UAE and Hungary to strengthen economic, investment relations

As part of its endeavours to strengthen and activate means of economic and investment cooperation with various countries of the world, the UAE, represented by the Ministry of Finance (MoF), signed an agreement to promote and protect mutual investments with Hungary.

The agreement, which was signed on Thursday morning at the ministry’s headquarters in Abu Dhabi, aims to enhance economic cooperation, provide an optimal investment environment, and secure a comprehensive balance between rights and obligations between investors and the host country, thus stimulating business initiatives for sustainable economic development.

Younis Haji Al Khoori, Undersecretary of Ministry of Finance, singed the agreement on behalf of the UAE, while Osama Naffa, Hungarian Ambassador to the UAE signed it on behalf of the Hungarian side, in the presence of senior officials from MoF.

The agreement protects both nations’ investments from all non-commercial risks including nationalisation, confiscation, judicial seizures, and freezing; and it creates a conducive environment for mutual investments and licensing. It also covers transfer of profits and revenues in convertible currency and provides investors a just and immediate compensation for their investments in case of their appropriation for the public interest – in accordance with the approved law and provided that the compensation value is in accordance with the market value of the investment prior to its seizure.

Younis Haji Al Khoori reaffirmed the UAE’s keenness to protect the UAE investments abroad and provide the optimal economic environment to attract foreign investments in accordance with a legal and legislative system that is in line with international best practices.

He said: “Agreements on protection and promotion of investments provide the legal framework and grant national and most-favoured-nation (MFN) treatment in the management, maintenance and expansion of investments, with emphasis on non-interference in all investment-related subjects.”

H.E. added: “Hungary is one of the UAE’s leading economic partners in the Central and Eastern European Countries (CEECs).

This agreement underscores both nations’ efforts to bolster bilateral relations, enhance cooperation in the economic and financial sectors, and encourage the growth of mutual investments.”

The UAE, represented by the Ministry of Finance, has signed 101 bilateral agreements to protect and encourage investment with different countries around the world.  These agreements support the country’s efforts to establish international partnerships to achieve common goals in line with the sustainable development goals, which represent a roadmap for establishing cooperation at an international level.

Meanwhile earlier as part of its endeavours to strengthen cooperation frameworks in tax matters, protect taxpayers from double taxation, and avoid impeding the flow of trade and investment, the Ministry of Finance (MoF) signed a protocol to amend the agreement for the Avoidance of Double Taxation and Prevention of Tax Evasion with respect to taxes on income with Austria. The agreement was previously signed between the UAE Government and Austria in September 2003.

Obaid Humaid Al Tayer, Minister of State for Financial Affairs, signed the agreement on behalf of the UAE, while Austrian Finance Minister Gernot Bluemel, signed it on behalf of Austria. The signing took place on Thursday, in the presence of Dr Andreas Liebmann, Ambassador of the Republic of Austria to the United Arab Emirates; Abdullah Ahmed Al Obaidly, Director of Relations and International Financial Organisations at MoF; and officials from both parties.

Obaid Al Tayer stressed on the importance of consolidating the financial, economic and investment relations between the UAE and Austria, in order to support the common interests of both countries. His Excellency said: “The UAE will continue to strengthen joint cooperation in all fields that benefit the peoples of both countries and enhance the comprehensive and sustainable development process. The signing of this protocol boosts the bilateral economic relations between the UAE and Austria in tax matters.” Through this protocol, both parties aim to avoid double taxation with respect to taxes on income, without creating opportunities for non-compliance with the tax system or reduced tax through tax evasion or avoidance.

During the meeting, both parties deliberated means of bolstering bilateral relations between both countries and enhancing joint cooperation in various fields, and exchanged views on several international issues of common interest.

The UAE recently participated in the G20 Finance Track’s second Global Partnership for Financial Inclusion (GPFI) meeting, which took place virtually. The meeting discussed the COVID-19 repercussions on remittances, future developments and possible solutions to existing challenges for cross-border payments and remittances, digital financial solutions to promote resilience and financial literacy, and Micro, Small & Medium Enterprises (MSMEs) financing and digital financial inclusion.