The government of Abu Dhabi is creating a financial free zone on Al Maryah Island, hoping to lure international companies away from similar financial centers in Dubai, Qatar, and Bahrain.
Companies will be given a variety of incentives by the Abu Dhabi World Financial Market to open offices in Al Maryah, including the ability to operate without a local business partner, the simplicity of sending money abroad, and compliance with international laws.
It would be a direct rival to the nine-year-old Dubai International Financial Centre, which has successfully established Dubai as a hub for the regional financial community and is 90 minutes away. The DIFC established its own court system, which has received praise for bringing Western-style legal proceedings to disputes within the financial center’s jurisdiction. This is just one of the benefits of the system.
The 114-hectare Al Maryah development will be designated as the official financial hub of the city by the Abu Dhabi World Financial Market. The project is where the new Abu Dhabi Stock Exchange headquarters, formerly known as Sowwah Island, are located.
CEO of Megacorp Fathi Ben Grira told The National, “I can tell you that all the local Emirati investors are talking about [the financial zone].” “Abu Dhabi’s stability makes it a desirable location for all the major international financial institutions. They are thought to be able to take advantage of business opportunities in general.”
In recent years, there has been an increase in competition for international financial companies as Bahrain and Qatar aggressively pursue Middle East operations. Both Abu Dhabi and Dubai provide a number of free trade zones, but Dubai has been more successful in luring the region’s banking and finance sectors.
Kai Schneider, a partner at the Dubai office of the law firm Latham & Watkins, told Dow Jones, “I don’t think [the Abu Dhabi World Financial market] necessarily is competition for the DIFC.” “Using Europe as a guide, it is possible for a region to have multiple financial centers, each of which can concentrate on a different area of the financial services industry. Asset management takes place in London, funds are domiciled in Luxembourg, and they are managed in Ireland.”
Industry observers point out that more work needs to be done on the details of the Abu Dhabi zone.
For the time being, Nick Clayson, a partner at the Abu Dhabi office of the law firm Norton Rose, told Dow Jones that “the first steps have been taken to build a legal and regulatory framework.” But it’s unclear if any specific laws, rules, or judicial precedents will be the same as the DIFC.