DIFC Hosted Seminar on how DIFC-based Companies Can Own Assets in The UAE

The Dubai International Financial Centre (DIFC) today hosted a seminar to highlight the Federal Laws and regulations of the United Arab Emirates that allow DIFC-based companies to own assets in the UAE.

Senior DIFC officials, leading private sector legal experts and top investment bankers, discussed these laws and related developments during the 'Going to the Market in the DIFC' seminar held at the DIFC Conference Centre in Dubai.

The experts referred to a Federal bylaw that permits DIFC-registered holding firms to own companies that operate throughout the UAE, provided that the holding companies themselves abide by the UAE Commercial Companies Law. Passed in August 2007, the bylaw requires that the holding company is no less than 51 per cent UAE owned.

Following the introduction of relevant regulations under the UAE Federal Laws, the DIFC and its regulatory body - the Dubai International Financial Services Authority (DFSA) - have recently amended their laws regulating listing criteria on the DIFX.

Abdulla Al Awar, Managing Director of the DIFC Authority, pointed out while opening the seminar that the DIFC's legal framework is constantly being refined and improved. He said the DIFC seeks to implement best global practices and works to address the ever-evolving business and legal environment.

The legal framework in place at the DIFC is a Common Law framework - the same type of system in place in the United Kingdom and the United States. This is in contrast to the Civil Law legal system that is in place in the rest of the UAE and across the Middle East.

"This difference in the legal systems can be confusing. Many people are unaware of the many implications - and benefits - to businesses that arise out of DIFC's decision to adopt the Common Law system and not the Civil Law system," said Al Awar.

"For all these reasons we felt there was a tremendous opportunity to communicate with DIFC stakeholders, particularly UAE businesses and financial services firms, about the laws and regulations that govern activity in DIFC, as well as to discuss any new changes, revisions and additions to these laws," added the DIFC Authority Managing Director.

Seminars such as 'Going to Market in the DIFC' bring together senior officials from DIFC, legal experts and other professionals from the specific area of law that are being discussed. In this way, those with questions can raise them directly with some of the most experienced and well-informed specialists in their fields, he added.

Legal experts said the thrust of the developments in the Federal as well as the DIFC Laws was designed to help regional firms access global capital markets.

Husam Hourani, Partner in leading UAE-based legal consultancy, Al Tamimi and Company, stated: "The recent developments have opened a completely new world of opportunities for companies in the UAE and the region to raise capital necessary for their growth from global markets."

He pointed out that the issuance of specific bylaws enables UAE-based companies to file an Initial Public Offering (IPO) at the DIFX, without some of the lengthy procedures that normally accompany listings in other exchanges.

A case study of why UAE-based Damas chose to list on the DIFX was followed by an interactive question-and-answer session with company management.

DIFC officials pointed out that the Centre has experienced tremendous success in building itself into a global financial hub. One of the key factors behind this success was the community of companies in DIFC District and Region and in future, the DIFC's ability to grow further as a prominent international financial centre will critically depend on the success of its member firms - and their success will grow DIFX as the regional link in the chain of global exchanges.

Jeff Singer, Chief Executive of the DIFX, said: "The DIFX will gain further momentum as the international exchange serving its region, through new listings and strengthening links to individual and institutional investors. The growth of the exchange supports Dubai 's role as a financial centre and the development of the capital markets across the Middle East."

'Going to the Market in the DIFC' was the first in a series of seminars planned to introduce the DIFC community, DIFC stakeholders and the public to the regulations that govern the DIFC. The need to host such seminars arose since many are not very aware of the value they could get by being in the DIFC because of the attractive regulatory environment within the Centre. As many of the laws are updated constantly, there is also a need to constantly update the public about these changes and how they effects the value proposition for any existing or prospective client that wishes to join the DIFC.