The Dubai International Financial Center is home to thousands of companies from around the world. Some of them have organic connections to the emirate; others are merely taking advantage of the center’s business-friendly rules and regulations around tax, immigration, and labor. A third group of businesses have chosen the DIFC not for the office space, or the taxes, but as a home base for legal disputes alone. In the event of a lawsuit, the DIFC is where they want to have their day in court.
That’s because Dubai’s financial center is not governed by Dubai—at least, not in the way most of us understand governance. The enclave is a special economic zone overseen by a board appointed by the city-state’s ruler, with its own bespoke laws drawn up for the benefit of its clients.
The DIFC is also a shimmering shopping center with three hotels, luxury apartment towers, high-end restaurants, clothing stores, spas, beauty salons, and art galleries. There’s even a mosque, open 24/7. The 110-acre compound sits in the shadow of the Gate, a gigantic rectangular structure inspired by the Arc de Triomphe. The Gate looks like the Parisian monument—had the French only chosen to commemorate their war dead with millions of gray Legos. But when you walk through it, you enter a microcosm of a world where we may someday all live. This is a world where boundaries are drawn not just around nations but around people and companies and wealth—a world with new kinds of states and new kinds of laws. Dubai is a test case for where they will take us.
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The DIFC’s story began in the early 2000s, when Dubai began opening gated business districts—Media City, with nominally freer speech laws than the rest of the country; Healthcare City; Internet City; and so on. In 2004, the president of the UAE changed its constitution to allow zero-tax, low-regulation “zones” specifically geared toward the exchange not of material goods but of financial assets. With that, the DIFC was born.
The essay was adapted from the forthcoming book The Hidden Globe: How Wealth Hacks the World.In a part of the world that had been losing money to wars and civil unrest, the DIFC promised businesses an oasis of protection and deregulation: a little Switzerland on the Gulf. The center’s tenants—who would come to include Bloomberg, Deutsche Bank, JPMorgan, and Goldman Sachs—would benefit from such concessions as corporate tax breaks, fully foreign ownership of companies, and expedited immigration procedures for expat workers.
But Dubai couldn’t stop there. After all, those who wanted Switzerland already had Switzerland—and Luxembourg, and the Cayman Islands, and any number of places that exacted little or nothing in taxes and had long track records of protecting wealth at all costs. So to entice investors further, the DIFC sold them on something new: law.
Law is no static thing. It does not sprout from the soil, like a tree. It doesn’t require a particular habitat to thrive, like a bug or a bird. It behaves more like a virus, hopping from place to place, cultivating new hosts and carriers, and mutating along the way.
Early on, the DIFC established a start-up court to oversee civil and commercial matters within the special zone. Its laws came mostly from elsewhere. So did its judges, plaintiffs, and defendants. The result was a state within a state within a state, or to borrow from a DIFC publication, an “example of how globalisation is reconfiguring the relationship between legal institutions and political systems in the twenty-first century.”
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Legal pluralism—the maintenance of multiple systems of law within a given territory—wasn’t a new concept in Dubai. From the early 19th century until 1971, Dubai and its sister emirates had been British protectorates, with one set of rules for non-Muslim subjects and another for natives and believers. After achieving independence, the new nation-state set out to build a devolved judicial system that allowed each emirate to strike out on its own or abide by federal rules instead.
From a judicial standpoint, the UAE had much in common with the federalism of the United States. But no matter the emirate, court hearings were in Arabic and rooted in Islamic jurisprudence as well as civil law. This, the then-ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, and his advisers realized, was a problem: To put it crudely, Western lawyers did not want to deal with Muslim courts.
Although a free zone with low taxes and minimal red tape was all well and good, Dubai’s rulers understood that foreign firms wanted a familiar legal system in which to settle things such as bankruptcy, data protection, intellectual property, and employment. Grafting on an identically British system would be too close to colonialism for comfort. So they sought another model: a composite jurisdiction, stitched together from regulations borrowed from elsewhere and with judges trained in the laws of the world.
To put it all together, the DIFC would need its own Dr. Frankenstein. He came to them by chance, in the form of a blue-eyed Englishman named Mark Beer.
