As the global economy continues to evolve, migration patterns of affluent individuals are shifting. According to the Henley Private Wealth Migration Report 2023, the United Arab Emirates (UAE) has become a top pick for millionaires seeking relocation. Many of them are moving to Dubai, UAE’s most populous city and financial hub. This article will explore the factors driving this trend.
Zero personal income tax
One of the draws for wealthy individuals moving to Dubai is its favourable tax landscape. Unlike other jurisdictions, the UAE does not impose income tax on individuals. This applies so long as they possess a UAE residence visa and do not have an official residence outside the UAE. This extends to all forms of personal income, allowing individuals to retain a larger portion of their earnings and investment gains.
In fact, undersecretary of the UAE Ministry of Finance, Younis Haji Al Khoori, reaffirmed that the government does not have plans to introduce personal income tax. This tax-free status makes Dubai an attractive destination for those seeking to accumulate wealth more efficiently.
Longer residency with Golden visa
When moving to Dubai, individuals may not only minimise their tax burdens and maximise wealth retention but they can also do so for longer. Introduced in 2019, the Golden visa grants expatriates a renewable five-year or ten-year visa in the UAE. Investors and entrepreneurs are among those that can qualify for the Golden visa.
Prior to this, the validity of a residence visa may range from one to three years.
For eligible individuals moving to Dubai, the Golden visa thus offers a pathway to obtain and maintain long-term residency. Among the benefits, they can travel outside the UAE for extended periods beyond the conventional six-month limit. This flexibility is particularly valuable for those who travel frequently for business or leisure purposes. They can maintain their legal status in Dubai without the need for reapplication or concerns about visa expiry.
The Golden visa scheme also simplifies the process of sponsoring family members, including spouses and children of any age. This means that family members can also enjoy ten years of residency in Dubai and within the UAE. The ability to sponsor an unlimited number of domestic helpers may further increase the convenience and quality of life for wealthy individuals and their loved ones.
Moreover, it comes with the assurance that in the event of the primary visa holder’s passing, family members can continue living in Dubai until the end of their visa validity. This enhances the city’s charm as a family-friendly destination.
Easier succession planning for individuals with family businesses
Dubai is also actively positioning itself as a safe and supportive environment for those involved in family businesses. As one of the free zones in Dubai, the Dubai International Financial Centre (DIFC) is constantly enhancing and evolving its ecosystem to assist global family businesses.
In 2023, the DIFC implemented the DIFC Family Arrangements Regulations for individuals who are in a family business, family entity, family office or part of a family structure. This new regulatory framework will help to facilitate effective succession planning and preservation of legacies.
For example, certification and accreditation initiatives within the DIFC aims to assist family businesses and their advisors, aligning with the benefits and incentives outlined in the UAE Family Business Law. As such, for affluent individuals with family businesses, the DIFC Family Arrangements Regulations would strengthen Dubai’s appeal as a secure destination for wealth management and company operations.
Dubai as a desirable destination for affluent individuals
At over 3.6 million residents, Dubai’s population is diverse, with expatriates making up a significant 92% majority. This reflects Dubai’s cosmopolitan nature, a city that welcomes people of different backgrounds and nationalities. Fuelled by factors such as advantageous tax policies, attractive residency options, and supportive regulatory environment, Dubai may continue to draw wealthy individuals from across the globe.
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