice versa), we’ve positioned them to achieve long-term international success. As more companies seek to bridge the gap and forge partnerships with US-based companies, we at UTF are eager to guide the way!