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Brazil: Close relations with the UAE

Brazil and the UAE on the 15th March signed a couple of accords whereby one of them is a cooperation accord aimed at fostering, simplifying and supporting bilateral investments.

This investment accord means a new step in the path that both Brazil and the UAE are following to have closer comercial relationships. It follows the one that abolished the need for a visa for Brazilian and Emirati citizens while visiting either of the two countries and also follows the treaty against double taxation, which must still be approved in Brazil according to its constitutional provisions.

Brazil is a traditional exporter of goods including Halal food to the GCC while on the other hand, the UAE has become, among others, an important hub in the region for trade and logistics with its several free trade zones. The bilateral trade exchange last year between both countries has reached US$2.6 billion and, of course, the intention is to make eff orts to continue this growth trend as to trade.

It is also important to note that the estimate of UAE investments in Brazil would correspond to approximately US$5 billion. Brazil is pursuing the goal of att racting more investments from the UAE, particularly through investments made by Emirati sovereign funds.

Brazil needs to improve its infrastructure and has been privatizing certain activities. In March, the federal government privatized through concession 12 airports in three diff erent regions of the country and the winning bidders in two of the regions were foreign economic groups (one from Spain and another from Switzerland).

Bearing in mind this privatization process that is taking place in Brazil, foreign investors from Muslim-majority countries (and not from the UAE) should keep an eye on business opportunities that may arise from this process. Brazil still does not have specific regulations dealing with Islamic fi nance. However, one should note that Islamic finance structures, such as Musharakah and Murabahah, could perhaps be carried out abroad, such as in Muslimmajority countries in which Islamic finance is already a reality.

Este artigo foi publicado no Islamic Finance News, no dia 12 de abril de 2019.