DIFC looks east as Dubai financial hub seeks new clients

Dubai International Financial Centre has posted continued growth in the first half of 2015, as it gears up for another push for new business in Asia.

The DIFC yesterday reported a 19.2 per cent rise in companies registered at the emirate’s financial hub compared with the same period last year, with an 11.8 per cent jump in the number of employees. The centre’s labour force is now 18,521 people working in 1,327 firms. Rentals of DIFC property also increased.

Interest in the DIFC from outside the traditional financial centres of North America and Europe continued to grow, with Chinese and Indian banks now making up the majority of balance sheet assets at DIFC.

Essa Kazim, governor of the DIFC and chairman of the DIFC Authority, said that the “encouraging performance illustrated the centre’s solid foundations for its 10 year growth strategy”. The strategy, which was unveiled in June, seeks to treble the centre’s amount of business and employees.

Mr Kazim is preparing to lead a party of DIFC officials and member firms on a week-long roadshow to China this week, where it will seek to add to the growing number of financial institutions from that country that have a presence in the centre.

“With a growing portfolio of active registered firms and an ever expanding and vibrant workforce, we are maximising the opportunities for investment into, and trade with, the emerging markets,” he said.

The visit will take in the China Economic and Financial Forum in Beijing organised by the Institute for International Finance, and will also include meetings with banks and financial institutions in Shanghai, China’s financial capital. It is the second official DIFC visit to China this year.

It comes as China’s authorities are grappling to assuage global concerns about the volatility that has shaken stock markets in the country and increased worries about China’s economic growth prospects.

One DIFC official who will be a member of the party visiting China said: “The visit is not connected to the downturn in markets. Like the rest of the world, we did not anticipate that, but it does not change anything. We have highlighted China as a growth opportunity for the next 10 years, and that will continue to be the case.”

DIFC already hosts the four biggest banks from the Chinese mainland – Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China – as well as the Hong Kong financial institution Far Eastern Investment Bank and two non-financial firms, PetroChina and telecoms manufacturer ZTE Corporation.

Last week the DIFC said it was also seeking to attract new business to the centre from India, aiming for a fivefold increase in the number of Indian companies to 100 by 2025.

Arif Amiri, deputy chief executive at DIFC, said: “With regards to our banking assets, especially on our full-fledged category 1 licence firms – more than half of them are from India and China. In terms of percentage, Asia represents 12 per cent of our financial firms, whereas the Asian banking sector represents more than 50 to 60 per cent of the balance sheet of the business that is booked in the DIFC. We see a significant opportunity that already exists, and which is on an upward trend.”

The Asian shift is not confined to its two biggest economies. In the first half of this year DIFC hosted its first South Korean law firm, BKL, and signed a memorandum of understanding with the government of Kazakhstan to develop a financial centre in its capital, Astana.

The majority of companies registered at DIFC, including non-financial firms, are from the Middle East, at 53 per cent, followed by European companies, at 19 per cent.

That represents a significant shift from the position at the end of the first half of last year, when European companies made up the largest contingent, at 35 per cent.

DIFC leased an additional 178,376 square feet of commercial space (roughly equivalent to two and a third football pitches) in the first half, and broke ground on the latest expansion of the DIFC master plan, with work beginning in July on Gate Village building 11.

The expansion represents a Dh205 million investment and will span a total of 200,000 sq ft, 80 per cent of it for office space and the rest for retail and food outlets, DIFC said. Completion is targeted for the second quarter of 2017.

“In line with Dubai’s ‘Smart City’ initiative, DIFC launched a dedicated portal offering registered entities a range of administrative services, including employee services, registration and licensing, certification and online payments to help. Efforts are also under way to enhance the IT systems and capabilities to further step up the overall client experience to further streamline the operations of its clients and tenants”, DIFC added.


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