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The Dubai International Financial Centre (DIFC), the World’s newest global financial hub, was declared open for business on 20^th September 2004. On this day, a major step was taken towards completing the global financial system with the DIFC ideally located to bridge the gap left by the existing financial centres of London and New York in the West and Hong Kong and Tokyo in the East.

The 20^th September also saw the announcement of the first companies licensed to operate from within the centre. Swiss private bank, Julius Baer was the first firm to receive a licence, followed by Standard Chartered and The GCC Energy Fund. In addition to these, international companies of the calibre of Credit Suisse, Deutsche Bank, AON and Merrill Lynch have also applied or signalled their intent to apply for a licence and it is expected that more firms will be licensed by the end of 2004. All of these institutions will receive benefits such as zero tax on income and profits, 100 per cent foreign ownership, no restrictions on foreign exchange or capital/profit repatriation, operational support and business continuity facilities.

Focusing on six primary sectors: banking; capital markets; asset management; reinsurance; Islamic finance and back office operations; the vision of the DIFC is to become the universally recognised hub for institutional financial services in the Region. It has been established by the Government of Dubai to create a platform for further growth, progress and economic development in a region already investing an estimated one trillion dollars around the world.

As with established international financial centres, at the heart of the overall DIFC concept is the independent regulator, the DIFC Financial Services Authority (DFSA). Staffed by experts with experience of working at leading regulatory agencies around the world, the DFSA is the independent regulatory and supervisory body which will grant licences and regulate the activities of financial institutions in the DIFC. It has been created using principle-based primary legislation modelled closely on that used in London and New York, and its regulatory regime will operate to standards that meet those in the world's major financial centres. Thus, this world-class regulatory framework as well as the laws of the DIFC will be familiar to the financial institutions and organisations that choose to locate in the DIFC and will provide legal certainty for their business operations.

A thriving exchange is at the heart of the world’s major capital markets. This will also be the case at the DIFC following the establishment of the Dubai International Financial Exchange (DIFX).

Tabled for launch towards the end of 2005, The DIFX will be a liquid and transparent electronic market trading securities, bonds and derivatives. It has been created to provide both investors and issuers with a larger and more liquid securities market than currently exists elsewhere in the region. The DIFX will not restrict investment to local investors as current exchanges do and will allow Governments and companies globally to access regional investment opportunities. In time, it is anticipated that companies outside the region will seek to have their shares dual listed on the exchange in order to benefit from the large pool of assets accessible in the region. The DIFX will facilitate anticipated privatisations in the region and enable initial public offerings by privately owned companies, giving impetus to the program of deregulation and market liberalisation throughout the region.

Marketing and managing the DIFC is the responsibility of the DIFC Authority. This is the core body established by Dubai law and is the body that issues all the laws and regulations for all the non-financial entities that will operate in the DIFC. In addition the DIFC Authority is responsible for the Companies and Security Registries.

The physical infrastructure will also be a major factor in enticing international business to locate in the DIFC. So much more than just a financial district, the DIFC is planned to be a ‘city within a city’ that will comprise of a unique integration of buildings and open spaces with over 65% of the total site landscaped with specific green zones. It will ultimately provide over four million square feet of ultra modern office space, residential and leisure areas which will include offices, serviced apartments, hotels, shops, restaurants, a museum, an art gallery and a performing arts centre.

Already beginning to transform Dubai’s already breathtaking skyline the DIFC site is characterised by the landmark ‘Gate’ building. Designed by leading international architects, Gensler, The Gate will house the DIFC Authority, DFSA and DIFX.

Guaranteeing the DIFC’s success is its location. The cosmopolitan city of Dubai has a safe, secure, economically, politically and socially stable environment with superb infrastructure and a highly skilled, educated and multi-cultural workforce.

Furthermore, Dubai has a remarkable track record in the timely and successful execution of such large, complex and ambitious projects. The DIFC initiative was launched in early 2002 by the Crown Prince of Dubai, HH Sheikh Mohammed Bin Rashid Al Maktoum, whose visionary leadership and efforts have already transformed Dubai. The success of Dubai’s remarkable economic development can be attributed to a progressive and enlightened Government whose vision and strategy for the country’s economy includes the DIFC as a key component.

With such a sophisticated physical infrastructure, a visionary leadership and a proper regulatory framework, the DIFC is poised to tap the largest emerging market for financial services within a region of 1.8 billion people and a combined economy worth $1.5 trillion in terms of GDP, growing at an annual rate in excess of 5 per cent. It will also create a global centre for Islamic Finance; create added reinsurance capacity in the region. Now open for business, the DIFC is the complementary hub connecting the region to the 24hour/7 days a week global financial network. The world’s newest international financial centre has become a reality and both the region and the world’s financial community are set to benefit.