As the United Arab Emirates (UAE) strengthens its role as an alternative to global financial hubs, Dubai and Abu Dhabi are racing to capture the attention of the world’s asset managers and billionaires. While Dubai has long held the top spot in the region, Abu Dhabi is rapidly emerging as a competitive financial powerhouse.
Over the last two decades, Dubai has positioned itself as the Middle East’s premier financial center, despite lacking the rich oil reserves of its neighbor. Its appeal lies in its low-tax environment, the application of English common law, and access to the region’s growing economy. Globally, Dubai ranks 16th in the Global Financial Centres Index, making it the top financial hub in the Middle East and Africa. In contrast, Abu Dhabi ranks 35th, but is quickly closing the gap.
Dubai’s financial sector is thriving, with over 420 wealth and asset management firms operating within the Dubai International Financial Centre (DIFC), according to a recent update from the AIM Summit. The city’s dynamic financial district, bolstered by its status as a vibrant entertainment hub with luxury amenities, continues to draw international attention.
Abu Dhabi’s Rise As A Financial Hub
Abu Dhabi, holding 90% of the UAE’s oil reserves, has made significant strides in diversifying its economy. Backed by nearly $2 trillion in sovereign wealth, the city is investing heavily in non-oil sectors, making it an attractive destination for asset managers and hedge funds. Companies are flocking to Abu Dhabi for the business opportunities its sovereign wealth funds create. According to data from the Abu Dhabi Global Market, the city’s financial center, around 112 fund firms were registered as of June.
The ease of setting up shop in Abu Dhabi, combined with the city’s regulatory clarity, has been a major draw for new arrivals. Global financial heavyweights such as Brevan Howard, PGIM, Nuveen, and billionaire hedge fund founder Ray Dalio have already established a presence in Abu Dhabi. Other firms, including General Atlantic, are expected to follow suit, with preliminary approvals already granted.
A Shift in the Financial Landscape
The financial rivalry between Dubai and Abu Dhabi reflects the UAE’s broader ambitions to become a global financial and crypto hub. Both cities benefit from favorable regulatory environments, with Abu Dhabi’s sovereign wealth funds serving as a significant lure for investors. Although Dubai retains an edge in entertainment and tourism, Abu Dhabi’s financial momentum is impossible to ignore, as the city continues to attract the world’s wealthiest investors and asset managers.
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