I met Beer for breakfast in Manhattan on a spring day in 2022. He came off as game and unpretentious: a dad of five who looks like he could have been a rugby player if he hadn’t ended up working as the registrar of an upstart court very far from home. His career had taken him around the world. After law school in the U.K., Beer trained as a mediator in Singapore and worked for brief stints in Dubai and Switzerland. In 2003, he returned to the Gulf to take a job in Internet City, as an in-house lawyer for Mastercard. For most of his life, he had operated under the conventional wisdom that ever since the world had been organized into a map of decolonized nation-states, laws and lands had been inextricable. The law was about codifying the values of a society and—in the best case—achieving justice. But he began to think of legal systems differently: “not just as a tool for fairness, but as a tool for economic development,” he told me.
In 2006, Beer met Nasser Saidi, a Lebanese politician who was then the chief economist of the DIFC. The commercial zone he was pitching to companies wasn’t just a group of high-end buildings; it was, as he put it, a “Vatican of international finance.” Beer was in the business of law, not divinity, but the similarities were striking: What was the DIFC if not a micro-sovereignty devoted to the interests of a group of powerful men serving what they believed was a higher power—in this case, the market?
In 2008, Beer became the new court’s first registrar. He understood that the role of the court was to “provide confidence” to businesses, he told me. “I don’t think anyone was that fussed about principles of the rule of law. In order to have confidence, they needed to feel that their promises would be honored. And they wanted to do that in a familiar environment—hence the establishment of that court.” He foresaw the possibility of an independent court not just for the free zone, or for the emirate, but perhaps for the entire world.
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The first big cases the court handled, however, were not what anyone had anticipated. Just as the DIFC was finding its feet, the global financial crisis brought Dubai World, the city-state’s equivalent of a sovereign wealth fund, to its knees. Before the crash, Dubai World employed 100,000 people working in real estate, shipping, and logistics spread over some 200 subsidiary companies. It was huge—and now it had almost $60 billion in debts that neither the parent company nor its offspring could repay on time. When the firm’s creditors came knocking, Dubai did something novel: It assembled a team of outside advisers to establish a brand-new insolvency tribunal, to be run by three DIFC judges. In December 2009, the court opened its doors to any of Dubai World’s creditors, regardless of where they conducted their business. The cases were complex, but the tribunal proved that it could be counted on to hear them fairly and impartially.
In the process, it broke the territorial seal. All kinds of parties showed up to file claims, including New York City hedge funds and local contractors. “The judges were clearly independent and agnostic as to who owed the money and were quite happy to award damages and costs and all sorts of things against the government,” Beer told me. The DIFC’s courts were now open to all. As of 2011, anyone could opt into the financial center’s judges, laws, and procedures to resolve their disputes. The court was in Dubai—but it could have been anywhere.
On the surface, such a court might seem like a nice thing for Dubai to have—a little strange, sure, but befitting a city full of migrants and expatriates. There aren’t any real losers in these trials, because to file a claim in the DIFC is to be, almost by definition, in a position of privilege to begin with. This is not a venue conceived for the overworked Filipina housekeepers, the trafficked Moldovan sex-workers, the injured Bangladeshi laborers on whose backs Dubai has been built.
At the same time, Dubai’s legal entrepreneurship reveals something more troubling: that speaking only of a “law of the land” no longer makes much sense. The law itself is the commodity here. The DIFC court thus set a new standard in play. To accommodate the needs of foreign firms, multinationals, and expatriates, countries can go so far as to offer them a separate system of justice.
The DIFC has since exported its court-in-a-box to other jurisdictions. In 2008, Saidi proclaimed in a speech that “we have been approached by countries as far away as the Caribbean and Latin America and Korea and Africa to establish DIFC clones.” By last year, independent commercial courts and DIFC-style tribunals, which are both part of and separate from the domestic system, had popped up in Abu Dhabi, Qatar, Benin, Kosovo, Iraq, the Netherlands, France, and Kazakhstan—where Mark Beer led the charge.
When it comes to seducing capitalists, Kazakhstan’s defining features—its enduring autocracy, its dependence on oil exports, its tendency toward graft, that goddamn Borat movie—might seem like disadvantages. Who would want to open a company in such a place? It turns out that there are perks to doing business in a state with such a lousy reputation.
In 2016, Beer was appointed to an advisory body called the International Council of the Supreme Court of Kazakhstan, whose purpose was to modernize and internationalize the country’s domestic courts. Two years later, the Astana International Financial Center was launched, combining an arbitration center (in which disputes are mostly privately resolved) and a DIFC-style tribunal.
Beer was bullish on the tribunal. He wrote celebratory columns for the local English-language newspaper and made cameos in press releases and videos. In June 2020, he wrote a report for the Council of Europe praising the success of Kazakhstan’s judicial reforms. “Objectively, no other judiciary has endeavored to achieve so much reform at such an accelerated pace,” he wrote.
