I spotted an article today that stated that Abu Dhabi plans on creating a new financial free zone. The Abu Dhabi World Financial Market, created based on UAE Federal Decree No. 15 of 2013 will be located at Al Maryah (also known as Sowwah Island, the new Wall Street of Abu Dhabi). Among the benefits are reportedly 100% foreign ownership. The whole notion begs the question – how will another financial free zone fare in the GCC?
The Dubai International Financial Centre (DIFC) was opened in 2004 with much fanfare. It was soon thereafter followed by the Qatar Financial Centre (QFC). Part of what has made the DIFC a success has been the adoption of comparatively sophisticated laws based on English law. In fact the zone, which houses everything from banks to law firms to consultancies (as well as some great restaurants) is a city or even country within Dubai.
As one person quoted in the Reuters article aptly points out, a niche will be critical for Abu Dhabi’s financial zone. Abu Dhabi is rich and the presence of sovereign wealth funds (SWFs) like the Abu Dhabi Investment Authority (ADIA) and other quasi-governmental giants like Mubadala will certain help foster some modicum of growth. But what will the Abu Dhabi zone specialize in?
For now, it appears unclear. There is little out there on this new free zone and accordingly details are scant. It will, however, be critical to keep on the lookout to the particulars of this very noteworthy project.