Dubai (AFP) – Rich people are flocking to Dubai in record numbers, drawn to the desert city by its zero income tax policy and easy luxury lifestyle that has become harder to maintain elsewhere. The United Arab Emirates and particularly Dubai have long welcomed wealthy people from nearby countries, and people helping millionaires to move there told AFP it is seeing more Westerners joining the fray. Advisory firm Henley & Partners estimates that the UAE will attract an unprecedented 9,800 millionaires this year — more than anywhere else in the world.
The tightly-policed UAE has moulded itself into a magnet for the wealthy, offering economic and political stability with extremely low crime rates, an easygoing business environment, and even easier access to luxury. The Gulf state’s golden visa scheme, meant to attract wealthy or skilled foreigners, allows individuals to obtain a 10-year residence permit. Mike Coady, who heads Skybound Wealth Management, an advisory firm for high-net-worth individuals, said some of his clients “feel like success has become a liability in their home countries.” “They’re being taxed more, scrutinised more, and offered less,” he said, but in Dubai, “wealth isn’t hidden, it’s normalised.” “In London, my clients whisper about their net worth. In Dubai, they can live freely.”
A top destination for flashy influencers, Dubai has become synonymous with over-the-top displays of wealth. It is home to an enormous mall with an indoor ski area, the world’s tallest building, and the Palm — an artificial island dotted with five-star hotels. The rapid development into a world-leading playground for the rich has been met with criticism over gross inequalities as armies of low-paid migrant workers form the backbone of the economy.
Coady said his relocating clients were mostly professionals in their 30s and 40s, including tech founders, second-generation business owners, consultants, and fund managers. One of them is the 42-year-old founder of a cloud software company who, fearing capital gains tax on its sale, had moved to the UAE from Britain — now a leading exporter of millionaires. Some are pushed out by a stricter taxation policy for people with “non-dom” status — those who live in Britain but whose permanent domicile is abroad and had benefitted from no tax on income earned outside the country.
Put together with other looming changes to taxation and inheritance rules, and what Coady called “increasing anti-wealth rhetoric,” Britain is expected to lose a record 16,500 millionaires this year, according to Henley & Partners. The most high-profile departee this year, billionaire John Fredriksen, told Norwegian media he was moving to the UAE because “Britain has gone to hell.” Speaking on the “Building Wealth With No Borders” podcast about his move to Dubai, Max Maxwell, CEO of Paddco Real Estate, said: “We’re all chasing a lifestyle, whatever that means to everybody.” The self-described “serial entrepreneur” explained that after leaving the United States for the UAE, he found his family could enjoy “a better lifestyle than where we were” for the same amount of money.
Philippe Amarante, of Henley & Partners in Dubai, said the wealthy seek to maintain their fortunes and lifestyle, and the ability to do business with “very little red tape.” And the UAE has positioned itself “with a very clear and simple message: we are open for business,” said Amarante. To Coady’s clients, “the UAE fits like a glove,” he said.
The inflow of rich foreigners has not been without controversy, however. Emirati authorities have cracked down on money laundering after the UAE was put on a global “grey list” in 2022 over concerns about murky financial transactions and a flood of Russian money, as wealthy Russians flocked to the Gulf after the Ukraine invasion to escape crippling sanctions at home. The UAE has also extradited some wanted individuals, including drug barons, reversing the grey listing.
The wealthy from all over the world are now taking their families, businesses, and private offices with them to Dubai, “which is something new,” said Faisal Durrani, head of Middle East research at Knight Frank real estate consultancy firm. Dubai is already one of the world’s top 20 cities with the most millionaires, home to 81,200 of them as well as 20 billionaires, according to Henley & Partners. Overtaking New York and London combined, 435 homes worth $10 million or more were sold in Dubai last year — making it the busiest market for high-end properties, relatively affordable in the UAE compared to the West, Durrani said. He said buyers from places such as Monaco and Switzerland would come to the company seeking a Dubai apartment for $100 million, for example. “But in Dubai, for that price, you could buy a whole building.”
© 2024 AFP
