The Emirati Game: Playing Both BRICS & the West with Russia Tax Deal
The deal would further cement the Gulf state as a place where Western and Eastern interests can converge, aligning with those of the UAE.
The Emirati Ministry of Finance has completed negotiations and signed a draft of a Double Taxation Avoidance Agreement with Russia. The agreement aims to reduce tax barriers for investors and further enhance the United Arab Emirates’ appeal as an investment-friendly destination, bolstering its reputation as a tax haven. This development builds on the growing Russo-Emirati bilateral relations, which cover a range of issues, from the Russia-Ukraine War to joint support for Khalifa Haftar in Libya, as well as space exploration. This agreement cements the UAE’s efforts to incorporate Russia, and more broadly the BRICS nations, into its strategic vision. This strategy enables the UAE to effectively play both sides of the coin—BRICS and the Abraham Accords market—pursuing an ambitious political-economic endeavour that seeks to balance global economic relations in a multipolar international order..
Strengthening Russo-Emirati Ties Amid Geopolitical Shifts
The strengthening of Russo-Emirati relations, which began in the early 21st century with the 2018 Strategic Partnership Agreement, has accelerated in recent years, particularly with the onset of the Russia-Ukraine War. Over the last three years, trade between the two nations has tripled as the UAE has become a financial haven for sanctioned Russian capital. This deepening partnership is further solidified with the recent signing of the UAE-Eurasian Economic Union (EAEU) Economic Partnership Agreement, in which Russia plays a key role and the UAE BRICS official accession in 2024. Both countries stand to benefit from enhanced economic ties as they seek to maintain regime stability amid increasingly uncertain global geopolitics.
The Russo-Emirati relationship is being prioritised in the context of the regional rivalry with Iran and Saudi Arabia. All three Middle Eastern nations are pursuing stronger relations with Russia, seeking to hedge their relations with great powers amidst shifting geopolitical dynamics. Russia’s support to Ansarullah inYemen was a game changer for the UAE and building closer ties with Russia especially economically helps give the UAE some leverage with Russia to prevent Ansarullah from attacking the UAE with advanced Russian weapons. Furthermore, for the UAE, gaining access to Russia’s influence in emerging markets, vast energy resources, and its status as a great power is crucial for achieving its trade hub ambitions.
The Double Taxation Avoidance Agreement sig is another crucial step towards the financial integration of Russia into the UAE's financial hub. Officials hope to finalise it soon, with plans for the agreement to take effect on 1 January 2026. This move is expected to lead to more transactions in local currencies, following the example of the UAE-India Local Currency Settlement System (LCSS) and Russian-Iranian trade being conducted almost entirely in local currencies.
Leveraging BRICS for Abraham Market Expansion
Despite strong bilateral relations, the UAE continues to keep its options open by engaging with great powers like the United States and Russia. Abu Dhabi’s growing interest in ties with Russia is driven by its pursuit of new energy opportunities and trade routes alongside national security.. This strategy was made explicit during a recent visit to Moscow, where the UAE Ambassador highlighted bilateral cooperation within the BRICS framework. Reports of a potential Trump-Putin meeting on the Russia-Ukraine War, to be hosted in the UAE, would further cement the Gulf state as a place where Western and Eastern interests can converge, aligning with those of the UAE.