Financial, Legal and Professional Services

An Expert's View about Banking, Finance and Insurance in the United Arab Emirates

Posted on: 15 Oct 2011

Within the UAE, financial services activity is focused in Dubai; Dubai has the largest and most sophisticated financial services industry in the region being home to many banks, insurance, financial and legal services firms.

Sector briefing Financial, Legal and Professional Services Opportunities in the UAE Why the UAE? Within the UAE, financial services activity is focused in Dubai; Dubai has the largest and most sophisticated financial services industry in the region being home to many banks, insurance, financial and legal services firms. Abu Dhabi and Dubai are growth markets in their own right in many areas of interest to UK financial services industry from which many UK firms have already set up shop accessing a significantly growing regional market. In the UAE there are effectively two financial services markets 1st Dubai International Financial Centre (DIFC), regulated by Dubai Financial Services Authority (DFSA), a hub for ?DIFC?s sophisticated institutional finance and a gateway for capital and investment to GCC & MENA region and 2nd regulatory platform & the the federally regulated market. various active SWFs make the UAE an ideal choice for The DIFC is emerging as a key regulatory environmen British firms? t, using mainly English common law and arbitration, with asset management and insurance being some key activities. In addition, being close to some of the largest and most active and diversified sovereign wealth funds not only helps cement relationships, but Find general information on the UAE market also facilitates inward investment into the UK. conditions on UKTI?s website. The Doing Business Guide for the UAE gives an overview The Abu Dhabi government owns one of the of the UAE?s economy, business culture, world?s biggest investment funds, ADIA, which potential opportunities and an introduction to has estimated reserves of between US$500- other relevant issues. 900 billion. UK Trade & Investment Sector briefing: Financial and Legal Services opportunities in the UAE School, Strathclyde Business school, to name a Opportunities few, have presence in the UAE. Opportunities for UK Financial, Legal and The DIFC created the DIFC Education Centre professional services companies in the UAE are (DEC) and is promoting itself as the leading growing - key areas are detailed below: provider of executive education in the GCC region. Both London Business School and CASS Private Public Partnerships (PPP) Business School have collaboration with DEC and deliver, since September 2007, an The global economic slowdown, limited liquidity Executive Master of Business Administration and relative scarcity of credit have led many program and an EMBA respectively. In regional governments to consider PPP as a February 2007, the CISI (then SII) launched serious means of financing public sector their new office in Dubai and recently projects. A recently published statement by an concluded a successful agreement with official from Dubai?s Roads and Transport Emirates Securities and Commodities Authority Authority (RTA) stated that it will seek private (SCA). funding for almost a third of its infrastructure projects over the next five years. The Dubai A recent insurance round table, attended by PPP law according to senior officials is being the Lord Mayor, identified promotion of finalised. Insurance standards and chartered qualifications as a local market need and an The priority for Dubai Government up to year opportunity to help up-skill local practitioners 2012 is delivery of mass transport projects and improve their performance. handled by the RTA followed by Power and Water (as longer term issues) delivered by Insurance Dubai Electricity and Water Authority (DEWA). Also, the ambitious levels of growth in Abu While the sector is recording impressive growth Dhabi 2030 strategy require more private and rates, insurance is not yet a main driver of public partnership to ensure delivery of its financial services output in the UAE. Although objectives though leaning towards services penetration levels in the UAE are amongst the delivery with some private participation and highest in the GCC, it is still underdeveloped funding. market by international standards. UKTI is engaged with both federal and Emirate The sector is fragmented, in many cases price level government stakeholders in PPP advice driven and highly competitive. Top three through private sector resources including players control 40% of the market (The Oman TheCityUk and high level visits such as of the Insurance Company, Abu Dhabi National Lord Mayor. Insurance and Arab Orient Insurance Company). The remaining 48 compete The identified opportunities shadowed in aggressively for remaining 60%. The sector is sectors like mass transport and energy such as moving towards greater consolidation. the Etihad Railways project valued at £11 Billion, Al Sufouh project valued at £600 Million Thanks to the DFSA regulatory regime; many and Dubai?s Independent Power Plant (IPP) London based and Lloyds syndicates and project valued at £1.35 Billion. brokers are present in DIFC and service the UAE and wider region. With room for more Education training & qualifications (ETQ) growth in capacity and need to be closer to the regional market to service and better The UAE government spending is strong in the understand local risk; DIFC represents a field of training and professional skills possible platform for UK companies in this development, specially for developing its discipline. nationals, and the UK is regarded as a partner of choice. The Institute of Chartered Takaful (Islamic insurance) accounts for a Accountants in England and Wales, Association small share of the business, but is seen as the of Chartered Certified Accountants, Ifs School driver for future growth. For the market size, of Finance, Chartered Institute of Management life insurance segment is underdeveloped Accountants, Middlesex University Dubai, The (around 16% of total annual premiums). This is University of Bolton, Manchester Business mainly due to cultural reasons. None life UK Trade & Investment Sector briefing: Financial and Legal Services opportunities in the UAE market is leading the insurance industry in the ? Mode of operation UAE with local companies dominating the market. This includes motor, real estate and In Abu Dhabi, as in many Gulf States, foreign construction. law firms must have a local associate. However, in Dubai foreign legal services firms The new healthcare regulations made 2008 an may establish themselves without a local important year for non life insurers, when sponsor but can only provide advisory services. compulsory health insurance law was Only UAE national lawyers are permitted to introduced in Abu Dhabi. The New health appear before UAE courts, with