Plans for a new trade deal between the UK and GCC are said to be at an advanced stage after recent talks between British Foreign Secretary Liz Truss and ministers from the GCC area.

The consultation period, which began at the beginning of October 2021, is due to end soon while negotiations with the GCC’s six member countries are scheduled to begin thereafter. The discussions broached a variety of subjects of mutual interest such as trade, development of security alliances, renewable energy, digital infrastructure and cybersecurity.

Trade between the UK and GCC was valued at £30 billion in 2020. Both parties seem to recognize the importance of protecting and growing this trading relationship. The free trade agreement is expected to reinforce these existing trade relations and increase future investments between the two regions.

The Gulf region — and the UAE in particular — has long been a popular investment destination for UK businesses, mainly due to the latter’s favorable tax environment with its absence of personal income or corporate tax, unrestricted repatriation of income and capital, a well-established infrastructure, a strong banking system, stable political system and easy access to the growing markets of Asia, Middle East and Africa.

GCC countries have also created many initiatives in recent years to make their countries more inclusive and attractive to foreign investment. The UAE’s recent amendments to company ownership laws and the introduction of new categories of residency visas has provided direct routes for foreign residents to establish wholly owned businesses on the mainland and gain residency without a local partner.

Saudi Arabia, on the other hand, has reformed many of its residency laws and relaxed its 49 percent limit on foreign ownership in publicly traded companies.

Oman’s implementation of excise tax in June 2019, which temporarily suspends withholding tax on dividends and interest, and its new bankruptcy law have both served to provide more transparency and predictability for foreign investors.

And Qatar, with its absence of restrictions on money exchange and transfer of profits overseas as well as flexible business regulations and procedures, has also shown its willingness to incentivise further foreign investment.

Since the UK’s withdrawal from the EU, it has been working to consolidate its standing as a key player in world economics and establish new trade agreements worldwide to replace ones it previously held as part of the EU.

It has already implemented new trade agreements with Japan, the EU and Australia and has a further 35 trade continuity agreements with 67 other nations in place.

The Middle East is seen as an important growth market that has the potential to generate successful investment opportunities for both sides and strengthen existing trade relations, particularly in sectors such as consumer goods, education, machinery, vehicles, aircraft and electrical goods. The recent discussions between the two regions representatives also included commitments to establishing partnerships in other important sectors of the future such as digital infrastructure and cybersecurity.

For some time now, GCC countries has been in the process of reducing their reliance on oil revenue and diversifying into new sectors. GCC leaders are cognizant of the decreasing supplies of oil and increasing importance of renewable energy sources for the future.

The region has already invested heavily in the expansion of its renewable energy sector and the concept of sustainability. With the UK being one of the six countries to have passed their carbon neutral targets into law, it is well placed to share with GCC countries its expertise in renewable energy and sustainability.

The FTA is seen as a positive step toward aligning the UK and Gulf countries, both from a business and social perspective, and is expected to generate many several opportunities for the free flow of trade, expertise and ideas in the future.

• Jessica Ashford is COO of PRO Partner Group.