Hedge funds looking to expand their horizons are turning to Dubai with a sense of optimism at a time when they see more challenging operating environments in more established markets. Dubai and Dubai International Financial Centre (DIFC) have set themselves apart with a powerful confluence of ecosystem benefits. For hedge funds and private equity in particular, Dubai's unique proposition includes additional regulatory, infrastructure and environmental advantages.
The Dubai Financial Services Authority (DFSA), which is globally recognised for its transparency and governance, has always been an accessible and collaborative regulator. While overseeing the DIFC jurisdiction for almost 20 years now, the DFSA frequently consults with the industry, unlike markets where funds have continued to become frustrated by slow and rigid approaches.
Alongside an environment of ambitious innovation, the DIFC ecosystem also provides the perfect set of partners for funds and their portfolio managers looking to establish in Dubai. Hedge funds can hit the ground running with unparalleled access to high-calibre professional advisors, including law firms, consultancies and tax specialists within the Centre.
Over the years, DIFC has grown extensively to become a source of capital on its own, adding to some very large pools of capital that currently exist in the region. We have more than 100 family offices based in the Centre – a sector responsible for employing 80 per cent of the Middle East’s workforce and contributing 60 per cent of the region’s GDP.
Another benefit for hedge funds looking to set up in the emirate is the operational convenience of Dubai's central location, which bridges time zones and markets between the East and the West.
According to the World Bank's Doing Business 2020 report, the UAE – located at the crossroads of emerging markets – holds the top spot for ease of doing business in the Middle East and North Africa. Many also appreciate the lower corporate and income tax rates. Dubai's globally competitive and enticing tax regime, including tax free income for employees, as well as the option to set up and domicile funds, make it an ideal destination for top funds amid the changing global climate.
Dubai government's focus on happiness and reputation for creating a high quality of life are also major factors in attracting hedge funds and the people who work for them. Dubai enjoys being one of the best cities in which to both live and work, ranking in the top three best cities for expats to live in globally along with Miami and Lisbon.
It’s clear to see the attraction that Dubai has for hedge fund managers and at DIFC, we will continue to create an environment where they and their employees can thrive.