How can UAE companies take advantage of opportunities in Israel

Toni Becker February 05, 2021

On 28 August 2020, the UAE President Sheikh Khalifa Bin Zayed Al Nahyan abolished the ban on business and trade between the UAE and Israel that had been in place since 1972. The Federal Decree Law Number 4 has opened the UAE and Israel up to new opportunities, and the UAE was the first Gulf Nation to have normalised these relations - and is only the third Arab nation to have done so.

The UAE is an economic powerhouse of the Gulf Region, and by leveraging its ideal location between the East and West, and  focusing its efforts on logistics as well as its forward-thinking approach to technology, business and foreign investment, the UAE has quickly become a bustling nerve center for international commerce. 

The UAE was once known for its hydrocarbon-based economy however the region has vastly diversified and the majority of its economic output actually comes from the  technology, real estate, innovation and finance sectors. 

But with the new Federal Decree Law in place, another great opportunity has opened up for the UAE and UAE companies. And with this new opportunity opening up to UAE companies, how can companies take advantage of business opportunities in Israel? 


How can UAE Companies can take advantage of opportunities in Israel

The ability for Israeli businesses to create an open presence in the UAE or team up with UAE based businesses is a huge opportunity for both the UAE and Israel - especially for Israeli businesses looking to grow their trading networks. In fact, early estimates have calculated that the normalisation of business between the two could see a massive rise in trade in the excess of an astounding $6 billion.  The benefits for Israeli companies is huge - but how can UAE companies take advantage of this opportunity and benefit from it? 

Below, we take a look at how UAE industry can benefit from Israeli Business. 

Technology and Innovation

As a business dedicated to digital technology, marketing and innovation, we take a look at the growth possibilities of these sectors - and how this new law has the power to increase business significantly. 

Israel has a reputation for being the “start-up” nation of the world - and for good reason. With 80 companies currently listed on NASDAQ, Israeli business rivals China by having the second biggest number of listings after United States businesses.

Here in lies a big opportunity for UAE business, as many UAE businesses have placed focus on innovation, tech, marketing and digital advancements.

Tourism and Travel

Of course the COVID-19 pandemic has drastically shifted the tourism, real-estate and travel industries across the globe and the pandemic will have an impact on these industries for years to come however, both UAE and Israel travel, real-estate and tourism businesses can work together to soften this impact.

As stated previously, the UAE is the ideal hub between the East and West and is well-known for its two airlines - Emirates and Etihad. With this in mind, the UAE will undoubtedly attract Israeli businesses transiting to anywhere else across the globe - and Israeli travelers will also benefit from the lower air fares which will result in increased competition for traditional airline providers.

With the above in mind, the real-estate industry in the UAE is set to grow - and real-estate agencies need to take advantage of this situation and create relationships with travel agencies and businesses across Israel. 

Medical, Health and Pharmaceutical 

It is well known that the UAE and Israel have actually been cooperating and collaborating in these industries for a while but since the announcement of the new law, the industries have made massive strides, with Abu Dhabi Stem Cell Centre having announced an important agreement with Israel. Not only will the two countries work together in regenerative medicine, they are also conducting important research regarding COVID-19. 

With mutual experience and interest in medical research, the two countries are set to create great advancements in the medical, health and pharmaceutical sectors. UAE businesses working in the medical equipment sector can quickly align with Israeli businesses to increase growth and opportunity. 

The Opportunities 

The opportunities for both the UAE and Israel is simple - cross-border investment flow and larger technical cooperation - which will in turn, develops both economies. The key is for businesses and business leaders to collaborate, integrate and trade ideas and knowledge - and by leveraging off each other and creating business bonds - your business in the UAE can quickly flourish alongside related Israeli businesses. 

his is about investing in long-term success as there is talk of other Gulf nations following in the footsteps of the UAE - and these countries will move to quickly regulate relations with Israel - this means that UAE businesses should establish ties with their Israeli counterparts in order to establish firm and trusted relationships because the Saudi Arabian market could potentially open up to Israel - which means ever greater growth. 

UAE companies need to create properly structured relationships between themselves and Israel based business, making use of corporate service provider nominees in the financial free zones of the UAE - and offer Israeli companies a holding vehicle for the region. This will route to a market taken on by multinationals from other administrations for years to come. 

By avoiding the need to structure through traditional nominee jurisdictions and use the UAE as a free zone Israel businesses will quickly reap significant tax benefits - which will make for greater mergers, collaboration and business growth for UAE companies as Israeli businesses will want and need to work alongside UAE businesses.