Dubai International Financial Centre (DIFC) continued to differentiate its position as the leading global financial centre for the Middle East, Africa and South Asia (MEASA) region during 2023. The Centre is now home to 5,523 active companies, a significant 26 per cent year-on-year boost from 4,377 in 2022. 1,451 new companies established in DIFC in 2023, the highest number of new registrations annually in the Centre’s history, up 34 per cent. DIFC also announced it is ahead of target to double its GDP contribution by 2030.
The results reflect the vision set out 20 years ago by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai for DIFC to make an effective contribution to the international financial services industry, promote the Emirate and develop the economy.
2023 combined revenues grew at their fastest levels since inception, approaching Dhs1.3bn, 23 per cent higher than 2022. Operating profit reached Dhs859mn, up 27 per cent. Reflecting the strength of DIFC’s financial position, total assets were Dhs18bn, an increase of 18 per cent.
His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai; Deputy Prime Minister and Minister of Finance of the UAE; and President of the Dubai International Financial Centre, said: “Two decades ago, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, articulated an ambitious vision to transform Dubai into one of the world’s leading global financial hubs. This vision has remained the cornerstone of DIFC’s sustained performance over the years. DIFC’s unprecedented growth in 2023 further consolidates Dubai’s status as the region’s foremost contributor to the global financial services industry.
“As DIFC continues its journey of success, its accelerated growth trajectory is perfectly aligned with the goals of the Dubai Economic Agenda D33 to double the size of Dubai’s economy over the next decade and reinforce its status as one of the world’s top three cities for business and investment. DIFC is focused on expanding and deepening its pool of financial services firms and growth-stage innovation businesses, whose success contributes to both the UAE and Dubai’s economic growth. Through strategic initiatives that support our partners’ development and expansion, we seek to provide a dynamic environment for innovation and enterprise to flourish. In close collaboration with our partner community, we are set to make DIFC an even more pivotal node in the global financial network,” His Highness added.
The total of financial and innovation related active companies in the Centre now stand at 1,674 up from 1,369 in 2022, a 22 per cent increase. During the year, 316 FinTech and Innovation firms established a DIFC presence, taking the net total to 902.
DIFC has also built the MEASA region’s biggest hub for wealth and asset management of over 350 firms primarily from the GCC, Europe, UK and US. There are now 50 hedge fund related firms in DIFC’s wealth and asset management ecosystem, with 15 establishing in 2023.
Performance is slated for continued growth following the DFSA licensing 117 regulated firms during the year, taking the total to 791 regulated entities.
New registrations included several global powerhouses such as Alliance Bernstein, Asia Research & Capital Management, Balyasny Asset Management, Brevan Howard, Carrhae Capital, Edmond de Rothschild, EnTrust Global, Farro Capital, Hudson Bay Capital, King Street, Lighthouse Partners, Lone Star Europe Acquisitions Limited, Merlyn Advisors, Nomura Singapore, Noventa Capital Management, Raiven Capital, Qube Research & Technologies, The Family Office Company and Verition Fund Management LLC.
Growth also came from existing clients that upgraded their licences in 2023. These companies included Amana Financial Services, Baraka, BlueGold Capital, CapThrone Investments, Lamer Capital and Schonfeld Strategic Advisors.
Essa Kazim, Governor of DIFC, commented: “DIFC’s 2023 performance reflects the Centre’s standing as the leading global financial hub in the region, central to Dubai’s Economic Agenda (D33). Reflecting DIFC’s position as the primary choice for financial services related companies and innovation firms over the last 20 years, the results catapulted DIFC towards its Strategy 2030 targets which include doubling its contribution to Dubai GDP.”
Arif Amiri, Chief Executive Officer of DIFC Authority, said: “In just 20 years, DIFC has evolved into the region’s centre of excellence for the financial industry where the world converges to innovate and mobilise capital. Being home to the region’s largest cluster of innovation and financial services means the ecosystem is uniquely scaled to a level where it can both capture existing opportunities and create sustainable economic growth. Our focus continues to be on driving the future of finance through collaboration with our clients and by pioneering innovation in the global financial landscape.”
20 years as the region’s leading global financial centre
Driven by DIFC-led initiatives, the financial services sector captured more than half (52 per cent) of all FDI investments coming into Dubai. According to Financial Times Ltd. “fDi Markets” data, Dubai climbed from eighth in H1 2022 to sixth globally in H1 2023. Additionally, Dubai ranked first globally in the attraction of HQ FDI projects.
During 2023, DIFC retained its position as the region’s leading global financial centre in both the Z/Yen Global Financial Centres Index (GFCI) and Green Financial Centres Index.
20 years of developing the industry through innovation
Demonstrating the global credibility of DIFC’s innovation efforts, DIFC held its first Dubai FinTech Summit and welcomed over 5,000 attendees from across the world. Venture Capital raised by DIFC-based start-ups increased to USD 2.6bn, up 116 per cent from USD 1.2bn in 2022.
