On this page
- Understand the region's economy
- Find export opportunities
- Tips for successful trade
- Tariffs, taxes and regulations
The Middle East and North Africa (MENA)
MENA encompasses the region extending from Morocco to the west and Iran to the east, and includes the majority of the Middle Eastern countries. The Gulf Cooperation Council (GCC) comprising Bahrain, Kuwait, Oman, Qatar, the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) is the region’s preeminent political and economic union. As of May 2011, Jordan had requested to join the council and Morocco had been invited to join.
Depending on how MENA is defined, the region has a population of between 381 million and 531 million, and is also home to 60 per cent of the world’s oil reserves and 45 per cent of the world’s natural gas reserves. High population growth and a young population within MENA are driving growth for commodities and services across all areas of the economy. MENA is also one of the fastest growing food and beverage markets with countries such as those in the GCC importing more than 90 per cent of their requirements.
MENA-an important growth region
The Middle East and North Africa is an important growth region for Victorian exports accounting for $2.5 billion of goods exported in the 2012. Automotive and food currently account for more than 80 per cent of Victorian goods exports to the MENA region.
Within MENA, the Gulf Cooperation Council countries are particularly significant for Victorian businesses, with the Kingdom of Saudi Arabia and the United Arab Emirates being in the state’s top twelve export destinations. In 2012, Victorian automotive exports to the region totaled $1 billion, while the state continued to build its reputation as an exporter of superior food and beverage products.
Food security is a major issue for MENA countries, driving opportunities for Victorian food and beverage suppliers who meet the highest international standards for quality management, food safety and halal products. Victorian food and beverage exports to the region totaled $951 million in 2011-12, which included $357 million worth of live animal and meat exports, and $279 million worth of dairy exports.
MENA is also an important destination for Victorian service providers, particularly in infrastructure management (urban planning, water, roads, ports, aviation and oil and gas) and international education. Unprecedented political unrest across the region has created economic challenges but is also creating opportunities for exporters, as governments respond by investing more in infrastructure, training and other projects.
Top tips for successful trade with MENA
Companies looking to export to the MENA region need to show a high level of commitment and patience for long-term success and should aim to develop an understanding of local cultural and religious traditions and practices.
Regular visits to the market and relationship building are an essential part of any MENA strategy. Market entrants should also consider factoring additional lead times into payment schedules and consider export insurance. To operate on-shore, an agreement with a local partner or agent is required. Time and care needs to be taken in appointing sponsors, partners or agents as these agreements are difficult to break once in place. An on-shore agent is still required if operating in a free trade zone.
Australian businesses are well received in most parts of the Middle East however visitors to the region should be aware that most countries in the Arab world fall under Islamic law and they should therefore take the time to develop some understanding of local laws, religious traditions, dress and local customs. During Ramadan, food or drink should not be offered during daylight hours. Talk and offers of alcohol should be avoided at all times.Visitors to the Middle East should also check for public holidays and aim to avoid visiting during high summer - from June to August - when high humidity and heat are a challenge and many workers take their holidays.
MENA's tariffs, taxes and regulations
Tariffs vary widely across the region depending on the product and the country. Across the GCC, there is a standard tariff of 5 per cent on most goods. However, Victorian companies need to investigate further for their sector, as there are various exceptions to this rate, such as the significantly higher rate for steel products.
Taxes also vary across the region, but in the GCC tend to be negligible with the exception of banking and the oil and gas sectors. Despite low taxes, Victorian companies need to be aware of other Government fees and charges, such as a variety of fees on documents that may apply to foreign-owned companies.
The Victorian Government provides targeted support to businesses through the Trade Mission program. The Victorian Government Business Office (VGBO) in Dubai (UAE) provides in-market intelligence and support to Victorian companies.