UAE, ESWATINI FORGE STRONGER ECONOMIC TIES

DUBAI, UAE – A new chapter in economic cooperation has opened between the United Arab Emirates (UAE) and the Kingdom of Eswatini. This follows the signing of an investment promotion and protection agreement yesterday. This landmark deal is designed to significantly boost investment between the two nations by creating a more welcoming and secure environment for investors.

Signing on behalf of the Kingdom of Eswatini was the Minister for Commerce, Industry and Trade Manqoba Khumalo while the Minister of State for Financial Affairs of the United Arab Emirates, Mohamed Bin Hadi Hussaini, signed for the UAE. It is named the ‘Agreement entered into between the Kingdom of Eswatini and the United Arab Emirates on Promotion and Reciprocal Protection of Investments.’

Statement

According to a statement from the two parties, this agreement has long been negotiated between the two countries and comes after the conclusion of the Avoidance of Double Taxation Agreement in August 2024.“The agreement seeks to encourage the flow of mutual promotion and facilitation of investments to strengthen economic cooperation between the two countries in accordance with national laws and regulations of the host country. It will stimulate the flow of capital and economic development of the two countries,” the ministers explained.

To ensure its effectiveness, a joint committee on investments will be created, meeting once a year alternating between Eswatini and the UAE. The joint committee is important as far as the implementation of the agreement is concerned and will provide a general review of the agreement, exchange information and discuss investment-related matters. The agreement applies to investments made both before and after its entry into force.

According to the document, the new arrangement is expected to create a more stable and predictable environment for businesses from both countries, looking to invest in the other’s territory. It clarifies the legal framework surrounding investments, covering crucial areas like fair and equitable treatment, ensuring investors are not discriminated against and receive appropriate compensation in cases of expropriation. It also simplifies the process for transferring funds related to investments, such as profits and capital, removing unnecessary bureaucratic hurdles.

Representatives

A joint committee, composed of representatives from both nations, will be established to monitor the agreement’s implementation, identify further areas of cooperation and address any issues that may arise. This committee will also play a key role in promoting transparency and encouraging information sharing about investment opportunities in both countries. The agreement emphasises the importance of respecting each country’s right to regulate investments to achieve national policy objectives, while ensuring such regulations are not discriminatory or arbitrary.

It also clarifies the definition of ‘investment’ to include a broad range of assets, from company shares and intellectual property rights to tangible assets like property, while specifically excluding purely commercial contracts and trade financing. Both countries hope this agreement will lead to increased collaboration on investment projects, contribute to economic growth and foster stronger economic ties. The Kingdom of Eswatini and the UAE established formal diplomatic relations in 1974.

Strengthen

Over the years, both countries have worked to strengthen their bilateral ties through visits by high-level officials, participation in international events and cooperation agreements in various sectors like trade, investment and tourism. Eswatini has an Embassy in Abu Dhabi. In September 2022, Eswatini appointed a new ambassador to the UAE, highlighting their commitment to strengthening bilateral ties.

The establishment of diplomatic relations between the UAE and the Kingdom of Eswatini opened doors for potential collaboration in various fields like trade, investment and cultural exchange. Both nations have expressed a strong desire to strengthen their economic ties, with particular focus on commercial and investment. The United Arab Emirates continues to extend invitations to the Kingdom of Eswatini, especially the Ministry of Commerce, Industry and Trade to participate in the Annual Investment Meeting (AIM).

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