The race between the UAE and Saudi Arabia – the two biggest economic power houses in the Arab world – to attract major wealth management companies is intensifying as both countries are wooing major companies to open their offices in their jurisdiction.
While Saudi Arabia has announced that government contracts will be given those companies which set up their regional headquarters in Riyadh by end of this year, the UAE has been offering various concessions to such companies which register with Dubai International Finance Centre (DIFC).
DIFC is the Middle East, Africa, and South Asia (MEASA) region’s leading global financial centre and is ranked 22nd in the list of Global International Financial Centres Index (GFCI) and first in the Middle East region for 2023.
DIFC is followed by Abu Dhabi (35), Doha (64), Bahrain (82), Riyadh (88), and Kuwait (102) and Tehran (118). Neither Oman nor Egypt and for that matter any other countries figure in the index.
GFCI is the world’s most authoritative comparison of the competitiveness of the world’s leading financial centres and is published by the Z/Yen Partners in collaboration with the China Development Institute.
DIFC Registered Firms Grow by 20%
According to DIFC Governor Ezza Kasim, Dubai’s economy continues to grow, and the Centre is a noteworthy contributor to the Emirate’s GDP and a key creator of employment.
The total number of active registered companies in DIFC registered a growth of 20% – from 3,644 in 2021 to 4,377 in 2022 – and 1,084 new companies were registered in DIFC last year, surpassing 1,000 for the first time in history.
Amongst its 4,377 entities, DIFC is home to 17 of the world’s top 20 banks, 25 of the world’s top 30 global systemically important banks, five of the top 10 insurance companies, five of the top 10 asset managers and many leading global law and consulting firms.
As a global hub for emerging market Wealth and Asset Management, DIFC portfolio managers invested USD164 bn in 2022 compared to a reported USD151 bn in 2021. Venture Capital raised increased to USD1.2 bn, up by 78%.
FinTech and Innovation became the fastest growing sector in DIFC with 291 new clients. 686 technology and innovation firms, ranging from start-ups to global unicorns, are now based in DIFC.
The latest entry into DIFC is the UK-based St. James’s Place (SJP), which chose DIFC to enter Middle East market, received approval from Dubai Financial Services Authority (DFSA) on Tuesday.
Th wealth management firm opened its office in DIFC as it is looking to enter the Middle East market. The Dubai office will form a part of SJP’s Asia and Middle East business alongside existing offices in Hong Kong and Singapore and supports its 2025 strategic objectives.
Currently, SJP, which is the FTSE 100 company, has $192.22 billion in funds under management and serves more than 917,000 clients.
SJP Middle East will focus on offering financial and wealth management advice to both local and expatriate clients with increasingly complex financial needs. The expat population in the Middle East now accounts for approximately 48% of the total population as the Dubai government and others in the region have made significant moves to make the business environment even more attractive for foreign investment and workforces.
New Opportunity for SJP
SJP’s Chief Operating Officer Iain Rayner said that Dubai has long established its position as a strategic wealth jurisdiction with immense growth potential.
“A presence in the Middle East will present a wealth corridor supporting a new generation of internationally mobile clients and this is an opportunity for us to expand our international reach as well as that of the SJP Partnership,” he added.
In his comments, Salmaan Jaffery, Chief Business Development Officer at DIFC, said that the Centre is the perfect location for wealth and asset managers because Dubai has the highest concentration of wealth of any city in the region, and over $3 trillion of private wealth is available within a one-hour flight radius.
“Dubai and DIFC also continue to attract the very best talent in financial services, including portfolio managers in the hedge fund space. There are tremendous opportunities here for our clients and DIFC is confident that St. James’s Place will successfully grow their business using our platform,” he added.