Business | Construction
Financial city: An offshore centre in the making
The newly unveiled Ras Al Khaimah Financial City is expected to become a new generation offshore financial centre (OFC) combining the benefits of a free zone, an offshore fin-ancial centre and an offshore business centre.
- By Babu Das Augustine, Banking Editor
- Published: 00:00 June 14, 2007
- Images of the Financial City towers that will reshape the skyline of the Ras Al Khaimah.
- Image Credit:
Dubai: The newly unveiled Ras Al Khaimah Financial City is expected to become a new generation offshore financial centre (OFC) combining the benefits of a free zone, an offshore fin-ancial centre and an offshore business centre.
The RAK Offshore project being built by the RAK Investment Authority will eventually move to Ras Al Khaimah Financial City when the infrastructure is ready.
The RAK Offshore plans to develop its free zone-based operations into another leading regional OFC that caters to the offshore business needs of the regional and international business community.
"We are keen to capitalise on opportunities in offshore businesses. The new centre will offer financial, legal, logistic and insurance services in a free zone environment," said Emad Haffar, chief operating officer of rakeen, the master developer of the RAK Financial Centre.
The Gulf region currently has a number of OFCs such as Bahrain, Qatar Financial Centre, Dubai International Financial Centre (DIFC) and Jebel Ali Offshore.
While Bahrain, DIFC and Qatar Financial Centres are more focused on offshore financial services business, RAK Financial City will offer a complete package of offshore business solutions including financial services.
"RAK Offshore has a business model that is very similar to that of Cayman Islands and British Virgin Islands.
"It targets audience not just offshore financial entities, rather any firm that has offshore business needs," said Raju Menon, managing partner of Morison Menon Group, a Dubai-based financial services consultancy.
According to recent estimates by the Economist Intelligence Unit offshore holdings worldwide now run to $5 trillion-$7 trillion, five times as much as two decades ago, and make up about 6-8 per cent of worldwide wealth under management.
Cayman, a trio of islands in the Caribbean, is the world's fifth-largest banking centre, with $1.4 trillion in assets. The British Virgin Islands are home to almost 700,000 offshore companies.
On average, the citizens of Cayman, Jersey, Guern-sey and Virgin Islands are richer than those in most of Europe, Canada and Japan. This has encouraged other countries with small domestic markets including the Gulf countries to set up financial centres in the recent past.
Offshore centres are often used for a variety of business purposes ranging from setting up business entities to own overseas financial and real assets, inheritance planning, setting up holding companies and special purpose vehicles to structure financing deals and ship and aircraft registration.
"There is a huge demand for offshore business opportunities in the region. Any business that requires taking their business offshore is our potential client," said Haffar.
The RAK Financial City expects to attract a number of regional firms that have offshore operations in international financial centres such as Cayman Islands and Mauritius.
International OFCs are well regulated and attract businesses from across the world. As companies become ever more multinational, they find it easier to shift their activities and profits across borders and into OFCs.
As globalisation becomes pervasive, OFCs are becoming increasingly relevant to all kinds of business activities.
Share this article
Related Articles
-
Ras Al Khaimah is the rising star of UAE
Ras Al Khaimah re-invents itself to become the rising star of the UAE
-
Asteco starts sales of Bab Al Bahr apartments
Asteco starts sales of Bab Al Bahr apartments
-
Focusing on variety of economic sectors
Focusing on variety of economic sectors
More from Construction
More from Business
Popular in Business
-
General
Precious jump
Gold prices at new high as India's central bank buys $6.7b worth of gold
Business Editor's choice
-
UAE companies in full force at WTM
Seventy-eight participants are from Dubai and 50 from Abu Dhabi
-
DIFC committed to high standards
Ensures an efficient process to serve the business community
-
Sweet life in the Middle East
A sweet look at the confectionary industry in the UAE and Middle East
