Aerial view of Dubai Marina cityscape and skyscrapers at sunset.
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The wealthy are often voting with their feet as costs and taxes rise back home, seeking greener living conditions – or, in the case of tax-free expat enclaves like Dubai, sandier beaches – a trend that some financiers say is likely to accelerate following Britain’s Labour Party’s landslide victory in June.
“There are drivers and pull factors behind this trend of billionaires choosing to relocate to Dubai,” Karim Jetha, a longtime regional investor who moved to the UAE from the UK during the pandemic, told CNBC.
“Push factors include the expectation of tax increases under the new Labour government – for example, one of Labour’s election pledges was to impose VAT on private school fees, which would mean a 20% increase in tuition fees,” he said. “Pull factors include the perception that Dubai is extremely safe and visa reforms to encourage immigration.”
According to the Henry Report released in June, the UAE is expected to see a record net influx of 6,700 billionaires from around the world by the end of 2024. That’s almost double the number of the second-placed country on the list, the United States, which is expected to see a net influx of 3,800 billionaires over the same period.
Palm Jumeirah in Dubai, United Arab Emirates
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“Zero income tax, golden visas, a luxurious lifestyle and strategic location have helped the UAE establish itself as the world’s number one billionaire relocation destination,” the report said. The UAE golden visa is a long-term residence visa that allows expatriates to live, work or study in the UAE.
He added that while most billionaires moving to the UAE are from India, the Middle East, Russia and Africa, more Britons and Europeans are also expected to move to the glamorous desert emirate.
Sunita Singh Dalal, partner at Hourani Private Wealth & Family Office in Dubai, said developments and reforms to the UAE’s “wealth management ecosystem” were a major factor in this.
“In less than five years, the UAE has put in place a strong regulatory framework that offers high net worth individuals a range of innovative solutions to protect, preserve and grow their wealth,” she said.
Modern infrastructure, an extensive international school system, geographical connectivity, low crime rates, income tax exemptions, remote worker visas and numerous investment incentives are also factors attracting wealthy individuals to Dubai.
In contrast, the UK’s billionaire population is expected to fall from 3,061,553 last year to 2,542,464 by 2028, according to the UBS Global Wealth Report published in June. However, it’s important to note that the UK’s billionaire population, the third-largest in the world, includes many expats from countries like Russia and the Middle East.
Many of those people will be considering giving up their UK residency as the British government phases out “non-resident” status – which allowed wealthy expats to avoid paying UK tax on their overseas income.
“The exodus already caused by the economic and political turmoil in the UK risks being accelerated by further unwelcome policy decisions,” Hannah White, director of the Institute for Government, an independent London-based think tank, said in comments made in the Henry report.
She pointed out that inheritances over 325,000 pounds ($417,755) are already taxed at 40 percent, and that Britain’s non-resident tax system ends in 2025.
The current Labour government has also promised to end the 20% VAT exemption on private school tuition fees in England, which will make education significantly more expensive for parents who send their children to elite schools.
“Labour’s pledge to remove the 20% VAT exemption is a further unwelcome development,” Mr White said.
