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Fintech, Family Offices And Expats: DIFC Sees Further Strong Growth Ahead

Tom Burroughes, Group Editor , 15 October 2018

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As part of a set of interviews with business leaders in the GCC region recently, this publication spoke to the Dubai International Financial Centre about its 2024 strategy and developments in fintech. And Brexit gets a mention.

There are other IFCs competing for a slice of business, such as the ADGM. Without commenting directly on them, what would we say marks out DIFC as particularly strong?
Leading international companies continue to choose DIFC as their preferred financial centre to build their MEASA business given our track record of close to 15 years of unrivalled infrastructure quality, proven legal and regulatory framework, and because they can have access to the best financial talent in the region.

DIFC has grown into an attractive, sought-after business environment with a sterling reputation. The centre is marked by the broad range of offerings we provide to our community of over 2,003 companies. Building on this unmatched ecosystem, and benefiting from the strategic location of Dubai, DIFC is perfectly positioned to continue to attract market leaders that are looking to access business 

We offer structures of substance allowing companies to manage assets in a robust regulatory setting, and our continuous sector development means that we are driving the future of finance in the region. We are becoming the leading business and lifestyle destination in the MEASA region which includes arts, culture, dining, hospitality, entertainment, a variety of welcoming office spaces, and iconic architecture.

Dubai, of course, is an important location for expats from countries such as the UK, for non-resident Indians, etc. Please say where the centre sees growth in the number of expats coming from? How, for example, does the centre think Brexit might affect the number of expats coming to do business in the district?
DIFC is attractive because we have become a business and lifestyle destination as outlined earlier. We expect to see continued growth of skilled professionals from around the world because of our proposition.

We are confident that we will continue to see financial firms from other key markets around the world which also choose DIFC as their preferred platform, as we head closer towards our target for 2024. In particular, we expect markets such as China and India to be among the leading sources of this new business.

The impact of Brexit on the UK financial services industry will undoubtedly mean that both individuals and organisations within the sector will be looking farther afield for opportunities to grow – and we believe DIFC will be able to attract world-class talent from London. We are building a strong and sustainable industry in the UAE thanks to our strategic position, best practices, and investment opportunities. Given that the UAE and the UK are long established and trusted trade partners, we expect more UK firms to base themselves at DIFC as they look to build their business in the region in a post-Brexit era.

At times there have been calls for more work to standardise definitions of sukuk and certain other forms of Shariah finance to encourage more growth. Is the DIFC pleased at the amount of sukuk issuance or does it think more can and should be done to promote growth?
Islamic finance is a young but fast-growing sector, so we see a lot of potential in its future. Indeed, Nasdaq Dubai in DIFC is the world’s largest centre for sukuk listings, so, yes, we are pleased with the amount and that the city is a trusted location for Islamic finance.

Of course, there is always more that can be accomplished, which is why a diverse and dynamic city like Dubai has the vision of becoming the capital of the world’s Islamic economy. As such, developing the regional and global Islamic finance industry is one of DIFC’s top priorities and a fundamental pillar of our 2024 strategy.

In 2008 the authority announced new regulations to encourage family offices to set up. A decade on, do you know how many there are, and what the continued potential is? What sort of requirements do family offices have?
DIFC is today home to an established family business sector, with over 30 single family offices and many more companies that are family owned. These businesses benefit from flexible structures and sophisticated legal and regulatory framework that DIFC offers to cater for their needs. This attractive proposition to family offices is supported by the safe and secure business environment and favourable tax regime that Dubai offers. 

The potential of this sector is huge and is yet to be unlocked. Market estimates that approximately $1 trillion of assets will be transferred to the next generation of family-owned businesses in the Middle East in the decade from 2015 to 2025, which explains the rising need for specialised wealth management and succession planning solutions, especially as many of these businesses are yet to experience their first generational transfer.

DIFC offers both conventional and Shariah compliant structures, including trusts, which offer families enhanced control over how their business is run. The centre is also constantly introducing regulatory enhancements to cater for this growth, the most recent of which was the enactment of the Trust Law and Foundations Law, both of which were aimed at improving and expanding our private wealth management and succession planning platforms.

 

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