Middle Eastern investors have traditionally looked to international finance centres (IFCs) to manage and protect their wealth. This historic trust in IFCs to make sure investment strategies are performing to their full potential is well-placed when times are good or, as is the case today, when shadows of macroeconomic uncertainty appear in the shape of low oil prices, fiscal imbalances and unpredictable global market conditions.

This success of high quality IFCs in supporting the wealth management needs of investors in the Middle East is rooted in the appeal of the range of structures high quality IFCs offer, as well as their flexible approach, good understanding of succession planning and control concerns, and ability to demonstrate robust regulatory and legislative frameworks. In Jersey’s experience, for instance, the demand from Gulf investors for trusts, property holding structures and foundations is strong, as is the need for a range of Sharia compliant financial products.

High value real estate deals

Middle East Investors are keen to make sure their investment strategies are performing to full potential. Gulf investors have long drawn on the strengths of IFCs for high value real estate deals in London and the UK. Jersey Finance’s “Jersey’s Value to Britain” report highlights the significant role played by the jurisdiction as a conduit to the UK, with £1 in every £20 (Dh106) invested by foreign individuals and companies in assets, including real estate, reached the UK via Jersey.

Investors in the Middle East look to IFCs as partners in navigating increasingly complex global investment market activity and to provide the springboard to further their strategies into new sectors and markets in line with their modern, multi-jurisdictional, multi-generational family dynamics.

This can provide a compelling proposition for Middle East investors who, in today’s turbulent markets and uncertain environment, are now turning to IFCs to ensure they can continue to tap into alternative markets and carry out their global investment strategies successfully.

Strong regulatory environment

Trust has long been at the heart of the strong relationships between the region and IFCs. The recent annual Edelman Trust Barometer indicates that high levels of trust in high-quality IFCs are reflected by strong levels of trust in the now mature financial and regulatory frameworks in domestic markets. Much of this trusted position reflects the efforts of UAE institutions to ensure a strong regulatory environment; the evolving governance framework and the steady development of the financial ecosystem, with the likes of Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) providing well-regulated jurisdictions for organisations looking to take advantage of market opportunities.

IFCs are a natural complement to these efforts. Jersey has long had a strong association with the UAE, built upon 50 years’ experience as a leading international banking and wealth management jurisdiction.

Formal mechanism

Recently Jersey’s regulator, the Jersey Financial Services Commission (JFSC) reaffirmed Jersey’s commitment to the region with the signing a landmark Memorandum of Understanding (MoU) with the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) in February 2016. This agreement puts in place a formal mechanism to enable the regulatory authorities to cooperate on supervisory matters and exchange of information, in order to maintain the stability and well-being of the financial systems in respective capital markets.

A key element of the work that Jersey undertakes is facilitating market access, whilst working to enhance its reputation and develop deepening relationships with key markets. The MoU underpins Jersey’s commitment to foster and uphold the highest international regulatory standards and practices in both jurisdictions. This provides a compelling proposition for Middle East investors who, in today’s turbulent markets and uncertain environment, are increasingly drawing on the reliability, flexibility, investment expertise, tax-neutral fiscal platform and robust regulatory frameworks of trusted jurisdictions to ensure they can carry out their global investment strategies successfully.

— Geoff Cook, Chief Executive Officer, Jersey Finance.