UAE have traditionally focused on real estate, but are expected to diversify more
France expects increased investments from the UAE
UAE investment into France is expected to increase as Europe’s second largest economy ramps up efforts to become more business friendly to global investors, said Jean-Baptiste Lemoyne, French minister of state to the minister for europe and foreign affairs.
While traditionally investors from the UAE have focused on real estate, they are expected to diversify more into other sectors as French president Emmanuel Macron makes good on plans to make it easier to hire and fire employees and reduce the corporate rate, the minister said.
The UAE is already beefing up investments in France.
Mubadala Investment Company, Abu Dhabi’s strategic firm with US$127 billion in assets, said last month it plans up to €1bn worth of investments in private and direct investments in the French economy.
Mubadala will do this in partnership with two French state-owned entities. The firm will develop an investment platform in collaboration with CDC International Capital, the investment arm of French state-owned lender Caisse des Dépôts Group, and Bpifrance, France’s state investment bank co-owned with CDC group.
The UAE is already one of the main Gulf investors in France, Mr Lemoyne said in response to e-mailed questions. “These investments are mainly oriented in the real estate sector especially in Paris, Lyon, and the French Riviera but the creation of a co-investment platform between CDC International Capital and Mubadala Investment Company has already led to a diversification of the portfolio.”
Mr Lemoyne said those investments, which have seen the commitment of almost €300 million of long term investments in healthcare, education, elderly care and real estate, were likely to rise after the partnership agreement signed between Mubadala and the French entities.
Thirty-four per cent of Middle East investments in France last year came from the UAE, while Qatar and Lebanon accounted for 18 per cent each, according to Business France, a promotion agency. Information technology took the lion’s share of the money that flowed into the country at 45 per cent while most of it went geographically to the Paris region.
“The perception of foreign investors is changing quickly,” the minister said. “Since the presidential election last May, France has been experiencing a fresh start. The French government is convinced that its role is to facilitate the development of competitive business.”
Among the changes, the government is aiming to lower the corporate tax rate gradually to 25 per cent in 2022 from the current 33 per cent, a level less than the European average, he said. It is also lowering the cost of labour through reductions in payroll taxes and removing the wealth tax on non-real estate assets, the minister said.
At the same time, French small businesses and start-ups, especially in the field of technology are expanding into the UAE, Mr Lemoyne said. The minister listed start-ups including Parrot, Sigfox and Effilab as among French companies that have made the UAE a hub for regional expansion.
“These entrepreneurs enjoy favourable conditions to develop their projects, in terms of innovation, financing and quality of life,” he said.
Mr Lemoyne is in Dubai today to hand out awards to French small businesses and young corporate employees.