Abu Dhabi to be Global Marketplace

President His Highness Sheikh Khalifa bin Zayed Al Nahyan, in his capacity as Ruler of the emirate of Abu Dhabi, has issued a law on the Global Marketplace Abu Dhabi.

The Global Marketplace Abu Dhabi aims to promote Abu Dhabi as a leading global market, develop the emirate's economy as well as to enhance the economic environment to attract financial investment and more effectively contribute to international financial services.

A federal law was recently issued to create a financial free zone under the name "Global Marketplace Abu Dhabi". The location of the Global Marketplace on the Al Maryah Island and the area of the free zone were determined by a resolution by the Cabinet.

The establishment of the Global Marketplace Abu Dhabi forms a strategic link between markets in the Far East and markets in Europe, in a manner that enhances the performance and efficiency of global transitions (Financial Highway), without having to stop or slow down hence bridging a time gap that is formed during the slowing movement of international financial markets, and that is between 7am and 11am UAE time.

According to the text of the law:

-  The market is created to promote the right economic environment to attract financial investments.

-  The market eliminates the time gap among  global financial markets 7-11 am, UAE time.

-  It provides all kinds of services for financial institutions, trade institutions and Producer institutions for goods and minerals from all sources

-  The new market helps on producing prices. It doubles the size of trading currencies and commodities and raw materials prices being issued.

-  It provides an integrated legal system that conforms with financial markets’ regulations as well as having special courts overseeing  litigations

The Global Marketplace Abu Dhabi provides all financial facilities.

Under the law, the Global Marketplace Abu Dhabi will see the establishing of independent Global Marketplace Authorities with independent budgets and corporate independent legal personality.  Each of these may issue executive decisions within their jurisdiction as determined by the law and the world market regulations. These authorities are: The Global Marketplace Registration Bureau, the Financial Services Regulations Bureau, the Global Marketplace courts.

The Global Marketplace Abu Dhabi will also strengthen the stature of the UAE among global markets, and is expected to double the size of currencies, commodities and raw materials traded, and by that it would be setting the trading prices and consequently provide high liquidity in the markets.

According to the new law, The Global Marketplace Abu Dhabi’s licensed companies may practice various activities including:

-  Financial and banking activities and services, including financing activities, providing  short, medium and long-term secured and unsecured loan facilities.

-  Business investments,  commercial banking, investment banking and private finance companies, investment companies, wholesale and e-banking and investment management.

-  Trading in securities, currencies and commodities and minerals and all kinds of derivatives (including futures trading or immediate –on spot- and on the margin trading, or sales, purchase and display of all kinds of financial options.

-   Storage, treatment and delivery of goods and metals of all kinds, whether these goods or minerals are represented via sukuk or through physical delivery, and carrying out any services complementary to that.

   Prime Brokerage, financial and cash brokerage

-  Market Making, through presenting offers of sales, purchase of currencies and commodities, metals, securities, bonds and financial instruments and derivatives of all kinds.

-  Islamic finance and Islamic banking activities and associated activities.

-  Eestablishing, operating, management and marketing of assets and funds, investment funds, pension funds, credit, mutual funds and hedge funds and investment portfolios of all kinds and asset management  in either/both restricted to act or unrestricted and trust, as well as credit representation services, and escrow accounts.

  Custodianship activities

-  Central clearing, settlement and depository activities.

-  Financing of projects, providing capital for companies and organizations in various investment areas.

-  Bbuying and selling and issuing stocks and bonds, sukuk, and other securities and financial products of all kinds, as well as currencies and commodities and metals of all kinds and derivatives, including futures and financial options related to any of them. Also guaranteed borrowing related to the aforementioned options, cash and securities ( Money Market).

-  Owns and operates of stock exchanges and financial markets for equities, bonds, currencies and financial instruments and securities, commodities and metals, futures and options and derivatives of all kinds.

-  Insurance and re-insurance, insurance brokerage, including securing property and casualty insurance, life insurance and other types of insurance and any other services related to such activities.

-  Advisory services related to banking activities, financial and investment activities.

-  Auditing and accounting services, legal services and any other services belonging to the business and financial and banking activities.

-  Credit rating services and information services supporting business and financial and banking activities.

The law also stipulates that Global Marketplace Abu Dhabi authorities and institutions, and their employees are subject to zero taxation, including income  tax relating to its operations within the Global Marketplace.

The tax rate includes the transfer of assets, profits or wages in any currency of currencies to any destination outside the Global Marketplace for a period of (50) years commencing from the date of the provisions of this law are executes, and this period may be renewed for a similar period based on the Executive Board’s decision.

Under the law, the funds, rights and activities of the Global Marketplace as well as its institutions and authorities are not subject to any form of confiscation or seizure or any restrictions on the individual property except by a judicial ruling from the relevant Global Marketplace court, and any Global Marketplace institution may be wholly or partially owned by persons or entities who are not UAE citizens or do not have a place of residence in the UAE.

The law exempts the Global Marketplace and its authorities and institutions of customs duties on all goods imported by it for the purposes of its business in the Global Marketplace.

Goods are also excluded from any customs duties if imported into any of the non-financial free zones established or managed by the Board of Directors.

According to the law, the Global Marketplace courts will be of two degrees: first instance courts, and courts of appeal. Their rulings, decisions and orders, as well as arbitration decisions approved by the Global Marketplace courts, are executed by the relevant specialized authorities outside the borders of the Global Marketplace in accordance to the followed regulations and procedures by these authorities and in accordance to any memo or agreement between the board of directors or the Global Marketplace courts and these authorities.

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