The monthly SME breakfast meeting offers the opportunity to discuss, debate and network to small and medium sized business owners.
With the Brexit vote starting to feel like a distant memory of the previous year, our first SME of 2017 was suitably named ‘Trading beyond the EU’. Jeremy Lister, Quercus France, outlined the benefits of the EU for European businesses: the largest international single market; harmonised technical and safety standards; similar cultures, lifestyles and religious beliefs despite only representing 6% of the world population and 17.3% of global GDP in 2016.
However, Mr. Lister avoided further Brexit discussion, which has become increasingly more common, focusing instead on relations with Iran and the cultural considerations and due diligence which come into play when trading with the Middle-Eastern culture.
Transforming your domestic business internationally is not easy, very often costly and can too often be unsuccessful as the main potential barriers were outlined as such: Country risk; Ease of doing business; Regulatory Requirements; Language; Culture; Religious Considerations; Government and Business environment.
Despite sitting rather low in the ‘Ease of doing Business’ and ‘World Corruption Perception’ index, Iran takes second position behind Saudi Arabia in terms of size of economy in the Middle East, and is in the top 15 of the most mineral and resource rich nations. The strategic location of Iran marks it as a strong potential market of 400 million persons.
Moreover, obvious cultural and religious considerations paired with regulatory sanctions make any move into the Iranian market difficult. Despite January 2016 marking the implementation of the JCPOA (UN nuclear deal), many sanctions remain in place such as arms embargos, restrictive person lists and human rights sanctions. Further, the country’s suspicion of the West, especially the UK, proves another significant hurdle; with Mr. Lister providing the most recent example of British Prime Minister Theresa May, “Iran is a threat that needs to be pushed back”.