The emirate of Abu Dhabi is in the final stages of revealing its plans to establish a financial free zone on the model of Dubai International Financial Centre.
In February, the UAE’s President Sheikh Khalifa bin Zayed al-Nahayan had passed a decree to develop an area, known as the Abu Dhabi World Financial Market, on Al Maryah island. Speaking to the Reuters, an official stated that, “it will have all the offerings of a financial free zone – 100 per cent foreign ownership, tax and capital repatriation, internationally accepted laws and regulations and other things”. Other details of the regulations applicable over the zone are yet to be announced.
The Al Maryah island, formerly called Sowwah island, is close to downtown Abu Dhabi and spread over an area of around 114 hectares. Under development since 2007 by Abu Dhabi state fund Mubadala, the area is now home to about 50 local and international firms.
The economy of UAE has enjoyed great success by establishing free zones in Dubai. Established in 2004, the Dubai International Financial Centre (DIFC) is one of the country’s most successful free zones with its own civil and commercial laws, its own courts and a financial exchange, NASDAQ Dubai. Foreign investors are allowed to fully own and operate companies under lax regulations. The zone has become the Gulf’s top financial centre, boasting the regional headquarters of the world’s biggest banks and finance firms.
Following the footsteps of Dubai, the Qatar Financial Centre was established in 2005 in Doha. Later, the Bahrain Financial Harbor also welcomed investors in 2009. Creating a free zone in Abu Dhabi is part of the government’s strategy to reduce reliance on income earned through the export of oil. Although Abu Dhabi’s vast oil wealth and resource rich sovereign wealth funds may provide an initial boost to the free zone, the financial center would have to find and develop a strong niche to attract business away from Dubai, Qatar and Bahrain.