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“We have refocused our growth strategy”

January 2016

Arif Amiri, Chief Executive Officer, Dubai International Financial Centre Authority, tells Wealth Monitor that rather than focusing on short-term fluctuations, it is important to remain focused on the broader economic picture of the MENA region, which continues to be an engine for considerable economic opportunity

How do you assess the year 2015 in terms of DIFC’s achievements and getting it ready for next year?
In the past year, we have recorded impressive growth with the total number of registered companies reaching 1,327 firms up 8.3% from 2014 and a combined workforce that jumped nearly 5% to more than 18,500.

In addition to growing our client portfolio, we have broken ground on the 11th building in the DIFC Gate Village, which will span a total area of 200,000 square feet of office space and retail and F&B – the latest expansion of the DIFC master plan, a key component of the DIFC 2024 growth strategy to consolidate a net additional 5.5 million square feet of commercial office space.
Further to this, in 2015, we launched all phases of our dedicated and integrated client portal offering the Centre’s registered entities a range of administrative services, including employee services, registration and licensing, certification and online payments. We also announced our partnership with du to provide our clients preferential pricing packages for their global connectivity.

As part of our growth strategy to connect South-South corridor, the delegation also visited key markets and clients in China, India, Latin America and Africa. The forward momentum established in 2015 will drive further expansion of our operations into 2016 and consolidate DIFC’s position as the leading financial hub for the Middle East, Africa and South Asia (MEASA) region.
In 2015, we welcomed some of the world’s top financial institutions. Financial and non-financial services firms such as Lloyd’s of London, global leader in specialist insurance and reinsurance, Shinhan Bank, one of South Korea’s leading banks, Bae, Kim & Lee (BKL), DIFC’s first Korean law firm, Access Bank, DIFC’s first Nigerian bank, and BankMed, one of Lebanon’s fastest growing banks and the first MENA-based financial institution to receive a Category-1 licensing, have set up operations within the Centre, further adding to our diverse client portfolio.

Furthermore, an important announcement made by HSBC Middle East confirmed its intent  to transfer its place of incorporation and head office to the Dubai International Financial Centre.
2015 marked the beginning of our 10-year growth strategy and witnessed the growth of our client portfolio, as well as the expansion of our physical and technological infrastructure.

Can you share your plans for DIFC in the years ahead? What are your priorities?
With the launch of our 2024 strategy, we aim to draw in new financial services firms, expand the presence of a skilled workforce, enhance infrastructure to optimise occupancy, increase assets under management, expand reach to international markets and strengthen our balance-sheet position.

Over the next decade, the Centre expects to increase the number of active registered financial firms from 382 firms in the first half of 2015 to 1,000 by 2024, and grow the combined workforce of DIFC-registered companies from 18,521 to 50,000. We will also enhance our real estate proposition by consolidating a net additional 5.5 million square feet of commercial office space and implementing plans to combine plots to form a pivotal retail project and vibrant community. Further to this, one of our key objectives is to attract 30% out of our overall future cumulative growth from existing clients that are looking to upgrade their licenses to higher categories, or expand their physical presence to become regional hubs. Our goal is for licensed financial firms to strengthen their balance-sheet by an estimated value of US$400 billion, compared to US$65 billion in 2014 by enhancing liquidity to fuel future growth. Moreover, targeting specialised sectors such as Family Offices and SMEs, developing a domicile for global fund management and, of course, serving as a hub for key sectors such as Islamic finance will be among the key focus of our activities over the coming decade. We will seek to enable sector growth by closely working with the Dubai Financial Services Authority (DFSA) to develop new products, services and infrastructure.

In order to step up access to these key regions, our leadership team will continue to hold regular meetings and roadshows in India, China, Africa and Latin America to strengthen our relations with the international financial community. In the years ahead, we aim to expand our presence and cement our position as a leading global financial hub.

