22 April 2017High net worth individuals are also bringing in skills and expertise apart from investment
High net worth individuals (HNWIs) from outside the UAE are increasingly looking to the country as a place to book assets. We, at Emirates Investment bank, have witnessed this first hand, with a sizeable inflow of international clients over the last few years, which we expect to continue and accelerate in the years ahead.
Interestingly, recent data on HNWI migration suggests that greater numbers of the world’s wealthy are now going one step further and moving permanently to the UAE. A report by New World Wealth showed that the Emirates welcomed the fourth most HNWI migrants globally in 2016 — 5,000 in total. The UAE was behind only Australia, US and Canada in the report, which revealed that, globally, 82,000 millionaires moved country last year, a 28 per cent increase on 2015.
This is an interesting trend and can only be a good thing for the UAE. Many of these HNWIs are entrepreneurs and business leaders — not only do they invest and spend money in the UAE, but they also bring skills and expertise. The human capital they bring may not be as tangible as the financial capital, but it is just as important in growing a successful economy.
From our experience, there are four main drivers behind the UAE’s increasing prominence as a jurisdiction where HNWIs choose to book their assets as well as reside themselves.
Quality of banks
Banking capabilities in the UAE have developed significantly over the last ten years. Local banks are enhancing their offering and there is an increased presence of international banks, both of which are servicing local clients and those who wish to use the UAE as an offshore banking jurisdiction. Whether they be local or international, banks in the UAE are setting themselves up to be more attuned to the needs of the global client, with multilingual relationship managers, global trading platforms and enhanced technology. Technology, in particular, has advanced significantly in recent years with banks investing heavily in developing their IT infrastructure to deliver superior reporting as well as accessibility to their accounts. While the private banking industry is traditionally known for its personal relationships with its clients, the new generation of HNWIs demand their bank is also readily accessible — wherever they are in the world.
Evolving legislation and regulation
The UAE is doing a lot of work to enhance its status as an international jurisdiction. For example, the introduction of new insolvency laws has created a more supportive environment for the private sector, which is helping encourage investment and innovation. Meanwhile, the recent launch of the DIFC Wills and Probate Registry provides legal arrangements for individuals who are looking for an inheritance structure more aligned with Anglo-Saxon jurisdictions. It is also fascinating to see other UAE jurisdictions such as Ras al-Khaimah adopt the DIFC Wills and Probate structure, allowing them to appeal to a broader international community.
Lifestyle and strategic location
The UAE offers an attractive lifestyle, is well-connected to major cities around the world, and has a smooth visa issuance processes. This makes the country a prime location for HNWIs to visit, live and conduct their business affairs from – so it only makes sense that they manage their assets from here as well.
Stable and tax-free
Over the last four decades, the UAE has worked hard to establish a dynamic and diversified economy with supportive infrastructure, which it has achieved while maintaining political stability. Coupled with the fact that HNWIs face no additional income taxes when banking or residing here in the UAE, it makes the Emirates an ideal place for HNWIs to domicile themselves.
More recently, His Highness Sheikh Mohammed bin Rashid, Vice President, Prime Minister, and Ruler of Dubai, established specialised committees to look at a new entry visa system aimed at attracting qualified and talented professionals to the UAE. Initiatives like this will only make the UAE an even more attractive destination for HNWIs from around the world, which will further cement its position as a hub for the world’s wealthy.
Khaled Sifri is the CEO of Emirates Investment Bank, an independent private bank based in the UAE.
© Gulf News 2017