Shipping to the Middle East: A Guide for E-Tailers
Whether you are a social-selling entrepreneur or a decision maker in an e-commerce enterprise, it is essential to do your homework before implementing plans to expand your business into potentially lucrative Middle East markets.
Cross border fulfilment, particularly the shipping element, will be one of the vital areas for research and planning, not least because it will be a key cost driver for your business.
The better you understand the intricacies of freight and parcel shipping to the Middle East, the more opportunities you can find to reduce costs—and to delight your customers with top-rate service standards.
To help you get started with your expansion plans, here are some of the critical points to consider when developing your shipping strategy.
Import Rules and Regulations While it is crucial to understand the rules and regulations for exporting goods, it is even more important to know those relating to imports into your target markets. We have picked a few of the critical import regulations for each GCC state and compiled them into the following collection.
Certificates of Origin Customs regulations in most, if not all, countries in the Middle East require Certificates of Origin to be presented with goods at the border, along with the typical requirements for waybills or bills of lading, commercial invoices, packing lists, and insurance papers.
You will need to provide Certificates of Origin for …
All shipments entering Oman and the United Arab Emirates Shipments with a CIF (Cost, Insurance and Freight) value of $100 or more entering Bahrain Shipments with a CIF value of $1,500 or more entering Kuwait Shipments containing multiple packages and weighing over 98 kilograms entering Qatar If you will be shipping your products to Saudi Arabia, you will need to provide another document, called a Certificate of Conformity, which you must obtain from an authorized service provider.
Payment of Duties Most goods crossing international borders in the Middle East are subject to duties and in some cases, VAT and excise tax. You can find the duty, VAT, and excise tax rates for each GCC country below, where known (VAT is not yet in force in some member states, but may be introduced in 2019):
Bahrain: In the Kingdom of Bahrain, duty is 5% of the shipment CIF value, except for alcoholic beverages, which are subject to 125% duty and for cigarettes(subject to duty at 100%). An excise tax is applicable for tobacco products and energy drinks at a rate of 100% (of CIF value) and 50% for soft drinks.
Kuwait: The general rate of duty is 5% of the shipment CIF value. However, customs regulations in Kuwait include the exemption of some food and medical products from duty, while tobacco products are subject to a rate of 100%.
Oman: Under the customs regulations of Oman, duty rates vary depending on product type, but in most cases do not exceed 10% of shipment CIF value.
Qatar: Duty is 5% of the shipment CIF value for imports to Qatar, except for tobacco products, which are subject to duty at 100%.
Saudi Arabia: The general rate of duty is 5% of the shipment CIF value; however, Saudi Arabia has a more complex regulatory system than its neighboring countries in the Middle East. For example…
- Tobacco products are subject to duty at the rate of 100%.
- Some 700 products are exempt from the need to pay duty.
- Goods from overseas that compete with domestically produced goods are subject to a duty rate of 12% or 20%, depending on their category.
Saudi Arabia has also implemented VAT, with the general rate of tax being 5%. An excise tax is applicable for tobacco products and energy drinks at a rate of 100% (of CIF value) and 50% for soft drinks.
United Arab Emirates(UAE): In the UAE, duty is 5% of the shipment CIF value when that value exceeds 1,000 Emirati Dirhams (AED), except for alcoholic beverages, which are subject to a duty of 50% and for tobacco products (subject to duty at 100%). Value Added Tax is also applicable to goods entering the UAE, at a rate of 5%.
Other Rules and Regulations
Aside from the requirements for import documentation and duty, many other rules and regulations exist, some of which are common to all countries in the GCC and even the broader Middle East, while others apply in specific countries. There are far too many such rules to detail in this brief article, but here are a few examples:
- Some types of items cannot enter Bahrain without a no objections certificate (examples include food products and broadcasting equipment).
- The Kuwaiti government imposes strict alcohol laws, including a complete prohibition on the importation of alcohol and related products.
- In Oman, imported goods labeling must be in Arabic, although it is permissible to add the same details in English also.
- The Saudi government has implemented prohibitions and restrictions on a wide range of imported product types, many more than other member states of the Gulf Cooperation Council (GCC). While there are too many to list here, it is vital that you check the permissibility of any products you intend shipping to Saudi Arabia. All prohibited imports are immediately destroyed at the Saudi border.
Lead Times for Shipping to Middle East Customers
With an understanding of the rules and regulations applicable to Middle East imports, you will be better able to plan what products to ship, how to ship them and to develop a pricing strategy for sales in the region.
Perhaps the next most important thing to be aware of is how long your customers will need to wait to receive their purchases.
A lot will depend on the type of shipping service you choose to work with, and the time needed for customs authorities to release your goods for domestic transportation. In the Middle East, this “border compliance time” can be quite lengthy. Expect your shipments to spend at least a couple of days undergoing customs processing at the destination port or airport.
Shipping Transit Times
You will also need to factor in the time it typically takes for air or ocean freight to travel from the port/airport of origin, to the destination port or airport.
Again, it’s not practical to discuss shipping times in detail in a short article, but to give you some idea, here are a few examples of air and ocean transit times from port to port, for goods destined for the Middle East.
Note that these are purely the air and ocean transit times and do not include domestic transportation in your country or the destination country, or the time your goods will spend waiting for border compliance processes to complete.
Ocean Shipping Transit Times
|Country of Origin||Port of Origin||Destination Country||Destination Port||Transit Time|
|Germany||Hamburg||Dubai||Jebel Ali||17 Days|
|Germany||Hamburg||Saudi Arabia||Jeddah||17 Days|
|Italy||Naples||Dubai||Jebel Ali||16 Days|
|Italy||Venice||Saudi Arabia||Jeddah||11 Days|
|United Kingdom||Southampton||Dubai||Jebel Ali||16 Days|
|United Kingdom||Southampton||Kuwait||Al Asamah||23 Days|
|United States||New York||Oman||Salalah||18 Days|
Air Freight Transit Times
Country of Origin|Airport of Origin|Destination Country|Destination Airport|Transit Time Germany|Munich |Qatar|Doha |6 Hours Germany|Frankfurt|Saudi Arabia|Jeddah|6 Hours Germany|Hamburg|UAE|Dubai|7 Hours United Kingdom|London|Bahrain|Bahrain|6 Hours United Kingdom|London|Saudi Arabia|Jeddah|6 Hours United Kingdom|London|UAE|Dubai|7 Hours United States|New York|Abu Dhabi|Abu Dhabi|14 Hours United States|Los Angeles|Abu Dhabi|Abu Dhabi|16 Hours United States|Dallas|Qatar|Doha|15 Hours
From the air freight transit times above, it is clear that wherever you are shipping from, your goods will spend less than a single day in transit, making this mode of transport by far the fastest.
However, shipping by air is also costly,and for some business models, products, and price points, ocean shipping may be more practical, especially if you decide to collaborate with local logistics providers to deploy some inventory in your target countries.
There’s Nothing like Local Logistics Knowledge
There are many more aspects and elements to understand about shipping to the Middle East in addition to those covered above. Ideally, you will want to perform a lot more research, and that should not stop, even after you launch your cross-border sales operation.
As an alternative to building extensive internal expertise though, you do have the option to work with a reliable logistics partner specializing in Middle East e-commerce.
This approach can remove many of the headaches involved in shipping commercial goods to the region, and enable yourself and (if applicable) your team, to stay focused on continued business growth—and perhaps even further expansion.