According to experts, the UAE is expected to see a further increase in the number of Ultra-High Net Worth Individuals (UHNWIs) moving to the country due to the country’s new regulations and tax benefits. This trend is expected to continue as the country’s wealth management industry grows. The growing number of these individuals also contributes to the country’s infrastructure development.
The UAE expects to welcome around 128,000 UHNWI individuals worldwide who will become millionaires this year. The number of these individuals is expected to increase significantly as the UAE continues to experience a significant increase in its millionaire population.
There are around 116,500 millionaires in the UAE, 308 centi-millionaires, and 20 billionaires. The increasing number of individuals relocating to the country has changed how they view it. Previously, UHNWIs typically only considered investing in real estate as a part of their portfolio. But that is changing as life standard becomes more and more attractive.
Influx of UHNWI to United Arab Emirates
The increasing number of individuals relocating to the UAE has changed because of how they view the country. They are now basing their decisions on the country’s increasing asset exposure and its ability to attract wealthy families and individuals. This is supported by the country’s efforts to become more attractive to such individuals.
The country’s continuous efforts to improve its legal and regulatory environment also contribute to the increasing number of UHNWI high-net-worth individuals moving to the UAE. According to a report released by Knight Frank’s 2024 Wealth Report, the number of ultra-high-net-worth individuals is expected to increase by 30 per cent by 2028. The region is planning on addressing this growing population through its infrastructure development.
The number of ultra-high net worth individuals worldwide grew by 4.2 percent in 2023. This was due to an increase of around 70 new investors every day. The Middle East and North America were the regions that experienced the biggest growth, with respective increases of 6.2 percent and 7.2 percent.
The GCC nations have been investing heavily in their infrastructure, which has contributed to the high standards of living that the region’s wealthy residents have come to expect. He noted that the real estate sector is expected to continue offering more opportunities to the ultra-high net worth individuals.
In Dubai, 26,154 new homes will be launched this year, while 32,667 will be introduced in 2025.
Emirate Ajman
Runner-up Emirate Ajman sees the rental market going sky-high. According to the Ajman Municipality and Planning Department, Ajman’s rental market recorded a significant 49 per cent increase in transaction value during the first half of 2024, reaching AED2.277 billion. Ajman’s real estate market witnessed remarkable growth in the first half of 2024, with 7,071 transactions valued at over AED9 billion, reflecting a 33 per cent increase compared to the same period in 2023.
For Dubai, high-end investors are looking for properties in prime locations such as Emirates Hills, Palm Jumeirah, and Jumeirah Bay Island. Dubai has experienced a record-breaking number of transactions. The city’s real estate market is expected to continue experiencing further growth due to the increased number of people moving into the country. The country’s financial centres are also becoming more accommodating to the needs of the country’s high-net-worth individuals.
The various regulatory changes introduced in the country’s financial centres are helping to accommodate the needs of the growing number of high-net-worth individuals. These include the introduction of the Family Business Law of the UAE.
The DIFC recently announced the implementation of Family Regulations, which allows certain family offices in UAE to operate without the need for a registration with the financial services authority of the UAE. This new feature allows them to operate as non-financial businesses.
Tax benefits UHNWI
The United Arab Emirates offers a variety of tax benefits that are ideal for families with multiple generations in mind. There are no inheritance taxes and no personal income taxes in the country. This makes it an ideal location for individuals who are looking to preserve their wealth. The number of family offices in the country has also increased due to the growing number of UHNWIs.
The total assets of family offices for UHNWI in the Middle East could reach $500 billion by 2025. Investment preferences for these types of businesses are diverse and will be more active in the UAE commercial real estate industry like Ajman.
The demand for alternative investments is expected to grow. The family office sector in the Middle East is expected to expand rapidly, with its total assets poised to increase by almost 50% by 2026.
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