Dubai Emerges as the Preferred Wealth Center for Asian Wealth Managers

An increasing number of wealth managers in Asia are setting up offices in Dubai, benefiting from the growing positive relationships between China and the Middle East, and banking on increased demand from clients for geographic diversification.

Wealth managers said that Dubai, the main financial center in the Gulf region, stands out as a preferred wealth hub for many businessmen and wealthy families in Asia, especially China. They are looking to benefit from favorable policies and expand their businesses.

Chen Bang, the financial manager of Noah Holdings, one of the largest wealth management companies in China overseeing approximately $23 billion in client assets, stated that the company expects to obtain a trading license in Dubai by the end of this year.

He added that the Dubai office will serve Chinese businessmen who are establishing their businesses in this market.

According to Ban, Noah’s strategy is to follow the growth of customer wealth. That is why we will need to be present and take care of the locally generated wealth. He added that the company plans to initially send some employees from China and later hire local employees.

“Many Chinese entrepreneurs are actively seeking new markets and diversifying their supply chains, with many of them being excited about the opportunities offered by the Middle East.”

The economic recovery post-COVID-19, neutral political stance, ease of doing business, convenient time zones, and tax exemptions have all contributed to attracting a large number of wealthy individuals to the Middle East in recent years.

Recently, the UAE has introduced incentives such as the “Golden Visa” system. Last year, Dubai launched a “Family Wealth Center” to assist wealthy individuals and companies in dealing with cultural and governance matters.

As a result, Western wealth managers, including Lombard Odier Swiss private bank, are looking to expand their commercial presence in the region to benefit from the influx of expatriates and the increasing number of wealthy individuals.

In Asia, Hong Kong and Singapore have long been favored as centers for foreign wealth by the wealthy individuals. However, wealth managers have stated that some clients are now looking to diversify into other markets and explore new investment opportunities.

According to the 2023 Wealth Report by Capgemini, the global number of individuals with high net worth decreased by 3.3 percent to reach 21.7 million in 2022. However, the number of millionaires in the Middle East increased by 2.8 percent in the same year.

The United Arab Emirates witnessed the highest net inflow of millionaires in the world in 2022, and estimates suggest that it received a net inflow of 4,500 additional wealthy individuals in 2023, according to data from Dubai-based wealth and immigration consultancy firm Henley & Partners.

In order to bet on this trend, Faru Capital, a Singapore-based multi-family company, established its office in Dubai last month. Patrick Tsang, Chairman of the Tsang Family Group based in Hong Kong, said that the company plans to launch new offices in Abu Dhabi and the Saudi capital Riyadh this year, after establishing a presence in Dubai in 2022.

Landmark Family Office, based in Hong Kong, also plans to establish an office in Dubai in the coming months. Cameron Harvey, the founder and CEO of Landmark, stated that the company’s Dubai office will be used to assist clients residing in China, Southeast Asia, and Australia in finding investment opportunities in the Middle East.

A recent study conducted by Camden Wealth and Raffles Family Office, on 76 individual and multi-family offices in the Asia-Pacific region, revealed that the average asset allocation for the Middle East region is only one percent, while seven percent of participants plan to increase it.

Manish Tiberwal, co-founder of Singaporean company Faro Capital, said “We are living in extremely interesting times where geopolitical map has become more important to families than ever before,” adding that Dubai’s efforts to regulate virtual assets and golden visa system, among other things, have enhanced its attractiveness. (Reuters)