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KUWAIT CITY, Feb 16: The United Arab Emirates and France have had a long-standing business relationship, with both nations engaging in numerous trade and investment partnerships over the years. This relationship has been built on mutual interests, shared values, and a commitment to growth and development.
The United Arab Emirates is the top destination for French companies in the Middle East, boasting nearly 600 subsidiaries with a workforce of over 30,000 people, including 222 VIEs. Dubai is a popular choice for various sized businesses, including SMEs and mid-sized enterprises, to establish their regional headquarters.
French companies play a significant role in various crucial sectors of the local economy, including aeronautics and space, civil and military, energy, sustainable development, luxury goods, urban transport, banking and insurance, hospitality, retail, and industrial sectors.
Afif Mshangama, a Dubai-based French lawyer and CEO of Nextcap, an advisory firm based in the UAE, explains that the UAE is a crucial player in France’s trade relations “The UAE ranks as France’s second largest trading partner in the Middle East region, this is a milestone achievement considering its population relative to Saudi Arabia”
In 2019, the UAE received 22% of France’s exports to the region, and the country also holds the position of France’s third largest supplier, accounting for 13% of the nation’s imports. Bilateral trade between the two nations, including both exports and imports, reached a total of EUR 4.8 billion in the same year.
The trade relationship between France and the UAE has consistently favored France, with the bilateral trade balance remaining in its surplus. The UAE is now France’s seventh largest trade surplus partner globally, with a surplus of EUR 1.7 billion in 2022. In the same year, bilateral trade between the two nations saw a positive trend, with French exports to the UAE experiencing a rise and reaching EUR 3.3 billion in 2022.
France is a major foreign investor in the UAE. In 2018, its stock of FDI in the country was valued at EUR 1.25 billion. With 4% of the FDI stock recorded in 2016, France ranks as the 4th largest foreign investor in the UAE. In 2016, it was the 3rd largest foreign investor in Abu Dhabi (7.7% of FDI stock) and 5th largest in Dubai in 2018.
French companies hold significant positions in various sectors, including energy, water, and hospitality. Mshangama has assisted and advised several of these companies in the UAE. He emphasizes that some French companies in the UAE are crucial players in several industries. For example, to understand the level of competition, he says “Total has had a presence in the UAE market since 1939 and is the leading French investor, holding various shareholdings in oil, gas, and solar power, this is a clear example of the sheer importance of French companies in the UAE.”
After renewing its onshore concessions in 2015, Total signed the renewal of its subsea concessions in 2017.
Afif Mshangama also explains other examples such as Engie which generates nearly 45% of the UAE’s electricity “Although relatively unnoticed, French companies play large roles across several industries within the UAE, such as EDF which is working with Masdar on the construction of the world’s largest solar park in Dubai and Suez which is involved in seawater desalination”
Afif Mshangama is correct in his assessment of the role of French companies in the UAE. For example, ACCOR is the leading hotel operator in Dubai and is well known for its various brands.
The UAE offers a number of advantages for French companies by providing investors a robust infrastructure to operate, a secure environment to trade with bilateral trade policies and agreements, and transparency from its stable government.
French companies have been setting up business in the United Arab Emirates for business opportunities for several decades and require expert advisors in compliance, specifically experts in both French and UAE legislation.
Mshangama also says “As we continue into the future, more French companies coming to the UAE will require legal assistance. Lawyers like myself know the laws and regulations in both France and the UAE, it’s absolutely necessary to effectively help these companies do business”
The future prospects of the UAE-France business relationship are very positive. With the UAE’s continued economic growth and its position as a major hub for trade and investment, and France’s reputation as a leader in innovation and technology, the two countries are poised to continue to strengthen their business relationship in the years to come which will certainly require experts in several professions including law to help them along the way.