China International Capital Corporation (CICC), a leading China specialist investment bank, recently launched its Dubai International Financial Centre (DIFC) office — marking its first official presence in the Gulf region.

In an interview with Gulf Business, Barry Chan, head of Asia-Australia Region, outlines how the firm aims to drive two-way capital flows within the China-GCC corridor, tapping into the Gulf’s trillion-dollar investment potential and growing appetite for cross-border collaboration.

What prompted CICC to establish a presence in Dubai’s DIFC, and how does this move fit into your global growth strategy?

CICC has long monitored the economic landscape of the Gulf region. The overall macroeconomic performance of Gulf countries has been impressive year on year, historically driven by the prominence of the oil and gas sector. More recently, strong performance has also been increasingly supported by non-oil sectors.

Investment activity has surged, with sovereign wealth funds and private investors actively deploying capital internationally and domestically — into infrastructure, real estate, technology, healthcare, and energy transition projects. Gulf sovereigns are projected to reach $18tn in assets under management by 2030, reinforcing their global influence.

Attracted by the Gulf market’s scale and growth, CICC has been keen to establish a presence in the DIFC to develop capital flows both ways within the China-GCC economic corridor. By leveraging Dubai’s role as a gateway to regional markets, we aim to provide comprehensive financial solutions that foster cross-border collaboration and long-term economic partnerships.

What specific markets and sectors across the Middle East and Africa are you prioritising, and what is your outlook on the region’s investment landscape?

Two key structural changes stand out in the Gulf’s investment landscape. First, Gulf sovereign wealth funds have significantly increased allocations to China and the broader Asia-Pacific region, investing $9.5bn into China in the year ending September 2024. This reflects a diversification strategy amid global uncertainty and the pursuit of higher growth.

Second, the Gulf is emerging as a preferred destination for Chinese companies seeking global expansion. China’s strengths in manufacturing, infrastructure, the digital economy, and innovation align well with Gulf diversification goals.

Looking ahead, we are highly optimistic about the region’s trajectory. Its strategic location, professional economic management, and proactive government policies create a dynamic, business-friendly environment ripe with investment opportunities.

What core services will the Dubai office offer, and who are your primary target clients — sovereign wealth funds, corporates, or family offices?

CICC has been approved by the Dubai Financial Services Authority (DFSA) for a Type 4 license, enabling us to provide arranging and advisory services within the DIFC.

Our offerings are tailored exclusively for institutional clients, including sovereign wealth funds, governments, SOEs, private corporations, financial institutions, and accredited family offices.

We aim to serve as a trusted financial bridge between China and the Gulf, delivering investment, advisory, and financing solutions that address the evolving needs of our clients on both sides of the corridor.

How will CICC facilitate cross-border investment flows between China and the Middle East, and what role will the firm play in supporting initiatives like the Belt and Road?

The Gulf is known for its appetite for high-value, strategic transactions — often exceeding global deal sizes. CICC is uniquely positioned to facilitate these cross-border flows, thanks to our deep market expertise in China, established client relationships, and regional insight.

We also play an active role in the evolution of the Belt and Road Initiative (BRI), identifying emerging opportunities and supporting our clients in navigating these investments. CICC strives to foster strategic partnerships that drive sustainable, long-term growth between China and the Gulf.

What are your short- and long-term goals for the DIFC office, and how do you define success for CICC in the region?

Our short-term goal — becoming the first China specialist investment bank with a presence in the Gulf — has been achieved. The next phase is to leverage our platform to deliver China-based solutions to regional clients and execute larger, high-impact transactions across capital markets, private markets, and strategic advisory.

In the long term, we aim to cultivate a dynamic financial ecosystem that enables Chinese and Gulf players to form strategic partnerships and engage in sustained capital flows.

Success for us means becoming the trusted China-focused financial partner for regional governments, SOEs, institutions, sovereign funds, corporates, and family offices — driving mutual growth through well-structured, long-term solutions.

For years, the UAE has been a preferred base for multinational businesses, offering a tax-friendly environment that’s attracted companies from around the world. Now, a new global tax framework is reshaping how large companies handle their tax obligations.

From January, MNEs operating in the UAE need to comply with Pillar Two, a global minimum tax framework introduced by the OECD and G20. The idea is simple: if a company’s effective tax rate in any country falls below 15 per cent, it will be required to pay a top-up tax to bring it up to that level.

To stay ahead of this, the UAE introduced a Domestic Minimum Top-Up Tax (DMTT). This ensures the UAE collects the tax rather than letting other jurisdictions claim it.

For businesses that have structured themselves around tax incentives, this raises serious questions. Will free zone benefits still hold up? What adjustments need to be made? And how will compliance and reporting obligations change?

The reality is that business as usual is no longer an option. Companies need to reassess their structures, tax strategies, and reporting systems now.

What is OECD Pillar Two?

Pillar Two is the OECD’s attempt to close tax loopholes used by large multinationals. The rules apply to businesses with global revenues of EUR750m or more in at least two of the last four years.

