With the coronavirus pandemic crippling businesses and disrupting people’s mobility globally, experts believe the UAE may see a partial exodus of millionaires this year.
However, according to a significant new report, the country is set to remain a preferred destination for the ultra-wealthy.
The recent Global Wealth Migration Review 2020, published by AfrAsia Bank and its research partner New World Wealth, examined wealth migration trends worldwide.
According to the report, the UAE remains a hotspot for the wealthy with the latest statistics for the country (as of June 2020) showing it boasts 79,000 high-net-worth individuals (HNWIs), 3,400 multimillionaires, and 12 billionaires.
For Dubai specifically, the latest statistics show the emirate has 49,500 HNWIs, 2,300 multimillionaires, and nine billionaires.
In 2019, the UAE saw nearly 15,000 new millionaires, making the total number of HNWI population more than 197,000, according to leading consultancy Knight Frank.
“Over the past 20 years, the UAE has been one of the world’s biggest recipients of migrating HNWIs, with more than 25,000 estimated to have moved to the country over the past decade (2010-2020) — many coming from India, the wider Middle East and Africa (MEA),” explains Andrew Amoils, Wealth Analyst at New World Wealth.
“The main reasons why HNWIs continue to move to the UAE include the fact that it’s a recognised safe haven in MENA and an international business hub with a high-income economy and low tax rates. It also has a first-class healthcare system, is a luxury hub with top-class shopping, top-end apartments and villas, good international schools, yachting and beaches.”
Although financial analysts have voiced concerns that countries with large numbers of wealthy expats may see an HNWI exodus in 2020-21 in the short term, the UAE is fighting back.
In Dubai, in a bid to further attract the wealthy, the emirate is revving up a programme for retirees that has taken on greater urgency as the regional business hub contends with the flight of expatriates amid an economic downturn.
Foreigners over the age of 55 will be eligible for a five-year renewable visa if they meet certain criteria. In its initial phase, the programme will focus on UAE residents working in Dubai. Eligible candidates should meet one of the following requirements: a monthly income of Dh20,000; savings of Dh1 million; own property in Dubai worth Dh2 million.
The UAE has also recently introduced a 10-year golden residency visa for investors and businessmen.
The so-called UAE Gold Card includes three broad categories of five- and 10-year residency permits. Those investing at least Dh10 million would qualify for 10-year visas, while entrepreneurs and special talents would be entitled to five-year residency.
As well as business leaders and investors, the 10-year visa programme is also open for scientists and researchers.
New World Wealth regularly tracks the migration of wealth around the world. The migration figures are considered a highly important gauge
of the health of an economy. If a country, for instance, is seeing a significant number of HNWIs leaving the country it is probably due to serious problems, according to the research firm.
As of 2019, the most preferred destination for wealthy individuals was Australia, which recorded 12,000 migrating millionaires, followed by the United States, which welcomed 10,800 HNWIs and Switzerland (4,000).
The countries that witnessed the highest outflows last year were China, India, Russia, Hong Kong, Turkey, the UK, France, Brazil, Saudi Arabia and Indonesia.
Not far behind were Iran, Qatar, the Philippines, Pakistan, Lebanon and Thailand, which also saw high outflows of millionaires.
The continuing economic and social impact of Covid-19 has tested the resilience of several economies worldwide, resulting in a 14 per cent decrease in global private wealth for the first half of 2020.