India's wealthy are increasingly setting their sights on a new address: the United Arab Emirates (UAE). This shift has seen Dubai, Abu Dhabi, and other emirates emerge as a favored destination for the nation's ultra-rich. But what exactly is drawing India's super rich to the UAE?
One key factor is the UAE's lucrative tax regime. Unlike India's income and capital gains taxes, the UAE offers a near-tax-free environment. This translates to significant financial benefits for wealthy individuals and families looking to optimize their wealth management strategies.
Beyond just taxes, the UAE presents a business-friendly ecosystem. Streamlined business setup processes, free trade zones, and a focus on innovation make it fertile ground for entrepreneurs and established businesses alike. This environment allows them to expand their ventures, explore new markets, and attract global investment.
Even a report by Henley & Partners, an international investment migration advisory firm claims that UAE has become the most preferred country for the ultra-wealthy.
The report highlighted that around 4,300 millionaires are expected to leave India in 2024, with the majority of them choosing to relocate to Dubai in the UAE.
"India continues to lose large numbers of millionaires, especially to the UAE. However, in our view, these outflows are not particularly concerning as India continues to produce far more new HNWIs than it loses to emigration. Furthermore, the bulk of the millionaires who leave India tend to retain business interests and second homes in the country, which is a positive sign," said the report.
Property Investments sees uptick trend
The UAE is increasingly drawing in wealthy Indians in comparison to other popular destinations such as Australia, Singapore, and the US. In the past year, Dubai's property market raked in 16 billion dirhams (Rs 35,500 crore) from Indian buyers, almost doubling the amount from 2021.
Indian buyers accounted for 40% of homebuyers in Dubai. Most of them were from Delhi-NCR, Ahmedabad, Surat, Hyderabad, and Punjab. Another 40% were Indians already residing in the UAE, and the remaining 20% were Indians living in different parts of the world.
Wealthy Indians are increasingly establishing family offices in cities like Dubai, Singapore, and London.
Younger generations, especially those who have studied abroad or recently returned to join family businesses, are increasingly interested in establishing family offices in foreign countries.
Founders of various startups are also moving their operations abroad and establishing family offices there. Several factors drive this trend. Firstly, they want to protect part of their wealth from potential tax or regulatory issues in India.
Secondly, having a family office abroad offers easier access to foreign markets and supports business expansion in other regions. Thirdly, it allows for diversification of investments and business ventures.
Typically, a family office is a privately owned entity that manages investments and wealth for a family with investable assets of approximately $100 million (Rs 820 crore).
Golden Visa
Besides, the ultra-wealthy, many professionals are now choosing Dubai as their destination. The UAE's Golden Visa program, expanded in 2022 to include more workers, skilled professionals, scientists, and researchers, has made the country even more appealing to affluent Indians.
This program offers a long-term residence visa, allowing foreign talent to live, work, or study in the UAE with exclusive benefits.
The UAE also offers a taste of the high life. Dubai, in particular, is synonymous with luxury. From world-class shopping and Michelin-starred restaurants to opulent penthouses and sprawling villas, the UAE caters to those who enjoy a lavish lifestyle.
However, the allure goes beyond just material pleasures. The UAE boasts a reputation for exceptional safety and security. This is a major draw for wealthy individuals and families seeking a stable and secure environment to raise their children.
A boon for startup community
In Dubai, Indians make up over 30% of the startup community, and the city aims to attract even more tech talent from India.
To achieve this, Dubai offers 100,000 Golden Visas, permitting entrepreneurs and technology investors to reside in the country for up to 10 years, much longer than regular visas.
Additionally, Dubai has established a national small-business program to help startups secure funding, partner with established companies, and market their products internationally.
This confluence of factors – tax benefits, a business-friendly environment, luxury living, security, strategic location, and accessible residency options – paints a compelling picture for India's super-rich. The UAE is not just a vacation destination; it's a new haven offering a combination of lucrative opportunities, a luxurious lifestyle, and a secure future.