With regards to establishing an entity in Dubai as a foreign company, what is the DIFC Authority doing to reduce barriers? Are you targeting any new business segments?
DIFC Authority and our independent and internationally recognised risk-based regulatory systems, DFSA and the DIFC Courts, are continuously developing new products and services and enhancing the legislative infrastructure to reduce barriers and meet the evolving needs of our growing and diverse regional and international client base.

The DFSA has expanded its international network of regulatory cooperation by signing bilateral and multilateral agreements with over 90 jurisdictions and regulatory counterparts globally. Meanwhile, DIFC Courts has become internationally integrated and provides protection of English Common law and judgements enforceable within the GCC and throughout the Arab world.

Furthermore, DIFC undertook a significant development with the enactment of DIFC Law No. 2/2014, the Netting Law, a method to create legal certainty regarding the enforceability of close-out netting agreements in the case of a party’s insolvency, which are effective tools that reduce exposure to risk. In 2014, the DFSA introduced a new funds regime with the Qualified Investor Fund, which enabled fast track authorization process and lighter regulatory treatment of professional funds. With the presence of DFSA and DIFC Courts, we continue to attract new and diverse clientele from a variety of targeted business segments, including wealth management, banking, insurance, and more.

The IMF has just released its regional outlook estimating that the drop in crude oil will slow down the growth in the GCC region from 3.25% this year to 2.75% next year. How is DIFC evolving to adapt to these developments?
Dubai and the DIFC continue to offer a refined, stable and regulated financial ecosystem constantly evolving to service the needs of its regional and global financial and non-financial client base. With an established, independent and favourable regulatory and legal system, we protect from economic and market fluctuations and reduce risks. As part of our growth strategy, we will continue to implement new strategic initiatives, deepen core client synergies, strengthen our relationship with international markets and business communities and position Dubai as a strategic business destination with unparalleled connectivity.

Are you concerned about the effects of low oil price and geopolitics in the UAE and the region as a whole?
Rather than focusing on short-term fluctuations, it is important to remain focused on the broader economic picture of the MENA region, which continues to be an engine for considerable economic opportunity. The UAE has demonstrated resilience in the face of market challenges in the past and the country’s business landscape and value proposition remain attractive and competitive, particularly for financial services.

We should also consider Dubai’s link to Expo 2020 as an engine for growth as it strengthens the UAE’s connectivity and positions the country as a truly globalised economy. Expo 2020 is expected to create nearly 300,000 jobs (40% of them permanent) and attract 25 million visitors. The projected infrastructure requirements alone will prove a boon for project finance, while the increasing population of Dubai and the wider UAE will generate organic growth opportunities across many sectors.

The DIFC plans to host more than 100 Indian companies by 2024. Are you reinventing your business strategies and platforms related to emerging markets, especially India, in any new ways?
We have refocused our growth strategy to encompass the latent potential of the fastest-growing emerging markets in the world and stimulate trade and investment flows along the South-South economic corridor. We pay greater attention to these markets by engaging with international financial communities, including India’s esteemed wealth managers, banks and law firms, and connecting them to our elite, diverse and global client cluster.On the institutional front, providing a strategic and stable platform to strengthen economic ties among African and Asian markets and the GCC countries and expanding logistical linkages and existing social networks has opened the gates of opportunity for Indian and Chinese financial firms.

If a client wants to engage in trade with  the Nigerian market or wishes to extend its lending capacity to a construction company in Egypt, financial firms can effectively conduct all business from a secure, stable and progressive environment fostered by DIFC and Dubai. As part of our growth strategy, we will continue to launch a series of regulatory reforms and strengthen existing regulation to attract wealthy, risk-tolerant Indian and global investors and asset managers to base more funds and set up operations in DIFC.

India is now one of the fastest growing economies. What are your key plans in terms of strengthening UAE-India ties and attracting Indian companies to set up bases in DIFC? DIFC is committed to strengthening ties and attracting Indian companies to set up operations in our financial centre. To attract these firms, we intend to develop and enhance services, regulations, legislation and fund regimes to help facilitate ease of operations and establishment. Moreover, we will continue to promote cooperation between both countries by visiting and welcoming Indian government delegations and leading financial services firms and law firms.

