Investors call for strategic planning for UAE-linked businesses

Industry

Published: 19 Jun. 2024, 18:54

Investors call for strategic planning for UAE-linked businesses

Minister Oh Young-ju of SMEs an Startups, fourth from left at the front row, poses with domestic entrepreneurs and investors active in the United Arab Emirates at a forum held in central Seoul on Wednesday. [MSS]

I
nvestors emphasized the importance of strategic planning, including the formation of joint ventures, for domestic enterprises to achieve a successful market entry in the United Arab Emirates (UAE).

The need was voiced at a forum hosted by the Ministry of SMEs and Startups (MSS) on Wednesday, gathering local entrepreneurs and venture capitalists to discuss future plans for business expansion in the Middle Eastern nation.

“While basic export and retail operations require minimal additional resources or support, products integrating advanced technology necessitate localization,” said Hwang Byung-sun, CEO of investment firm Bigbang Angels, at a forum in central Seoul on Wednesday.

“Obtaining local certification is essential, requiring collaboration between domestic and local companies to form joint ventures. Essentially, these joint ventures must evolve into localized entities equipped with technology developed by Korean enterprises."

Hwang also stated a need to establish a global fund dedicated to investing in joint venture companies.

“It must be formulated as a global fund — whether that be based in Singapore, the Middle East, or elsewhere — to attract investments from sovereign wealth funds,” he said. “Naturally, entities like [the UAE's] Mubadala or [Saudi Arabia's] PIF cannot invest in Korean venture capitals or entities that present regulations in Korean — it’s impractical.”

SME Minister Oh Young-ju responded that his ministry is working to create a fund of funds (FOF), allowing the allocation of a budget to support SMEs by investing in venture capital funds, which then invest in these businesses.

"Moreover, we will organize ministerial-level committees for SMEs and ventures between Korea and the UAE to create events that facilitate meetings between our companies and UAE executives,” Oh added.

The two nations have been bolstering efforts to collaborate in the defense and energy sectors, with President Mohamed bin Zayed Al Nahyan making a two-day state visit to Korea for a bilateral summit with President Yoon Suk Yeol last month.

During the summit, MSS and the UAE's Ministry of Economy signed a memorandum of understanding to establish the Korea-UAE SME and Startup Committee, the first regular consultative body for SMEs and startups in both countries. The first official meeting is scheduled to convene within the year.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]