Dubai International Finance Centre: A model for Sri Lanka’s financial hub aspirations

How certain Middle East countries have become economic miracles overcoming from vagaries of desert are excellent case studies for Sri Lanka. Dubai of UAE success is outstanding and its Dubai International Finance Centre (DFIC) is an excellent model for Sri Lanka which is aspiring to be a financial hub.

The bold decision to set up DFIC by rulers of UAE and its unprecedented success since then was a key learning which a Sri Lankan delegation brought home following the Heraymila Investments/Securities organised road-show in Dubai recently.

During a luncheon presentation by DFIC Chief Economist and Head of External Relations, Member of Management Executive Committee Dr. Nasser H. Saidi, the advantage for Sri Lankan companies in considering locating in DFIC to maximise potential in UAE and the Middle East was also highlighted. He emphasised that if there is vision, commitment and action global success of becoming a hub was possible and that Dubai was a classic case.

During the discussions between DFIC officials and Lankan delegation headed by Senior Minister Dr. Sarath Amunugama, the prospects for collaboration were discussed. An exchange of DFIC’s experience and expertise in developing Dubai as a financial hub as well as using DFIC as a platform to promote Sri Lanka were other key discussion points.

Heraymila Securities’ parent Heraymila Investments Ltd. is also located in the DFIC, which is a free zone in Dubai dedicated to financial services industry. DIFC launched in 2004 and has grown to be recognised as a global financial hub for business and finance in the Middle East, Africa and South Asia region.  The centre provides a robust platform for its companies to transact business throughout the region supported by modern infrastructure, a regulatory and legal framework maintained to the highest international standards.

The companies operating in DIFC employ a total of 14,000 people and, in 2009, its businesses accounted for roughly 1.1% of the UAE’s economy and 3.8% of Dubai’s.  DIFC is an onshore financial centre strategically located between the east and west, which provides a secure and efficient platform for business and financial institutions to reach into and out of the emerging markets of the region.

The quality and range of DIFC’s independent regulation, common law framework, supportive infrastructure and its tax-friendly regime make it the perfect base to take advantage of the region’s rapidly growing demand for financial and business services.  DIFC fills the time-zone gap for a global financial centre between the leading financial centres of London and New York in the west and Hong Kong and Tokyo in the east. Guided by its core values of integrity, transparency and efficiency, DIFC is playing a pivotal role in meeting the growing financial needs of the region.

At the heart of the DIFC model is an independent risk-based regulator, the Dubai Financial Services Authority (DFSA), which grants licenses and regulates the activities of all banking and financial institutions in DIFC.

The regulatory body was created using principle-based primary legislation modelled closely on that used in London and New York. The DFSA has played a major role in providing financial companies the confidence that they have a sound, stable, secure and growth-oriented platform for their business.

As part of its autonomy, DIFC has created an independent judicial system. The DIFC Courts is the entity responsible for the independent administration and enforcement of justice in DIFC. The Courts have exclusive jurisdiction over all civil and commercial disputes arising within DIFC and or relating to bodies and companies registered in DIFC.  

DIFC has been designed as a ‘city within a city’ that provides a complete range of business and lifestyle facilities for today’s professionals.  The infrastructure within the financial district features:  Ultra-modern office space, Retail outlets, Restaurants, Art galleries, Residential apartments and Hotels.