Reasons why millionaires flock to the UAE

dubai - The country will continue to attract expat millionaires and provide opportunities for home-grown ones.

The UAE will remain a magnet for millionaires as the population of high net worth individuals (HNWIs) will grow faster in the coming years. The country will continue to attract expat millionaires as well as provide opportunities for home-grown ones.

According to the Wealth-X estimates of regional private wealth, the number of millionaires in the UAE with assets between $1 million and $30 million reached 46,998 while ultra-high net worth individuals with assets of $30 million-plus reached 1,380 last year. The UAE houses the second largest wealthy population after Saudi Arabia in the GCC.

The number of millionaires in the UAE with assets between $1 million and $30 million is projected to grow by 5.5 per cent between 2017 and 2022 as compared to 2.5 per cent during 2012 and 2017. Similarly, the population of ultra-high net worth individuals will also grow by 5.5 per cent during the 2017-2022 period as against 3.4 per cent during 2012-2017.


Taimur Khan, research manager, Knight Frank, said given the projected economic growth and the UAE's attractions as a lifestyle and business-oriented destination, the country is very likely to see the number of millionaires increase over the next five years.

"The rate of economic growth is expected to increase in 2018 to 3.3 per cent, up from the 0.8 per cent seen in 2017 - this increase is likely to support the growth in wealth of HNWIs who tend to be business owners. Additionally, as regulations become relaxed in terms of ownership and an easier business environment, we are likely to see the rise of new industries and sectors which will lead to an increase in HNWIs," Khan said.

Andrew Amoils, head of research, New World Wealth, said most new millionaires will be expats as the UAE is a great place to start a business with low tax rates and good services.

"In our view, most new millionaires will be expats. We expect strong HNWI migration to the UAE over the next 10 years. We see strong growth in UAE financial services [banking, wealth management] and professional services [law firms, consultancies] sector over the next 10 years. Hi-tech, healthcare and media sectors are also expected to grow strongly," Amoils said.

Commenting on the reasons why millionaires would continue to move to the UAE, Amoils attributed it to a high-income economy, first-class healthcare system, low tax rates, international business hub, luxury hub with top-class shopping, quality apartments and villas, good international schools and universities and world-class yachting and beaches.

Khan believes most new millionaires will be a mixture of both home-grown residents and rich expats migrating to the UAE.

"It will be a mixture. The UAE is likely to become ever more attractive for foreign HNWIs to relocate as the country enacts 10-year visa regulations and allows 100 per cent foreign ownership - in a largely tax-free environment. Additionally, as part of various diversification strategies, we are likely to see home-grown HNWIs increase as they operate in a growing economy which is looking to facilitate new and growing economic industries," Khan added.

In the Middle East, according to the Wealth-X report, more resilient commodity markets should support growth prospects and large economies such as Saudi Arabia, Egypt and the UAE will continue to offer lucrative investment opportunities.

The Middle East was home to 9,090 ultra-high net worth individuals in 2017, registering an increase of 4.4 per cent over the previous year with total wealth reaching $1.526 trillion (Dh5.6 trillion).

Globally, there were 255,810 UHNWIs last year, owning $31.5 trillion wealth (Dh115.6 trillion).

- waheedabbas@khaleejtimes.com