How the UAE became a magnet for millionaires

Sebastian Castelier

Jun 25, 2024

Boats are anchored in the Dubai Creek surrounded by high-rise buildings in the Gult emirate, on February 18, 2023. Home to towering skyscrapers and ultra-luxury villas, Dubai saw record real estate transactions in 2022, largely due to an influx of wealthy investors. — KARIM SAHIB/AFP via Getty Images

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DUBAI — The United Arab Emirates (UAE) was crowned the world’s top wealth magnet for the third consecutive year in a report released last week by Henley & Partners, a British investment migration advisory consultancy. The country is set to attract a net inflow of 6,700 individuals with liquid wealth of $1 million or more in 2024, according to the report, with a large number from the UK and the European Union expected to add to already high inflows from India, the Middle East, Russia and Africa.

The rise in the UAE’s millionaire population, whereby Dubai recorded the world’s 10th fastest increase in millionaires between 2013 and 2023, is a boost for the Emirati economy. Indeed, the arrival of high-net-worth individuals’ spending power indirectly creates jobs in sectors such as real estate, wealth advisory, luxury retail, dining and hotels, automotive and fashion.

The UAE attracted a net inflow of 5,200 millionaires in 2022 and 4,700 in 2023, bringing its total millionaire population to 116,500. According to the firm, the Gulf country will lure about 5% of the 128,000 millionaires who are expected to relocate worldwide in 2024, a figure that is disproportionate to its share of the world’s population, which stands at 0.12%. The UAE has entered a cycle as more wealth attracts financiers and high-quality wealth management services, which in turn enhances the country’s status as a global wealth hub.

Tapping into the Global South

The UAE’s geographical location, at the crossroads between Asia, Africa and Europe, and its nonaligned political positioning have helped the country tap into various pools of wealth. As a result, the UAE emerged as a global wealth magnet that attracts wealthy individuals from Western countries as well as from established emerging powerhouses such as India and smaller frontier economies in Asia and Africa. In recent years, the country has signed free trade agreements with Cambodia, Turkey, Indonesia and India, and is in discussion with Vietnam and Malaysia, helping the country deepen ties with the Global South. While China and India saw their millionaire populations grow by 92% and 85%, respectively, since 2013, the millionaire population grew by 15% in Germany and 14% in France, and declined by 8% in the UK.

The trend of growing millionaire populations originating from the Global South is likely to continue. International Monetary Fund (IMF) projections show that emerging and developing economies are expected to grow at least twice as fast as advanced economies until 2029.

Gulf competition

The absence of personal income, capital gains and inheritance taxes is key for the UAE to attract wealth. While virtually all Gulf states offer such advantages, the UAE has leveraged other value propositions to rise to the rank of the Middle East’s biggest millionaire hub — 14th globally — ahead of Saudi Arabia, which is the region’s largest economy but was only home to 58,300 millionaires in 2023, according to Henley & Partners data.

The ease of obtaining long-term residency visas known as golden visas, as well as the widespread availability of alcohol, since 2020, unlike in Saudi Arabia, where the sale of alcohol has been banned since 1952, has also contributed to the emirate's allure to high-net-worth individuals.

Dubai is the only Gulf city ranked among the world’s top 50 cities in millionaire population, but Henley & Partners listed Abu Dhabi, Riyadh and Jeddah in its top 15 cities to watch due to their strong wealth growth potential. The two Saudi Arabian cities recorded an increase in their millionaire populations of 40% and 32%, respectively, between 2013 and 2023.

Following decades of religious conservatism, Saudi Arabia lags behind the UAE in its appeal to wealthy individuals. The kingdom’s Crown Prince Mohammed bin Salman is implementing a social and economic reform program known as Vision 2030, which aims to position the country as a global hub open for business. In January 2024, Saudi Arabia launched five new green card-like “premium residency” permits to attract foreign talent. The kingdom’s first alcohol shop opened in 2024, but it is reserved for non-Muslim diplomats.

Still, the Gulf region is often perceived as having done little to combat illicit financial flows. Inflow of Russian wealth into the UAE since 2022 has raised concerns that it acts as a haven for those facing punitive Western measures. Critics said individuals under sanctions have been able to park assets in the UAE, including via shadow companies. The UAE has denied wrongdoing, and the Financial Action Task Force said there are signs of progress. The financial watchdog removed the UAE from its grey list in February 2024 for making progress "in addressing the strategic AML/CFT (anti-money laundering and counterterrorist financing) deficiencies previously identified during their mutual evaluations."