A historic trade deal has been struck between the UK and the Gulf Cooperation Council (GCC). It is estimated to be worth £3.7 billion to the economy every year.
The UK has become the first G7 country to agree to a deal with the GCC.
The GCC is comprised of six countries in the Middle East: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Businesses in the UK are set to turn massive profits from this trade deal, allowing the UK and GCC to work closer together than ever before, so having a strong understanding of the trade deal is vital.
What does the trade deal with the Gulf Cooperation Council include?
The agreement removes tariffs on UK food exports, medical equipment and advanced manufacturing.
Customs provisions have also been given, so shipments are expected to clear within 48 hours and perishable goods could be released in under six hours once the requirements are met.
Perishable goods that are included under the trade deal include butter, chocolate and salmon.
The trade deal also includes digital trade commitments that will allow UK companies to store and process data outside the Gulf region for the first time. This reduces the operational costs of local data centre requirements.
In 2024, there were 400,000 business visits made from the UK to the Middle East. This deal will allow British professionals to travel to the region more easily and allow them to stay for longer.
What are the economic benefits of the Gulf Cooperation Council Trade deal?
Britain’s Department for Business and Trade said the agreement could add an estimated £3.7 billion annually to the UK economy and increase long-term bilateral trade by 19.8 per cent.
According to the UK Government, £580 million annually on UK exports to the Gulf will eventually be eliminated. When the trade agreement begins, £360 million will be removed immediately, which will reduce costs for UK businesses and support supply chains.
This agreement, which is the latest in a series of new major international trade deals the UK has drafted with countries from around the world, is expected to support business growth, boost jobs and increase wages.
Combined with the India trade deal, the agreements are expected to rake in £8 billion a year to the UK GDP in the long run when compared to 2040 projections.
What can you do now that the Gulf Cooperation Council trade deal has started?
This trade deal is set to bring large amounts of investment across the region while supporting British businesses.
You need to assess if the GCC offers viable growth opportunities for your business. The most in-demand sectors are food, professional services, manufacturing and digital services.
Once you have assessed demand, one of the most important steps to take to ensure the successful expansion of your company into the GCC is to get your tax position right from day one.
One of the biggest risks of international expansion is incorrect tax treatment. You need to ensure that cross-border operations are tax-efficient and that you are compliant with those countries’ tax rules.
For expert advice on opening a business in the GCC, get in contact with our team today. We offer expert services helping businesses understand corporate tax and international tax rules.
If you want to learn more about the Gulf Cooperation Council trade deal and how it can positively impact your business, get in touch.