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DIFC Aims To Replicate First Ten Years' Growth

by Lorys Charalambous, Tax-News.com, Cyprus

17 November 2014


The Dubai International Financial Centre (DIFC), a free zone in the United Arab Emirates (UAE), used the occasion of its ten-year anniversary on November 10, 2014, to highlight its progress over the last decade and to discuss its goals for the future.

Speaking at a press briefing, DIFC Governor Essa Kazim said, "Over the past decade, the DIFC has been one of the fastest growing international financial centers in the world, and we continue to enjoy a very strong momentum with a soundly established physical, legal, and regulatory infrastructure."

The DIFC was created by Decree in 2003 and began operations in 2004. The perks it offers to firms include zero percent income tax guaranteed for 50 years, 100 percent foreign ownership, and no exchange controls.

The Decree gives the DIFC a large degree of sovereignty and it has a separate set of laws called the Commercial Code, comprising a comprehensive set of regulations, a companies law, legislation on property rights, including laws on security and collateral, title to goods and securities, commercial transactions and contracts, and insolvency. Asset management companies, banks, and other financial service providers that establish headquarters in the DIFC are permitted to do business with locally based high-net-worth individuals but are not allowed to enter into the retail market in Dubai.

The DIFC is currently home to 1,113 active registered companies with a combined workforce of 17,000. According to a statement issued on November 10, the free zone plans to be home to 1,700 firms and 20,000 employees by 2018. In order to accommodate new clients, a fourth business center, which will add 11,000 square feet of office space, is under development in Gate Village Two.

Whereas the DIFC's growth over the last decade has primarily been driven by companies from the United States and Europe, the Center said that in the coming years it will focus more on China and Africa by "investing heavily to better serve these critical emerging economies."

The DIFC said it has strongly supported Dubai's vision to broaden its economy over the last ten years, with the financial sector's contribution to gross domestic product (GDP) rising from 5.5 percent in 2004 to more than 12 percent today.

It also said it is committed to the Government's bid to secure Dubai's position as the leading Islamic financial and economic hub. It noted that it has achieved significant milestones to date in establishing world-class legislation and regulation for Islamic finance institutions to develop and provide Shari'ah-compliant products relevant to clients in the region and across the globe. The free zone's regulator, the Dubai Financial Services Authority, will continue to work to develop regulation to support this sector.

"As we look to the next decade and beyond, fueled by our success to date, we are determined to strengthen our role as an international financial center and Dubai's position as an international hub for business and finance," DIFC Governor Essa Kazim said.

DIFC hopes to double in size in a decade's time, when it will celebrate its 20th anniversary.

TAGS: individuals | United Arab Emirates | tax | business | law | gross domestic product (GDP) | employees | China | legislation | United States | regulation | retail | trade | individual income tax | Dubai | free trade zone | Europe | Africa

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