on classicprinciples –efficiency, low cost and
safety. Minimum commission ratedoes not
exceed$25 for onepurchase and saledeal
regardless of the amount: such commission rate
is achieveddue tohuge turnover. Membership
fees are alsonot huge– they arewithin a few
thousanddollars.
While in1980-swhen themarketwas just
starting toaccelerate, bearerbondsweremost
popular, bymid-nineties the situationbegan
tochange. Strengtheningof the statusofmain
borrowersandgrowthof jointmarket capitalization
resulted in the shift towardsdominationof euro-
medium-term-notes (EMTN), alsoknownas
Euronoteson theEurobondsmarket.
As compared to Eurobonds, Euronotes
turnedout tobe faster and cheaper loans,
without requirement of forming the security for
them. ÅMTN are issued for specific investors. The
main advantageof Euronotes is the fact that their
issue canbeorganized as quickly aswithin a few
days or evenhours. Today, their share innew
issues is 50 to60%. Over thepast 6 years, the
market of Euronotes practically tripled.
Certainly, inorder touse the advantages
of Eurobonds including the EMTNdynamic
packages, oneneeds tohave access to
appropriate financial instruments. They are
usually concentrated in international financial
centers, where there arebanks and specialized
credit and finance institutions performing
internationalmonetary, credit and financial
transactions, dealswith securities andgold.
What is thedifferencebetween international
financial centers andnational markets? Primarily,
the difference is in scale. According to certain
information, daily transactions on theworld
moneymarkets and financial markets exceed
dailyworld trade of commodities by 50 times.
Another advantage of financial markets is
the absence of borders and around the clock
operations.Worldwide, in real time, one can
watchon themonitors of information agencies
the dynamics of financial market –beginning
withquotations and endingwith interest rates.
Thenumber of companies intending to
increase their capital with thehelpof IPO and
secondaryoffers grows all the time. The increase
of their liquidity stimulates local governments
and international agencies toput the assets into
circulation. Inorder to satisfy thedemand for
shares and securities, onehas tohaveexhaustive
informationonmoney investment, consolidate
theefforts of local stock exchanges andother
financial structures, which is onlypossiblewithin
the frameofmajor financial centers.
London, Singapore, HongKong, Dublin
andnowDubai – these cities are calledworld
financial capitals today. International financial
center inDubai is oneof the latest successful
experiences of integration intoglobalmarket.
HOW IS ITDONE?
When thedecisionwasmadeon
establishment of the International Financial
Center inDubai, theemiratewas alreadyon the
wayof stableeconomicdevelopment andhad
the reputationof amajor re-export center.With
direct participationof Dubai government, vital
infrastructurewas created– the seaport, airport,
a few free trade zones (FTZ) and freeeconomic
zones (FEZ)with attractive conditions and
benefits for foreign companies and investors.
Federal decreeonestablishmentof
International Financial Center asa free financial
zonewas signed in June2004. Already in
Septemberof the sameyear, therewas theopening
ofDubai International Financial Center (DIFC).
Locatednear EmiratesTowers and Sheikh
ZayedRoad, DIFC initiallywas thought as
yet another real estateproject –huge and
fantasticallybeautiful. Today, DIFC is positioned
as thepremier financial center of “broad
specialization” in theMiddle East and covers the
following types of activities: banking services,
stockmarkets, assetsmanagement, funds
registration, reinsurance, Islamic financial services
and auxiliaryoperations.
By registeringwith the center, companies
and financial institutions get the right for
100% foreignownership, zero tax onprofit and
income, and absenceof limitations of foreign
currency. Also, it is necessary to take into
account the absenceof foreign currency control,
tradebarriers andquotas and limitations on
repatriationof capital, aswell as competitive
import duty (4%withmany cases of exemptions).
Companies registeredwithDIFCenjoymodern
infrastructureprovidingexcellent operational
support. Uninterrupted flowof business
operationswith sustainablehigh standards
of functioningguarantees highprofitability.
Additionally, the center provides individual
banking services using special Islamic financial
instruments. DIFC companies also are relieved
fromobligations onhiring local personnel.
It is interesting, that during theestablishment
of DIFC, foreigners thought Dubai legal and
regulatory systemwas corrupted andunclear.
Another risk factorwas languagebarrier, since
THENUMBEROF
COMPANIES INTENDINGTO
INCREASETHEIRCAPITAL
WITHTHEHELPOF IPO
ANDSECONDARYOFFERS
GROWSALLTHETIME.
THE INCREASEOFTHEIR
LIQUIDITYSTIMULATES
LOCALGOVERNMENTSAND
INTERNATIONALAGENCIES
TOPUTTHEASSETS INTO
CIRCULATION
IhorHuk–Advisor to thePresident
of theCommitteeonEconomic
andSocial issuersofUkrainewith
EuropeanCommission, professorof
ViennaUniversity, foreignmember
ofNational Academyof Science
ofUkraine, AnatoliyS. Zlenko
(jun.) –Advisor to thePresident
of theFoundation for Supportof
International CooperationofUkraine,
Sergii Pachkovskyi –DirectorGeneral
ofUkraineTradeCenter
91
ÍÅÄÂÈÆÈÌÎÑÒÜ, ÁÈÇÍÅÑ, ÈÍÂÅÑÒÈÖÈÈ
BUSINESS EMIRATES
UKRAINE -UAE
