Dubai: The Desired Destination For The World’s Wealthy

Dubai: The Desired Destination For The World’s Wealthy

Why is Dubai the desired destination for the world’s wealthy who are quietly moving to the Emirate?

A billionaire tech entrepreneur recently moved to Dubai with his family, taking with him his family office and a fleet of 30 luxury cars, to start a new life. The entrepreneur, who does not want to be named, stated that Dubai is a safe location for his family in comparison to Los Angeles, where crime has risen due to COVID.

Although finding a property with space for 30 vehicles proved difficult, Rohal Kohyar, marketing director of Luxhabitat Sotheby’s International Realty, stated that eventually a villa on its own private estate was identified for the entrepreneur.

In addition, the family office set up was not straightforward – family offices of this magnitude, manage hundreds of millions of dollars in private wealth and require several specialist teams to do this.

Zahra Clark, head of the MENA region for Tiger Recruitment stated “We’ve had to increase the salary for an executive assistant position for it to be attractive for people to come back to the UAE”.

The pandemic saw many expats leaving Dubai and returning home, however, so many wealthy families are now relocating to Dubai and recruiters are having to offer big incentives to attract investment professionals back to the Emirate.

Kohyar estimates that 20 billionaires have bought property in Dubai this past year. Luxhabitat Sotheby’s International Realty has seen around a 300% increase in business compared to the same period in 2020.

According to the Dubai Land Department, the volume of property sales in Dubai increased by 136.5% in August 2021 compared to August 2020. Villa sales are up 124%, partly due to the sale of several Dh 100 million ($27 million) villas in Dubai Hills Grove area. “Normally we do one or two Dh 100 million ($27 million) deals a year. This year we’ve already done nine of them,” says Kohyar.

Kohyar added that although there have been real estate booms in the past, it is different now as people are buying luxury properties to live in them with their families. He added that wealthy buyers are in a rush to purchase unfinished developments, and have them completed the as soon as possible.

Another difference in comparison to previous years, is that people are migrating from countries further away than usual, mostly major European countries like U.K., Switzerland and Germany. The majority of super wealthy migrants setting up family offices in Dubai are from the U.S. and U.K., according to Kohyar. Other recruiters say that there is also a increased interest from Singapore and Hong Kong.

Many were impressed with the way Dubai handled the pandemic, however, the pandemic hit Dubai very hard, as thousands of skilled expats started heading home as jobs dried up, the cost of living spiraled and they worried about being stranded abroad.

Dubai’s rulers realized the fallibility of their economy, as expats brought with them businesses, wealth and entertainment. Without them, Dubai’s own talented or entrepreneurial youth might follow them overseas.

In an effort to reverse this, the UAE started offering “golden visas” to high achievers and actors. In July, 45 students who scored more than 95% in their exams were granted golden visas. The 10-year residency visa was created in 2019, but since the beginning of this year it has been handed out to top students, successful entrepreneurs and award-winning actors. The UAE also made 100,000 golden visas available to computer coders. Having lost out to Europe, Israel and Silicon Valley, Dubai now wants to establish itself as a tech hub and has a target to establish 1,000 major digital companies over the next five years.

This has made Dubai more attractive for the wealthy. For Dh 10 million ($2.7 million) they can have a golden visa. And, thanks to a new law introduced in February this year, (Decree Law 19), they can bring their family offices with them.

The most enticing thing about the UAE is the lack of income tax. When other parts of the world, and especially the US and UK are increasing wealth taxes to pay for the pandemic, Dubai suddenly looks much more attractive.

If the wealthy start moving their businesses or family offices to the UAE, they are more likely to stick around, says Kohyar: “This surge right now is more on a personal level, it’s more rounded, and we think this is going to be much more sustainable because people are moving here with their families and with their businesses so they’ll definitely stay.”

 

Source: Forbes

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