The principle is straightforward: if a multinational’s effective tax rate (ETR) in a particular country falls below 15 per cent, it must pay a top-up tax to bring it to that level.

How it works

To enforce this, Pillar Two introduces three key rules:

• Income inclusion rule (IIR): If a subsidiary in a low-tax country pays less than 15 per cent, the parent company must cover the shortfall.
• Undertaxed profits rule (UTPR): If the parent company’s home country doesn’t enforce the IIR, other jurisdictions where the company operates can claim the tax.
• Qualified domestic minimum top-up tax (QDMTT): Countries can apply the tax themselves, ensuring they keep the revenue rather than losing it to foreign tax authorities.

The UAE has confirmed it will apply a DMTT, meaning multinationals operating here will pay any shortfall in the UAE rather than elsewhere.

Companies that have structured their operations around low or zero-tax incentives will need to reassess their tax strategies to stay compliant.

How will this affect businesses?

This is bigger than just paying more tax — it impacts business models, tax planning, and compliance processes.

Free zone incentives will need a fresh look

Many companies have chosen UAE free zones for their 0 per cent corporate tax rates, but under Pillar Two, a lower tax rate won’t necessarily mean lower taxes.

Even if a company qualifies for a lower rate in a free zone, if its ETR falls below 15 per cent, it will still need to pay the difference as a top-up tax.

Multinationals relying on free zone benefits need to reassess whether these incentives still serve their purpose or if a structural change is needed.

Transfer pricing will face more scrutiny

Intercompany transactions — such as intellectual property fees, intra-group loans, and cost-sharing agreements — will get closer inspection.

Tax authorities will be looking at whether pricing reflects real market value or is being used to lower tax obligations.

Businesses that don’t document these transactions properly could face audits, adjustments, or even financial penalties.

Beyond documentation, companies will also need to ensure consistency in their approach across different jurisdictions. Any misalignment in reported figures across tax filings could raise flags and trigger investigations, adding compliance risks on a global scale.

The reporting burden will increase

Tax compliance is about to get a lot more complicated. Companies will have to provide more detailed tax filings, with new disclosures and stricter tracking requirements. One major addition is the GloBE information return, requiring over 240 data points per entity.

On top of that, businesses will need to align their country-by-country reporting (CbCR) with the new rules, ensuring tax filings across jurisdictions match up without inconsistencies.

This means upgrading financial systems, tightening internal controls, and ensuring tax filings are accurate across multiple jurisdictions. The move to more detailed disclosures will require careful planning, as errors or inconsistencies could lead to audits or financial penalties.

What should businesses do now?

With the UAE’s DMTT taking effect earlier this year, businesses need to act now. Here’s where to start:

Determine if you’re affected

Start by confirming whether your company falls under Pillar Two. If your global revenue has reached EUR750m in at least two of the last four years, you need to start preparing immediately.

If you’re approaching this threshold, it’s time to monitor revenue closely — crossing the line means major tax and compliance changes.

Assess your effective tax rate (ETR)

Work out your company’s current ETR in every country where you operate.

If your UAE operations — or any other jurisdictions you’re in — have an ETR below 15 per cent, you’ll need to determine where the top-up tax will apply.

Free zone businesses, in particular, should review their structures to ensure they’re not exposed to unexpected tax liabilities.

Strengthen tax reporting and compliance

Pillar Two brings stricter compliance requirements, so businesses need to get their systems in order.

Key areas to focus on:

• Update financial reporting systems to track the necessary tax data.
• Ensure all tax filings align across different jurisdictions to avoid red flags.
• Review transfer pricing policies to ensure intercompany transactions meet compliance standards.

Having clear documentation and well-organised financial records will be crucial in avoiding unnecessary scrutiny and ensuring compliance with the new regulations.

Work with experts to develop a strategy

With tax rules becoming increasingly complex, expert guidance is essential.

Businesses need to rethink their tax structures, ensure compliance, and minimise unnecessary exposure.

The right approach will depend on each company’s setup, so planning early is far better than reacting under pressure later.

The bottom line

Pillar Two isn’t just a tax update — it’s a global change in how multinational businesses are taxed.

The UAE’s introduction of DMTT in 2025 means that companies need to reassess their tax planning, compliance, and reporting processes now.

This isn’t something to put off. Companies that prepare early will have a smoother transition, while those that wait risk compliance issues and unexpected tax liabilities.

The time to act is now.

The writer is the group CEO of Knightsbridge Group.

Saudi Arabia has achieved a new milestone in entrepreneurship, with its capital, Riyadh, advancing 60 places over the past three years to rank 23rd among the top 100 emerging startup ecosystems globally. This achievement was featured in the Global Startup Ecosystem Report 2025, published by Startup Genome in partnership with the Global Entrepreneurship Network.

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The country’s remarkable progress highlights its rapid development in the entrepreneurial landscape, particularly evident in strong venture capital indicators, advanced infrastructure, and increasing innovation and investment in emerging technologies, a Saudi Press Agency report said.

