Italy is looking forward to further strengthen economic and investment ties with the UAE. Gianpaolo Bruno, Italy’s Trade Commissioner in the UAE expressed the wish to partner with UAE sovereign wealth funds to jointly invest in Africa and Asia. Africa is predicted to be the next lion in the market in economic terms along with South East Asia.
Italy is the Eurozone’s third largest economy but the nation is facing numerous issues such as decline in economic growth, huge debts and conflicts with other European members on Italy’s budgeting plans. This is why the nation is looking to attract FDI to stabilize its economy and boost growth.
The response of UAE government is quite welcoming for the projects and we can expect to see potential investment of UAE in Italian logistics, tourism and technology-intensive industries. Furthermore, Italy will also partner with Jebel Ali Free Zone Authority in Dubai to setup two large scale free zones in southern part of the country. Not only this engagement will drive Italy’s economy, it will also allow UAE to access the important markets of Europe.
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Trade Relations between Italy and UAE
Oil and gas sector is still the biggest driver of FDI in the UAE and Italian firms have major stake in this industry. Efforts are also been made to boost non-oil trade between the countries. In April 2019, Italy sent a large business delegation to the UAE.
UAE is the biggest export market for Italy in the Mena region according to The National. According to Mr. Bruno,
“Italian exports to the UAE last year reach €4.7 billion euros (Dh19.4bn) while the UAE exported €1.1bn worth of non-oil goods to Italy. Italian exports, which saw a decline in the past two years on the back of a global economic slowdown and a three-year oil price slump, are expected to rise as much as 7 per cent by 2020”
In 2015, Italian exports to the UAE were at maximum point i.e. €6bn but market volatility and economic situation brought down a contraction. Mr. Bruno now expects a CGAR of 5% which is why Italy is putting efforts to further strengthen bilateral trade relations with the UAE.
Investments in the Technology Sector
Italy is also working to boost investments in technology sector. The Italian government has allocated 1 billion Euro innovation fund to help small and medium sized businesses to grow and form joint ventures with other companies in and outside of Italy.
Once the funds are given to the Italian companies, they will also take minority stakes in the UAE tech startups with the purpose to jointly innovate and grow. For this purpose, both UAE and Italian governments have signed an agreement to facilitate such deals and they will be financed between 2-10 million euros. Not only Italian companies, but the deal will also allow UAE tech firms and startups to be able to invest and have stakes in Italian firms.
We can also expect further details to be announced as more meetings will take place in October 2019 in Italy.
Right now, UAE presents a great business landscape for company formation in UAE. Especially in the technological sector, after the biggest tech-deal that the Middle East region ever saw i.e. between Uber and Careem (Uber bought its Middle East rival Careem for 3.1 billion dollars).
According to UAE Central bank, UAE sustains its number one ranking in FDI and had inflows amounting to $10.4 billion in 2018 and technology is right now a major catalyst to UAE’s economic growth.
Be a part of the growing landscape and utilize the immense business opportunities in Dubai and wider UAE. For professional assistance related to business setup in UAE, contact our business setup consultants at Business Formation Dubai. You can also send your query at info@businessformationdubai.com.