All the while, Kazakhstan was battling a series of high-level corruption cases and experiencing unprecedented popular unrest over graft and inequality. Billions of profits from extracting uranium, titanium, gold, copper, and, of course, oil had been hoarded by oligarchs who stashed most of their wealth in foreign property holdings and offshore accounts.
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Beer has described his mission in Kazakhstan as an effort to increase the low levels of trust that foreigners would (understandably!) have in the country’s judicial and political systems. But however well the new court works, it won’t necessarily do ordinary citizens much good. At worst, it will end up helping an undemocratic regime make more money and launder its reputation by attracting fancy international businesses, without doing anything to improve economic inequality, social justice, or human rights.
When I confronted Beer with this objection, he invoked the response of Sir Anthony Evans—the chief justice of the DIFC—when he was fielding a controversy about Dubai’s treatment of migrant workers. Beer said, “His answer, which I thought was brilliant, was: I must be doing what I do to improve the system. People have access to a system they didn’t have access to before. If the court is credible and independent, it must be making a positive contribution.” Beer pointed out that the idea of a female judge was for a long time sacrilegious in the UAE. But after the DIFC appointed one and “the sun continued to rise the next day,” the “onshore” system decided to appoint female judges too.
In fact, Beer has been succeeded in his post at the DIFC by a woman: Amna Al Owais, a vivacious young Emirati lawyer from Dubai. Under Al Owais’s leadership, the court has kept expanding, adding clients, cases, and divisions. It’s also been conscious not to overshadow the original courts of Dubai. Even in Dubai, whose ruler invited the court in, replacing a homegrown legal system with borrowed law and rented judges on quasi-extraterritorial ground remains controversial. To help maintain the fragile balance between the national and the global, authorities have created yet another court, staffed with a mix of local and foreign judges, to decide which court has jurisdiction in contested scenarios.
But when I visited the DIFC in late 2021, I discovered a more literal display of power. Near the main entrance stood a glass case, and inside it, the clay handprint of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, alongside those of his six children. The artifacts seemed a crude attempt at conveying an important point: that no matter where its laws and litigants and judges had come from, this cathedral of high finance was still very much a part of Rome.
In the years since leaving Dubai, Mark Beer has found an additional venue for his ideas and ambitions, one as far from the Gulf, the Steppe, and his home in Oxford as you can get.
Beer’s latest preoccupation is with the laws of outer space: an arena with no nations, no territory, and no people. In a sense, space is the ultimate free zone—an extraterrestrial DIFC, offshore even from offshore. Of course it needs laws. And who better to serve as their keeper than Mark Beer?
Beer told me he got curious about space when he met the owner of a satellite company at the Davos World Economic Forum in 2017. Shortly thereafter, Beer nominated himself to become the justice minister of Asgardia: the world’s first space-based nation, whose “landmass” was briefly a server on a satellite orbiting the Earth, whose “population” communicates predominantly on a blog platform, and whose “laws” are decided by the community.
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I had signed up to be a citizen of Asgardia too, long before I met Beer. Like him, I wanted to understand what it might mean to have a jurisdiction without a nation or a territory. But I let my membership lapse because the citizenship fees—$110 a year—began to add up. Beer, by contrast, persisted, as one of a handful of officials who is “not a Trekkie,” as he puts it. (He’s not in it for the money: The position is unpaid. In the meantime, he also mounted a run for Oxford City Council, in 2022, as a Conservative, but lost that race.)
“Like in Dubai, I want to do more, and perhaps I’m pushing harder than I ought to,” he told me. “But we’ll soon launch the formation of companies in Asgardia, and I think that gives a whole new dimension and platform to talk about economic zones outside any territorial jurisdiction.”
For the time being, Asgardia is cosplay: a thought experiment for those of us who like to imagine a world beyond our own, whether it’s for fun or out of despair, or even, perhaps, in the hopes of striking it rich (asteroid mining, anyone?). “It’s a bit like the pioneers of the internet,” Beer told me. “We thought they were crackpots too.”
As we finished our breakfast, it occurred to me that Beer was either light-years ahead of most political thinkers when it came to predicting the silhouette of state sovereignty 10, 20, 50 years from now—or he was on a different planet. And just maybe, these things were not opposed, but one and the same.
The essay was adapted from the forthcoming book The Hidden Globe: How Wealth Hacks the World.
theatlantic.com