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DIFC beats odds, attracts more firms despite Covid

Waheed Abbas/Dubai
Filed on July 19, 2020 | Last updated on July 19, 2020 at 06.28 am
The DIFC is now home to 820 finance-related companies, a 22 per cent increase year-on-year.

(Reuters file)

Sustained expansion proves ability to offer partners constructive solutions to deal with uncertain circumstances: Sheikh Maktoum

Dubai continues to be a magnet for financial and fintech firms even during the coronavirus pandemic as the number companies at the Dubai International Financial Centre (DIFC) increased by 13 per cent to 2,584 at the end of the first half of 2020 compared to 2,289 in the same period last year.

The region's largest financial free zone added 310 new companies during the January-June 2020 period, which included financial, fintech and other sectors, an increase of 25 per cent, it said in a statement on Saturday.

This achievement ensured that the financial centre is on track and one step closer to achieve its target set in 2016 of reaching tripling of its size by 2024.

The financial centre achieved an average monthly registration of 52 companies and two record-breaking months with 66 company registrations in March 2020 and 88 in June 2020, respectively. The DIFC is now home to 820 finance-related companies, a 22 per cent increase year-on-year.

"The Dubai International Financial Centre's ability to maintain a high momentum of growth despite the global repercussions of the pandemic reflects the centre's strong fundamentals and its high levels of preparedness to navigate unforeseen crises, supported by Dubai's broader economic stability, adaptability and spirit of resilience," said Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of the DIFC.

 "The DIFC's sustained expansion also proves its ability to offer partners constructive solutions to deal with uncertain circumstances as well as its robust governance, regulatory framework and infrastructure. Furthermore, the strong results demonstrate the trust that stakeholders and partners have in Dubai and the DIFC even amidst unfavourable global economic conditions," he added.

Dubai recently joined the global financial elite after it was ranked among the top 10 most powerful financial centres in the world for the first time. The Global Financial Centre Index (GFCI), released by commercial think-tank Z/Yen, placed it above the likes of Frankfurt, Paris, San Francisco and Toronto.

"The sustained growth delivered during the first half of 2020 is testament to the resilience of the Centre. The performance demonstrates the confidence the industry has in the DIFC. As we enter a new period of digital transformation and operate within a 'new normal', we will continue to play a key role in contributing to the economy. The DIFC will continue to demonstrate our forward-thinking approach to ensure we shape the future of finance, whilst attracting the world's leading firms, inspirational startups and the best talent," said Essa Kazim, governor of the DIFC.

The free zone said 87 fintech firms joined the centre, boosting the number of licenced fintech firms by 74 per cent from the first half of 2019. Notable new financial services firms include Tata Asset Management, Samba Financial Group, Gazprombank, Funding Souq, Brookfield Private Capital (upgrade) and Decimal Factor Middle East, whilst new FinTechs include Ripple and KoFax Me.

The financial centre invested in four fintech firms as part of the $100 million DIFC FinTech Fund launched in 2019 to help startup- and growth-stage fintech companies scale up. The four companies - FlexxPay, Go Rise, NOW Money and Sarwa - focus on payments and robo-advisory.

Arif Amiri, CEO of the DIFC Authority, said during the first six months of 2020, the centre continued to report progress on its 2024 targets.

"During H1 2020, the DIFC delivered a series of record-breaking months for registrations. This was achieved whilst we supported our clients during the global challenges of Covid-19," added Amiri.

Rajiv Kumar, senior executive officer of PhilipCapital (DIFC) Private Limited, said being one of the top 10 global financial centre and leading financial hubs in the Measa region, the DIFC is one of the top choices for institutions and investors across the globe.

"While maintaining the highest standards in regulations and investor protection, the DIFC's approach to innovative ideas makes it unique. The DIFC accelerates the growth of financial technology in the region as FinTech Hive has played a significant role in the emerging financial technology market by way of supporting start-ups and entrepreneurs. On account of its robust infrastructure and regulatory framework, it is now a preferred destination for businesses with access to funding and collaboration with leading global financial Institutions," added Kumar.

With the rollout of new data protection law in line with the European Union's General Data Protection Regulation, he said the DIFC has shown its commitment towards maintaining the highest standard of data protection, privacy and cybersecurity.

Anish Mehta, chairman of the Institute of Chartered Accountants of India - Dubai Chapter, said financial centres that are international hubs of great financial activity are distinguished by four main characteristics: Economic and political stability; an efficient and experienced financial community; good communications and supportive services; and an official regulatory climate favourable to the financial industry.

"The DIFC plays a very important role for making Dubai truly international as apart from having all these characteristics. It has a vibrant ecosystem for professionals, firms and entities having its own independent judicial system, world-class architecture, and global financial and stock exchange," he added.

- waheedabbas@khaleejtimes.com


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