Abu Dhabi Investment Office in Tel Aviv Opens Opportunities for Israeli Businesses

The Abraham Accords in August 2020 normalizing relations between Israel and UAE and Baharain, followed by agreements with Morocco and Sudan are already reaping economic fruits after just a few months. In April, the UAE opened the Abu Dhabi Investment Office (ADIO) in Tel Aviv and signed a healthcare collaboration agreement. More agreements and mutual investment is expected, signaling a sea change for economic development in the region.

The opening of the ADIO office provides an opportunity for Israeli and UAE companies to collaborate and share innovation. Mohammad Mahmoud Al Khajah, UAE’s first ambassador to Israel said in a text message, “The Abu Dhabi Investment Office in Tel Aviv will help Israeli companies navigate the UAE economic market and develop opportunities.”

After its opening ceremony, ADIO signed cooperation agreements with Invest in Israel and the Israeli Investment Authority, and Israel Export Institute to facilitate shared innovation, trade, and investment between the countries.

Expanded Healthcare Horizons for UAE and Israel

In addition to hi-tech, healthcare is another area where the UAE and Israel are seeing increased collaboration. The Health and Foreign Ministry of Israel announced official cooperation with the UAE in the area of healthcare, particularly preventing future pandemics, and strengthening cybersecurity and data protection. The agreement is expected to be the starting point for a number of joint UAE and Israeli projects in the tech and healthcare sectors.

The Economics of the Abraham Accords

In addition to increased cooperation between governments and companies, the Abraham Accords and related economic agreements have created new markets for both countries with positive economic benefits.

This is compounded when considering the fact that these markets were entirely off-limits to Israel before 2020. One potential roadblock that threatened the Abraham Accords in its early phases was the Israel Boycott Law of 1975 imposed by the Arab League. The law criminalized travel, business and trade dealings with Israel. The purpose was to boycott Israel until Palestinian statehood was achieved. The law was abolished and a compromise reached was that Israel would refrain from annexing the West Bank.

The repeal of the Israel boycott law that has been in place since 1975 signals an unprecedented opening of markets and economic cooperation. Israeli companies are opening offices in Abu Dhabi and consumers in these countries will for the first time since 1975 purchase Israeli products. This is akin to earlier and similar agreements that normalized relations between Israel and its former adversaries Egypt and Jordan.

What is different now from agreements in past decades is that the Abraham Accords frees venture capitalists in the UAE and Bahrain to invest in the robust Israeli healthcare and tech startup space. Israeli startups’ fundraising broke records in 2020 despite the pandemic with a 70% uptick in investments. As the appetite for Israeli tech startups grows, investors in the region may jump on board.

In addition, the UAE has also been ramping up innovation which provides more opportunities for Israeli hi-tech developers to collaborate on projects. The UAE has made impressive strides in the areas of logistics, finance, sustainable energy, and the internet of things.

Like Israel, UAE has its share of unicorns or private hi-tech businesses valued at at least a billion. Its first unicorn, Souq, was acquired by Amazon. UAE startups are also the target of lucrative acquisitions as transportation startup Careem was bought by Uber for $3 billion.

This may increase competition between the two countries, but that is a quality problem after decades of boycotts and muted hostility. Along with the competition also comes collaboration and cooperation, which is good for the quality of life of citizens in both countries and excellent for the region’s economy.

How to Benefit from the Opportunities Provided by the Abraham Accords

The Abraham Accords have already had a positive effect on the economies of participating countries and will stimulate innovation and development for the long term.

Investors should not allow this opportunity to pass them by, but should invest in Israeli businesses which will benefit significantly from the opening up of new markets and collaboration with UAE businesses. One of the best ways to invest in Israel is through the Jerusalem Portfolio which provides significant exposure to Israeli assets with an initial investment as low as $180.

About the Jerusalem Portfolio

The Jerusalem Portfolio is comprised of a fractional interest in 100 Israeli companies through a portfolio of professionally managed  ETFs. The recipient will be given a plaque with a beautiful and customized image of Jerusalem. Talk to our experts today about giving the Jerusalem Portfolio to a special young person as a bar or bat mitzvah gift, birthday, graduation, or other occasions.