UAE signs historic business pact with Jersey

UK dependency's first bilateral investment treaty offers investors better protection

Jersey is a Crown dependency of the United Kingdom, off the coast of Normandy, France. Elizabeth Castle is a castle on a tidal island in Saint Helier, Jersey. Construction was started in the 16th century.

The UAE signed a historic investment pact with Jersey on Wednesday to “help facilitate” financial flows between the two and offer investors “better protection”.

The agreement – Jersey's first bilateral investment treaty – was signed at the UAE Ministry of Finance’s headquarters in Dubai in an effort to encourage foreign investment and protect the investments of both parties “from all non-commercial risks”.

Mohamed Al Hussaini, Minister of State for Financial Affairs, who signed the pact on behalf of the government, said the deal reaffirmed the ambitions of the UAE and Jersey to “strengthen economic and investment co-operation”.

“It also reiterates their commitment to provide the appropriate environment to attract foreign investments in accordance with a legal and legislative system that is in line with best international practices,” Mr Al Hussaini said.

Senator Ian Gorst, who signed the deal on behalf of the self-governing UK dependency, said the “important treaty” will boost the business environment and enhance investment flows between Jersey and the UAE.

“This is Jersey’s first bilateral investment treaty, and it is symbolic of our deep friendship that this should be signed between our respective jurisdictions," Mr Gorst said.

"As Jersey celebrates its 60th anniversary as an international finance centre, and as the UAE looks forward to the occasion of its 50th National Day, this new treaty reflects the strength of the relationship between us and will encourage greater economic co-operation for mutual benefit."

To tie in with the event, Jersey Finance, an organisation funded by Jersey’s finance industry to promote the island as a financial centre, unveiled a study on global attitudes towards Islamic finance.

Of the 96 per cent of Muslim high net worth individuals preparing for wealth succession, 57 per cent wanted tax advice, and nearly two-thirds (63 per cent) wanted Sharia compliance advice.

The study found that Islamic finance investors are also taking an active interest in environmental, social, and corporate governance, offering private wealth managers an opportunity to offer more advice and a codified approach to ethical finance.

The study, release to tie-in with the 10th anniversary of the organisation operating in the GCC, also found that venture capital is increasingly becoming a staple asset class for Muslim high net worth investors who are particularly interested in early-stage high-growth opportunities in FinTech and the digital economy in the GCC.

Crypto and digital assets are also attracting interest. However, debate rages over the Sharia compliance of cryptocurrency

Meanwhile, the UK continues to rank as the main jurisdiction for Muslim high net worth investors, the study found, thanks to its legal framework, superior property rights, and inherent compatibility with Islamic law, including for financial transactions and wealth succession.

Jersey is particularly favoured by Muslim high net worth families and family offices for these services, especially investment trusts, according to the study, which polled more than 2,000 respondents in the UK, Kuala Lumpur, the GCC and South Africa.

“Jersey already has a long-standing presence in the Gulf region and has a wealth of experience in Sharia compliance, succession planning and asset protection, placing us in the top rank for jurisdictions supporting the needs of Muslim family offices, ultra-high net-worth and high-net worth individuals," said Faizal Bhana, director for Middle East, Africa and India, Jersey Finance.

Meanwhile, the new agreement between the UAE and Jersey will offer investors “just and immediate compensation for their investments" if they are handled in an illegal way.

The UAE has signed 104 bilateral agreements to protect and encourage investment with countries.

Updated: November 10th 2021, 2:32 PM
EDITOR'S PICKS
NEWSLETTERS