Ambassador interviews: Austria and United Arab Emirates

Interview with His Excellency Herbert Pichler, the Ambassador of Austria to Finland

What kind of impact has the current geopolitical situation had on Austria?

The ongoing crises in our neighborhood forming a ring of fire around Europe create numerous major challenges for all European countries. Austria is very export-oriented and among the most important foreign investors in South-Eastern Europe and the Black Sea region. The conflicts in the Middle East as well as in the Caucasus region have caused instability in the immediate neighborhood of the EU, and the unprovoked and illegal Russian war of aggression against Ukraine is taking place in Europe itself.

This war has huge regional and global implications. It affects not only the European security architecture including the comprehensive concept of security that we developed in the framework of the OSCE, but also our whole international and multilateral system. One can remain militarily neutral, but one cannot remain neutral in the face of massive violations of international law, war crimes, human rights abuses and even crimes against humanity. For Austria, the struggle for accountability for serious crimes is and will remain a top priority. “Might does not make right”: Austria resolutely condemns this breach of international law and supports the European sanctions placed on Russia and Belarus.

One cannot remain neutral in the face of massive violations of international law

Ever since Putin’s brutal war of aggression against Ukraine began, Austria has stood shoulder to shoulder with the people of Ukraine and offered political, financial and humanitarian assistance. Austria will continue to do so, together with Finland and her other European partners. Altogether, over 100.000 displaced persons from Ukraine have come to Austria since February 2022. Currently, still approximately 70.000 Ukrainians stay in Austria. Austria has also offered extensive humanitarian assistance and financial help to Ukraine, so far over 230 million euros. Additional humanitarian support is provided in-kind and via Austrian provinces and municipalities. We also have significantly increased our humanitarian and development assistance to Moldova, which is a long-standing partner in our bilateral development co-operation.

What kind of opportunities do you see both in general, and specifically in R&D, for cooperation between Finnish and Austrian companies?

Very much like Finland, Austria has always scored very well in international quality of life and environment rankings, and both countries benefit from a highly educated, professional work force. Both Austria and Finland are rated among the most livable countries in the world. The similar profiles of our two countries facilitate cooperation between Finnish and Austrian companies. Austria is very much interested in Finnish digitalization solutions, as Finland is a role model especially in the field of medicine and social services. There is potential for increased cooperation, though.

When it comes to R&D Austria has improved in recent years and is now ranked among the frontrunners in Europe. Fortunately, Austrian companies tend to invest heavily in R&D. Over 3.000 Austrian companies are active in research, development, and innovation. Out of these, 400 are ranked among global technology and/or market leaders in their respective segments. For Finnish companies looking to find reliable, experienced partners, these companies might offer excellent opportunities for cooperation. As Austria has greatly improved the economic environment for start-ups and as Finland is well-known for its very start-up-friendly environment, the start-up segment offers great opportunities as well. Of course, much of the bilateral trade still takes place in the context of traditional sectors, such as machinery and other industrial production.

Last but not least, I would like to mention that Austria and Finland have very similar positions regarding the value of the forest industry, both for the environment and for the economy. The forest industry employs many people and generates considerable tax revenue for the state. Within the EU, there is close coordination on sustainable forestry.

Purchasing power, cost of energy, lack of work force – how have Austrian companies tackled these challenges?

Austria remains one of the most stable countries of Europe, and had a GPD per capita of 49.553 euros in 2022 – compared to 38.210 ten years earlier. The past few years have been, of course, quite challenging – not only for Austria but for the entire world.

As for energy, Austria is actively working on reducing its dependence on fossil fuels. This will have a positive effect on employment, as more domestically produced green energy also means more jobs. During the recent difficulties caused by high energy costs, the government reacted quickly by for example offering financial support for smaller companies hit by the rising cost of energy, as well as to households. Numerous mechanisms were put in place to prevent excessive fluctuations in energy costs. Altogether, Austria has invested over 30 billion euros to ease the situation caused by the high cost of energy. Thankfully, the end of the COVID pandemic has put the tourism sector back on track again which is important for Austria. According to Austrian experts, 2024 should be a bridge year between the somewhat difficult year 2023 and the return to growth in 2025.

Read the full interview of Herbert Pichler >>

Interview with Ms. H.E. Amna Fikri, Ambassador of United Arab Emirates to Finland

Previously served as an Economic Advisor to Minister of State HE Ahmed Al Sayegh since October 2022. Also served as Director of the Economic and Trade Affairs (ETA) Department of UAE.

