The UAE and Japan signed preliminary agreements and deals on Monday to support energy transition and boost bilateral co-operation.
The deals were signed as Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, UAE special envoy to Japan and Cop28 president-designate, met Yasutoshi Nishimura, Japan’s Minister of Economy, Trade and Industry, on the sidelines of Abu Dhabi Sustainability Week, MoIAT said in a statement on Tuesday.
The ministers discussed ways to further strengthen the relationship between the UAE and Japan under their comprehensive economic partnership, which was signed by the two countries in September.
They explored the hydrogen sector as a key component of the energy transition and also discussed the importance of accelerating progress towards carbon neutrality and opportunities for collaboration ahead of Cop28 in the UAE this year.
"The UAE and Japan have a longstanding and strong relationship that has developed into a comprehensive economic partnership, underpinned by our leaderships’ commitment to enhance co-operation with strategic partners," said Dr Al Jaber.
"We seek to build on this long-term partnership by exploring new opportunities for co-operation and investment that contribute to mutually beneficial sustainable economic growth and diversification.”
The MoIAT and the Japanese ministry signed a preliminary agreement to enhance partnerships between Emirati and Japanese companies as well as explore joint investment opportunities.
The deal also aims to accelerate the adoption of advanced technology in support of both countries’ industrial goals and carbon-reduction targets.
Adnoc also signed a joint study agreement with Tsubame BHB to explore research and development co-operation to find new solutions for manufacturing ammonia.
The agreement falls under the Japanese-Emirati partnership for advanced technology and will help connect Japanese technology start-ups with Emirati investors to facilitate their expansion, the statement said.
A preliminary agreement was also signed between Masdar and Japanese company Jera covering green hydrogen and renewable energy.
The economic partnership between the UAE and Japan focuses on the areas of business, trade, energy and industry, as well as diplomacy, enhancing international development and humanitarian aid efforts.
The countries also aim to encourage bilateral investment across technology, manufacturing, infrastructure, artificial intelligence, health care and small and medium enterprises, as well as other high-priority sectors including agriculture, environmental preservation, climate-change solutions, education, science, defence and security.
In November, Dubai-based Emirates National Oil Company signed an initial agreement with Japanese heavy-industry manufacturer IHI Corporation to explore setting up a low-carbon hydrogen and ammonia plant in the UAE, supporting the Emirates' energy transition efforts.
The fuel produced will be exported to Japan and supplied within the UAE, as well as the broader region, for bunkering and other purposes.
In June last year, Adnoc, Eneos Corporation and Mitsui also agreed to explore establishing a hydrogen supply chain between the UAE and Japan.
The companies will evaluate the potential to convert hydrogen as a by-product from Adnoc's refining and petrochemical operations and blue hydrogen produced from natural gas to methylcyclohexane, an efficient form of hydrogen transport, for export to Japan, they said at the time.
Masdar also signed an initial pact with Sumitomo Corporation to develop waste-to-energy projects in June last year. The two companies aim to co-operate on a range of projects, including a plant to treat 390,000 tonnes of waste and generate 25 megawatts of energy annually.
The volume of non-oil trade between the UAE and Japan reached more than Dh49 billion ($13.3 billion) in 2021, according to official figures.
Non-oil trade between the two countries also rose by 4.3 per cent annually during the first nine months of last year.
White hydrogen: Naturally occurring hydrogen
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Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
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How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