This success is largely driven by strong government support, notably from the Small and Medium Enterprises General Authority (Monsha’at), which plays a key role in building an integrated entrepreneurship environment through initiatives and programs that foster startup growth and expansion. Monsha’at also works to enhance the legislative and regulatory framework for entrepreneurs.

These efforts aim to increase the sector’s contribution to gross domestic product (GDP), aligning with the goals of Saudi Vision 2030.

High-impact sectors fuel growth

According to the report, Saudi Arabia recorded the second-highest performance in the Middle East and North Africa region. It ranked third in terms of funding volume and investment value relative to impact, and fourth in the availability of skills and expertise—further boosting its capacity to attract and retain entrepreneurial talent.

The report also highlighted several high-potential sectors contributing to this performance, notably artificial intelligence, FinTech, cybersecurity, smart cities, infrastructure, and digital health. These sectors form critical pillars in the country’s economic transformation strategy.

Dubai Sotheby’s International Realty has brokered the sale of a residential plot on Palm Jumeirah for Dhs365m ($100m), setting a new record for the island’s most expensive land transaction in 2025.

The 90,036 square feet freehold plot occupies a coveted frond tip position — among the rarest land sites on Palm Jumeirah — with unobstructed views of Bluewaters Island, and the Dubai Marina skyline. With most of the island already developed, prime land opportunities have become increasingly scarce, fueling demand from developers and ultra-high-net-worth individuals (UHNWIs).

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George Azar, Chairman and CEO of Dubai Sotheby’s International Realty, said the deal underscores Palm Jumeirah’s status as a premier destination for global wealth. “The sale of this rare frond tip plot highlights the enduring prestige of Palm Jumeirah,” he said. “As supply continues to tighten, we expect both land and ultra-prime residence prices to rise further.”

The buyer, 25 Degrees, is a boutique developer known for producing architecturally distinctive luxury homes in Dubai’s most elite neighborhoods. The company is expected to build a custom-designed residence on the site, targeting the emirate’s growing market for bespoke ultra-luxury homes.

Surging prices, strong investor confidence

Leigh Borg, Executive Partner at Dubai Sotheby’s, represented the seller in the transaction. “This site offers a rare opportunity to deliver a landmark property,” Borg said. “In today’s competitive luxury market, originality and visionary design are crucial.”

The landmark deal follows a record-setting trend in Dubai’s high-end real estate market. In December 2024, Dubai Sotheby’s also facilitated the Dhs130m ($35.4m) sale of a five-bedroom Signature Villa at Six Senses Palm Jumeirah — one of the world’s top ten most expensive branded residences sold that year.

According to Dubai Sotheby’s data, Palm Jumeirah has seen land prices climb by 18.92 per cent between January and May 2025, even as transaction volumes declined by 14 per cent.

The surge in value reflects growing interest from both developers and international buyers seeking secure investments and waterfront living.

Data from the Dubai Land Department supports this upward trend, with over 7,700 plots transacted in the first 100 days of 2025 alone. The figures highlight strong investor confidence and sustained momentum in Dubai’s luxury market, particularly in limited-supply zones like Palm Jumeirah.

Dubai Sotheby’s International Realty continues to lead the ultra-prime property sector in the region, facilitating marquee transactions that reflect Dubai’s position as a global hub for elite real estate investment.

Gold prices rose on Tuesday as the conflict between Israel and Iran prompted investors to seek refuge in safe-haven assets, as they also await the upcoming US Federal Reserve policy meeting.

Spot gold was up 0.1 per cent to $3,386.29 an ounce, as of 1203 GMT. US gold futures fell 0.4 per cent to $3,404.90.

Israel’s attacks on Iran have broadened its conflicts in the region to a level that poses a global threat, Jordan’s King Abdullah said in a speech in the European Parliament on Tuesday.

US President Donald Trump said he wanted a “real end” to the nuclear dispute with Iran and cut short his trip to the G7 summit in Canada. A separate report said he had asked for his administration’s National Security Council to be prepared in the situation room.

“Gold still retains its bias for lurching upwards on signs of a worsening Middle East crisis, given the precious metal’s stature as the preferred safe haven of late,” said Han Tan, chief market analyst at Exinity Group.

Gold: A hedge against economic uncertainty

Zero-yield bullion is considered a hedge against geopolitical and economic uncertainty and tends to thrive in a low-interest environment.

“Barring knee-jerk spikes on a worsening geopolitical conflict, bullion bulls’ quest for pushing spot prices sustainably above $,3500 may only be fulfilled once the Fed signals a sooner-than-later rate cut,” Tan said.

The US central bank’s rate decision and Chair Jerome Powell’s remarks are due on Wednesday. Traders are currently pricing in two cuts by the end of the year.

Meanwhile, Citi lowered its short-term and long-term price targets for gold, projecting prices could drop below $3,000 per ounce by late 2025 or early 2026, driven by declining investment demand and an improving global growth outlook, it said in a note on Monday.

Elsewhere, spot silver was up 1.9 per cenr at $37.01 per ounce, its highest level since February 2012, platinum rose 1.3 per cent to $1,262.43, while palladium gained 1.5 per cent to $1,044.94.