On May 5 the Executive Council announced that the federal government had issued a decree establishing a financial free zone in the emirate. To be called Global Marketplace Abu Dhabi, the free zone will be built on Al Maryah Island, the 114-ha mixed-use development that has been identified by the government as the location of a new central business district.
According to the Executive Council, financial activities at the free zone will include investment and commercial banking, trading, brokering and Islamic finance. Global Marketplace Abu Dhabi will full foreign ownership of businesses and offer a tax-free environment for at least 50 years.
The decree also establishes a new regulator ? the Financial Services Regulations Bureau ? as well as the Global Marketplace Registration Bureau and the Global Marketplace courts, which will include a court of first instance as well as an appellate court. The Executive Statement has not specified the legal system to be used, although, it could, like other financial free zones have done, be based on English common law.
Attracting foreign finance outfits to set up shop in Abu Dhabi could have several benefits, such as providing jobs to local Emiratis and boosting the number of tenants for the new Sowwah Square development, which features four office towers and the headquarters of the Abu Dhabi Securities Exchange. The master developer of Sowwah Square, Mubadala Real Estate and Infrastructure, is a business unit of Mubadala Development Company, an investment company that is fully owned by the Abu Dhabi government.
But Abu Dhabi is not alone in its aspirations to build a global financial centre. In the Gulf alone, alternatives include Doha and Dubai, while further afield, Johannesburg, Istanbul and Moscow have similar plans. Still, the emirate has some advantages over these other options, including the presence of a number of sizeable institutional investors, including government-owned entities, which could attract some global asset managers to establish operations in the new financial free zone.
Global Marketplace Abu Dhabi will join four other free zones in the emirate, including the Khalifa Industrial Zone Abu Dhabi (Kizad), which officially opened in September of last year. Abu Dhabi?s first industrial free zone, it is focused on both logistics and industrial manufacturing. Kizad is expected to contribute around 15% of the emirate?s non-oil GDP by 2030 and could lead to the creation of more than 150,000 jobs as a result of deals signed with more than 50 Emirati and international firms.
Masdar City Free Zone and Science and Technology Park is the flagship project of Abu Dhabi Future Energy Company (Masdar) and focuses on clean technologies and renewable energy, while Abu Dhabi Airport Free Zone, which is currently being developed by Abu Dhabi Airports Company, provides infrastructure and facilities geared toward aviation, airport services, and cargo and logistics. Finally, Twofour54, which was established in 2007 with the aim of making Abu Dhabi a player in the Arabic-language media and production, hosts prominent international media companies such as the BBC, CNN and Financial Times.
With the Global Marketplace Abu Dhabi targeting investment from financial services firms, the emirate seems to have covered a broad list of industries with its five free zones. This in turn will bring Abu Dhabi closer to reaching its aims of economic diversification and sustainability, the creation of jobs and reduced dependence on the oil and gas sector.