Financial Sector

Banks

UAE banks – both domestic and foreign – are the backbone of the financial industry, providing retail and corporate services to members of the private and public sectors. Top banks in the UAE include:

The Central Bank of the UAE is the primary financial regulatory authority. It is mandated to direct monetary, credit and banking policy and supervise its implementation in accordance with the state's general policy and in ways meant to help support the national economy and stability of the currency.

Islamic Finance

The global Islamic finance sector has been growing rapidly.  Islamic finance is not just for Muslims but is based on an Islamic ethical foundation. Trade in money for the sake of profit is forbidden, but trade in goods is permitted.  Transactions must be based on assets or other tangible goods, in order to avoid what is considered usury, not in compliance with sharia law. Islamic banks have a different structure from traditional banks but the services they offer are similar.

Sukuk has become a very attractive financial instrument. According to the 2014 Global Islamic Finance Report, $1.813 trillion of assets are being managed in a sharia compliant manner.

Stock Markets

The UAE hosts three stock exchanges: Nasdaq Dubai (nasdaqdubai.com), Abu Dhabi Securities Market (ADX.ae) and Dubai Financial Market (dfm.ae).

The UAE as a Financial Center

Established in 2004, Dubai International Financial Center (DIFC) is a financial free zone that offers businesses and investors advantages such as security of contracts, independent courts, 100 percent ownership and a friendly tax regime. Located strategically between East and West, DIFC provides a stable and secure platform for businesses and financial institutions to tap into the emerging markets of the Middle East, Africa and South Asia. 

Abu Dhabi Global Market (ADGM) is an international financial center for local, regional and international institutions. In collaboration with other international financial centers, global institutions and regulators, Abu Dhabi Global Market develops and supports member institutions with the regulatory framework, legal jurisdiction and attractive business environment they need for sustainable business growth.

Outward Investment

Overseas investments have been a critical component of the UAE’s economic development strategy for decades as the country has sought to diversify where and how it invests its financial assets. The UAE Government regards such investment as a security net for future generations who will one day face a depletion of the country’s energy resources.

This strategy led to the creation of a number of government-owned investment institutions such as:

  • Abu Dhabi Investment Authority (ADIA)
  • Abu Dhabi Investment Council (ADIC)
  • Mubadala Development Company (MDC)
  • International Petroleum Investment Company (IPIC)
  • Dubai World
  • Dubai International Capital (DIC)

These government investment organizations have been active and responsible participants in global financial markets for over three decades. Representing patient and responsible capital, these professionally managed entities include some of the world’s oldest, biggest and most respected government investment funds.

Like private equity firms, pension funds and other institutional investors, UAE investment organizations seek to maximize risk-adjusted returns.

Recently, Abu Dhabi investment institutions clarified their roles and investment approaches and took a number of steps to enhance international understanding and cooperation.  In particular, they clarified that they haven’t ever used and will never use their investment organizations or individual investments as a foreign policy tool.

The Abu Dhabi Investment Authority (ADIA) co-chaired the IMF-sponsored International Working Group (IWG) to create the first-ever set of best practices. The IWG comprises both investing and recipient countries and reached a shared set of principles called the “Santiago Principles.”

In this process, Abu Dhabi has accepted the need of other governments for increased scrutiny of inbound investments that have potential national security implications—so long as the process is clear, fair and timely. For example, to date, Abu Dhabi investment organizations fully accept the Committee on Foreign Investment in the United States (CFIUS) review process, and remain committed to abiding by both the letter and the spirit of the law.

Inward Investment

The Arab World Competitiveness Report 2013, issued by the World Economic Forum (WEF), ranks the UAE highly among Arab countries and in the 24th position in the Global Competitiveness Index (GCI). It states that the “country’s competitiveness reflects the high quality of its infrastructure…as well as its highly efficient good markets.”