UAE Emerges as Financial Refuge for Wealthy Individuals
Billionaires seeking to safeguard their financial assets are turning to the United Arab Emirates (UAE) and its capital city, Abu Dhabi, as traditional tax havens face increased scrutiny. The UAE, aiming to diversify its economy away from oil revenue, has become an attractive destination for high-net-worth individuals. Notable figures such as hedge fund billionaire Ray Dalio, crypto magnate CZ Zhao, and the Adani family of India have established special purpose vehicles (SPVs) in the Abu Dhabi International Financial Center this year alone, according to a Bloomberg News analysis.
Abu Dhabi Global Market Sees Surge in SPVs
The analysis reveals that over 5,000 SPVs now exist in the Abu Dhabi Global Market (ADGM), a substantial increase from 46 in 2016. SPVs in the ADGM offer opportunities for investment in both equity and property assets. Moreover, they boast advantages such as the absence of minimum capital requirements or restrictions on shareholders’ nationality. These favorable conditions enable investors to park their wealth in Abu Dhabi, benefiting from low taxation.
Russian Investors Find Haven in Abu Dhabi
Abu Dhabi’s open policy towards investors of any nationality has made it an attractive destination for Russian billionaires, including steel industry tycoon Vladimir Lisin. As Western countries impose sanctions on Russia following its invasion of Ukraine, Abu Dhabi’s lack of restrictions on nationality allows Russian investors to seek refuge for their wealth.
ADGM’s Rise as a Leading Financial Hub
Established in 2013 and fully operational by October 2015, the ADGM has become a prominent financial hub. The ADGM free zone operates with its own financial regulator, registration bureau for legal entities, and court system. The court system, based on English common law and principles of precedent, ensures impartiality and independence. This use of common law instills confidence in global businesses, as it aligns with legal systems in countries such as the United States, United Kingdom, Australia, and Canada. The influence of ADGM’s legal framework is evident in other financial centers like Singapore and Hong Kong.
ADGM’s Expanding Jurisdiction
With its physical presence spanning Al Maryah and Al Reem Islands, the ADGM boasts one of the largest financial districts globally. In April 2023, the ADGM extended its jurisdiction to include Al Reem Island, further solidifying its position as a leading financial hub.
Overall, as established tax havens face increased scrutiny, Abu Dhabi and the ADGM have emerged as a preferred destination for billionaires seeking to protect and grow their wealth.
