Strategic advantages of investment in the UAE: How UAE businesses leverage CEPA, BITs, and DTTs in times of changing key market players roles

Global trade has been facing turbulence for a number of years now, but 2025 has no doubt escalated the issues with rising tariffs, additional geopolitical sanctions, and supply chains requiring realignments.

The UAE’s legal and economic framework however, has proven remarkably resilient, in large measures thanks to the wise long-term planning of leaders who have early in the UAE’s journey already recognised the value of three powerful instruments: Comprehensive Economic Partnership Agreements (CEPAs), Bilateral Investment Treaties (BITs), and Double Taxation Treaties (DTTs).

These agreements are currently not only mitigating negative impact on UAE-based companies from external shocks, but also unlocking new growth corridors across Asia, Africa, and Europe. We are increasingly seeing clients looking for advice on how to strategically align their operations to benefit from these evolving agreements.

CEPAs: A gateway to global markets

The UAE’s CEPA programme has expanded continuously with currently 27 agreements signed and 8 in force. Providing for tariff elimination of up to 99% of goods, granting market access for services and digital trade and regulatory harmonisation in sectors such as e-commerce, logistics, and renewable energy, these agreements go beyond traditional free trade deals.

A prominent example is the India–UAE CEPA, which, according to press reports, boosted non-oil trade by 20.5% and UAE exports by 75% by end of 2024. In force since May 2022, the UAE–India CEPA has become a cornerstone of bilateral trade strategy between two critical players in the eastern hemisphere:

• Streamlined customs and digital trade facilitation is beneficial for small and medium enterprises and large enterprises alike;
• The non-oil trade reached $37.6 billion in H1 2025, a 33.9% YoY increase; and
• Tariff elimination on 90% of Indian exports to the UAE, including textiles, gems, electronics, and food products strengthen the close trade relationship between the countries.

When the U.S. imposed up to 50% tariffs on Indian exports in 2025, it is believed to have disrupted approximately $30–35 billion in Indian exports to the U.S. As a consequence, Indian exporters were prompted to relocate operations or re-export, with the UAE being a key jurisdiction for such changes to operations the UAE-India CEPA facilitating these changes. Goods routed through UAE free zones face only 10% U.S. tariffs, compared to 50% from India.

In addition, the UAE-India CEPA ensures preferential treatment for goods originating or processed in the UAE.

Some of the most recent examples are CEPAs with Malaysia, Kenya, and Australia signed in 2025, offering preferential access for UAE businesses to high-growth markets.

As CEPAs provide enforceable commitments under international law, they offer predictability which is of utmost importance for business planning, especially in the current fast changing environment and global trade disruptions.

Benefits can also be obtained through UAE companies restructuring supply chains to route exports through CEPA partners, thereby mitigating the impact of U.S. and EU tariffs. Having traditionally been a commercial hub for international trade and home to some of the region’s largest freight ports, the UAE is an ideal place to function as a re-export hub and we see increasing activity in Jebel Ali Free Zone (JAFZ) and Khalifa Economic Zones Abu Dhabi (KEZAD).

Regulatory Compliance can also be enhanced for CEPA covered industries. For example:

• The UAE–India CEPA supports collaboration on Open Finance, digital payments, and data protection;
• The UAE’s Open Finance Regulation and sandbox licensing allow fintech companies to test services before full authorisation; and
• Integration of India’s UPI payment settlement system enables seamless cross-border payments in local currencies.

An increasing amount of Indian fintech companies are launching operations in DIFC and ADGM, using the UAE’s regulatory frameworks to access CEPA markets and offer services across borders. This boom in tech goes both ways – just this year, it was announced at GITEX Global (one of the largest technology exhibitions in the world, held annually in Dubai) that the inaugural GITEX AI India exhibition will be held in 2027. It is expected to create even more opportunities for trade collaboration.

The logistics sector also often benefits. CEPAs typically simplify customs procedures, promote mutual recognition of standards, and enhance port connectivity. Many UAE free zones, including JAFZ and KEZAD are aligning with CEPA rules of origin to facilitate re-exports.

When UAE logistics firms are partnering with Indian exporters to reroute goods through Dubai, they can leverage CEPA benefits and potentially avoid U.S. tariffs.

BITs: Legal certainty in uncertain times

With over 100 BITs in force, the UAE offers robust protections for outbound and inbound investors. Although, carve-outs are not unusual and each BIT will need to be looked at on a case by case basis, these treaties typically include provisions for:

• Fair and equitable treatment;
• Protection against expropriation; and
• Investor-State Dispute Settlement (ISDS) mechanisms.

We see UAE investors in Africa and South Asia increasingly relying on BITs to de-risk cross-border ventures, especially in jurisdictions facing political or economic volatility. The India-UAE BIT, in force since August 2024 and a number of BIT between the UAE and several countries in Africa make UAE-based entities a popular choice for Indian and African investors to structure outbound investments, benefiting from BIT protections and CEPA market access.

DTTs: Tax efficiency being key to successful business

Although the application of VAT and Corporate Tax may be relatively new for the UAE itself, the UAE’s network of over 130 DTTs has been built over many years and ensures that businesses can mitigate double taxation and benefit from tax certainty. Such treaties commonly offer relief from double taxation on cross-border income, favourable withholding tax rates, allocation of taxing rights between states,  and include Mutual Agreement Procedures (MAPs) for resolving tax disputes.

We have seen numerous multinationals restructuring holding companies and IP ownership through the UAE to optimise tax exposure and benefit from the protections and reliefs that DTTs can offer. UAE-based holding structures are increasingly used to support operations in India, Africa, and Europe.

A UAE business with the right strategy can give a real competitive advantage

In a world of rising tariffs, sanctions, and regulatory complexity, the UAE’s legal infrastructure offers businesses a rare combination of market access, investment protection, and tax efficiency. CEPA, BITs, and DTTs are no longer just compliance tools - they are strategic enablers of growth and resilience.

We help international clients and businesses operating globally turn these frameworks into actionable strategies - whether entering new markets, protecting cross-border investments, or optimising tax structures. Companies in many sectors can benefit and many of our clients across a variety of sectors, including logistics, manufacturing, fintech, and energy are already taking steps to take advantage of CEPAs, BIT and DTTs.

Some examples include restructuring supply chains, arranging exports through UAE free zones, establishing joint ventures with Indian and African partners in the UAE to access CEPA benefits and utilising DTTs for tax-efficient repatriation of profits and dispute resolution. For any questions and to discuss how we can support your growth strategy, please contact Ben Smith, Roshanak Bassiri Gharb, Janet Gooi, Julia Ofer, Liam Thomas and Kinshuk Kislaya.