UAE Set to Retain Top Spot for Wealth Migration
The United Arab Emirates is on track to be the world’s top wealth magnet for the third consecutive year, according to the Henley Private Wealth Migration Report. With a growing influx of high-net-worth individuals (HNWIs) choosing Dubai as their preferred destination, the UAE has established itself as the leading global hub for migrating millionaires.
UK Millionaire Population Expected to Decline
At the same time, the U.K. – a significant source of expatriates to the UAE – is projected to see its millionaire population drop by 17% by 2028, as per a report from Swiss bank UBS. The rising costs and taxes in the U.K. are pushing wealthy individuals to seek more favorable environments abroad, with Dubai’s tax-free incentives proving highly attractive.
Push and Pull Factors for Millionaires
The trend of millionaires migrating to Dubai is driven by both “push” and “pull” factors. Push factors include the prospect of higher taxes under the U.K.’s Labour government, including a proposed 20% VAT on private school tuition. Meanwhile, pull factors highlight Dubai’s appeal: its reputation for safety, attractive visa reforms, and the city’s luxury lifestyle.
Karim Jetha, a regional investor who moved to the UAE from the U.K. during the pandemic, discussed these factors, noting that Dubai’s tax-free environment and recent visa reforms are key reasons for this influx.
Record Influx of Millionaires Expected by 2024
According to the Henley report, the UAE is set to see a record net inflow of 6,700 millionaires by the end of 2024. This influx is nearly double that of the U.S., which is expected to attract 3,800 millionaires in the same period. With its zero income tax, golden visas, luxury living options, and strategic location, the UAE continues to attract wealthy individuals from around the globe.
The Golden Visa and Wealth-Friendly Ecosystem
The UAE’s Golden Visa program, which provides long-term residence options for foreign nationals, is a significant factor contributing to the country’s rise as a wealth hub. The program offers foreign residents the ability to live, work, or study in the UAE while enjoying the benefits of a tax-free lifestyle. Additionally, the UAE’s evolving “wealth management ecosystem,” including innovative solutions to protect, preserve, and enhance wealth, has made it increasingly attractive for HNWIs.
Sunita Singh-Dalal, partner at Hourani Private Wealth & Family Offices in Dubai, highlights the country’s robust regulatory framework as one of the key drivers of this trend. The UAE’s modern infrastructure, low crime rates, geographical connectivity, and robust international school system further cement its position as a prime destination for the wealthy.
Increased Migration from the U.K. and Europe
While millionaires migrating to the UAE most commonly come from India, Russia, Africa, and the Middle East, the report forecasts a growing influx from the U.K. and other European countries. As taxes increase and policies change in their home countries, many are opting to relocate to Dubai for a better financial and lifestyle environment.
UK’s Millionaire Exodus and Tax Changes
The U.K. is projected to see its millionaire population drop from 3,061,553 in 2023 to 2,542,464 by 2028, according to UBS’s Global Wealth Report. The country’s millionaire population, which is the third-highest in the world, includes many foreign residents. However, the UK government’s decision to phase out its “non-dom” status – which allowed wealthy foreign residents to avoid paying British taxes on overseas income – is expected to accelerate this outflow.
Hannah White, director of the Institute for Government in London, points out that the policy changes in the U.K., including the phased elimination of the non-dom status and higher estate taxes, are likely to further encourage wealthy individuals to relocate abroad.
Impact of VAT on Private School Fees
An additional push factor for the wealthy in the U.K. is Labour’s proposal to remove the exemption from the 20% VAT charge on private school tuition fees. This policy is set to increase the cost of sending children to elite private schools, which is a significant concern for many wealthy families. The U.K.’s higher taxes and the economic instability triggered by political changes are likely to contribute to the outflow of millionaires.
Conclusion: Dubai’s Continued Appeal for the Wealthy
The UAE’s combination of tax incentives, strategic location, safety, and modern infrastructure has made it the top destination for millionaires seeking a better quality of life. As the U.K. faces economic and political uncertainty, the trend of high-net-worth individuals relocating to Dubai is expected to continue growing, solidifying the UAE’s position as the world’s leading wealth magnet.
Source: CNBC News
