Once famed for its oil-rich economy, Abu Dhabi is now drawing the world’s billionaires with a new allure. In a shift from traditional wealth places like the Cayman Islands, Switzerland, and the British Virgin Islands, this skyscraper-studded emirate is emerging as a new epicenter for safeguarding global fortunes.
Abu Dhabi’s International Financial Center is at the forefront of this wealth migration, which now boasts over 5,000 Special Purpose Vehicles (SPVs), a stark rise from a mere 46 in 2016. Bloomberg News reported on this massive increase, proving how much Abu Dhabi is growing in popularity.
SPVs, which became popular in the late 1980s thanks to Michael Milken, are legal entities created to manage financial risk. In Abu Dhabi, these entities work like companies that manage a lot of money, holding different assets like property and stocks. This way of organizing assets strongly protects wealthy people’s fortunes from the prying eyes of foreign jurisdictions.
Among the notable billionaires capitalizing on Abu Dhabi’s offerings are Zhao Changpeng, the cryptocurrency titan, India’s Adani family, hedge fund magnate Ray Dalio, and Russian steel tycoon Vladimir Lisin. Their move to Abu Dhabi isn’t just about keeping their wealth safe; it also shows how the places preferred by the wealthy are changing worldwide.
The emirate’s rise as a wealth hub coincides with increased scrutiny and regulatory pressures on traditional offshore jurisdictions. The British Virgin Islands and the Cayman Islands, which used to be popular with the rich, are facing more checks and rules. Fewer new companies are being set up on these islands because of their global clampdown on tax evasion and money laundering.
Bhaskar Dasgupta, a corporate adviser with insights into Abu Dhabi’s financial landscape, says, “ADGM (Abu Dhabi Global Market) is a great place to set up SPVs, and it’s increasing sharply. We’re seeing more high-net-worth individuals moving from the BVI, Caymans, Mauritius, and Singapore to here.”
The UAE’s double tax treaty network is a significant draw, offering potential tax minimization for companies nested within SPVs, depending on their business locations. People who advise investors who don’t want to be named talk about the many good things Abu Dhabi offers. These include the chance to live there for extended periods and sometimes even getting a UAE passport for those who invest a significant amount.
Abu Dhabi—and its neighboring Dubai—has transformed into a global city, attracting wealth not just with its financial incentives but also through its sovereign wealth funds and private investment firms, controlling over US$1 trillion in assets. The country has also become a safe place for those facing regulatory challenges in their home countries.
Take the case of Zhao Changpeng. The former Binance chief, enticed by Dubai’s friendly stance toward cryptocurrencies, set up base there in 2021. Despite legal entanglements in the United States, Zhao has established multiple SPVs in Abu Dhabi, signifying the emirate’s growing importance to his business interests.
The UAE’s reluctance to impose sanctions on countries like Russia, in contrast to the actions of the US, Britain, and the EU, has further enhanced Abu Dhabi’s appeal. While nations like Switzerland and Britain tighten their grip on individuals with ties to sanctioned countries, Abu Dhabi offers a more lenient environment.
Even the UAE’s royal family is joining this trend. For instance, Sheikh Tahnoun bin Zayed Al Nahyan’s Royal Group has set up many SPVs in ADGM, showing that the royal family supports Abu Dhabi’s financial practices.
Abu Dhabi is doing well in attracting SPVs partly because of the UAE’s special visa and passport programs. These programs have welcomed rich people and made them consider making the UAE their permanent home.
Armand Arton, founder of citizenship firm Arton Capital, observes, “We see this trend of more billionaires moving to the country. Once they feel welcome and safe, they then look to relocate their businesses and assets, with ADGM being one of the preferred places.”
Abu Dhabi becoming a key place for financial safety marks a significant change in how wealth is managed. As the wealthiest people head there, the emirate is getting ready to be known not just for its oil but as a safe place for the world’s richest people.
