Change is becoming the norm on Abu Dhabi's Al Maryah Island. First, starting in 2007, a bumper crop of imposing new buildings sprouted and climbed on the island, just a bridge away from the capital's Tourist Club area. Then, a year ago, its name was changed, from Sowwah. And now comes the news, both expected and welcome, that the island will house a new, independent financial free zone.
As The National reported yesterday, February's federal decree on the subject has now been fleshed out with legal and organisational details setting up Global Marketplace Abu Dhabi, which will have its own rules for investors, registrar of companies, commercial courts and more, all overseen by a new Financial Services Regulations System.
In the zone, companies can be 100 per cent foreign-owned, earning and repatriating profits tax-free. Simplicity of operation, the type of legal system most familiar to multinational corporations and innate integration into the global marketplace promise to draw financial firms large and small, new and old, to operate in the new zone.
To some observers it will seem at first glance that the new entity will be a rival to the Dubai International Financial Centre, that has been in successful operation for almost a decade now.
But closer consideration of the situation reveals that the new Global Marketplace will in fact add a robust additional dimension to what the DIFC offers investors and marketmakers. And so the Abu Dhabi zone promises to strengthen the UAE's overall place in the regional economy.
To be sure, proper coordination and cooperation with DIFC will be essential. But as business columnist Frank Kane noted this week in The National, once the new free zone is in full operation, the two can complement each other very neatly: Abu Dhabi has deep-pocketed government investing agencies and a natural focus on oil and gas, while Dubai, as a trade centre, is well-positioned to specialise in trade finance. Dubai has also been building expertise and stature in Islamic finance.
The world continues to grow more interdependent, and global finance never sleeps. Many countries aspire to offer financial hubs. But Abu Dhabi's new free zone, along with the UAE's prosperity, stability and increasingly diversified economy, make this country a natural locus for banking, trade finance, equity markets and other financial enterprises, for the region and, increasingly, on a larger scale as well.