► reading news

Focus UAE

Dubai: A leading Global Financial Centre?

(08/08/2012, Dubai) The global financial crisis which has become almost pandemic in the last few years has led to a lack of confidence in not only the banking and economic systems which currently operate, but in the financial centres and governments that provide these services and regulate them. The City ofLondon, for example, has come under continual fire in recent years and similar criticism has been seen across the Atlantic in Wall Street too.

The majority of the problems seem to have originated in the West. America and Europe in particular have encountered great difficulty with complications arising in the futures and conglomerated debt markets, in addition to recurring sovereign debt crises seen throughout the Euro Zone. The financial commotion has continued to deteriorate in recent months with Spain requesting a bailout from the European Financial Stability Fund adding to existing recipients Greece, Ireland and Portugal.

There seems to be no end in sight to the financial crisis in the West and it could deteriorate further in coming years. However I think this crisis presents an opportunity for other countries around the world to enter the financial service market. Dubai in particular is a prime candidate for such an industry and already has many advantages over the existing financial centres.

The current problems in the West will likely end with an increase in regulation and higher taxes to pay off the enormous sovereign debt. This will deter financial organisations from setting up operations in the existing financial centres. Some may move elsewhere to avoid the escalating costs of auditing and reductions in profit margins from further taxes.

Dubai does not currently charge personal income tax or corporation tax, which makes it an attractive alternative for financiers who wish to escape from the looming asset confiscation likely to occur in America and Europe. The cost of auditing will be less expensive in Dubai due to softer regulation and the smaller sized government. Employment costs will also be lower and it would be easier to reduce employee numbers to streamline businesses in difficult times due to less union pressure.

The infrastructure already exists in Dubai to accommodate large corporations and the staff they would need to employ. Recreation and amusements parks throughout Dubai, which were originally built to attract tourists, will also be an appealing attribute to a prospective investor. Existing skilled labour, which has also been called in to serve the tourist industry, could also be useful resource for a new financial centre.

New financial products could also be an appealing draw to Dubai. The Islamic banking system has been relatively unaffected by the financial crisis and a move into this alternative would give Dubai an edge over many other competitors trying to attract financial service providing corporations. This in addition to Dubai’s positioning, which is well placed for the new emerging world markets including Russia, India and China, sets Dubai as a front runner to become the next global financial centre.

Source: AB, by Peter Morgan *

* Peter Morgan is a freelance writer and macroeconomist.

You can read more of his work at http://morganisteconomics.blogspot.co.uk/

Discussion

One Response to “Dubai: A leading Global Financial Centre?”

  1. I totally doubt that Dubai is seeing – even catching – this chance at all. New statistics show, that the bank deposit volumes in Dubai have decreased, not increased.

    There was a time where Dubai promoted agressively its vision to reach the Top 5 Financial Centres worldwide. This is 5 or 6 years ago – and no one is even talking about any ranking, which is actually rank 19 or so.

    DIFC is since years blamed as Dubai’s biggest and most luxurious Food Court and office vacancies of roughly 50% of the total area are a clear opposite fact. Not to mention 100,000’s of sqft new offices still under construction.

    We expect, the future financial centers with leading role will take place in Asia – nowhere else.

    Posted by mk.admin | 2012-08-08

Post a comment

 

INTELLIGENT CORPORATE SERVICES | TAX | LAW | COMPLIANCE BANKING | CUSTODIANS | REGISTERED AGENTS | CORPORATIONS

Welcome to the Web of MCI CLT GROUP - have a good Day!

Language

New articles

\n\n\n\n\nEurope\'s Legal Answer To Tax Havens\n\n\n\n Introduction\n\n\n\nWhen thinking of asset or profit shifting, capital protection and tax benefits (even tax havens), the thoughts of man...
\n\n\n\n\nWithout any doubt, 2020 was so far the biggest challenge for us all!\n\n\n\nAs we all\nslowly move into our New-Normal, it is now a very important time to reflect and\nadapt this s...
\nVideoconferencing - even in the Middle East\n\n\n\n These times are no doubt as uncertain as they are stressful.We at MCI CLT are here to help as much as we can.\n\n\n\nWe are offering\n\n...
\n26.03.2020\n\n\n\nintending not to sound like the dozens of emails you have received in the past weeks, we aim to relay a different message; of course, we are still very concerned abo...
\nUAE Free Zones started with legal execution of claims\n\n\n\n\n\n\n\nThere was a very attractive double taxation agreement (DTA) between Germany and the United Arab Emirates (UAE) up to a...
\n\n\n\n\nThis News Alert information could be useful, maybe essential for your business activities in the United Arab Emirates. Please don’t hesitate to contact us for further inform...
\nEconomic Substance Regulation (Reporting) implemented in UAE – a massive change of the shape of business operating environment\n\n\n\n\n\n\n\n(Dubai, 07/08/2019) The United Arab Emirate...
\n(The Hague, 17.06.2019) TMF Group, MCI CLT’s associated partners in Asian Offshore Association (AOA), published in the beginning of June its 2019 Global Business Complexity Inde...
\n\n\n\n\n(The Hague, 03.06.2019) Coming out of Q1/Q2 of 2019, the crypto currency space is seemingly reigniting the spark it had lost over the bear cycle that began in January 2018. Ar...
\n(Hong Kong, 2018-06-06) RAK Bank, RAK Bank, RAK Bank (although it could be nearly any other UAE Bank)!\n\n\n\nYou and your other competitors are well know - even over borders - for ar...

Facebook

Tags