There are many holidays per year in the Middle East. Hence Singapore investors should have a good plan in place particularly in the area of time management if they have the intention to expand their business in Middle East. This is to avoid facing any difficulties doing business in the Middle East in the long run.

CEO of Singapore listed Cityneon, Mr Ko Chee Wah mentioned in his interview about the short working days there and long summer vacation lasting as long as 3 months. He also explained that the weather is very hot and humid with temperature in the summer going as high as 45 Degree Celsius. The wealthier Middle Eastern will go to places like Los Angeles or Riveria in France to escape from the heat during summer whilst the commoners will choose to stay at home.

It is sometimes very difficult to contact clients or the employees as you would not know when they decided to come for work or when they will take a long holiday. Other than the 3 months summer vacation, there is also the Ramadan, which last for 1 month. During this 1 month, most of the Middle Easterns will fast during the day and this usually affects their work due to the lack of energy. Most of them will choose not to work during the day and stay at home to rest. Hence it is not advisable to visit the clients during this period, as they will usually not be in the office. This is not a common situation in Singapore but it is very common in the Middle East.

Mr Ko said that the New Year in Middle East is a big and important festival for the people in the Middle Eastern and the holiday could last between one to two weeks. "Officially, the New Year holiday is only about 2 or 3 days but normally the celebrations will be stretched over from 7 to 10 days. Therefore the working hours and efficiency rate during this period will be affected. "

Mr Ko suggested that Singapore investors in Middle East should try to understand and respect the culture of these Middle East countries in order to build a long-lasting business relationship and expand the business.

"In this kind of working environment where there are more holidays and lesser working days, Singaporean investors must plan carefully in order to maximize their profit. If not, these investors will have difficulties to do business there in the long run."

Cityneon is on of the pioneer batch of Singaporean companies to enter the Middle East market. After the Gulf War in 1991, it expanded its business to Bahrain and become the subcontractor for the exhibition "Reconstructing Kuwait." Subsequently, due to the rapid establishment of the MICE industry, Cityneon, in 1994 incorporated a subsidiary in Bahrain and expanded their business there. Today the company has 60 employees and owned a 10,000 square meters factory.

Cityneon is currently the biggest exhibition subcontractor and is also one of the main exhibition subcontractors in the Middle East. It also helped out with exhibition activities in nearby countries such as Kuwait, Saudi Arabia, Qatar and Iraq. Due to Cityneon's long existence in the Middle East, Mr Ko is very familiar with the business culture and has his own way of doing business in the Middle East.

Foreign Investors should collaborate with trustworthy local companies

Mr Ko also reminded that those Singapore investors who are interested in tapping into the Middle East market should find a trustworthy local partner to partner with. Many countries in the Middle East have the "bumiputra" policy whereby foreign investors need to collaborate with a local partner in order to set up companies there and the foreign investors cannot hold 100% of the company.

"The experience, knowledge and credit worthiness of the local partners are very important for the company's development in these countries as most of the applications and paper work need to be filed by the locals."

As most of the Middle East countries are facing manpower shortage due to low population hence most employees are foreigners from India and Parkistan. And these foreigners need to apply for special visas in order to work in the Middle East, which usually takes about 6 months to process. Furthermore, these foreign employees need to have a local sponsor before these visas are granted. Hence the experience and contacts of the local partners are important in this case in order to expedite the application of these visas. However, the business will be greatly affected if they local partner turned out to be dishonest and extorted the investors.

Many Singapore investors are not familiar with business culture in the Middle East and do not have any contacts there hence it is not easy to find a suitable and trustworthy local partner. Therefore Mr Ko was suggesting that interested investors can go through big accounting firms, law firms or public relations companies for advices and help.

"Big accounting firms such as PwC and KPMG have business in many international markets and have contacts of many well-established enterprises and companies. Singapore companies can also go through KPMG in Singapore to help them find suitable partners in the Middle Est. The same goes for well-established international public relations and law firms as they have very wide contacts too.

Mr Ko also mentioned that there are challenges in doing business in the Middle East hence Singapore investors should be prepared to make necessary adjustments when entering into the market. However, he encourages the local investors to venture into and do business in Middle East, as the Middle East market is booming, creating unlimited business opportunities.

Middle Eastern countries are relying less on oil industry but more on lifestyle

"The Middle East countries are now relying less on their oil industry and promoting more on non-oil industry and investments. Instead of investing in non-oil industry in the Western countries, they are now investing in their own countries to increase their standard of living. There will be plenty of business opportunities in these countries in the near future for foreign investors to tap on. "

Mr Ko also mentioned that these Middle East countries are now focusing on industries such as the tourism, themeparks, resorts and MICE industry which the Singapore investors could tap on given their rich experiences in these industries.

LHZB_10 May 2007.pdf (276.85 KB)