The UAE: A Global Magnet for Wealth

With solid inflows from the United Kingdom (U.K.) and Europe, the United Arab Emirates (UAE) has become the top global destination for wealth, attracting businesses, investors, and high-net-worth individuals (HNWIs) for the third year in a row. The UAE’s strategic blend of political stability, a welcoming cultural environment, a thriving real estate market, favourable tax regulations, and economic stability accounts for its resurgence as the top destination for affluent individuals in 2024. Strengthening its position as a leading hub for investment and wealth migration, the country’s forward-thinking vision and dedication to innovation and development ensure its sustained appeal to global wealth. The UAE is expected to gain significant economic advantages as more wealthy individuals and their families relocate there, thereby increasing the country’s appeal and influence on a worldwide scale.

According to the Henley Private Wealth Migration 2024 report, the UAE is expected to receive a record net inflow of 6,700 millionaires this year, solidifying its position as the top destination for migrant billionaires due to its strategic location, zero-income tax, luxurious lifestyle, and golden visas. Considerably more billionaires are forecasted to be drawn to the Emirates than to its closest rival, the U.S., which is predicted to get a net inflow of 3,800 millionaires in 2024. These inflows come from Russia, Africa, India, and the broader Middle East, in addition to an anticipated surge from the U.K. and Europe.

Sunita Singh-Dalal, Partner leading the Private Wealth & Family Offices at Hourani in Dubai, remarks in the report, “The evolution and development of the UAE’s wealth management ecosystem is unprecedented. In less than five years, the UAE has introduced a robust regulatory framework that provides the wealthy various innovative solutions to protect, preserve, and enhance their wealth.”

Regulations and Reforms

Through a robust regulatory framework that facilitates business operations, the UAE has created a business-friendly environment and has become an attractive destination for investors and entrepreneurs due to its open legal system, strong intellectual property regulations, and streamlined business establishment procedures. The country continuously ranks highly in global indexes of business easiness, demonstrating its dedication to creating a favourable business environment. Some major reforms are allowing 100% foreign ownership in numerous industries, streamlining the business registration process, and modernizing the Commercial Companies Law for improved corporate governance. An updated Arbitration Law that aligns with international norms for resolving disputes, with the adoption of a Bankruptcy Law that offers stability to financially distressed companies. The financial sector is additionally supported by enhanced capital market transparency and strengthened anti-money laundering legislation. New data protection and e-commerce regulations promote digital transformation by encouraging fair competition and trust in online business. Stronger intellectual property laws preserve innovations, and labour law improvements enhance the rights and conditions of workers. Foreign investments are drawn in by the growth of free zones that offer tax incentives and customs exemptions, fostering a robust and dynamic economy. Indeed, the UAE’s favourable tax laws are, in fact, one of the main draws for HNWIs. The country’s full repatriation of profits, low corporate tax rates, and the absence of personal income tax translate into substantial financial advantages. These tax benefits are a significant attraction for individuals and companies looking to improve their financial positions.

Further, the UAE is also a suitable place to establish a business due to its many benefits. Over 40 free zones offer 100% foreign ownership and flexibility in picking business locations. The Basher digital platform facilitates speedy business setup in under 15 minutes, and investors can participate in over 2,000 economic activities. UAE nationals do not need to be on the board of directors for foreign investors to own and control commercial firms. Limited liability companies offer flexibility in setting up a firm with no minimum capital requirements. Investors, entrepreneurs, and talented individuals can apply for long-term resident visas, which allow for long-term settlement and last five to ten years. With its flexible policies that draw in skilled labour, the UAE is a global commercial hub that ranks first in the Arab world and third globally for re-exports, thanks to its low customs rates of 0–5%.

Economic Diversification and FDI

The UAE has become a wealth magnet due mainly to its effective economic diversification strategy. Despite being historically dependent on oil, the UAE has made large investments to grow other industries, including real estate, aviation, tourism, and financial services. The economy’s reliance on oil has decreased as a result of these initiatives, creating new sources of revenue, with the UAE’s non-oil GDP contribution reaching 73.8% in 2022.

The UAE real estate industry offers substantial investment opportunities, attracting domestic and foreign investors. With a growing range of wealth management and private banking services to meet the needs of wealthy individuals and families, the financial services industry has also experienced significant growth. The UAE is now a preferred choice for people looking to protect and grow their wealth because of these investing opportunities and wealth management options.

The UAE had a 35% increase in FDI inflows to $30.6 billion in 2023 from $22.7 billion in 2022, while FDI outflows fell to $22.3 billion from $24.8 billion. Additionally, in terms of announcements of greenfield foreign direct investment (FDI) projects in 2023, the UAE came in second place worldwide, only behind the U.S. With 216 greenfield FDI projects, the U.K. dominated the field, followed by India, the U.S., Italy, and France. The UAE registered 1,323 projects, a 33% increase from 2022, according to the UNCTAD World Investment Report 2024. With 60 new greenfield projects in 2023, Dubai surpassed Singapore and London in this regard. Greenfield FDI into the UAE came primarily from the U.S., with inflows rising by 137% to $3.8 billion, France, the U.K., India, and China came next.

