Chief Operating Officer at The Dubai Multi Commodities Centre
Nelson Mandela said: “For to be free is not merely to cast off one’s chains, but to live in a way that respects and enhances the freedom of others.”
The development of “freezones” in over 120 countries reflects this vision by liberalising markets, diversifying economies and attracting human and financial capital. As Cayman expands its vision to embrace other knowledge based industries, what opportunities are available for Caymanians and what lessons can be learnt from other jurisdictions?
Dubai has attracted substantial attention over the last two decades and its 22 freezones contribute over 33 per cent of the GDP of the country. The fastest growing freezone in the world is Dubai Multi Commodities Centre – which signed a Joint Venture with Cayman Enterprise City in 2011.
Gautam Sashittal, the Chief Operating Officer at The Dubai Multi Commodities Centre and a Non-Executive Director at Dubai Gold & Commodities Exchange, talks about the rise of DMCC and the creation of a zone that now accommodates over 50,000 people.
Blick: DMCC is a great success story. What do you believe DMCC has delivered to Dubai?
Since its inception in 2002, DMCC has focused on establishing Dubai as the global gateway for commodities trade whilst building and enhancing its physical and financial infrastructure, world-class regulation, products and services, including the launch of the Jumeirah Lakes Towers Free Zone (JLT).
Today the JLT Free Zone attracts businesses from all over the world choosing to operate from Dubai, ranging from start-ups to multi-nationals to leading commodity houses. Leveraging Dubai’s ideal location, DMCC has utilised the physical and financial infrastructure at its disposal (ports, airports, connectivity, exchanges, etc) to secure the trade between producing and consuming nations.
It has also developed commodities trading through Dubai, with a focus on several commodity sectors such as gold, diamond and tea. Dubai is now amongst the world’s leading diamond trading centres, having set up the Dubai Diamond Exchange (DDE) in 2005 with the direct aim of encouraging trade in diamonds. It now counts over 600 diamond and jewellery members and figures for 2011 witnessed Dubai import and export diamonds with a value of US$39 billion through the city. Dubai is also one of the largest global hubs for the physical trade of gold, with over 1,200 tonnes traded with a value of over US$ 56bn in 2011.
Blick: How do you believe DMCC has enriched the lives of locals?
The JLT Free Zone has over 5,500 member companies. This creates jobs and centres of expertise in new business sectors, which in turn brings more business to the Emirate. DMCC’s companies make a substantial contribution to Dubai’s GDP.
Tens of thousands of individuals directly and indirectly depend on DMCC for their livelihoods. The Free Zone development – called Jumeirah Lakes Towers (JLT) – hosts the infrastructure that has allowed it to flourish. In just ten years, the DMCC has overseen the rise of 62 mix-use towers around its four lakes, with over 160 retail offerings, over 5,500 companies registered and 50,000 people working and living in the development.
Blick: What new opportunities has it given rise to for locals?
The opportunities are endless. If you are an entrepreneur or a multinational, DMCC offers the right balance in infrastructure and regulations to ensure your business has the right ingredients to succeed.
Our success speaks for itself DMCC continues to record an average of 160 new members a month, and as a result, JLT is the fastest growing free zone in the UAE. The influx of foreign direct investment through those new companies is significant and a critical success factor for the UAE.
Blick: Do you see a continued demand for the DMCC offering?
Absolutely, the Arab Spring and the European Winter, as they have been coined, have meant that Dubai has remained as attractive as ever for the establishment of businesses, may that be by entrepreneurs or as regional offices of bigger players. Dubai has a unique geographical advantage – perfectly positioned at the crossroads of the producing and consuming nations.
Inspired by the visionary leadership of HH Sheikh Mohammed Bin Rashid Al Maktoum, today DMCC caters for and brings together the entire value chain of commodities trade participants with all the relevant ingredients required such as finance, logistics, insurance, regulation, refining, manufacturing and trading.
It is however important to mention that we do not rest on our laurels here. The DMCC will be launching several new products and services in the first half of 2013 that will continue to support our current clients and attract new members. We have set ourselves a target of 7,200 companies in the JLT Free Zone by the end of 2013 and we are on course to achieve that target.
Blick: As the COO of DMCC, what is your personal vision for DMCC in the future?
The JLT Free Zone attracts businesses from all over the world, choosing to operate from Dubai, ranging from start-ups to multi-nationals. Over 85 per cent of these businesses are new to Dubai. We will keep innovating to ensure that our member companies benefit from the DMCC partnership.
Through these efforts we would like to enable global, regional and local players to see and experience the JLT Free Zone as the ideal place from which to develop and grow their businesses, and DMCC as their ideal partner in commodities trade.
The partnership will be not only through the licensing and regulation that we offer, but also in terms of value added services which are specific to their industry, such as finance, logistics, insurance, regulation, refining, manufacturing and trading.
Today, all DMCC member companies benefit from freehold business premises, 0 per cent corporate and personal income tax, 100 per cent business ownership rights, and a client services facility for processing of all documentation including licensing requirement, situated in Almas Tower – the Middle East’s tallest commercial tower.
We are also continuously improving our physical and financial infrastructure, regulation, products and services to enable our members to grow their businesses and trade with confidence here.
To quote our Executive Chairman Ahmed Bin Sulayem: “In the race to excellence there is no finish line”.
Blick: What synergies do you see between Dubai and Cayman?
The establishment of a corporate passport that would allow companies from each country to set up, operate and conduct business in the respective jurisdiction should be tremendously valuable for companies intending to operate from both countries.
We are keen to foster mutually beneficial trade opportunities and have identified some specific opportunities, with our current focus on the fund management sector. We have the right infrastructure and regulations to allow Cayman Island funds to operate fluidly in Dubai and to offer them a gateway to Africa and Asia. Our geographical location and unparalleled transport connectivity offers a clear advantage.
Blick: How do you feel that Cayman replicate the extraordinary economic success of Dubai?
Free zones have been a key driver of economic growth in Dubai and we are fully supportive of the Cayman Island and the work undertaken to create a similar offering. Ease of doing business is in our view the key to long-term success – for the individual corporations and so ultimately also for the location the business operates from.
Blick: What is your personal vision for a partnership between Dubai and Cayman?
I would like to foster mutually beneficial trade into a fully-fledged cross-border operation. Specifically, I think there is a significant room for cooperation between the Cayman Enterprise City’s (CEC) commodities and derivatives economic zone and DMCC.
Both centres have a unique position in their respective part of the world. I believe that our partnership can provide interested corporations an almost limitless platform for operations helping them to connect from East to West as well as from North to South. Dubai and Cayman can play a similar role by connecting the Northern and Southern hemisphere, or producing and consuming countries.
Blick: What lessons could Dubai learn from Cayman?
I am certain this is no different in the Cayman Island, but here in the JLT Free Zone we benefit greatly from a shared vision and strong support from the government of Dubai. It really does enable us to provide our member companies with the right mixture of products and services, may that be with regards to licensing or the broader commercial support we offer. The focus on our members and customers is critical and our members’ success is instrumental to Dubai’s success.