The Richie Rich flock to Abu Dhabi



What do cryptocurrency’s richest man Zhao Changpeng, India’s Adani family, hedge fund billionaire Ray Dalio, Russian steel magnate Vladimir Lisin and Nassef Sawiris, Egypt’s wealthiest man have in common? They are just a few among thousands of high-net-worth individuals (HNWIs) who have moved their assets to Abu Dhabi making the skyscraper-studded emirate the latest most preferred choice for billionaires.

Data compiled by M/HQ, a wealth advisory firm, revealed that more than 5,000 of them exist now in the Abu Dhabi Global Market compared to just 46 in 2016. Prior to the pandemic, the UAE saw net inflows of around 1,000 HNWIs per year. Now the UAE has emerged to be among the top five destinations along with Australia, Singapore, United States and Switzerland.

Abu Dhabi, the capital city of the UAE has thus become the choice for the world’s Richie Rich to set up special purpose vehicles (SPVs). SPVs are business entities, subsidiaries or holding companies created by a parent company and are established with their own balance sheet to minimise financial risk.

For instance, Nassef Sawiris, with a net worth of about $7.6 billion, recently moved his family office to Abu Dhabi. He is among the richest in the world, investing in German sporting-goods maker Adidas as well as English soccer club Aston Villa. Similarly, Ray Dalio, founder of Bridgewater Associates also established a branch of his family office in Abu Dhabi.

Though it is not publicly known where individual billionaires moved their assets from, the wealth influx reveals the global shifts in how the world’s rich are protecting their money.

As far as the UAE is concerned the financial flows to the country mark a new role for its $509 billion economy as the emirate attempts to diversify away from oil.

The move to Abu Dhabi also come at a time when certain low-tax jurisdictions like the British Virgin Islands and Cayman Islands have faced greater scrutiny from officials resulting in a slide in new corporate registrations.

But why is Abu Dhabi attracting the rich and famous?

Abu Dhabi’s tax rate is perhaps the driving force. The UAE’s double tax treaties with other countries, help wealthy SPV owner minimise their tax bill for holdings within the SPV. The emirate also has mechanisms in place to protect assets from foreign interference. The UAE has remained neutral when it has come to sanctioning countries like Russia owing to the Ukraine war, while, Switzerland, Britain and some Caribbean nations have cracked down on people with ties to countries navigating sanctions.

Abu Dhabi’s recent policy changes offering long-term residency and in some cases even UAE passports, has made it more attractive to HNWIs. Add to that a highly developed infrastructure, low crime, the sun and sand, affordable apartments and increasingly cultural attractions such as the Louvre in Abu Dhabi, and the emirate has become a favoured choice.



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