The UAE remains top destination for wealthy in the Middle East
Saudi Arabia rising in status with a surge in ultra-high-net-worth individuals
The UAE’s popularity as the top destination for the wealthy in the region is here to stay.
With an enticing array of tax advantages, vibrant business landscape, and strategic appeal, the UAE continues to captivate high-net-worth individuals (HNWIs) and businesses alike, according to experts.
According to the Brics Wealth Report earlier this year by investment migration advisory firm Henley & Partners in collaboration with New World Wealth, Dubai hosts 72,500 millionaires, with 212 classified as centi-millionaires and 15 as billionaires. Similarly, Abu Dhabi is home to 22,700 millionaires, including 68 centi-millionaires and five billionaires. People with a net worth of $100 million or more in investable assets are called centi-millionaires. The Emirates was expected to attract 4,500 more millionaires last year, according to a separate report by Henley & Partners in June 2023.
“The UAE has strategically transformed into a thriving global nexus of wealth,” says Mohammad Al Bastaki, Group Head of Private Banking at Emirates NBD, adding that having a great location and connectivity are huge benefits.
“Being a central hub to both western and eastern/Asian countries, the UAE is considered among the world’s top 10 most globalised countries in terms of connectivity and accessibility mainly through top local airline carriers, known worldwide,” he says.
The UAE has strategically transformed into a thriving global nexus of wealth.
According to Al Bastaki, the UAE boasts impressive infrastructure developments such as the expansion of Dubai’s Al Maktoum International Airport and the Etihad Railway project, enhancing connectivity within the country. “Dubai’s Al Maktoum International Airport is set to be the biggest airport in the world with the capacity to handle up to 260 million passengers a year, improving connectivity for international travellers. Plus, projects like the Etihad Railway development also aim to bring greater connectivity within the country.”
The UAE's tax-free income policy for individuals and nominal tax rates for businesses too make it an appealing destination for high-net-worth individuals, business owners, and entrepreneurs alike, says Vipul Kapur, Head of Private Banking, Mashreq. "The overall business-friendly atmosphere has significantly contributed to its emergence as a leading wealth centre. Furthermore, it provides businesses with favourable regulations, a robust legal structure, and substantial government backing for entrepreneurship, alongside the establishment of special economic zones."
The overall business-friendly atmosphere has significantly contributed to its emergence as a leading wealth centre.
Visa rules
The new UAE visa rules align nicely with wealth diversification – such as the extended tourist visa which now lasts 60 days (previously 30), the five-year multi-entry tourist visa, which means visitors can stay up to 90 continuous days, the 10-year golden visa, promoting business and investment.
Additionally, the UAE is investing heavily in technological innovation. The country has allocated a whopping $500 million to drive research and development in artificial intelligence (AI) and other emerging technologies while business-friendly policies such as a highly competitive corporate tax rate have propelled it into a global hub for trade, finance, and technology, adds Al Bastaki.
It’s hardly surprising then that in the domain of private banking the UAE remains a top choice for affluent individuals seeking financial services and investment opportunities – in fact, the country’s UHNWI growth is forecasted to grow by 22 per cent until 2025.
Amid this dynamic landscape, there is an increasing demand for sophisticated financial services that Swiss banks like Lombard Odier are well equipped to meet.
“These changes underscore the need for a sharp focus on client-centricity, value-added services, thought leadership, superior investment content, fintech collaborations and talent development,” says Ali Janoudi, Head of New Markets, Lombard Odier Group.
These changes underscore the need for a sharp focus on client-centricity, value-added services, thought leadership, superior investment content, fintech collaborations and talent development.
“This evolution is evident in the growing high-net-worth expatriate community in the UAE. These individuals seek sophisticated and trusted financial advisors, prompting institutions like ours to establish a strong presence in the Dubai International Financial Centre (DIFC). This strategic move aligns with our goal to effectively serve an affluent and discerning client base.”
Among the UAE’s many attractions, the wealthy are also being lured by a well-monitored regulatory environment, particularly conducive to establishing foundations and trust structures. The UAE also allows 100 per cent foreign ownership in professional sectors and free zones, encouraging foreign direct investment (FDI).
Furthermore, government initiatives like the Dubai Economic Agenda D33 focus on transformative projects and priorities for sustainable economic growth, aiming to double Dubai’s economy within the next decade and attract more wealthy investors.
“The establishment of a Family Business and Private Wealth Centre in DIFC has also played a pivotal role, attracting global family-owned businesses and UHNWIs, evidenced by a 25 per cent growth in new investment firm and asset manager licences issued by DFSA,” says Al Bastaki.
This centre seeks to nurture local family businesses and draw international family enterprises and UHNW individuals to the UAE, crucial given the anticipated transfer of trillions of dollars in generational wealth globally over the next decade.
Private banks are increasingly investing in digital tools and platforms to enhance client experience and streamline operations, says Kapur. "We continue to appreciate the importance of further digitizing our private banking services to offer more convenient, curated, timely and relevant information to our clients to help them with their financial goals and ease of banking. This includes the adoption of digital platforms for account management and wealth management services, as well as the use of advanced analytics and artificial intelligence to personalise client experiences and optimize investment strategies."
He believes the client-centric approach will continue to be the primary aspect of private banking. "There has been a lot of discussion on relationship model of this industry in the wake of new age, AI-led world. It has now been widely accepted and amply vocalized by industry leaders that this has facilitated the way banking is done, rather than replace it. We have equipped our best-in-class relationship management team with the availability of sophisticated in-house digital capabilities for enhancing our client-centric approach by focusing on building strong relationships, understanding client needs and delivering tailored solutions.
Kapur also points towards the growing interest in sustainable and responsible investing among high-net-worth individuals as they show higher considerations for ESG in their investment portfolio. "Private banks are increasingly recognising the importance of ESG criteria in managing wealth and meeting the evolving preferences of their clients, who often seek to align their investments with their values and sustainability goals. By incorporating ESG principles into their practices, private banks can better meet the evolving needs and expectations of their clients while contributing to a more sustainable and responsible financial system."
Rise of Saudi Arabia
Other countries in the Middle East are attempting to advance their reputation as an influential player in private banking – notably Saudi Arabia, which is experiencing a transformative era under its Vision 2030 programme, which aims to reduce the country’s dependence on oil and diversify its economy into new sectors including technology, tourism, entertainment, and renewable energy. “These initiatives are rapidly changing the economic landscape of Saudi Arabia, making it an attractive destination for the ultra-wealthy. We do anticipate an increase in the number of ultra-wealthy individuals in the Middle East, particularly in the UAE and Saudi Arabia,”says Janoudi. “Both countries have shown significant strides in wealth creation, driven by unique factors that appeal to high-net-worth individuals globally.”
The number of UHNWIs in Saudi Arabia (those with assets of $30 million or more), has experienced remarkable growth. In the five years to 2021, its UHNWI population surged by an impressive 227 per cent – it currently holds the title of having the most billionaires in the Middle East, with 71 individuals commanding a cumulative wealth of $205 billion, according to data compiled by Wealth-X for the Billionaire Census 2023.
“Given the developments in both the UAE and Saudi Arabia, coupled with ongoing efforts to enhance their business and financial services ecosystems, we can expect a notable increase in their ultra-wealthy populations in the coming years. This growth not only reflects the economic vitality of these regions but also underscores their burgeoning importance as key players in the global financial and investment landscape,” Janoudi concludes.