How the UAE could be the future market of Brazilian companies

A few days prior to COP 28’s launch, Global Markets organized a Business mission around a major event hosted by Dubai Chambers , the Dubai Chamber Global Business Forums , which gathered a highly curated audience and top-level authorities from the public and private sectors, to share achievements and the future outlook of the Emirate in major sectors of the economy aligned with the Dubai Economic Agenda (D33)’s goals over the next decade.?

When a city aims to double the size of its economy and to consolidate its position among the top three global cities, there are several transformational projects, precisely 100 projects, that need to start today in order to accommodate the needs of tomorrow.

Dubai’s population in 2023 surged 14,5% in a five-year period. From East to West, people are migrating to the Emirate looking for better opportunities and quality of living. Therefore, the demographics are continuously being adapted and the city keeps on building intelligence and? enhancing its already strong social and governance principles, positioning Dubai as a knowledge based economy.?

This diversity is what creates #Dubai, a resilient market without much fluctuation during challenging times. One example is the egg price that increased over 70% in the last year but it its price remained the same in Dubai. Here it is possible to predict supply and demand and as a global hub, Dubai makes it easier to access anything in the domestic market.

That is one of the reasons why Logistics is one of the key pillars for the next decade: Future Economic Corridors will be launched by 2033 with Africa, Latin America, South East Asia, and 400 new cities will be added to Dubai’s foreign trade map.?

In our meetings, we could sense a high satisfaction rate of people living and working in the country. From Croatia to Belgium to Argentina, we found qualified professionals with shine in their eyes, praising the country for the safety and opportunities encountered. This is not a coincidence, though. For a country that breaths money, power and luxury day in day out, the definition of success in the UAE measures success internally by a high satisfaction net score rate; in other words, people’s happiness. This is only possible when one manages its challenges bottom up, not letting conventional metrics and status quo defining one’s reality. Although this is easier said than done, there are practical examples already there.

Last year, the country achieved a growth rate of 3,6% and attracted USD 23 billion in FDI, 10% above pre-pandemic levels. While most countries drive their FDI efforts to large-scale manufacturing facilities, so dozens of thousands of jobs are created to impact economy, they keep on a very low success rate; in fact, global foreign direct investment (FDI) fell by 12% in 2022 to $1.3 trillion.

Dubai too is looking to attract more Industry investments, however Manufacturing in the Emirate is not based on heavy robotics, on the contrary, it is highly automated so it does not require fixing it later.? And that means building today the type of city we will live in tomorrow.?

However, we noticed from our interactions with the main Government Authorities and group subsidiaries across the country that the country is facing a new moment in time. The needs of the country have changed and so have their FDI attraction requirements. The market is more developed, the business atmosphere is a lot more mature and the pace remains agile. That means that although business is easier each time, a solid ambition is required from companies willing to tap into this market.??

At this stage, you may be questioning what solid ambition technically means. In our countless interactions with companies entering the UAE or planning their market entry, it is very common to spend between 12 to 18 months deciding whether or not to open an office in Dubai, particularly in Latin American countries.?

This time gap is crucial to dictate the suitable timing to have a presence in the market. Time is a luxury in the #UAE and it is advised not to be wasted, otherwise the opportunity cost of missing out on opportunities can be very expensive for companies.?

Another key factor to consider to commit to an expansion in this market is the tax reform that Brazil is currently approving before the end of the year. The tax reform has its pros and cons as usual and the key concerns relate to :

1) the limitations that state governments will have to offer tax incentives to specific economic sectors;

2) the bill to tax offshore and closed-end funds, and change an instrument companies use for shareholder payments, the so-called interest on equity.

Such changes will directly and immediately impact tax collection and in a matter of weeks we may see a surge in investment instruments interest from #Brazilian investors to the UAE.

The UAE has international standards when it comes to business expansion or investment instrument structures. Several alternatives are based on English Common Law with a very cosmopolitan regulatory framework which is possible to enjoy one of the lowest corporate taxes in the world while having the ability to repatriate 100% of capital, if needed.

We at Global Markets are ready to accommodate the needs of Brazilian #investors into the UAE through our business missions to access knowledge and key connections in the UAE in order for businesses opportunities to flourish.

by Ludmilla Figueiredo , Managing Partner, Global Markets.

This article is currently featured at a macroeconomic analysis report released by ESGovernance.Inc and BONAMICO & CAMPOS DE ALMEIDA ADVOGADOS . FOr those interested in learning more about the entire report, please find it here in Portuguese.

#globalmarkets #Dubaichambers #D33 #dubaibusinessforum