The UAE’s Economic Diplomacy
Through its global network of missions and embassies, the Ministry of Foreign Affairs and International Cooperation (MoFAIC) aims to attract foreign investments, encourage outbound investments, promote trade, and strengthen bilateral and multilateral economic relationships. These operations make up the core of the UAE’s economic diplomacy, which ultimately supports the long-term economic and societal needs of the UAE highlighted under Vision 2021 and the 2071 Centenary Plan.
Supporting a Diversified Economy
The UAE continues to work to create a diversified economy, while still sustainably reaping the benefits of its abundant natural resources. MoFAIC plays an important role in ensuring that the UAE benefits from global economic trends through consolidating and strengthening its position as a key player on the world stage. The UAE’s economy is already the Arab world’s second-largest, with strong, sustainable growth generated through tourism, transport and logistics, financial services, real estate, banking, and renewable energy. Increasingly, the UAE is looking to the economy of the future, prioritizing investments in education, information technology, artificial intelligence, health, and industrial manufacturing.
Inward and Outward Investment
The UAE has an impressive track record of attracting Foreign Direct Investment (FDI) through favorable tax regulations, developed infrastructure, and minimizing barriers to establishing business. The UAE continually demonstrates its determination to provide the best possible regulatory environment for investments. The 2018 FDI Law opens up numerous economic sectors for 100 percent foreign ownership. This new framework supports investments that build regional and global value through production chains focused on advanced and high-value industries.
The UAE has also worked to facilitate outward investment, including through the establishment of successful sovereign wealth funds. Through these funds, the UAE has become a major investor in many parts of the world. The returns generated by these funds are invested back into the development of the UAE, with a significant portion going to projects in energy, industry, communication and information technology, infrastructure, healthcare, and renewable energy.
MoFAIC works to ensure clarity over taxation and investment issues by supporting national efforts to sign bilateral Double Taxation Agreements and Bilateral Investment Treaties (also known as Investment Protection and Promotion Agreements). MoFAIC also assists in signing bilateral aviation agreements, which is key given the size of the UAE’s aviation sector, hosting two of the world’s leading airlines: Emirates and Etihad.
Through substantial investments in infrastructure, the UAE has emerged as a regional and global trading hub. This is further bolstered by the UAE’s unique geographic location between Asia, Europe, and Africa, as well as being a gateway to the Middle East. In seeking to further increase trade volume, the UAE is a leading proponent of global free trade and has been a member of the World Trade Organization since 1996.
Diplomacy in Partnership
MoFAIC works closely with Emirate-level investment promotion agencies, the private sector, sovereign wealth funds, business councils, and other economic actors to ensure successful outcomes through economic diplomacy. In late 2019, the Emirates Diplomatic Academy hosted the Economic Diplomacy Seminar for the UAE and Saudi Arabia, aimed at strengthening the economic might of the two nations.
Held in partnership with Prince Saud Al-Faisal Institute of Diplomatic Studies, the event sought to support UAE and Saudi entities in foreign markets, evaluate the level of global integration of their economies and promote the attraction of foreign direct investments to support job creation in the two countries.