UAE invites Italian firms to partner with its private sector in bid for FDI boost

Oil and gas, technology, renewables and infrastructure are priorities, Economy Minister Sultan Al Mansouri says

Sultan Al Mansouri, the UAE Minister of Economy, is touring China as part of a ministerial delegation. Mona Al Marzooqi / The National

The UAE is inviting Italian oil and gas, technology, renewable energy and infrastructure companies to partner with its private sector as it seeks to further boost foreign direct investments flows, Economy Minister said.

“Our FDI law provides a wide range of opportunities," Sultan Al Mansouri told the Italy-UAE Business Forum in Dubai on Monday.

“All of these are priority sectors for the UAE government and the private sector. Given many opportunities of mutual investments, I would like to invite Italian companies to benefit from the UAE as a regional and global hub [of investments].”

The UAE, the second-biggest economy in the Arabian Gulf, ranks first in the region in terms of FDI inflows, which amounted to $10.4bn (Dh38.17bn) in 2018, the minister said, citing estimates by the Central Bank. The country accounted for more than 22 per cent of the total FDI inflows into the Middle East and North Africa, UAE Minister of State Ahmed Al Sayegh said last week.

The oil and gas sector has been a major driver of FDI in the UAE and over the past few years the sector has attracted more than $21bn in both on and offshore concessions, Mr Al Sayegh said.

Attracting foreign investment is high on the country's agenda as it continues to diversify its revenue base, cutting dependence on oil proceeds. The UAE, which last year passed an FDI law that streamlines and facilitates capital inflow, is expecting a significant boost in foreign investments this year. The country, which has increasingly looked to Asian trade partners in recent years, is also keen to strengthen its existing trade relations with the European countries such as Italy.

“The issuance of new FDI law, which allows up to 100 per cent ownership in selected sectors is the latest milestone in our continuous national effort to improve the UAE’s investment environment,” Mr Al Mansouri said.

The bilateral trade between the UAE and Italy has grown significantly. The total non-oil trade between the two countries reached almost $7.8bn in 2017. The UAE's non-oil exports to Italy in the first nine months of 2018 rose 7.7 per cent year-on-year, the minister said.

“The figure is complementary to the fact that the UAE is the largest Arab trading partner with Italy. In turn, Italy is the fourth-largest trading partner of the UAE and was also the second-biggest exporter to the UAE within the EU in 2017,” he added.

Italian hotel guests and the number of flights from the UAE to destinations in Italy have also been on the rise. The number of Italian tourists to the UAE in 2018 increased by 3 per cent, while budget airline flydubai is adding to the 60 weekly flights already operated by Emirates and Etihad Airways, as it puts Catania and Napoli on its list of destinations.

In the past decade, the Emirates has been focusing on innovation, small and medium-sized enterprises and start-ups, it is building partnerships with developed economies to boost these sectors and increase their contribution to the country’s gross domestic product.

The UAE has an agreement in place with Italy since 2012 and it is signing several preliminary agreements on SME partnerships, investments, economic development and innovation during the three-day business conference.

“This will take our strategic partnership to a new level,” Mr Al Mansouri said. The agreements, he said, cover sectors identified in the UAE National Innovation Strategy which includes healthcare, education, technology, transportation, aerospace, water and renewable energy. They also include the key economic sectors of Italy including engineering, financial technology, bio-technology and pharmaceuticals.

Luigi Di Maio, Deputy Prime Minister and Minister of Economic Development of Italy, who is leading the large business delegation, said Italy would look at possible reforms of UAE’s SME sector and Italian firms may consider taking minority equity stakes in some of the companies to help them grow.