Regulation and taxes to drive bankers to Dubai

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The two things bankers fleeing London most want to avoid are regulation and taxes, according to a new survey from eFinancialCareers, a jobs website.

An online survey of 400 London based financial professionals found that 57 per cent of respondents though more City redundancies probable or definite over the next six months. Over one third believed London’s position as the global financial capital is under threat.

Financial crisis

The respondents cited concern about the competitiveness of the City in the face of new regulations set to follow the recent financial crisis, and the Labour Government’s new 50 per cent top income tax rate.

Dubai is not yet on a list of the top destinations favored by respondents which might indicate that its marketing message is not yet getting through, or simply that there are not yet enough new jobs for global financial professionals in Dubai.

Indeed, perhaps such job seeker surveys should be treated with the same circumspection as consumer confidence reports. The results might indicate what is desired but not necessarily what is actually available.

However, anybody casting their eye around the building site circumventing The Gate at the Dubai International Financial Centre can have no doubt that a financial services hub of the future is being built.

The real estate crash in Dubai means that the occupants of those buildings are now likely to pay very much lower rental rates, and that there staff will enjoy high-quality homes at much lower rentals than heretofore.

Then, of course, there is the matter of regulation and taxation. The Dubai Financial Services Authority is modeled on the London FSA and is tasked with maintaining regulation and supervision to best global practice.

No tax

But taxation is another issue. Firms inside the DIFC will not be taxed, and their staff will not have their income taxed, earned or unearned. For financial professionals with their own investment portfolios to run this could amount to a huge bonus over a decade.

After 9/11 inward investment flows into Dubai temporarily dried up, and some commentators thought the city was dead. But then the money came in a torrent and the city boomed. Perhaps the global financial crisis will prove to have a similar impact on Dubai.