During 2023, the Dubai AI and Web3 Campus was launched by the DIFC Innovation Hub to create the largest cluster of artificial intelligence (AI) and tech companies in the region, housing over 500 global AI and Web3 start-ups and create over 3,000 jobs by 2028.
Dubai’s Higher Committee for Future Technology and Digital Economy endorsed the DIFC Metaverse Platform, and its inaugural Metaverse Accelerator Programme attracted over 160 applicants from France, India, UAE, UK and US with a focus on primarily Metaverse, AI, Web3, AR/VR and Blockchain sectors.
20 years of developing human capital
DIFC continues to be a magnet for talent attraction and extended its status as hosting the region’s largest, deepest and most experiences pool of financial services related talent. The total workforce grew to 41,597, a 15 per cent year-on-year increase, creating 5,514 new jobs.
The Centre launched DIFC Talent Network to support the migration of talent into DIFC companies, as well provide employment opportunities in other locations across the world where its clients have premises. Currently, 57,334 people are registered on the platform accessing opportunities within DIFC and internationally (data taken as of 1 February 2024).
During 2023, 5,600 people took part in DIFC Academy hosted programmes, taking the total number of graduates to 32,000 since inception. New partnerships were also announced with American University of Cairo, the CFA Institute, Chartered Banker Institute, CISCO Networking Academy, Georgetown University, Institute for Mergers Acquisitions and Alliances, the Ministry of Climate Change and Environment for the Green Charter for Sustainability in Education for the Future of our Youth, MIT Sloan Executive Education, United Nations Principles for Responsible Banking Academy and the United Nations SDG Academy.
20 years of excellence in financial services laws and regulations
DIFC laws and regulations continued to evolve, reflecting global best practice. Family Arrangements Regulations were enacted to provide comprehensive guidelines for family businesses holding assets and operating in or from DIFC. Venture Studio Regulations were introduced and were the first legislative framework for venture building globally.
Data Protection Regulations were amended to address safer, and more ethical management of personal data processing and operations, with Regulation 10, a first-of-its-kind inclusion introduced on the processing of personal data via autonomous and semi-autonomous systems. A consultation was announced for a new Digital Assets Law and Law of Security, which sets out legal characteristics of a digital asset, its proprietary nature, how it may be controlled, transferred, and dealt with by interested parties.
20 years of supporting family businesses achieve their financial goals
Building on 20 years of supporting family businesses, DIFC Family Wealth Centre (DFWC) was launched in March. Already trusted by over 600 family businesses and related entities, the DFWC is a natural extension to enable the sector to advance their long-term contribution to the economy.
A broad range of accredited advisors have been onboarded to the Centre which member families can trust to help them manage their wealth and considerations such as succession planning. The Family Arrangements Regulations provide additional assurances and benefits to families based in the Centre.
DIFC-based family business foundation structures also surged by 53 per cent to 443, reflecting a significant uptake during 2023.
20 years as the region’s sought-after address
DIFC owned and managed properties continue to be in high demand. At the end of 2023, occupancy stood at 99.5 per cent. DIFC Living, the Centre’s first residential offering sold out within 48 hours of being launched.
15 DIFC buildings were awarded Platinum and Gold LEED certification. As one of Dubai’s most iconic buildings, The Gate was awarded Platinum certification.
Footfall to DIFC’s urban retail district Gate Avenue, increased 25 per cent to 12mn visitors, helped by a growing number of events and the opening of 66 new food and beverage outlets and retail units.
20 years as the region’s sustainable finance centre
During the UAE’s Year of Sustainability, DIFC led the first and largest action-focused programme for the finance industry relating to climate change ahead of COP28 including a series of events, roundtables, lectures and education sessions in association with the Global Ethical Finance Initiative, as well as DIFC’s first Future Sustainability Forum.
Leading by example, the Centre became the first financial centre in the region to publish its Sustainable Finance Framework, with a positive Second Party Opinion review by S&P Global Ratings.
The DIFC Sustainable Finance Catalyst was announced in December which, by 2030, will increase sustainable finance flows from Dubai to USD 100bn, activate a network of strategic partners to train and grow 1mn sustainability leaders, and grow its sustainability-driven start-up ecosystem 50 times its current size.
DIFC continued to support growth of the sustainable debt market within Nasdaq Dubai. The DIFC exchange emerged as the world’s largest ESG sukuk market with more than 60 per cent of US-denominated ESG sukuk and close to 50 per cent of all-currencies ESG sukuk. Nasdaq Dubai’s total value of ESG related issuances stood at USD 27.05bn, contributing to a total value of debt listed on the exchange of USD 128.66bn as of 15 January 2024.
Other DIFC anchored initiatives included allocating up to 20 per cent of the Dubai Future District Fund up to drive growth and back sustainability-driven tech and innovation start-ups; a carbon credits trading pilot with DFM; chairing the Dubai Sustainable Finance Working Group – which now has more than 40 members; as a founding partner, DIFC also welcomed the second edition of Prototypes for Humanity and issued innovation licences to select projects to help accelerate the next generation of growth and innovation.
tanvir@dubainewsweek.com
