The number of companies at Dubai International Financial Centre grew at a record pace in the first half of this year despite uncertainty over the Iran war, as the emirate’s financial hub continued to attract banks, wealth and asset managers, and hedge funds from around the globe.
DIFC, one of the fastest-growing onshore financial hubs of the broader Middle East, North Africa and South Asia region, registered 2,318 new companies in the 12 months until the end of June, marking a 30 per cent annual increase, DIFC said on Monday.
The aggregate number of companies operating out of the financial hub crossed the 10,000 mark, including 1,134 regulated firms, which also grew by 16 per cent on an annual basis.
This best-ever performance comes despite the Iran war-driven geopolitical uncertainty that has had an impact on regional economies. Earlier this month, the DIFC, along with its regulator, the Dubai Financial Services Authority, unveiled economic stimulus measures aimed at helping companies cope with the effects of the regional conflict.
The conflict, which began with on February 28, has dented growth of sectors including tourism, hospitality, aviation and property. However, the banking, financial services, and asset and wealth management sectors have remained resilient.
“The performance reflects the strength, resilience and long-term attractiveness of Dubai's economy,” DIFC governor Essa Kazim said on Tuesday.
“As the region's largest and most diversified financial services ecosystem, the DIFC continues to attract global institutions, capital and talent seeking access to high-growth markets across the Middle East, Africa and South Asia.”
DIFC has consistently delivered a “stable, transparent, and highly competitive environment”, helping Dubai achieve its economic diversification goals, he added.
“DIFC’s rise to seventh place globally in the Global Financial Centres Index is a powerful endorsement of our role as the definitive bridge connecting East and West,” Mr Kazim said.
Strong growth
DIFC recorded strong growth across business segments, including banking and capital markets, wealth and asset management, insurance and reinsurance, hedge funds, FinTech and innovation.
The number of banks and capital market firms at the centre grew by 13 per cent year on year, while a 22 per cent jump in insurance and reinsurance firms to 165 also supported the expansion of the DIFC ecosystem.
Wealth and asset management firms recorded a 35 per cent jump to 592, while family offices operating out of the DIFC grew by 36 per cent to 1,408 since the first half of last year.
“As the only financial centre in the region operating at scale across all sectors, our deep capabilities, regulatory clarity, and access to high-growth markets … continue to attract the world’s leading financial institutions and asset managers to Dubai,” Mr Kazim said.
Global companies that set up their regional offices at DIFC during the reporting period include Allianz Trade Middle East, Arrowpoint Investment Partners, Bank of Canada, Blue Mountain Capital, Citadel, Gordian Capital, ICICI Prudential Asset Management, JP Morgan International Advisors, and Varenne Capital Partners.
The centre is among the key planks of Dubai's growth ambitions and is aligned with the Dubai Economic Agenda, the initiative known as D33, which aims to double the size of the emirate's economy to Dh32 trillion ($8.71 trillion) over the next decade and establish Dubai among the top three global cities.
Dubai is also pursuing a Dh100 billion expansion plan for the second phase of the DIFC, known as DIFC Za'abeel District, which on completion, will boost the centre’s capacity to 42,000 companies and house 125,000 professionals across more than 1.5 square kilometres of floor space.
Demand for office space continued during the first six months of this year, with DIFC Square which has 600,000 square feet of space, 100 per cent pre-leased ahead of completion, DIFC said.
