The UAE will most likely add thousands of new millionaires to its existing wealthy population this year, as rising security tension in some markets have spurred a migration of affluent tycoons.
The UAE is one of the top destinations for moneyed citizens from various countries around the world, with 3,000 super-wealthy individuals (HNWIs) or 4 per cent added to the millionaire population in 2015. The country is ranked as the fifth favorite place among the well-heeled, while Australia occupies the first spot, followed by the United States and Canada in the top 3.
Given the migration patterns of millionaires and following the recent atrocities in other markets, some 3,500 new millionaires are expected to move to the UAE this year. These moguls will come from different countries, although many of them will be moving in from Turkey.
“For 2016 full year, our provisional forecast is that another 3,500 HNWIs will move to the UAE during the year, mainly from Turkey. Turkey has a lot of problems,” Andrew Amoils, head of research at New World Wealth, told Gulf News.
According to New World Wealth, an agency that provides information on the global wealth sector, millionaire migration out of Turkey is likely to increase, as it is “suffering from serious political and economic problems."
“It is also being negatively impacted by terrorism and a rising level of religious violence.”
Turkey used to be the number one destination for migrating HNWIs,with some 98,000 millionaires living there are the end of 2014.
“However, Turkish HNWIs were hard hit in 2015. Specifically, the number of HNWIs living in Turkey declined by 24 per cent in 2015,” New World Wealth said. Adding to the country’s woes, the Turkish Lira fell by 20 per cent against the US dollar, while the stock market dropped by 30 per cent in 2015.
“A large number of Turkish HNWIs left the country in 2015. Most went to the UK, the UAE, Malta, Cyprus and Qatar,” New World Wealth said.
On the other hand, the UAE’s millionaire population, or those with about $6 million to $7 million in assets, continued to grow, reaching 72,000 last year, the second-highest in the Middle East region. Dubai, which recorded a net inflow of 2,000 wealthy individuals in 2015, is currently home to 42,000 HNWIs.
Amoils said Dubai or the UAE remains attractive to millionaires because of its tax-free regime and low crime rate, among many other factors. The influx of new millionaires will positively impact the economy, as HNWIs will “add to the spending pool” and most likely start their own business that will consequently lead to more job creation.
“Reasons to move to UAE [include] no income tax, relatively safe, good educational options for children, good places to socialise, good business opportunities, growing economy, first-world transport and infrastructure,” said Amoils.
Andrew Prince, financial planner at deVere Acuma in Dubai, said the UAE's international air connectivity, political stability, wide variety of shopping and dining options and year-round sunshine are attracting a growing number of wealthy residents.
"Politically, we are blessed with a stable and 'open for business government' that recognizes the traditional value of 'marhaba' which means welcome in Arabic," Prince said.
"Dubai permits residency for certain property purchasers and let's face it, who doesn't like a bit of sunshine? Shopping, fast cars and every conceivable cuiine imaginable. Who wouldn't wish to come to Dubai, millionaire or not?"
By Cleofe Maceda
© Al Nisr Publishing LLC 2022. All rights reserved.