The United Arab Emirates (UAE) is poised to retain its status as the world’s premier destination for wealthy individuals, with a record net inflow of 6,700 millionaires expected by the end of 2024, according to the Henley Private Wealth Migration Report.
This figure almost doubles the net inflow projected for the United States, which is expected to attract 3,800 millionaires during the same period.
In stark contrast, the United Kingdom is forecasted to see a 17% reduction in its millionaire population by 2028, dropping from 3,061,553 to 2,542,464, as reported by Swiss bank UBS.
This decline is attributed to rising living costs and taxes in the UK, prompting many high-net-worth individuals to seek refuge in more tax-friendly jurisdictions.
UK’s declining millionaire population
The anticipated decline in the UK’s millionaire population is significant given the country’s status as home to the third-largest number of millionaires globally, including many foreign residents from Russia, the Middle East, and beyond.
The UK’s decision to phase out the “non-dom” status, which allowed wealthy individuals to avoid British taxes on overseas income, is a major factor in this decline.
The 40% estate duty on estates above £325,000 ($417,755) and the abolition of the non-dom tax regime starting in 2025 are expected to drive more wealthy individuals to relocate.
Additionally, the Labour government’s proposed VAT charge on private school tuition fees is likely to make education more costly, prompting further migration to tax havens like Dubai.
Dubai’s tax-free appeal and golden visas
Dubai’s allure for millionaires is undeniable.
The city offers a zero income tax regime, long-term golden visas, and an enviable lifestyle.
The UAE’s golden visa allows foreign residents to live, work, or study in the country, making it an attractive option for those looking to relocate.
The Henley report notes that while many of Dubai’s new residents come from India, the Middle East, Russia, and Africa, there is a noticeable increase in British and European millionaires moving to the emirate.
Factors driving migration
The migration trend is driven by both push and pull factors.
On the push side, the potential for increased taxes under the new Labour government in the UK is a significant concern.
Labour’s campaign pledge to impose VAT on private school tuition, potentially increasing costs by 20%, exemplifies the tax hikes driving wealthy individuals abroad.
On the pull side, Dubai’s modern infrastructure, low crime rate, and comprehensive visa reforms make it a highly desirable destination.
The UAE’s advanced wealth management framework is another key factor attracting the wealthy.
The country has introduced a sophisticated regulatory environment that offers innovative solutions for wealth protection, preservation, and enhancement.
These reforms, coupled with Dubai’s modern infrastructure and investment incentives, make it an increasingly attractive option for millionaires.
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