Other BriefingsIsraeli Manufacturers Can Consolidate Production In The UAE For GCC & South Asian Access
The UAE and Israel will expand mutual investment and manufacturing under a deal signed on Wednesday between the UAE Ras Al Khaimah Economic Zone (RAKEZ) and the Israeli Manufacturers Association (IMA). The Memorandum of Understanding (MoU) calls for the two sides to collaborate to create investment opportunities and expand the operations of industrial companies.
Israel and the UAE also have a CEPA trade agreement.
This new agreement with the Israeli Manufacturing Association means that Israeli companies that are members of this, and considering setting up in the UAE RAKEZ zone can take advantage of three main incentives and new market advantages:
Free Trade Zone Incentives and Duty Free Importation
RAKEZ is a bonded zone, meaning that component products can be imported into the area duty free. This means they escape duty and VAT while they can be worked on within the zone. These can either be reexported elsewhere or sold onto the UAE market (when VAT and duty applies to the component parts). This saves cash-flow timescales.
Inexpensive Labour
The UAE is home to a significant low cost labour force recruited from elsewhere in the Middle East, as well as other countries in South Asia, most notably Pakistan, India and Bangladesh.
Access to the GCC and other FTA
As long as rules of origin criteria are met, finished products produced in the UAE can be exported to other Gulf Cooperation Council (GCC) countries, as the UAE is part of this trade bloc. The GCC also includes Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia.
Meanwhile, the UAE has its own CEPA trade agreements which give access to markets in Cambodia, India, and Turkiye, while negotiations are in advanced stages with China. Trade agreements are also being sought with Russia and the Eurasian Economic Union.
UAE trade and geographical closeness to East Africa is also seeing the Emirate becoming a significant regional player.
Dezan Shira & Associates can assist with business plan modelling for Israeli investors looking at the UAE as an export gateway further into Asia. Please contact Maria Kotova at dubai@dezshira.com for assistance.
Related Reading
- Understanding The UAE Free Trade Zone Vs. UAE Mainland Establishment Investment Structure Options
- Establishing A Foreign Invested Business In Dubai
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Middle East Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Dubai (UAE), China, India, Vietnam, Singapore, Indonesia, Italy, Germany, and USA. We also have partner firms in Malaysia, Bangladesh, the Philippines, Thailand, and Australia.
For support with establishing a business in the Middle East, or for assistance in analyzing and entering markets elsewhere in Asia, please contact us at dubai@dezshira.com or visit us at www.dezshira.com. To subscribe for content products from the Middle East Briefing, please click here.
