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As the world becomes more interconnected, Thai businesses are finding lucrative opportunities in the Middle East. This region is not just rich in culture and history; it's also a burgeoning market for a diverse array of Thai products. From the bustling streets of Dubai to the vibrant markets of Riyadh and Kuwait City, the demand for goods from Thailand is on a steady rise.
In 2022, Thailand’s trade with the United Arab Emirates (UAE) reached a remarkable US$3.4 billion, dominated by car parts, air conditioners, agricultural goods, and tech equipment, noted by the ASEAN Briefing. The non-oil trade alone between the two countries grew by 21%, hitting US$6.1 billion. These numbers represent a growing economic synergy and a plethora of opportunities for Thai exporters.
Similarly, Saudi Arabia and Kuwait are becoming increasingly important trade partners. According to the United Nations COMTRADE database, Thailand’s exports to Saudi Arabia amounted to US$2.04 billion in 2022, while its exports to Kuwait totaled US$327.66 million. These markets are ripe with potential, spanning a range of sectors.
For Thai companies eyeing the Middle East, understanding the art of international shipping to these destinations is crucial. Each country has its unique set of custom rules and regulations. Tapping into this potential means not only expanding your market reach but also contributing to a global narrative of trade and cultural exchange. Let's dive into the essentials of making your shipping journey from Thailand to these vibrant Middle Eastern markets a success.
The Middle East, a region rich in history and culture, is increasingly turning towards Thailand for a variety of goods. This burgeoning market has shown a growing demand for Thai products, a testament to the deepening economic and cultural ties between these regions.
One of the key areas of growth is in the agricultural sector. The Thai Ministry of Agriculture and Cooperatives is keenly focused on increasing fruit exports to Middle Eastern countries, including Saudi Arabia and the UAE. These nations have shown a high demand for Thai fruits such as rambutan, mangosteen, longan, mango, and durian. In 2022, efforts were intensified to boost the shipping of farm products and food to the UAE by US$299 million, marking a 4.6% increase year-on-year. Such initiatives reflect the growing appetite in the Middle East for Thai agricultural products.
Moreover, in 2022, Thai rice prices saw a significant rise due to heightened demand from Middle Eastern markets. Prices for Thailand's 5% broken rice climbed to US$432-US$435 per tonne, up from US$410-US$414. This increase was attributed to growing interest from countries like Iraq and Iran and improved diplomatic relations with Saudi Arabia.
Adding to this momentum is the Thailand Mega Fair 2023, held in December, in Riyadh, Saudi Arabia. This trade fair was the largest showcase of Thai products and services in Saudi Arabia, aimed to forge new business opportunities, expand trade and investment ties, and promote Thai culture. With participation from major Thai corporations like Siam Piwat, Tourism Authority of Thailand, BDMS, and SCG International, this event was a strategic move to cater to the diverse and increasing demand for Thai products in the Middle East.
Evidently, for Thai businesses, the Middle East is not just a market; it’s a gateway to a world of opportunities, where the richness of Thai products meets the diverse needs and tastes of the Middle Eastern consumer.
Shipping to the Middle East involves understanding and adapting to the region's specific custom duties and tax regulations. Each country in the Middle East has its unique set of rules that govern imports, and it's crucial for Thai exporters to be well informed to ensure smooth transactions.
In the UAE, a general Value Added Tax (VAT) rate of 5% applies to most goods shipped, though some items are subject to a 0% rate or exempt under certain conditions. Additionally, a customs duty of 5% is typically imposed on the cost, insurance, and freight (CIF) value of imports.
However, when shipping goods like alcohol and tobacco, other rates may apply. The UAE also enforces anti-dumping duties on specific imports like car batteries and ceramic tiles, with rates varying based on the Harmonised System (HS) codes and the country of export or origin.
In extreme cases, this duty can be as high as 67.5% of the CIF value. Excise tax rates in the UAE are particularly high for tobacco products and electronic smoking devices at 100%, and 50% for carbonated and sweetened drinks.
In Saudi Arabia, a VAT rate of 5% is generally imposed on goods, with some exceptions. Notably, from 1 July 2020, the standard VAT rate was increased to 15%.
Customs duties on goods shipped to Saudi Arabia are calculated based on their price, which includes the cost of goods plus freight and insurance converted to Saudi riyals. With the recent increase, these duties will now range from 6% to 25%, affecting 99 HS codes covering a wide range of products, including foodstuffs and aluminium products.
Kuwait also has a unified customs tariff of 5% on the CIF invoice price of imports, with some exceptions. Basic foodstuffs and medical items are usually exempt from this tariff. However, tobacco products attract a 100% duty. Currently, discussions are underway in Kuwait regarding the implementation of VAT, which Thai exporters should closely monitor for any developments.
The UAE maintains a strict policy on certain items, banning them entirely from import. These include:
For restricted items, permission from specific UAE authorities is required before shipping them into the country. These items include:
In Saudi Arabia, the import regulations include prohibitions on:
For detailed information, consult the Saudi Standards, Metrology and Quality Organization (SASO) and Saudi Customs websites.
Restricted items you need special approval before shipping to Saudi Arabia include:
For more detailed information on duties and restrictions, you can visit the Saudi Customs Tariff Search page.
Prohibited items you cannot ship to Kuwait include:
Restricted items you require special permissions before importing into Kuwait include:
When shipping from Thailand to the Middle East, understanding customs documentation requirements is vital.
Standard export documents include:
In addition, here are specific types of documents you’ll need to prepare before shipping to these Middle Eastern countries:
When shipping from Thailand to the UAE, the additional customs documents to prepare include:
Additional customs documents to show when shipping to Saudi Arabia include:
When shipping to Kuwait, these are some of the additional documents you’ll need to prepare:
When shipping goods from Thailand to the Middle East, whether it’s the UAE, Saudi Arabia or Kuwait, proper preparation of your parcels is crucial. This not only ensures the safety and integrity of the products during transit but also helps in smooth customs clearance. Here's a guide to packing and labelling your shipments effectively:
We cover more on packaging guidelines here.
When shipping goods to the Middle East, adhering to specific labelling regulations of each country is crucial. These rules are designed to ensure consumer safety and regulatory compliance. Here's a breakdown of what you need to know:
Goods shipped to the UAE must follow these labelling requirements:
Likewise, when shipping to Saudi Arabia, goods must have these labelling rules followed:
Shipping to Kuwait also entails product labelling rules like:
In the intricate landscape of shipping from Thailand to the Middle East, choosing a logistics partner like DHL Express is key. We excel in handling complex customs processes, ensuring that your shipments are not just timely but also comply with local regulations. This is crucial for smooth overseas deliveries, especially in diverse markets like Saudi Arabia, UAE, and Kuwait.
DHL Express offers real-time tracking for deliveries in over 220 countries and territories, including the UAE, Saudi Arabia and Kuwait, providing transparency and peace of mind for your shipments. Whether it’s delicate jewellery or bulky industrial goods, our services are tailored to meet diverse needs.
For Thai businesses eyeing the Middle Eastern market, DHL Express Thailand isn’t just a shipping provider; we’re a partner in your growth and expansion. Opening a business account with us means access to top-tier shipping and delivery solutions, expert support, and a gateway to new opportunities in these emerging markets. With DHL Express, navigate the intricacies of international shipping with ease and confidence.