What is the current economic outlook for the United Arab Emirates (UAE) and what are the economic prospects for the country?

The UAE’s policies are focused on supporting long-term economic prosperity and building an economy based on knowledge and diversity, reinforced by scientific and technological progress. The country’s economic strategy has yielded significant success in this regard, and is projected to experience further growth in the years ahead. The UAE has worked over the past five decades to strengthen international partnerships and is moving rapidly to enhance the competitiveness and sustainability of its economy while exploring new opportunities. The UAE also launched national strategic projects to lead the next era of domestic and international growth, called ‘Projects of the 50.’ Projects of the 50 provides an impetus for investment in the digital and circular economies, as well as sectors based on artificial intelligence and the fourth industrial revolution.

In its most recent economic update on the Middle East and North Africa (MENA) region, the World Bank increased its forecast for the UAE’s economic growth in 2025 to 4.1 percent, up from the previous estimate of 3.8 percent.  In addition, according to the International Monetary Fund (IMF), the country’s nominal GDP is projected to grow to 652 billion US dollars by 2028, from a projected 536 US dollars billion in 2024, signifying approximately a 22 percent increase. Moreover, the country’s inflation rate is projected to maintain around two percent until 2028.

Which kind of business opportunities are available for Finnish companies in the UAE?

The UAE’s economic business environment is characterized as dynamic, prosperous, and attractive to direct foreign investments, ranking first amongst Arab nations and holding an advanced position globally as a modern financial, trading and economic hub.

Under the guidance of its wise leadership, the country’s vision for the next 50 years is to become an international hub for investment and economic innovation, with an inclusive system for entrepreneurship, in addition to being an advanced lab for new economic opportunities and projects. 

With burgeoning economic growth and low inflation, the UAE continues to offer exciting prospects to any and all investors looking to participate in the nation’s developmental journey. 

Please outline specific investment opportunities available for Finnish companies in in the UAE?

According to global indices, the UAE has one of the world’s most open economies, and is one of the most attractive environments for foreign investment. Trade, industry and investment lie at the heart of the UAE’s long-term strategy for prosperity, and within the UAE’s federation of seven geographically and economically diverse emirates (Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al Khaimah, Um Al Quwain and Fujairah) investors can explore myriad opportunities across different business environments and industry sectors.

It is notable that the Commercial Companies Law in the UAE underwent substantial amendments in 2021, introducing prominent features and incentives specifically tailored for foreign investors. These include full ownership privileges across all economic sectors with exceptions limited to activities of strategic impact.

Additionally, foreign investors enjoy complete ownership of various legal forms of companies and the possibility of ownership in sectors with strategic impact under specific legislations. The revised law enables foreign entities to engage in banking and insurance businesses across various legal forms. Notably, limited liability companies are relieved of the obligation to bear the name of their owner. Further advantages include the absence of a requirement for a local service agent, freedom in settling disputes, no minimum capital stipulation for limited liability companies, and the ability to convene a general assembly meeting upon request by partners holding 10 percent of the LLC’s capital, among other benefits. These provisions collectively foster a conducive and attractive environment for foreign investment, facilitating the expansion of foreign enterprises within the UAE.

Reflecting the UAE’s successful efforts in becoming a role model for economic diversification, there are a numerous investment opportunities in key industries such as human capital development, healthcare, industrial manufacturing, logistics, advanced technology, and renewable energy. In particular, the UAE’s investment policies are geared towards attracting national and foreign investments in various sectors, including tourism, technology, AI, space, renewable energy, and water research, amongst others.

If a Finnish company decides to invest in the UAE market, what are the most important issues that should be taken into consideration in order to succeed?

Overall, there are two key points that all Finnish companies should consider when deciding to invest and operate in the UAE.

Firstly, it is important to maintain a clear understanding of both federal- and emirate-level laws and regulations. Each emirate has slight variations in their business environments and legal frameworks, which can impact investment decisions. It is crucial to consult UAE-based lawyers and accountants in this regard.

It is important to maintain a clear understanding of both federal- and emirate-level laws and regulations.

Secondly, it is key to determine whether the company plans to generate income from transactions with the UAE mainland or via foreign markets. This will then determine whether the company should be established within the UAE mainland or within one of the UAE’s more than 40 multidisciplinary free zones. For instance, if a company is established within a UAE free zone and transacts only with international customers, thus sourcing income exclusively from outside the country, it may not therefore be subject to UAE federal corporate tax. As one may appreciate, such decisions can have a significant impact on a business.

Read the full interview of Amna Fikri >>