some Arab funding scheme introduced by Dubai Health lawyers are given exceptions, subject to Authority also opened a window of periodic review. Foreign companies must opportunities for health insurers. therefore use local advocates (barristers), either taking them on as employees, or The market entry for new insurers, however, is instructing them as clients. somewhat restricted as the Emirates Insurance Authority is currently not issuing new insurance ? The sector in brief licenses for foreign companies. Highlighting the benefits this will bring to the local The sector is mature and highly competitive economy; UKTI will continue engaging to seek with many players including local, the lifting of the current moratorium. multinational, and a large number of UK firms. The UK maintains an enviable reputation for Asset Management: excellence in financial, legal and professional services in the UAE, with visits by the Lord An expanding sector spanning in all segments Mayor and The City UK reinforcing the UK of asset classes from savings to private wealth brand. Legal services are regulated both at the management in the following growth areas: national and emirate levels. - The expected exponential growth in the There are about 500 UK solicitors practicing in savings industry will require the provision of or use the UAE (particularly DIFC) as a base for attendant direct services (from life policies to their activities. After the US, the UAE has the retirement plans to actual fund management largest concentration of UK solicitors overseas. and back office functions as well as after sales Dubai is home to Clifford Chance, Clyde & Co, service); Ashurst, Denton Wilde Sapte, DLA Piper, Norton Rose, and Simmons & Simmons. - Private banking and wealth management as the region reverts to being a very large private ? Accounting and auditing services: capital exporter. Managing private wealth also leads to corporate banking opportunities as International Accounting Standards are applied relationships are established and or in the UAE. The sector is regulated at federal strengthened. Legal, accounting and other level. Accountants, provided they obtain the professional services follow as well as boutique relevant professional license and approvals, corporate finance services. benefit from free movement within the UAE, enabling them to operate in an emirate other - SWF related fund management services. than the one in which they are registered, without requiring a special licence. Legal and professional services Some 264 foreign individual auditors, 208 local ? The system (or GCC) individual auditors, 47 local firms and 12 foreign firms operate in the UAE, the latter The UAE is based on secular law sourced from in the form of branches. Egyptian, French and Roman law. Though Shari?ah law has primacy in the constitution, in ? DIFC practice, Shari'ah courts are used to settle cases of family law, and some criminal appeals. DFSA (DIFC?s legal and regulatory framework) Commercial law is dealt with by the secular closely mirrors the UK?s English Common law courts. and FSA framework, is a familiar environment for UK firms. It adopted the only operating English language common law court in the UK Trade & Investment Sector briefing: Financial and Legal Services opportunities in the UAE region (DIFC Court?s Deputy Chief Justice is Sir Anthony Colman). London Court of International Arbitration (LCIA) chose DIFC for its first overseas JV to establish DIFC-LCIA Arbitration Centre, to promote arbitration in the region, and its awards passing through DIFC Courts are executed by Dubai Courts. Opportunities Scope exists for the UK to offer its experience and expertise in various areas, including financial services, PPP advisory, corporate governance, commercial litigation, contracts, legal systems and administration and dispute resolution. There are obvious overlaps here with ETQ. If you have any questions on the opportunities above, contact the UKTI Financial and legal services contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. Find out more on UKTI?s business opportunities service on the UKTI website UK Trade & Investment Sector briefing: Financial and Legal Services opportunities in the UAE Major events and activities UKTI contacts Bonds & Loans Middle East Mohammed AlBastaki Contact: Gulf Financial Conferences Trade & Investment Attaché www.megaevents.net British Embassy Dubai Time: 7 - 8 June 2011 Tel: 00971 4 3094213 Email: mohammed.albastaki@fco.gov.uk Middle East Retail Banking conference www.ukti.gov.uk 2011 Contact: MEED Conferences Frances Moffett-Kouadio www.meedconferences.com/retailbanking/ Director of Trade & Investment Time: 4-5 October 2011 British Embassy Abu Dhabi Tel: 00971 2 610 1111 Power, Utilities, Infrastructure Finance & Email: frances.moffett-kouadio@fco.gov.uk Investment MENA Conference www.ukti.gov.uk Contact: Gulf Financial Conferences www.gulffinancialconferences.com Adam Bowery Time: 4-5 October 2011 Trade & Investment Advisor British Embassy Abu Dhabi World Takaful Conference (WTC) Tel: 00971 2 610 1160 Contact: Mega Events Email: adam.bowery@fco.gov.uk www.megaevents.net/takaful/ www.ukti.gov.uk Time: 15-16 April 2011 Middle East Islamic Finance & Investment Conference (MEIFIC) Contact: Mega Events www.megaevents.net/middleeast_finance/ Time: 17-18 April 2011 Find full details of all financial and legal services events in the UAE on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Financial and Legal Services opportunities in the UAE Next steps - How UKTI can help British companies wishing to develop their business in the UAE market are advised to undertake as much market research and planning as possible in the UK. UKTI?s team in the UAE, with its wide local knowledge and experience, can provide a range of services to British-based companies wishing to grow their business in global markets. This can include: ? Provision of market information ? Validated lists of agents/distributors ? Key market players or potential customers in the Chinese market ? Establishment of interest of such contacts in working with you ? Arranging appointments ? Organise seminars or other events for you to meet contacts and promote your company in the Chinese market This work is available via our Overseas Market Introduction Service (OMIS) a chargeable service which assists British-based companies wishing to enter or expand their business in overseas markets. To find out more about commissioning this work, or accessing other UKTI services and specialist advice, please visit the UKTI website to find contact details for your local UKTI office. Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © Published 2011 by UK Trade & Investment. ©Crown Copyright 2011 You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Financial and Legal Services opportunities in the UAE
Posted: 15 October 2011

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