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19 April 2024

'DIFC firms cannot operate from outside'

Companies had taken advantage of the lower rents outside. (EB FILE)

By Karen Remo-Listana

Companies with the Dubai International Financial Centre (DIFC) licence are no longer allowed to practice or operate outside the centre, its Governor told Emirates Business.

Firms that are currently occupying office spaces outside the financial free zone would, therefore, have to come back and DIFC can now accommodate them.

"Why practice outside the centre? It can accommodate everybody," said Ahmed Humaid Al Tayer. "Before there was shortage of space, now investors are putting more space there."

During the economic peak in 2007 and 2008, a substantial number of DIFC-registered companies was allowed to conduct business outside its premises due to lack of space. The new buildings only started to open up beginning 2009, said Abdulla Al Awar, DIFC Authority CEO, in an earlier interview. More units, he said, would be available until 2013, which is the target completion year for the financial complex.

Companies had taken advantage of the lower rents outside, which is about three to five times cheaper. Real estate fees in the DIFC have largely remained the same despite the market correction. Al Awar said this is due to the fact that the centre is offering state-of-the-art infrastructure and services.

"One cannot package it as an office space," he said. "This is a federal free zone, and a federal free zone has certain legal benefits that are not available in regular office space."

DIFC-based Algebra Capital has recently aired the concern that the DIFC is a "very expensive" jurisdiction to operate out of.

Because of this, a number of companies have already left the centre due to the high cost of office, said analysts.


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