Indian families shift wealth to UAE in ‘unprecedented numbers’

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• Legislation encouraging UAE residency is attracting investors
• India’s non-oil exports to UAE have recorded double-digit growth

Indian families are coming to Dubai and other UAE cities in “unprecedented numbers” to set up financial structures to relocate their wealth.

Industry experts say the Emirates is attracting significant numbers of Indian family offices thanks to “compelling characteristics” such as the relaxation of business ownership rules, residency options and the promotion of golden visas.

• Influx of millionaires stokes UAE demand for private bankers
• World’s richest families are shifting investments to Gulf 

Sunita Singh-Dalal, partner at commercial law firm Hourani & Partners, said: “During the global pandemic we saw a significant rise in wealthy individuals and business families relocate to the UAE.

“However, what was originally perceived as a possible kneejerk reaction to a global lockdown seems to be a consistent phenomenon that shows no signs of abating but is rather gathering momentum.”

She added: “Significant legislation, conducive to encouraging long-term residency in the UAE, was introduced in quick succession since January 2020. New regulations have collectively attracted serious investors and family-run businesses to relocate to the UAE.”

According to Dr Bhaskar Dasgupta, head of strategic development, MEA at financial services provider Apex Group, this direction of capital flows between India and the UAE is part of a well-established trend. 

“Building on a long history of Indian presence in Dubai, Indian families are coming to Dubai and UAE in unprecedented numbers,” he told AGBI.

India’s non-oil exports to the UAE have recorded double-digit growth since the two nations signed a trade deal last year, growing 14 percent to $5.9 billion in June-August. About 3.5 million Indian nationals live in the Emirates, making up close to 30 percent of the total population.

Dasgupta added: “The family office structure is becoming increasingly popular for India’s growing number of wealth creators, making their money more mobile than ever before.

“Traditionally it was European and American families that dominated the global family office space. We are now seeing the long-predicted boom in India’s family office landscape come to fruition.

“Celebrities, entrepreneurs and senior managers seek to preserve, enhance and protect their hard-earned wealth.”

India now accounts for around 200 of the 10,000 family offices globally, according to industry estimates.

Setting up an exclusive single-family office is costly, so it is usually the preserve of families with more than 10 billion rupees ($150 million) in assets. 

Those with fortunes of 500 million to 5 billion rupees may opt instead for a multi-family office, which looks after the interests of several families. 

Dasgupta added that Apex family office clients often point to long-term golden visas, as well as connectivity via airlines flying from Dubai, Abu Dhabi and Sharjah, as attractions of the UAE. 

The Q2 2022 Henley Global Citizens Report predicted that the UAE would gain an extra 4,000 high net worth individuals – those with a net worth greater than $1 million – by the end of last year.

The report also highlighted a substantial inflow of millionaires from India. 

Devika Raveendran, founder and CEO of DR Partners, a corporate advisory and wealth structuring firm, said: “In the last couple of years Indian families have been considering jurisdictional diversification both from a personal and business wealth perspective. 

“The recent pandemic has accelerated the demand for private wealth being managed either by multi-family offices or single family offices.

“The existing regulatory framework both in financial and non-financial free zones in UAE – together with ease of accessing banking platforms, relaxation of business ownership rules, residency options and active promotion of golden visas – continues to make the UAE an attractive destination.” 

Dasgupta added that there were a “plethora of local investible opportunities” across sectors such as manufacturing, agtech, fintech, e-commerce, metaverse and Web3, logistics and healthcare.

Jyoti Keshavan, founder and CEO of Xanara Advisors, a multi-family office consultancy, has also identified this trend, saying: “We observe the UAE becoming a true home for many of our clients. The migration of businesses and the respective family offices is a trend we are seeing in abundance. 

“The UAE has showcased its ability to match the worldwide financial regulations. Clients find establishing and conducting businesses in the UAE to be friendly, efficient, adaptive and harmonious.

“Global citizens see this as a value-added advantage for their businesses and wealth diversification. They see this as a gateway to wealth creation, expansion and preservation.”

According to Dasgupta, there is no “one-size-fits all” answer for Indian families looking to relocate their wealth. 

“Some may test the water as part of a multi-family office until more comfortable with the processes and structures,” he said.

“We have seen first-hand that when the movement of a family office to the UAE is implemented and structured properly, it can empower families to grow their wealth, achieve their investment goals and support their legacy for the benefit of future generations.”