A United Arab Emirates sovereign wealth fund has invested nearly $100 million in "Israel's" technology sector, signaling a new sign of deepening ties between the two countries.

A year and a half after the normalization of ties with the Israeli occupation, trade is expected to reach $2 billion this year, up from $250 million annually before the agreement.

Israeli firms are establishing new offices in Dubai and Abu Dhabi, as well as relocating employees from "Tel Aviv". Emirati sovereign-wealth funds are investing directly in Israeli technological businesses, while UAE corporations are positioning themselves as partners for Israeli development throughout the rest of the Middle East.

According to a spokesperson, Abu Dhabi's Mubadala Investment Co., which controls $250 billion in assets, has invested up to $20 million in six Israeli-based or focused venture capital companies, including Mangrove Capital Partners, Entrée Capital, Aleph Capital, Viola Ventures, Pitango, and MizMaa.

According to a person familiar with the fund, Mubadala's investments, which have not been previously publicized, were based on each venture firm's financial success and the personal relationships created between the two teams after the Abu Dhabi fund met with about 100 investors.

While the Israeli investments are minor in comparison to Mubadala's size, they are crucial for Abu Dhabi that is desperate to encourage entrepreneurs to diversify its oil-heavy economy.

“It’s all grown from relationships, getting to know people, and not chasing a buck,” said AviEyal, whose fund has also now invested roughly $15 million in UAE-based startups.

"Israel" in the summer of 2020 agreed to re-establish relations with the United Arab Emirates, Bahrain, and, subsequently, Morocco and Sudan. Israelis flocked to the UAE in droves, and Israeli and Emirati corporations inked agreements to collaborate on developing technological and defense connections.

Emirati government entities set their sights on "Israel's" technological sector, however, there were few substantial tangible transactions at first. The epidemic has restricted travel, and businesses from both sides have taken longer than usual to comprehend each other, according to business executives.

“Sometimes Israelis think they can just go to the U.A.E. and do business,” he said. “You need to find ways to bridge gaps.”

Some Israeli companies have struggled to negotiate the UAE business climate, according to Samuel Shay, a member of the UAE-"Israel" Council and a consultant who attempts to connect Israeli IT firms with Persian Gulf development projects. While hundreds of international corporations have regional headquarters in the UAE, the country is also dominated by Emirati family or government-owned firms that have typically taken a share in foreign companies' local operations.

According to Mr. Shay, the message from such companies is, "Give us your best services and technologies, we will pay for it."

However, he says they are not looking to be partners with the "Israeli individual".

"Israel" has previously signed a non-double taxation treaty with the UAE, joining 58 treaties that "Israel" signed with several countries. 

According to the Ministry of Finance, the tax treaty is mainly based on the OECD Model Treaty. The treaty aims to "encourage economic cooperation between countries, along with provisions relating to non-discrimination, exchange of information, prevention of exploitation, and the provision of reduced tax rates."