Secret Behind India’s Wealthy Elite’s Migration to the Dubai
India’s affluent are increasingly looking towards a fresh destination: the United Arab Emirates (UAE). This move has positioned Dubai, Abu Dhabi, and other emirates as preferred choices for the country’s ultra-wealthy. However, what exactly is attracting India’s super wealthy to the UAE?
One crucial element is the UAE’s advantageous tax system. In contrast to India’s taxes on income and capital gains, the UAE provides a nearly tax-free environment. This results in substantial financial advantages for affluent individuals and families seeking to enhance their wealth management approaches.
Besides taxation advantages, the UAE offers a business-friendly environment characterized by streamlined processes for business setup, numerous free trade zones, and a strong focus on innovation. This creates fertile ground for both entrepreneurs and established businesses to expand their operations, enter new markets, and attract global investment.
According to a report by Henley & Partners, an international investment migration advisory firm, the UAE has emerged as the top choice for the ultra-wealthy. The report predicts that approximately 4,300 millionaires will leave India in 2024, with a significant portion opting to relocate to Dubai in the UAE.
The report also noted that while India continues to experience significant outflows of millionaires, primarily towards the UAE, these migrations are not viewed as alarming. India continues to generate a substantial number of new High Net Worth Individuals (HNWIs) despite emigration. Moreover, many of the millionaires leaving India maintain business interests and secondary residences in the country, indicating a continued connection and positive economic engagement.
Investors are increasingly favoring property investments.
The UAE has become increasingly attractive to wealthy Indians compared to other popular destinations like Australia, Singapore, and the US. Over the past year, Indian buyers have significantly boosted Dubai’s property market, contributing 16 billion dirhams (approximately Rs 35,500 crore), nearly double the amount from the previous year.
Indians accounted for 40% of homebuyers in Dubai, with a majority coming from Delhi-NCR, Ahmedabad, Surat, Hyderabad, and Punjab. Another 40% were Indians already residing in the UAE, while the remaining 20% were Indians living in various other parts of the world.
Wealthy Indians are also increasingly establishing family offices in cities such as Dubai, Singapore, and London. This trend is particularly driven by younger generations, many of whom have studied abroad or recently returned to join family businesses. These individuals are interested in setting up family offices abroad for several reasons.
Firstly, they seek to safeguard a portion of their wealth from potential tax or regulatory issues in India. Secondly, having a family office in a foreign country provides easier access to international markets and supports business expansion globally. 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 typically exceeding $100 million (approximately Rs 820 crore).
UAE’s Golden Visa Program
In addition to the ultra-wealthy, many professionals are increasingly choosing Dubai as their preferred destination. The UAE’s Golden Visa program, expanded in 2022 to encompass a wider range of workers, skilled professionals, scientists, and researchers, has significantly enhanced the country’s appeal among affluent Indians.
This program offers a long-term residence visa that allows foreign talent to reside, work, or study in the UAE with exclusive privileges.
Moreover, the UAE provides a taste of luxury living, particularly in Dubai, renowned for its extravagance. From world-renowned shopping and Michelin-starred dining to luxurious penthouses and expansive villas, the UAE caters to those who appreciate a lavish lifestyle.
Yet, beyond material indulgences, the UAE’s allure also u in its reputation for exceptional safety and security. This is a compelling factor for wealthy individuals and families seeking a stable and secure environment to raise their families.
A blessing for the startup community
In Dubai, Indians constitute more than 30% of the startup community, and the city is actively seeking to attract even more tech talent from India.
To achieve this goal, Dubai has introduced a special initiative: 100,000 Golden Visas are being offered, allowing entrepreneurs and technology investors to reside in the country for up to 10 years, significantly longer than standard visas.
Furthermore, Dubai has launched a national program tailored for small businesses. This initiative assists startups in securing funding, establishing partnerships with established companies, and promoting their products on a global scale.
These combined factors – including tax advantages, a favorable business environment, luxurious living standards, high levels of security, strategic location, and accessible residency options – create a compelling proposition for India’s ultra-wealthy. The UAE is more than just a tourist destination; it represents a new sanctuary offering a blend of lucrative opportunities, opulent lifestyles, and a stable future.