The Emirates (UAE) have witnessed an influx of millionaires and billionaires in the past year, mainly owing to the successful handling of the Covid-19 pandemic, strengthening confidence among the elites around the world in the emirate’s healthcare sector and the quality of life it provides to residents. The emirate’s population surpassed 3.5 million for the first time ever earlier this year.
A Henley Global Citizens Report released previously projected that the UAE will overtake the US to attract the largest number of millionaires in the world this year. It projected that 4,000 millionaires will migrate to the UAE in 2022, surpassing major countries such as Australia, Singapore, Israel, Switzerland, the USA, Canada, New Zealand, the UK and India.
Henley & Partners, international residency and citizenship advisory firm, partnered with wealth research firm New World Wealth to create the Henley Private Wealth Migration Dashboard – an overview of the migration of high net worth individuals and the distribution and movement of private wealth in the whole world.
The overview data covers 62 countries in eight regions worldwide: Europe and the UK, North and South America, the Middle East, Africa, the Commonwealth of Independent States, East Asia, South Asia, and Southeast Asia and Oceania. Overall, the moves and spending habits of over 150,000 so-called HNWIs in the New World Wealth database are evaluated for studies. An HNWI is considered to be anyone with assets of at least $1 million.
With 4,000 projected net inflows from HNWIs in 2022, the United Arab Emirates is still the most popular expatriate destination, followed by Australia with 3,500 and Singapore with 2,800. With 15,000 projected net emigrations of the wealthy in 2022, Russia is the least popular country, followed by China with 10,000 and India with 8,000.
But what does that mean in political terms? When Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai, announced in early 2021 that expats could become emirates in the future, he heralded a new phase in migration policy on the Arabian Peninsula.
So far, there has been no prospect of permanent residence for the approximately 25 million foreigners in the Arab Gulf States, let alone citizenship – neither for the construction worker from Bangladesh nor for the lawyer from Lebanon. Those who did not have an employment contract had to leave the country practically overnight. No matter how many decades you have worked in the country.
As already seen by the data of Henley & Partners, the rulers in the Gulf are targeting a very specific target group, a global elite that should invest their money in their new home – especially in view of the profound change that is imminent for the countries: the national economies have to switch from oil to finance, technology and tourism.
That is why investors, scientists, doctors, engineers, artists, authors and their families can now acquire Emirati citizenship in addition to their original citizenship with no open application process, rather nominated by government officials or members of the royal family. This elite selection process is now being enhanced with a new package effective from this September: people arriving as visitors can stay 60 days instead of 30 days. Academics in particular can use new job-seeking visas without having to rely on a local sponsor.
The Corona crisis at the beginning of 2020 made the rulers of the Gulf realize that their strict migration policy urgently needed an update, because it is mostly foreigners who keep the Gulf States running. Of the almost ten million inhabitants of the United Arab Emirates, around 90 percent are foreigners and only ten percent locals. During the pandemic, many people lost their jobs and had to leave the country. The lockdowns were too strict for some expats. Dubai’s population fell by 8.4 percent. A lot of potential was lost as a result.
The UAE are not alone in defining a new migration policy: Saudi Crown Prince Mohammed bin Salman wants around 100 million people to live in Saudi Arabia by 2040. Highly qualified foreigners should feel at home in futuristic megacities like Neom. The Gulf states have primarily been welfare states that have concluded a clear social pact of loyalty with their local population: They receive lavish state benefits in exchange for renouncing political participation. For example, Emirati citizens have access to free health care, generous government-funded pension plans, and interest-free loans to buy or build property. In order to reduce the cost of marriage, the government gives Emirati men a subsidy of several thousand euros if they marry an Emirati woman. These benefits cost a lot of money – and are therefore limited to the few citizens.
Experts consider the legislative changes in the Gulf to be long overdue in order to ensure the economic resilience of the states. And apparently the competition for the global elite is also paying off for the United Arab Emirates, which maintain their image as a tax haven: According to Henley & Partners, in 2022 and in the wake of the Russian war in Ukraine, the Emirates were able to Attract 4000 millionaires.
And these millionaires should stay on the Arabian Peninsula in the long term. For far too long, foreigners have only stayed for a few years to save on taxes and then invest the money at home. But now, and this is the core of the new migration policy, they should feel at home.
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