Last month, a specially organized roundtable on trade opportunities brought together industry executives to highlight intriguing opportunities to strengthen trade partnerships between the UK and the UAE. The roundtable also emphasized how important cooperation and forming strong alliances are to long-term success.
As companies and investors attempt to negotiate the terrain in both markets, it is essential to comprehend the underlying dynamics and trends.
The process of diversification
The United Arab Emirates is rapidly diversifying its economy. This mostly entails shifting away from reliance on fossil fuels and toward various industries, such as life sciences, renewable energy, and fintech. In 2023, the UAE’s non-oil trade reached a new high of US$950 billion, which shows how much of an influence diversity is having on increasing economic growth.
This is related to the continuous growth of free zones throughout the United Arab Emirates, which allow foreign investors and expatriates to own businesses fully. The goal of these zones is to lure and facilitate foreign trade in particular industries. The United Arab Emirates now has around 50 free zones.
The UAE also boasts a robust talent pool. Aware that it must attract the greatest talent to support its diversification goals, the UAE provides attractive incentives to entice those with specialized knowledge and abilities to live and work there.
External investment
In addition to drawing in foreign investment, the UAE is a significant outbound investor in international markets, such as the UK, where its investors have made substantial financial investments in sectors including renewable energy and digital infrastructure. Businesses considering expanding into the UK can explore opening a UK branch to capitalize on these opportunities.
In the UK, commercial expansion and investment from the UAE are visible in various industries and across the board. It’s a bold, wide-ranging, and obviously diversified strategy for UAE overseas investment.
A launching pad
The United Arab Emirates effectively promotes itself as a significant springboard to support global business expansion and growth goals and as the “endpoint” for luring business. Ideally situated between the time zones of Asia and Europe, the UAE has a very active trade strategy that aims to lower trade barriers and foster relationships in important international markets.
One example is the current UK-GCC Free Trade Agreement. This deal is anticipated to be finalized during the upcoming year, providing favourable opportunities for commerce between the UK and the Gulf Cooperation Council (GCC). Additionally, the UAE is interested in negotiating a trade pact with the UK, perhaps in particular industries.
SMEs
The foundation of the UK economy is small and medium-sized businesses (SMEs), which account for almost half of private sector revenue and three-fifths of all jobs. There is a genuine chance for such SMEs to move outside of their current borders and pursue expansion prospects in foreign markets, such as the United Arab Emirates.
With improved growth projections for the UK, British SMEs are well-positioned to propel exports to the UAE. They can use incentives and expanded capital allowances to boost domestic productivity before entering the UAE market.
With industries including food, drink, retail, professional services, and life sciences, the UAE is the most sought-after market for investment, second only to Europe. These businesses typically succeed, and the UAE market frequently values British knowledge, abilities, and services.
Assistance and collaborations
Despite these changes, success is not assured. Seeking excellent advice is essential when growing in the United Arab Emirates and beyond.
The market in the United Arab Emirates is highly competitive and saturated, and entrance and operating expenses might be expensive for some brands, which can frequently come as a shock. Companies must consider the UAE entering the market with a carefully considered business plan.
Building those relationships and solid networks is essential when businesses use the UAE to launch global expansion. It may take some time, but the long-term objective is worthwhile.
Similarly, during the run-up to the UK budget and due to a change of administration, some uncertainty has emerged for UAE companies considering the UK market. Without a doubt, the UK presents a highly complementary potential for UAE businesses wishing to expand globally, so it’s crucial to get the appropriate guidance and respond logically rather than impulsively.
Anticipating
This is a critical juncture in terms of how the trade relationship between the UK and the UAE has developed. While UAE companies are eager to investigate international prospects, the UK has conveyed a message that it is “open for business” to foreign investors. Synergies are evident.
However, success is not guaranteed. Building strong relationships can lead to innovative opportunities, increased resilience, and enjoyable cooperation, benefiting businesses on both sides.
To learn more about business opportunities in the UAE, contact us at GERAI LTD.
Giorgi Kurtsikidze
https://gerai.co.ukMy mission is to provide client-focused legal solutions and services through flexible, value-driven approaches by leveraging technologies to anticipate the needs of those existing and potential clients I serve in a manner that adheres to the highest standards of excellence and integrity in the field of Business Law.