Dubai Marina Image Credit: Gulf News archives

Dubai: The UAE continues to cement itself as the migration of choice for the mega rich, with tens of thousands of multi-million-dirham millionaires shifting their home base to the country in less than two decades, according to the latest estimates.

A report from a global market research firm, released on Monday, showed that since 2000, more than 38,000 high-net-worth individuals (HNWIs) have already moved to the UAE, providing a huge investment boost to the Gulf state.

HNWIs are people with a personal wealth of at least $1 million (Dh3.6 million). They’re among the highly mobile members of the upper echelon of wealth, who are constantly on the lookout for opportunities to grow their fortunes overseas.

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In 2017 alone, some 5,000 HNWIs transferred to the UAE from countries like India, Turkey, Saudi Arabia, Egypt, Nigeria, Iran and Lebanon, according to the UAE 2018 Wealth Report of New World Wealth.

Millionaires are attracted to the UAE as it is a high-income economy with good tax rates

- Andrew Amoils, New World Wealth

Andrew Amoils, head of research at New World Wealth, said ultra-wealthy individuals are pouring into the UAE because the country offers low tax rates and strong opportunities for setting up businesses.

The country is also known for its luxury shopping options, high-income economy, top-end apartments and villas, good international schools and universities, as well as yachting and beaches.

“Millionaires are attracted to the UAE as it is a high-income economy with good tax rates and strong business opportunities. It is also relatively stable when compared to other countries in the Middle East,” Amoils told Gulf News.

The International Monetary Fund (IMF) had earlier revised its growth forecasts for Gulf economies, citing that the UAE alone is expected to see its gross domestic product (GDP) to rise by 2.91 per cent this year, compared to the July estimate of 1.96 per cent. By next year, the country’s GDP should jump by 3.66 per cent, compared to the earlier estimate of 3.04 per cent.

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Off-plan residences in Dubai Marina Image Credit: Supplied

Besides the GDP, wealth migration figures are considered to be a very important gauge of the health of an economy. If a country, for example, is seeing a huge number of millionaires moving away, it can be an indication of an underlying problem.

Wealthy residents are probably being turned off by the high crime rate, lack of business opportunities, religious tensions in the host country.

“It also can be a sign of bad things to come, as HNWIs are often the first people to leave – they have the means to leave unlike middle-class citizens,” said the report.

“If one looks at any major country collapse in history, it is normally preceded by a migration of wealthy people away from that country. Conversely, countries that attract HNWIs tend to be very healthy and normally have low crime rates, good schools and good business opportunities.”

However, there are still a number of issues facing the UAE that could affect millionaire migration trends going forward.

Wealthy residents, for instance, tend to move around a lot and many of them stay in the UAE for about a year or two and then move on elsewhere.

“Despite strong diversification of the economy over the past 20 years, the UAE is still highly dependent on oil, especially when it comes to exports and tax revenue collection. Considering the ongoing move towards electric cars and renewable energy, this may become a problem in the future,” New World Wealth stated.

“[There is an] increased pressure on low tax countries – tax authorities in Europe are increasingly cracking down on low tax countries such as the UAE, Monaco, Bermuda and Singapore.”

The UAE has been a constant magnet for the affluent in search of not just a luxurious lifestyle, but a piece of property to park their money in or as an investment to earn some rental income.

Data showed that Indian nationals poured a total of Dh5.9 billion into Dubai real estate between January and June this year.

Buyers from Saudi Arabia acquired Dh3.7 billion worth of properties, while those from the United Kingdom, Pakistan, China, Egypt, Jordan and France spent several billions of dirhams more.