As Dubai continues to solidify its position as a global financial center, it presents a unique and compelling opportunity for African investors to partake in its success story. Enabled by the government’s ambitious initiatives, incentivizing regulatory frameworks, tax policies, long-term residency visas, a robust financial ecosystem, high quality of life, and strategic geographic location, Dubai has become a preferred destination for private wealth and family offices, both homegrown and global.
The city boasts the highest concentration of ultra-high-net-worth individuals (UHNWIs) among cities in the Middle East, with projections indicating that this trend will not slow down. According to Henley & Partners, Dubai’s population of centi-millionaires is expected to surge by 78% within the next decade.
A Preferred Destination for Family Offices and Private Wealth
Dubai’s appeal to private wealth and family offices is multifaceted. The city offers a favorable regulatory environment, tax incentives and a high standard of living, making it an ideal hub for wealthy individuals and their families. Key factors contributing to Dubai’s attractiveness include:
Government Ambition and Regulatory Frameworks
The Dubai government’s ambition to establish the city as a global financial hub is central to its strategy. The D33 Agenda, Dubai’s ten-year economic plan, aims to position the city among the top four global financial centers. This agenda includes initiatives to attract family offices and private wealth, with more high-net-worth individuals (HNWIs) relocating and diversifying their investments in Dubai.
The city has taken notable measures to maintain favorable tax policies, implement expat-friendly regulations, and improve the regulatory landscape for family offices. For example, the Dubai International Financial Centre (DIFC) enacted the DIFC Family Arrangements Regulations, which simplify the legal framework for family offices and set a benchmark for good conduct.
Robust Financial and Banking Infrastructure
Dubai’s financial ecosystem is highly developed and continuously growing, offering a hyper-connected environment for family offices and UHNWIs. The city is home to some of the world’s most reputable banking institutions, hedge funds, and wealth management firms.
The DIFC houses over 300 wealth and asset management companies, representing an industry size of $450 billion. Additionally, Dubai ranks first in the Middle East and among the top 10 globally in the Global Financial Centres Index 2023. The city is the only financial center in the Middle East, Africa and South Asia (MEASA) region included in this classification.
Strategic Geographic Location
Dubai’s strategic geographic location offers unparalleled access to the world’s largest growth markets, including Africa, India, and Asia. With 2.4 billion people living within a four-hour flight and five billion within an eight-hour flight, Dubai provides a unique advantage for global business operations. This ideal time zone positioning, between the East and West, makes Dubai an attractive hub for global headquarters, financial giants, and executive nomads.
High Quality of Life and Luxurious Lifestyle
Dubai is renowned for its high quality of life and luxurious lifestyle, making it a desirable destination for UHNWIs. The city is ranked as one of the safest in the world, offering political stability and a luxurious living environment. Dubai’s real estate market is particularly attractive, with luxury property transactions and rental yields outperforming global benchmarks.
The city’s luxury property market recorded a 42% increase in sales transactions in the first half of 2023, totaling AED 178 billion ($48.4 billion). Moreover, Dubai offers significant value and return on investment (ROI), with luxury properties providing more space for the same price compared to other global cities.
Attracting Private Wealth, HNWIs and Family Offices
Dubai’s success in attracting private wealth, HNWIs, and family offices is evident from various reports and statistics:
– The UAE saw the highest net influx of HNWIs globally in 2022, with over 5,200 HNWIs relocating to the country, according to Henley & Partners’ 2022 Global Citizens report.
– Dubai houses $517 billion of wealth, the highest in any Middle Eastern city, and more than 55,000 HNWIs and UHNWIs. Over $3 trillion of private wealth is within an hour’s flight of Dubai, and $8 trillion across the region, according to DIFC.
– Dubai’s population of HNWIs rose to 67,900 in 2023, up from 54,000 in June 2021, according to Henley & Partners’ 2023 Private Wealth Migration report.
Ongoing Government Initiatives
Dubai’s government is committed to cementing the city’s position as a global hub for financial services and private wealth. The D33 Agenda aims to double Dubai’s economy over the next decade and position the city among the top three global cities. Additionally, the DIFC’s 2030 Strategy aims to double its size and economic contribution to Dubai’s GDP, promoting investment and encouraging financial institutions to establish themselves in the DIFC.
Factors Contributing to the Influx of Private Wealth
- Favorable Policies and Regulatory Incentives
Dubai offers business-friendly tax policies, including zero personal income tax and a low corporate tax capped at 9% for annual profits above AED 375,000. Expat-friendly regulations have also been implemented, such as new laws governing marriage, divorce, inheritance, and child custody for non-Muslim residents. The Golden Visa residency system, introduced in 2019, has been a significant draw for investors and high-net-worth individuals. Over 150,000 golden visas have been granted, providing long-term residency for investors.
- Growing Financial Ecosystem
Dubai’s capital market is thriving, demonstrated by the Dubai Financial Market (DFM), the leading financial market in the region. In 2022, AED 31.15 billion ($8.4 billion) worth of capital was raised through five IPOs, and the market cap of equities listed during the same year reached AED 582 billion ($158 billion). Dubai is home to some of the world’s most reputable banking institutions, private banks, hedge funds, and wealth management firms. The DIFC is a top global financial center, housing more than 300 wealth and asset management companies and 5,523 active companies.
- Access to Capital, Funding, and Investment Opportunities
Dubai’s venture funding has seen tremendous growth, with the city becoming the only one in the MENA region to host startups raising funds in Series E and Series F rounds. In the first half of 2023, Dubai recorded a 70% year-on-year growth in total announced FDI projects, with greenfield FDI projects accounting for 65% of the total. The city maintained its ranking as the world’s top destination for greenfield FDI projects.
- Luxury Lifestyle and High Quality of Life
Dubai offers a luxurious lifestyle and high quality of life, attracting UHNWIs from around the world. The city is ranked as the world’s third greatest city by The Economist and retains its leading position in the MENA region in Kearney’s Global Cities Index 2023. Dubai is also named the world’s best city to relocate to in a 2023 report by Remitly and the best city for remote workers according to Savills’ 2023 Executive Nomad Index.
The city’s luxury living options are unmatched, with Dubai ranked seventh in the Julius Baer 2023 Lifestyle Index. Dubai’s education system caters to all demographics and age groups, with numerous universities and higher education institutions from around the world. The city is also a leading healthcare destination, ranking first in the MENA region and sixth globally.
Dubai’s strategic initiatives and favorable environment have positioned it as a global financial hub and a preferred destination for private wealth and family offices. African investors have a unique opportunity to participate in Dubai’s success story, leveraging the city’s robust financial ecosystem, strategic location, high quality of life, and luxurious lifestyle.
As Dubai continues to attract and retain UHNWIs, the city promises unparalleled opportunities for prosperity and growth, making it an ideal destination for investors seeking new pathways to success.
