The most comprehensive source of information on the world's international fund domiciles and their service providers
The fastest growing financial hub in the world, the Dubai International Finance Centre (DIFC) is a strategic base for investment funds to tap opportunities in rapidly growing emerging markets stretching from North Africa to India and South Africa to the Caspian.
Ideally located to bridge the gap for a global financial centre in the time zone between London and Hong Kong, DIFC was named by the City of London's Global Financial Centres Index (GFCI) as number one among financial centres to "become significantly more important over the next two to three years". Since being launched in 2004, DIFC has grown into an international community of over 650 financial services companies.
DIFC has attracted international firms such as Merrill Lynch, Morgan Stanley, Goldman Sachs, Bank of New York Mellon, Barclays Capital, Credit Suisse, Deutsche Bank, Standard Chartered, HSBC, JP Morgan, Goldman Sachs and many other leading international financial institutions.
Institutions joining DIFC enjoy a number of benefits, including:
100 per cent foreign ownership
Zero per cent tax rate on income and profits
Wide network of double taxation treaties available to UAE incorporated entities
No restrictions on foreign exchange or capital/profit repatriation
Globally-benchmarked regulatory framework
Strict supervision and enforcement of money laundering laws
Modern office accommodation, state-of-the-art technology, sophisticated infrastructure, data protection/security, operational support and business continuity facilities of uncompromisingly high standards
The DIFC focuses on the following main financial services sectors:
Banking and Brokerage
Re-insurance and Captives
At the heart of the DIFC concept is an independent regulator, the Dubai Financial Services Authority (DFSA), which grants licenses and regulates the activities of financial institutions in DIFC. Staffed by professionals with experience of working at leading regulatory agencies around the world, the Dubai Financial Services Authority (DFSA) has set uncompromisingly high standards in creating a regulatory and legal framework built on global best practices. The DFSA has been created using principle-based primary legislation modelled closely on that used in London and New York. As the DFSA is recognised by the UK Financial Services Authority and the US Securities and Exchange Commission, funds domiciled in DIFC can be marketed internationally.
With the Middle East among the fastest growing regions for High Net-Worth Individual (HNWI) assets, there are tremendous opportunities for providers of wealth management services in the region. In 2007, the largest regional growth of the HNWI population in the world occurred in the Middle East with an increase of 15.6%. HNWI wealth in the Middle East is expected to grow at a rate of 15.3% by 2012. In the GCC region alone, HNWI wealth is expected to grow from $2.1 trillion in 2007 to $3.8 trillion by 2012.
According to estimates, 30% of Middle East wealth is currently invested offshore. However, there is a new trend for this wealth to be invested in this region, presenting many opportunities for fund managers to build local operations to serve wealth locally. The demand for Islamic finance products has also risen significantly over the past few years, offering many new avenues of opportunity for private banks. Furthermore, several new opportunities are emerging within real estate and infrastructure funds, real estate investment trusts (REITs), pension funds, fund of funds and exchange-traded fund (ETFs).
The Collective Investment Law enacted by the DFSA in 2006 makes DIFC an ideal environment for domiciling investment funds. The law offers a cutting-edge regulatory regime that matches current market and industry needs.
The legislation was introduced after extensive discussions between the DFSA and institutions operating in the fund management industry. The Collective Investment Law encompasses various types and categories of funds, including alternative investment vehicles such as property funds, Islamic funds, hedge funds, and funds of funds.
Currently, over 1,600 foreign investment funds are offered out of DIFC. Over half of DFSA-licensed companies list asset management as one of their activities. Several dedicated fund management firms, including Ansbacher, Shuaa Capital, Franklin Templeton, Mellon Global and Merrill Lynch have established themselves in DIFC. Hedge fund managers with a presence in DIFC include Man Investments, Argent Financial Group and Permal.