The hopes – and insecurities – of Russian exiles in Dubai

Dubai Tourism

There is a story going round the Russian community in Dubai that illustrates the challenges, but also the opportunities, presented by the UAE to exiles from that country since the invasion of Ukraine.

Late last year, a young Russian man – let’s call him Sergey – was in despair. He had left his well-paid job in finance in Moscow, scared of being caught up in Putin’s mobilisation, and was kicking his heels around Dubai Marina – “Marinagrad” – the area of the city where I live and which has been a prime destination for new arrivals from Russia.

With his capital diminishing and little apparent prospect of a job in banking in the sanctions-twitchy UAE, depressed Sergey decided one night to go for a swim off JBR beach.

While floating on his back in the cool waters, looking up at the skies and thinking dark thoughts, he realised he had a compatriot floating right beside him.

Striking up a conversation, it turned out the new friend was a senior banker working for an Abu Dhabi institution who had been in the UAE for many years, who was in a position to provide references, work and contacts.

Sergey now has a good job in a brokerage in Abu Dhabi and will probably never return to Russia.

The story – perhaps apocryphal – offers several insights on the Russian predicament in the UAE.

There was always a Russian presence in the UAE well before the Ukraine war. The Russian community is as expert as other expat groups at looking after its own, and, if you land on your feet in Dubai, there is little to pull you back home.

Back in April, I wrote a piece in AGBI noting the Russian “invasion” of Dubai, and specifically “Marinagrad”, and wondering whether it could prove to be a problem.

How would other expat groups take to the sudden influx? How would it add to the inflationary pressures in the city? Would it change the emirate’s business culture?

Six months on, and many conversations with Russian expatriates later, the picture that emerges is far more nuanced. There certainly has been an invasion, but so far it has been a pretty benign one.

First, some numbers. There are no official statistics from the government on how many Russians have taken up UAE residency, but piecing it together from various sources – embassies, the PR profession, tourism figures – it looks like as many as 500,000 Russians (including dependents) have been granted the right to live in the UAE since February 2022.

Add to this perhaps another 150,000 on 90-day tourism visas at any one time, and that is a sizeable minority in a city of 3.3 million – perhaps the second or third largest expat grouping. Property sales figures confirm that ranking.

Another thing that emerges is that not all Russian exiles have found the UAE to their liking. Sources report that, while last year Russian-owned businesses were opening at a rate of about 10 per month, this year that has flattened out – and even reversed in some cases.

Those who thought it was going to be easy have found in some cases that the UAE corporate infrastructure is actually pretty rigorous. UAE banks demand stringent documentation from new Russian corporate arrivals, and some have given up.

In this respect, the cancellation by the UAE authorities of the banking licence it had given to Russia’s MTS Bank – sanctioned in Britain and the USA – was a blow.

It was a sign that, while the UAE would be a welcoming home for respectable business people from Russia, it would not jeopardise efforts to get off the FATF “grey list” by dealing with people subject to international sanctions.

“Unofficially, Russians are super-toxic,” says one exile.

The MTS ban halted a move on the part of Russian finance professionals in the UAE to list Russian companies on local markets in Dubai and Abu Dhabi, according to sources. In fact, there is now a wave of Russian IPOs back in Moscow to absorb exiles’ capital.

The other factor that stands out from conversations with Russians is that getting a UAE visa does not necessarily signal a long-term commitment to the country.

Many who have set up a business here, or bought property above the value of AED2m to qualify for a golden visa, can come and go as they please, as long as they observe the minimum residency requirements.

They can happily carry on their business in Russia, or anywhere else in the world that will allow them, while having a base in the UAE.

For those who decide the UAE is worth a career commitment, there are undoubtedly opportunities: in high tech, where many Russian entrepreneurs have specialist expertise; increasingly in financial services (like Sergey); and of course in leisure, food and beverage and entertainment, a sector Russians know well all around the world.

The big question is: what if by some miracle the war in Ukraine ended tomorrow and international sanctions were lifted on Russia? How many of those 500,000 would choose to stay in the UAE? What would Sergey do?

Unfortunately, it does not look like that scenario will be tested any time soon.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He also acts as a consultant to the Ministry of Energy of Saudi Arabia