The country has considerably expanded the volume of its commerce and varied its trading partners thanks to its commitment to open markets and proactive approach in negotiating bilateral trade agreements. A wide range of sectors have invested in the UAE thanks to its dynamic economy and business-friendly policies, which has further boosted trade growth. Through its Comprehensive Economic Partnership Agreements program, the UAE has forged strong trade ties with many countries, including Turkey, Indonesia, Cambodia, and Georgia. The agreement with Georgia will eliminate or reduce tariffs on most goods traded between the two countries, which is expected, within five years, to triple non-oil trade to $1.5 billion. It has also engaged in ongoing negotiations with at least 16 other countries, all of which have contributed to creating a favourable environment for FDI.

The International Monetary Fund estimated that the UAE’s real GDP would increase by almost 4% in 2024 due to all these initiatives, and average inflation would stay below 2%. In addition to its remarkable GDP growth, the UAE has solidified its ranking in the top 10 globally in several competitiveness indicators. The country came in sixth place globally in GDP (PPP) per capita, as per the International Institute for Management Development World Competitiveness Yearbook 2023, fifth place in the Real Economic Growth Rate Index, and sixth place in the GNI Index, as per the UNDP Human Development Index Report 2024.

With unrivalled access to growing markets, the UAE’s strategic location at the intersection of Europe, Africa, and Asia further solidifies its status as a central hub for international trade. Modern highways, ports, airports, communication networks, and other world-class infrastructure combine to create an ideal location for business and boost connectivity. Businesses and investors looking for reliable and effective logistics solutions have been drawn to the UAE, largely thanks to its infrastructural investments. With significant investments in digital infrastructure and smart city initiatives, such as Dubai’s Smart City initiative, which positions the UAE as a leader in technological advancements and draws in skilled technology businesses and investors, the UAE is at the forefront of innovation and technology. In addition, the UAE supports innovation and entrepreneurship by creating a thriving startup ecosystem that includes incubators, accelerators, and venture capital backing.

The UAE has greatly increased its international exposure and attracted investment thanks to its ability to host major international events like Expo 2020 Dubai. Such occasions demonstrate the country’s potential and boost the economy in several different areas. These international events significantly benefit the tourism industry, bringing in millions yearly. In terms of tourism revenues, the UAE is first in the Middle East and fifth globally, with $49 billion in revenue generated from travel in 2022, according to the World Tourism Organization report.

Furthermore, the UAE provides a high standard of living distinguished by security, safety, and contemporary amenities. The country offers a safe environment for citizens and businesses due to its low crime rate and political stability. For HNWIs and their families, the UAE is an attractive destination since it provides a cosmopolitan lifestyle and excellent access to recreational, educational, and medical services. Also, the introduction of long-term resident visas for high-skilled workers, entrepreneurs, and investors makes the UAE more appealing. These visas provide a stable and secure environment for long-term planning and investment. Investors, business owners, and highly skilled professionals can apply for long-term residency under the UAE’s Golden Visa program, Residence by Investment. Under this scheme, investors can purchase at least $550,000 in properties to qualify for a 10-year renewable resident visa in several investment sectors, including real estate.

The migration of wealthy individuals will increase investments in several sectors, including tourism, technology, finance, tourism, and real estate. The economy will be stabilised and will become more resilient to global economic fluctuations due to this investment diversification. The need for a skilled labour force grows as investments increase, leading to creating jobs in a variety of industries and reducing unemployment rates while attracting top talent from across the world and solidifying the UAE’s position as a major hub for business. As more HNWIs move to the country, demand for luxury items and high-end real estate rises which boosts the retail, real estate, and construction industries, increasing GDP and fostering economic growth.

Furthermore, drawing wealth aligns with the UAE Centennial 2071 and We Vision 2031 goals. Economic diversification, lowering reliance on oil earnings, and encouraging growth in other sectors are key components of We Vision 2031, which aims to place the UAE’s economy among the most competitive in the world. Being a top wealth magnet increases a country’s ability to compete globally because it draws HNWIs, which provide significant capital inflows supporting the financial sector and boosting FDI. This financial inflow promotes sustainable development and helps to create world-class infrastructure, health care, and educational systems.

HNWIs will provide financial support to the government for investments related to environmental sustainability, renewable energy, and smart cities. Furthermore, the vision highly prioritises growing human capital. Since HNWIs frequently invest in local talent, they provide job opportunities and support skill development, which will contribute to the knowledge economy of the UAE. As a result of their presence, the UAE’s intellectual capital is increased, and the country will move closer to becoming a knowledge-based economy through international collaboration and knowledge transfer.

Finally, the UAE’s Vision Centennial 2071, which seeks to make the UAE the greatest country in the world by 2071, is closely aligned with its position as the world’s top wealth magnet. To build a diversified knowledge economy through productivity, national companies, scientific research, and international cooperation, the vision focuses on four main pillars: establishing a future-focused government with a long-term vision for social prosperity and diversified revenues; promoting excellent education with an emphasis on advanced sciences, technology, innovation, and moral values, along with fostering a happy and cohesive society by promoting tolerance, respect, and loyalty, empowering youth and women, enhancing health and sports, and preparing future generations as goodwill ambassadors. The vision aims to improve social cohesion, strengthen values, invest in technology-based education, diversify the economy, and boost the UAE’s standing. By focusing on these aspects, the UAE can ensure that its status as a leading wealth magnet contributes positively to the long-term goals set out in its visions, paving the way for sustainable growth and prosperity.

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