Dubai set to welcome more millionaires as wealthy British people move money | Wilnesh News

The United Arab Emirates is on track to become the world’s biggest wealth magnet for the third year in a row, according to the United Arab Emirates Henry Private Wealth Migration Report.

Meanwhile, Swiss bank UBS expects the UK – already a country of origin for many Emirati expats – to see a 17% decline in its millionaire population by 2028.

In many cases, as costs and taxes rise in their home countries, high-net-worth individuals are voting with their feet, seeking greener pastures — or sandier situations in tax-free expat hubs like Dubai. Some financiers say the trend could accelerate as Britain’s Labor Party scores a landslide victory in June’s election.

“The trend of millionaires choosing to relocate to Dubai has both push and pull factors,” Karim Jetha, a long-time regional investor who moved to the UAE from the UK during the pandemic, told CNBC.

“Push factors include the potential for a new Labor government to raise taxes. For example, one of Labor’s election promises was to introduce VAT on private school tuition fees, which would increase costs by 20 per cent,” he said. “Pull factors include Dubai’s perceived extreme safety and visa reforms that encourage immigration.”

Net inflows of millionaires from around the world into the UAE will reach a record high of 6,700 by the end of 2024, according to the Henry Report released in June. That’s nearly twice as much as the second-ranked country on the list, the United States, which is expected to see a net inflow of 3,800 millionaires over the same period.

“With zero income tax, golden visa, luxurious lifestyle and strategic location, the UAE has become the number one destination for millionaire immigrants worldwide,” the report said. The UAE golden visa is a long-term residence visa that allows foreign residents to live in the UAE live, work or study.

The report adds that while millionaires moving to the UAE are most commonly from India, the Greater Middle East, Russia and Africa, more Britons and Europeans are also expected to immigrate to the dazzling desert emirate.

Sunita Singh-Dalal, partner at Hourani Private Wealth and Family Office in Dubai, said this is largely due to the development and reform of the UAE’s “wealth management ecosystem”.

“In less than five years, the UAE has launched a strong regulatory framework that provides wealthy individuals with a range of innovative solutions to protect, preserve and grow their wealth,” she said.

Factors such as modern infrastructure and a strong international school system, geographical connectivity, low crime rates, no income tax, remote work visas and a range of investment incentives also help attract wealthy people to Dubai.

By comparison, UBS Group AG’s Global Wealth Report in June predicts that the number of millionaires in the UK will fall to 2,542,464 by 2028 from 3,061,553 last year. But it’s worth noting that Britain’s huge millionaire population is the third largest in the world, including many foreign residents from Russia, the Middle East and elsewhere.

The British government is now gradually removing its “non-dom” state — which frees wealthy, often foreign residents from paying UK tax on overseas earnings — most of whom will seek to give up their UK residency.

Hannah White, director of the Institute of Government, an independent think tank in London, commented in the Henry Report: “The outflows already caused by economic and political turmoil in the UK are likely to be accelerated by further unpopular policy decisions.”

She noted that a 40% duty was already imposed on estates over £325,000 ($417,755) and that the UK’s non-domestic tax system would end from 2025.

The current Labor government has also pledged to remove the 20% VAT exemption on UK private school tuition fees, which will significantly increase the cost of education for those who send their children to elite institutions.

“Labour’s commitment to scrap the 20 per cent VAT exemption is a further unwelcome development,” White said.