Hong Kong-UAE Investment Agreement to Take Effect
An investment agreement signed between Hong Kong and the United Arab Emirates (UAE) will enter into force on 6 March 2020. The HK-UAE Investment Promotion and Protection Agreement (IPPA) was signed in June 2019 and will enhance investors’ confidence, expand investment flows, and further strengthen the economic and trade ties between Hong Kong and UAE.
Hong Kong-UAE Investment Promotion and Protection Agreement (HK-UAE IPPA)
The Agreement was signed in June 2019 and sets out various conditions for the two governments to undertake:
- Fair and equitable treatment of investments
- Full protection and security of investments
- Non-discriminatory treatment of investments
- Non-discriminatory treatment in compensation for losses owing to, among others, war or other armed conflicts
- Compensation for the expropriation of investments
- Free transfer abroad of investments and returns
- Settlement of investment disputes between a contracting party and an investor of another contracting party
- Settlement of disputes between the contracting parties on interpretation or application of the IPPA
IPPAs provide two-way assurance to overseas investors and local investors that their overseas investments are protected.
The Hong Kong-UAE IPPA is one of four similar agreement that the Hong Kong current term government has signed since coming into office in July 2017. It is also Hong Kong’s 21st investment agreement signed with a foreign economy. The other three investment agreements have been signed with the Association of Southeast Asian Nations (ASEAN), Australia, and Mexico respectively; with the former two having come into effect as well.
Other Hong Kong Investment Promotion and Protection Agreements
As of 15 March 2020, Hong Kong has signed a total of 22 IPPAs with foreign economies.
Other foreign economies that Hong Kong has signed an IPPA with include Austria, the Belgo-Luxembourg Economic Union, Canada, Chile, Denmark, Finland, France, Germany, Italy, Japan, Korea, Kuwait, the Netherlands, New Zealand, Sweden, Switzerland, Thailand, and the United Kingdom.
The most recent IPPA was signed with Mexico on January 24, 2020 at the sidelines of the World Economic Forum (WEF) Annual Meeting in Davos, Philippines. This Agreement has not come into effect yet.
Bahrain, Maldives, and Myanmar have concluded IPPA negotiations with Hong Kong and are pending the signing of an Agreement. On the other hand, Iran, Russia, and Turkey are still under IPPA negotiations with Hong Kong and are pending the conclusion of negotiations.
It is expected that Hong Kong will continue making dedicated efforts to expand their network of IPPAs and help enhance two-way investment flows to further boost the economy.
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