Dubai Courts Chinese Finance in Bid to Become Global IPO Hub

Dubai is making a strategic push to attract Chinese financial institutions and corporates seeking offshore fundraising opportunities, positioning itself as a viable alternative to Hong Kong and New York for initial public offerings.

The Dubai International Financial Centre (DIFC), established in 2004, serves as a financial free zone with its own legal and regulatory framework, distinct from the wider UAE system. Based on English common law, the DIFC operates with independent courts and a dedicated regulatory authority.

Currently, the DIFC is home to over 400 wealth and asset management firms, including 75 hedge funds, 48 of which each manage assets exceeding $1 billion.

“Several Chinese companies are exploring options for overseas IPOs,” said Ahmed Al Aulaqi, DIFC’s Head of Banks and Capital Markets, speaking at The Capital Market Summit in Dubai. “Historically, they’ve had to look to Hong Kong or the US. But there’s a growing opportunity for Dubai to step in and provide a new route for listings”.

This shift comes amid heightened geopolitical tensions between the US and China, including trade disputes and increasing regulatory barriers. The US Holding Foreign Companies Accountable Act, enacted in 2020, mandates stringent audit compliance from Chinese firms listed on American exchanges, creating uncertainty for those companies and prompting them to consider other markets.

Simultaneously, China has also imposed stricter outbound listing rules since 2021, further complicating foreign fundraising efforts for Chinese firms.

With existing ties to the top five Chinese banks, which now represent more than 30% of the DIFC’s banking and capital market assets, Dubai is actively targeting Chinese securities firms that are following their clients into the Gulf region.

“These firms are eager to tap into regional markets and offer their retail and institutional clients exposure to the Middle Eas,” Al Aulaqi noted.

Soon, the DIFC expects an increase in Chinese companies relocating to Dubai, especially those in high-growth sectors such as electric vehicles, technology, and manufacturing.

“We’ll see more Chinese corporates setting up in UAE free zones and economic clusters,” Al Aulaqi predicted.

Nasdaq Dubai, operating within the DIFC, has already built strong financial ties with China. By November last year, it had attracted $22 billion in Chinese debt listings—many of them green bonds financing renewable energy, water desalination, clean transportation, and other sustainable projects across the Gulf.

“If we succeed in bringing Chinese equity listings here, it could fundamentally shift the financial landscape of the region” Al Aulaqi said.

Dubai’s pitch is further strengthened by its reputation as a magnet for global wealth. The UAE is home to nearly 130,000 millionaires, about 70% of whom are residing in Dubai, and expects to attract another 8,000 this year alone, more than any other country.

“As more affluent individuals relocate here, part of their wealth will inevitably flow into regional stock markets, boosting trading volumes and investment activity” Al Aulaqi concluded.