In 2015 alone, two senior leadership teams from the DIFC visited India to engage with the country’s private and public sector banks, leading law firms and wealth and fund management experts. Earlier in the year, we collaborated with a number of Dubai-based Indian banks to host a high-level Indian business delegation to discuss the potential of Gujarat International Financial and Tech City, billed as India’s first ‘smart city’. Indian investors and consumers are looking for the assurance of fair and transparent regulation. DIFC has set the benchmark in this regard by establishing independent judicial frameworks and regulatory oversight that combine best practices from all over the world.

In addition, Dubai’s unrivalled connectivity with emerging markets in the MEASA region and its secure environment complemented by DIFC’s modern infrastructure, offers India’s growing wealth sector an opportunity to extend their capacity and expand and diversify their assets and investments to the MEASA region. Moreover, Dubai is a critical region for private banking and wealth management. Indian banks and professional service firms can benefit from partnering with local UAE banks and financial institutions to become facilitators for trade and remittance flows within the GCC-India corridor.

Indian firms can also benefit from our vibrant business cluster and our sophisticated financial and regulatory ecosystem. By introducing new fund classes and regulations that provide easy access and integration into trade and investment networks, we can successfully meet the evolving needs of our Indian client base.

Many Indian firms including Aditya Birla Sun Life Asset Management, IL&FS Global Financial Services, IIFL Private Wealth Management, Kotak Mahindra Financial Services and Gateway Investments have already benefited from our business-friendly framework and our access to the UAE’s non-resident Indian community.

What are the key challenges for Dubai to maintain its status as an international financial centre?
One of our greatest challenges is to bring domestic regulators on par with international standards, securing a leading position not just in the Middle Eastern region but on a global scale. Dubai must enhance and standardise its financial policies and regulations in order to foster substantial growth in its financial services sector. The emirate will also have to develop its human infrastructure in financial services in order to compete with international centres. Nonetheless, Dubai’s tolerant outlook, safe environment and business and investor friendly policies help sustain the emirate’s competitive edge on the wider global landscape.

Is DIFC planning to take a more active role in global and regional regulatory cooperation?How do you see the emergence of ADGM as a new development in this region?
Within a short time span of 10 years, DIFC has become a hub and gateway for firms seeking to access the Middle East, Africa and South Asia. In addition to benefiting from our strategic location, our clients can also work within an internationally-recognised legal and regulatory framework while being assured that DIFC has the critical mass and ease of connectivity for businesses to thrive. As outlined in our 2024 strategy, we intend to enhance our regulatory cooperation with international jurisdictions to facilitate cooperation between emerging and developed markets.

With a combined nominal GDP of US$ 7.9 trillion across the MEASA, there is certainly potential to further attract leading global financial institutions to this region. The establishment of ADGM and continued growth of DIFC is testament to the appetite for development we are witnessing in the region’s financial and professional services industry. Over the course of the next decade, we will continue to position Dubai as the hub of choice for reinsurance, Islamic finance, asset and fund management, among other financial services.

Profile

Prior to joining DIFC Authority, Amiri held a number of positions within Emaar Properties PJSC, including Chief Commercial Officer. Before this, Amiri was also Chief Executive Officer of Emaar Retail. Amiri’s career began with an eight year term at HSBC Bank Middle East. To his credit, Amiri was appointed as the Chairman of the Middle East Investor Relations Society from 2008 to 2011. Underlining his significant contribution to the region’s retail sector, Amiri received the Honorary Award at the Retail City Awards in 2011. He further won the Retail Leadership Award at the 2012 Asian Leadership awards. Amiri holds a Post-Graduate Executive Diploma in Organisation Behaviour and Marketing Strategy from the University of Cambridge, Dubai, as well as a Bachelor’s Degree in Aviation Business Administration from the Embry-Riddle Aeronautical University in Florida.

 

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