DIFC achieves record 2022 growth amid Dubai's continued economic recovery

The number of companies at the financial centre doubled from the pre-pandemic level and employment grew at the fastest rate on record

DIFC officials on Monday announced that new companies registered exceeded the annual milestone of 1,000 for the first time in 2022. Photo: DIFC

Dubai International Financial Centre (DIFC) grew at a record pace last year, with the number of active registered companies climbing by 20 per cent while the financial hub’s annual revenue exceeded Dh1 billion ($288 million) for the first time, amid strong economic momentum in the emirate.

Employment in DIFC, one of the top financial centres in the Middle East, Africa and South Asia (Measa) region, also increased at the fastest pace in 2022, jumping 22 per cent annually to more than 36,000, Essa Kazim, governor of DIFC, told a media briefing on Monday.

The sharp growth supports Dubai’s D33 economic agenda objectives and was driven by the financial centre’s 2030 strategy aimed at doubling its contribution to the emirate’s economy by the end of the decade.

DIFC is “enhancing and supporting the strength of the diversification process that Dubai had embarked on a long time ago, [with] the financial services sector as one of the main pillars to support that diversification”, Mr Kazim said.

The number of active registered companies in DIFC rose to 4,377, almost doubling from the 2019 pre-pandemic level of 2,431. New companies registered in DIFC last year surpassed 1,000 for the first time since its inception.

“In 2022, DIFC managed to registered around 1,084 companies, so that would make it like four companies every working day and that … indicates the attractiveness of DIFC as a major hub,” Mr Kazim said.

FinTech and Innovation was the fastest-growing sector in DIFC last year, with the total number of firms in the sector growing 36 per cent to reach 686.

DIFC also recorded a 33 per cent rise in net profit to $141 million. Revenue rose 18 per cent on an annual basis, driven by a 19 per cent increase in its operating income to $185 million, the Dubai Media Office said in a separate statement on Monday.

Total assets of DIFC, which last year recorded a $174 million gain on investment in properties, reached $4.54 billion at the end of 2022, the statement said.

Dubai’s rapid recovery from the pandemic-driven slowdown on the back of government initiatives has supported the growth of DIFC over the past two year, Mr Kazim said.

He expects the emirate, the commercial and business centre of the Middle East, to continue its growth momentum this year, despite global geopolitical uncertainties and macroeconomic headwinds.

“I think this year, we're very much optimistic to achieve the growth rate of anywhere between 4 per cent [and] 5 per cent,” he said.

Dubai's economy expanded 4.6 per cent on an annual basis in the first nine months of 2022, according to the Dubai Statistics Centre.

Emirates NBD estimates Dubai's full-year 2022 growth at 5 per cent, and expects the emirate’s GDP to grow by 3.5 per cent in 2023.

DIFC, which has also proven to be a catalyst in driving foreign direct investment over the past five years, is home to 17 of the world’s top 20 banks, 25 of the world’s top 30 “systemically important” global financial institutions and five of the top 10 global insurance companies, the media office statement said.

The financial centre also has a pipeline of more than 50 hedge funds with assets under management in excess of $1 trillion that are waiting to be licensed, Mr Kazim said.

Total banking assets booked in DIFC companies were stable at $199 billion at the end of 2022. However, lending arranged by DIFC firms rose 54 per cent, or by $166 billion, during the year.

Wealth and asset management portfolio managers in DIFC invested $164 billion last year compared with $151 billion in the previous year. Venture capital companies' funding increased to $1.2 billion, up by 78 per cent, while DIFC-based FinTech and innovation companies attracted more than $615 million in 2022, the media office said.

The financial hub’s “DIFC 2.0" master plan, an extension designed to triple the space DIFC has, is also ready and could be launched soon, Mr Kazim said.

DIFC will look at a combination of funding options to finance the expansion project, he added.