On 7 August 2025, Russia and the United Arab Emirates signed an intergovernmental agreement on trade in services and investment in Moscow, supplementing the existing free trade agreement between the two countries. The agreement entered into force in August 2026, sixty days after the parties exchanged written notifications confirming completion of their respective domestic procedures.
A key feature of the agreement is its symmetry. This is not a one-way opening of the UAE market to Russian companies, but a reciprocal package of commitments: the same non-discrimination guarantees and the same new capital-ownership opportunities are extended to UAE companies operating in Russia. For counsel advising on cross-border transactions and market-entry structuring, it is important to understand how the agreement works in both directions.
The core principle: non-discrimination in both directions
The agreement rests on two principles standard to trade treaties, applied symmetrically to Russian service providers in the UAE and to UAE service providers in Russia.
First, most-favoured-nation treatment: the conditions of market access and operation for a foreign service provider in the host country’s market may not be less favourable than the conditions granted to providers from any third state. Second, national treatment: foreign providers must be afforded conditions of operation no less favourable than those available to domestic providers of equivalent services.
With respect to cross-border IT services, under their specific commitments the parties may not impose quotas on the number of foreign providers, create monopolies, or designate exclusive operators, nor may they restrict a company’s activity based on the aggregate value of services provided or the number of transactions completed.
What UAE companies gain in Russia
For UAE business, the agreement means primarily expanded and legally protected access to a market of 145 million consumers, simplified procedures for trade in services, and direct support for small and medium-sized enterprises seeking to build partnerships.
The key practical change concerns new options for structuring a presence in Russia. UAE companies are granted the right to hold 100% of the equity in Russian legal entities operating in hospital services, ship repair and maintenance, catering on maritime transport, chartering of vessels with crew, certain air transport services, and higher and other education services. Separately, the agreement grants the right to open branches — without incorporating a Russian legal entity — in retail trade, hotels and restaurants, aircraft repair and maintenance, architectural services, personnel recruitment and placement services, and cinema exhibition.
According to statements from the Emirati side, the sectors identified as priorities for practical cooperation are energy and infrastructure, professional services, advanced manufacturing, the chemical industry, construction, and food security and sustainable agriculture — these are the areas where the agreement is expected to provide the clearest regulatory framework for market entry.
What Russian companies gain in the UAE
Mirroring the above, the agreement opens the UAE services market to Russian business under the same protective principles. The UAE has undertaken commitments in 64 additional services subsectors beyond its WTO commitments, compared with 12 additional subsectors undertaken by Russia — meaning the degree of market opening for Russian providers in the UAE is markedly deeper than the WTO baseline.
Russian investors are granted the right to 100% ownership of companies in legal and computer services, research and development, rail transport, and a number of other sectors, as well as the right to hold up to 70% of the equity in medical and engineering services — with the additional possibility of establishing enterprises with 100% Russian capital in certain UAE free economic zones.
The limits of the agreement’s protection
The agreement does not create unrestricted market access for either side, and these carve-outs matter equally when structuring a market-entry strategy for Russia or for the UAE.
Each country’s regulator retains the right to impose restrictions to protect public morals, public order, and human life and health. The sole requirement is that such measures must not be discriminatory, unjustified, or used as a disguised means of restricting trade. This is a standard reservation in trade agreements, but it is precisely this reservation that most often becomes the subject of disputes over its good-faith application.
It is also important to understand the limits of the agreement’s coverage in banking and payments. The agreement governs “measures of the parties” — that is, laws, regulations, and legally significant acts of public authorities — but not the conduct of private companies. Where a bank or another private service provider, acting at its own discretion, imposes restrictions on particular customers of the other party or tightens its internal compliance checks, the agreement does not apply to that conduct — unless the private entity has been vested by the state with authority to set rules binding on an entire sector. That said, the parties guarantee that no restrictions will be applied to international transfers and payments for current transactions relating to bilateral trade in services, subject to exceptions for serious balance-of-payments difficulties or the need for prudential measures.
Another important point: the agreement does not provide for automatic recognition of licences and certificates for either side. That requires a separate international agreement specifically addressing recognition. However, whatever recognition procedures do exist may not be used by either party as a tool of discrimination or a disguised barrier to trade in services.
Dispute resolution mechanism
The agreement provides for a two-stage procedure available to both parties at the state-to-state level. The parties are first required to hold consultations. If the matter cannot be resolved this way, the initiating party may convene a three-member arbitral panel. Violations found by the panel must be remedied; failing that, the aggrieved party may invoke the mechanism of withdrawal of concessions — that is, suspend, to an equivalent extent, the preferences granted to the service providers of the breaching party.
It is important to understand that this mechanism operates at the intergovernmental level and does not replace either commercial arbitration or the protection of an individual company’s rights before the national courts and regulatory authorities of Russia or the UAE. The agreement provides an additional argument and legal basis for sector-level and state-level engagement — it is not a direct instrument of individual redress for business.
Practical implications
For companies planning, or already conducting, business in the other party’s territory — whether Russian business in the UAE or Emirati business in Russia — the agreement provides an additional legal reference point when challenging discriminatory regulatory decisions and when structuring market presence through the new capital-ownership options it creates.
At the same time, the agreement does not remove the need for targeted legal due diligence: whether a specific restriction applies to your particular services subsector; whether it genuinely originates from a state authority rather than a private counterparty; whether it falls within a permitted exception; and how well-founded the regulator’s reliance on public order or public morals actually is in the specific case. The choice of market-entry vehicle — branch, joint venture, or a wholly foreign-owned company — also requires separate analysis, since the available ownership regime differs by sector.
Companies encountering restrictions on access to the partner country’s market, or being denied equal conditions of operation, would be well advised to document evidence of the discriminatory nature of such measures in advance — this can form the basis for invoking the agreement’s consultation mechanism at the state-to-state level.
Rinat Zaynutdinov
Partner | TPG-Legal
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This material was prepared on the basis of publicly available information on the Russia–UAE agreement on trade in services and investment, comments from the Russian Ministry of Economic Development, statements from the UAE Embassy, and reporting on the ratification process.