The Middle East and North Africa (MENA) region is currently experiencing a vibrant tech startup boom, driven by the rapid growth of countries like the United Arab Emirates and Saudi Arabia, the infusion of capital from wealthy new investors, and the emergence of Egypt’s latest “unicorn.” From Rabat to Riyadh, there’s an unmistakable surge in entrepreneurial vigor, further propelled by the increasing prominence of sovereign wealth funds as significant investors and the ubiquitous spread of smartphones.
In 2022, these startups raised an impressive $3.94 billion in funding, with the UAE, Saudi Arabia, and Egypt leading the way in terms of deal volume, according to regional tech analyst and investor Wamda.
While these figures may appear relatively modest when compared to more established tech startup ecosystems, or even to similarly emerging markets (such as Southeast Asia, where startups secured about $18 billion in funding), the increasing involvement of wealth funds and governmental initiatives aimed at nurturing tech ecosystems, combined with the fierce competition to attract entrepreneurs, sets the stage for explosive growth in the years to come. This climate is particularly favorable for foreign companies looking to enter the local market, as exemplified by Reputation House, a U.S.-based online reputation management agency. Under the brilliant leadership of Dima Raketa, the agency’s CEO, it was recognized as the Best Data Solution Provider of 2023 at the prestigious Tech Innovation Awards, hosted by Entrepreneur Middle East. Today, Dima Raketa shares insights on how American companies can effectively enter and thrive in the MENA region’s market.
Why Does the Market Attract American Businesses?
The MENA market attracts U.S. businesses for several compelling reasons. It offers substantial economic opportunities driven by regional growth, a large and increasingly affluent consumer base, and a strategic location at the crossroads of three continents. Additionally, the region’s significance in the energy sector, political stability in countries like the United Arab Emirates, and the presence of free trade zones like the Dubai International Financial Centre (DIFC) and Jebel Ali Free Zone (JAFZA) in the UAE, as well as the Qatar Financial Centre (QFC) in Qatar, and the King Abdullah Economic City (KAEC) in Saudi Arabia, along with incentives for foreign investment, make it an appealing destination for American companies seeking to expand globally.
However, potential entrepreneurs should exercise caution and conduct thorough market research, as the business landscape and stability can vary significantly across countries within the region.
Understanding the MENA Region
Respect the unique business customs of the MENA region and leave behind any assumptions based on American business etiquette. MENA has its distinct traditions and corporate practices, and respecting these is essential for successful engagement in this market. It’s crucial to leave the American mindset at home if you intend to operate effectively in the region.
It all begins with a greeting. Do not initiate physical greetings like handshakes or welcoming kisses unless the other person does so first. Often, a simple smile and a hand over the heart suffice. However, when dealing with individuals of the same sex, there are no such restrictions. A firm handshake, a warm smile, and an inquiry about the well-being of their loved ones is a suitable way to greet without causing offense.
Avoid making commitments that you cannot fulfill. Verbal agreements carry significant weight in the region, so exercise caution before making promises or discussing outcomes. Punctuality is vital, but also be prepared for the possibility that your business partner might be late. Middle Easterners and North Africans may not adhere to Western notions of time, and while they might not arrive promptly themselves, they will expect you to do so as a gesture of respect.
How to Be the Best?
To establish yourself as a leader in the region, active engagement within the region is imperative. Once you’ve successfully entered the local market, shift your focus to forging connections within the local community. Concentrate on cultivating robust relationships, familiarizing yourself with the local culture and customs, and exercise patience; the effort is rewarding. Consider forming regional partnerships, remain compliant with local regulations, and stay well-informed about the latest developments.
MENA is a region of rich diversity, with leaders and businesses originating from various parts of the world. However, during the initial stages of your venture in the region, it’s crucial to dedicate time and attention to local companies and brands. Display loyalty and a commitment to local values. Invest in learning the local language, adapt to regional business practices, and place emphasis on long-term objectives.
Reputation House in the MENA Region
Reputation House has established a great foothold in the region and enjoys a respected standing within the local business community. The company has exerted significant effort to demonstrate that American businesses can flourish in this unique region. It has displayed the quality of its services in the MENA region, not only through its high-level service delivery but also through noteworthy accomplishments such as hosting prominent events like the Real Estate Reputation Awards and active participation in panel discussions at leading conferences and workshops throughout the region.
