The UAE has emerged as an attractive destination for high-net-worth individuals (HNWIs) that will help boost its financial wealth at a compound aggregate growth rate of 6.7 per cent to more than $1 trillion by 2026, says a latest report.
"Unprecedented government stimulus packages, low-interest-rate environments, increased liquidity, stock market gains, and widespread Covid-19 vaccinations drove 2021 global economic resilience and accelerated HNWIs population and wealth growth last year," according to a report Dash Venture Labs.
Rise in HNWIs population
The report noted that global HNWI population expanded by 7.8 per cent and added 1.7 million new HNWIs in 2021. It further saw eight per cent increase in wealth to $6.4 trillion in 2021.
In the Middle East, the report said HNWI population and wealth grew by 5.5 per cent and 6.3 per cent, respectively.
"The growth was primarily led by Israel and the UAE, which witnessed HNWI wealth and population growth higher than the global average due to their increased tech-industry focus and recovery in oil prices during 2021," according to the report.
Why HNWIs prefer UAE
Shailesh Dash, founder of Dash Venture Labs, said, high net worth individuals (HNWIs) are flocking to the UAE after the pandemic for several reasons, primarily combination of a tax-friendly environment, robust economy, world-class infrastructure, and its strategic location.
"Dubai recorded a 18 per cent growth in its HNWI population in the post pandemic era and secured first position in the Mena region," Dash said.
To a question, he said the recent changes to the UAE visa policies, including the introduction of long-term visas for students, skilled workers, and wealthy investors, are just the beginning of a new era in attracting talent, skills, and investment to the country.
"These changes are part of a broader effort by the UAE to create a more attractive and competitive environment for international talent, businesses, and investments. The country recognises that a diverse and skilled workforce, as well as a strong entrepreneurial and investment community, are key drivers of economic growth and competitiveness," Dash said.
Wealth in safe hands
With the Middle East, Africa, and South Asia (Measa) region's leading international financial centre, the Dubai International Financial Centre (DIFC) recently announced the opening of the first Global Family Business and Private Wealth Centre in the world as part of its strategy to double the sector’s contribution to the emirate's economy by 2030.
The new wealth centre is expected to bring family businesses and UHNWIs — people with a net wealth of $30 million or more — from the UAE and the broader Measa region and beyond to DIFC at a time when investors are looking for a safe, secure and stable place.
"The UAE, and particularly Dubai, still has a lot to offer to HNWIs, with its continued investments in luxury real estate, diverse entertainment options, innovative technology, and stable political environment. Golden, green and investor visas, among others, are just the beginning of new era to attract talented students, skilled people and wealthy investors," Dash said.
UAE a leading hub for HNWIs
Ravi Krishnan, general manager of the Dubai-based business consultancy Ascent Partners, said the UAE’s proactiveness in dealing with the pandemic through its efficient roll-out of vaccines, as well as effective balancing of safety precautions with opening up the economy without delay, set the country apart from the rest of the world.
"While the UAE was always seen as a leading hub for HNWIs from the Middle East, South Asia and Africa, its superior handling of the pandemic attracted HNWIs from non-traditional geographies," Krishnan told Khaleej Times.
Referring to the more recent geopolitical crisis in Russia and the economic challenges in most of Europe, he said geopolitical tensions and economic challenges have pushed even more HNWIs to establish an alternate base in the UAE. "The possibility for individuals from any part of the world to live and work in a country that provides unparalleled safety, security and opportunities is a huge draw," he said.
Spike in inquiries
Hatem El Safty, CEO of Business Link, also echoed the similar views and said a lot of millionaires and foreign investors have shown interest in setting up their business operations in the UAE.
"We have noticed a spike in business inquiries as investors have shown interest in the UAE following its successful Covid strategy and recent visa reforms. It is likely that high-net-worth individuals will relocate to the emirate and expand their business operations in the region,” El Safty said.
"At Business Link, we have noticed an increase in inquiries for e-commerce and IT-related industries since the pandemic hit the global economy two years back," he said.
UAE welcomes entrepreneurial DNA
Krishnan said the UAE leadership has shown the world that the country welcomes people from the world over who can aspire and achieve in a non-bureaucratic environment.
"HNWIs are, almost without exception, individuals who share an entrepreneurial DNA and as such thrive in countries that offer the freedom to think big, implement bold ideas and foster innovation," he said.
He said the UAE has also shown itself as being open to change in terms of attracting investments and talents.
Referring to the revised Commercial Companies Law on foreign ownership in the mainland and introduction of SPVs as a legal entity type, he said today it is possible in the UAE to set-up foundations and register wills under English common law standards.
"Any sophisticated investor will readily appreciate the possibilities that come with such regulatory options," he said.
In reply to a question, he said various types of visas —golden, silver and investor — will help bring skilled workforces and wealthy investors to the UAE.
"Absolutely. The new visa regime makes it possible for individuals to move to the UAE in larger numbers and contribute more broadly towards its development goals. The remote worker visa and the retirement visa are other visa types available to support the desire of those who wish to live in the UAE," he said.
"Over time, the new talent pool and wealth will mean greater collective prosperity for all who make UAE their home," Krishnan said.
*As posted on Khaleej Times