If you want to see what it takes to set up an entirely new financial center (and what is best avoided) , head for Dubai. This tiny, sun-baked patch of sand in the midst of a war-torn and isolated region started with few advantages other than a long tradition as a hub for Middle Eastern trade routes.

But over the past few years Dubai had built a new financial center from nothing. Dozens of the worlds leading financial institutions have opened offices in its new financial district, hoping to grab a portion of the $2 trillion-plus investment from the Gulf. Some say there is more hype than business, but few big firms are willing to risk missing out.

Dealmaking in Dubai centers around The Gate, a cube-shaped structure at the heart of the Dubai International Financial Centre (DIFC) . A brainchild of the ruling Al- Maktoum family, the DIFC is a tax-free zone for wholesale financial services. Firms licensed for it are not approved to serve the local financial market. The DIFC aims to become the leading wholesale financial centre in the Gulf, offering one-stop shopping for everything from stocks to sukuk bonds, investment banking and insurance. In August the Dubai bourse made a bid for a big stake in OMX, a Scandinavian exchange operator that also sells trading technology to many of the world’ s exchanges.

Dubai may have generated the biggest splash thus far, but much of the Gulf region has seen a surge of activity in recent years. Record flows of petrodollars have enabled governments in the area to spend billions on infrastructure projects and development. Personal wealth too is growing rapidly.

Qatar, Bahrain and Abu Dhabi also have big aspirations for their financial hubs, though they keep a lower profile than Dubai. They, too, are trying to learn from more established financial centers what they must do to achieve the magic mix of transparent regulation, good infrastructure and low or no taxes. Some of the fiercest competition between them is for talent. Most English- speaking professionals have to be imported.

Each of the Gulf hubs, though, has its own distinct characteristics. Abu Dhabi is trying to present itself as a more cultured, less congested alternative to neighboring Dubai, and is building a huge Guggenheim museum. Energy- rich Qatar is an important hub for infrastructure finance, with ambitions to develop further business in wealth management, private equity, retail banking and insurance. Bahrain is well established in Islamic banking, but it is facing new competition from London, Kuala Lumpur and other hubs that have caught on to Islamic finance. “If you’ ve got one string to your bow and suddenly someone takes it away, you’ re in trouble, ” says Stuart Pearce of the Qatar Financial Center about Bahrain.

Saudi Arabia, by far the biggest economy in the Gulf, is creating a cluster of its own economic zones, including King Abdullah City, which is aimed at foreign investors seeking a presence in the country. Trying to cut down on the number of “Suitcase bankers” who fly in from nearby centers rather than live in the country， the Saudis now require firms working with them to have local business licences. Yet the bulk of the region’ s money is still flowing to established financial centre in Europe, America and other parts of Asia.

The financial hubs there offer lessons for aspiring centers in other parts of the developing world. Building the confidence of financial markets takes more than new skyscrapers, tax breaks and incentives. The DIFC, for instance, initially suffered from suspicions of government meddling and from a high turnover among senior executives. Trading on its stockmarket remains thin, and the government seems unwilling to float its most successful companies there. Making the desert bloom was never easy.