A new financial centre in Dubai will bridge Western and East Asian markets

Over the past decade, Dubai has made great strides in opening up new avenues for economic growth, becoming a strategic hub for international businesses to reach nearby emerging markets. This development has been guided by an economic diversification plan focused on key sectors that can accelerate growth, not only in Dubai and the UAE, but also the entire region.

Financial Planning

The Dubai International Financial Centre (DIFC) is an initiative launched to harness the potential of the region’s financial services industry. Bridging the time difference between London and Hong Kong, DIFC has become a gateway for regional capital and investment, and a platform for tapping the largest emerging market for financial services. Today, DIFC is a community of over 800 firms, including some of the world’s largest financial services companies.

At the heart of the DIFC concept is an independent regulator, the Dubai Financial Services Authority (DFSA), which grants licences and regulates the activities of financial institutions in the DIFC. DIFC has been granted authority to self-legislate in civil and commercial areas. An amendment to the UAE constitution and a resulting federal law concerning financial free zones have allowed the DIFC Authority to create a legal framework based on the best practices of leading jurisdictions in Europe, North America and East Asia. The DIFC Authority and DFSA have reviewed the laws and regulations of the world’s major financial centres , and with the assistance of leading professional advisors, have adopted various best practices to produce clear, flexible and practical legislative and regulating frameworks.

Gateway To The Region

Between the financial centres of Europe and South-east Asia are 42 countries with a population of 2.2bn people and a combined GDP worth $2.5trn. This region, stretching from the western tip of North Africa to the eastern part of South Asia and comprising North and Eastern Africa, the Levant, the Caspian, the Indian Subcontinent and the GCC, has until recently, been without a financial centre. With recent economic development comes a growing need for a financial centre to serve the rapidly expanding institutions and governments in this region.

The DIFC concept has evolved as a means of providing depth to the regional financial markets, attracting liquidity, facilitating privatisations in the region and enabling initial public offerings of privately owned firms, contributing to the development of regional stock markets, and promoting the growth of Islamic finance and the development of the region’s reinsurance sector.

Nasdaq Dubai, formerly the Dubai International Financial Exchange (DIFX), is an international stock exchange located in DIFC that continues to play a major role in the development of regional capital markets by attracting key companies to list their shares and other issued securities on the exchange. This is expected to attract international investors and encourage portfolio flows to the region, thereby accelerating the process of the region’s integration with world markets.

The DIFC District

The DIFC is centrally located just to the south of the Dubai Emirates Towers landmark. Gracing the northern entry to the district is “The Gate”, the architectural signature of DIFC. Designed by US architects, this iconic building houses the executive offices of the DIFC Authority and the DFSA, and provides office space for leading international financial institutions. The DIFC district is expected to provide 4m sq feet of ultra-modern office space, including 31,000 underground car parking spaces and is designed to meet, and exceed, the demands of the world’s most sophisticated international financial institutions and the professionals who work for them.

The Gate, the surrounding precinct buildings and the Gate Village represent the first phase in the development of the DIFC district. All DIFC-registered entities will operate from within the district, but are permitted to operate from outside of DIFC for now, until the infrastructural facilities within DIFC have been completed.

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The Report: Dubai 2015

Tax chapter from The Report: Dubai 2015

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