The playing field for individuals and families with ultra-high net worth (UHNW) is constantly shifting. A fundamental change has occurred in the ways and locations that UHNW people choose to manage and increase their wealth. Geopolitics, economic pressures, the standardisation of business ethics and standards, and the worldwide pandemic have all had an impact on this change. But concerted efforts by the United Arab Emirates (UAE) to stop the financing of terrorism and money laundering have built a strong foundation of trust and confidence in the country’s expanding business environment.
Despite this, the Gulf region has seen an influx of about 4,000 millionaires over the past year [1]. Over the next 10 years, the number of UHNW UAE residents, those with a net worth of over USD 30 million [2], is expected to increase by 50%. Given recent efforts by the UAE government to safeguard and uphold the integrity of the financial system by building an effective anti-money laundering and countering the financing of terrorism (AML/CFT) system, this may be a conservative prediction. The regional Financial Action Task Force (FATF) body, however, recently raised the UAE’s ratings in recognition of improvements in adherence to the FATF’s forty recommendations.
One of the most important factors for any UHNW person and their family looking for greener pastures is
‘Clear and effective policy making is the key factor influencing where wealth is managed and grown’
Additionally, foreign direct investment is increasing. Ranking third globally after China and India, the UAE is the most prominent emerging market in the Middle East and North Africa (MENA) region. The GDP increased by 7.9% in 2022, while weak growth plagued most other economies around the world. Through 2023 and 2024, growth is expected to remain robust at 3.2 percent and 4.8%, respectively. [3] While high inflation and economic ambiguity have an impact, it is possible that the most important factor affecting how wealth is managed and expanded is the implementation of clear and effective policies.
“The UAE has become the leading private wealth management hub for UHNW individuals and their families, from which to operate globally”
The ADGM, an acclaimed tier-1 international financial centre based in the Emirate of Abu Dhabi, is a separate legal jurisdiction within the UAE that applies English common law in its own dedicated court system, regardless of nationality or religion.
“The ADGM understands the needs of UHNW individuals who demand bespoke business and financial services and solutions”
The recent expansion of ADGM’s jurisdiction is the best illustration of the edge that you could find. Al Reem Island, which has grown to be one of the largest financial districts in the world with a total area of 1,438 hectares, is now part of the ADGM’s jurisdiction as of April 24, 2023 [4]. Therefore, it is an outstanding illustration of ADGM’s proactive leadership responding to the growing demand from both international and regional businesses and UHNW individuals seeking access to the ground-breaking regulatory framework and establishing a presence in Abu Dhabi. While many other financial centres are stagnant or, worse yet, shrinking, their expansion during this time solidifies their position as a global financial powerhouse.
UHNW people want reliable, expert, and adaptable wealth solutions in the face of prevailing economic and social unrest. The ADGM has all the necessary tools, including family holdings, single-family offices, special purpose vehicle (SPV) regimes, foundations, and trusts, as well as one of the centre’s USPs. Due to its limited-scope company regime, families can control their level of privacy by limiting the information that is made publicly available. Therefore, due to flexible, organised, and secure central legacy planning and asset protection structures, UHNW individuals can combine local and international interests.
Although ADGM has top-notch tools, its true competitive advantage comes from its active promotion of human connection—local to international, peer-to-peer, and business-to-business—which boosts resilience and encourages investment diversification in a precarious social and economic environment. Legacy centres toil under oppressive political and economic pressure, but the ADGM stands out as a vibrant, dynamic, and sophisticated centre that fosters cross-industry peer-to-peer networking and creates co-investment opportunities. In the field of fintech, the collaboration of innovators, investors, and service providers can be seen in the work of ADGM Reglab and ADGM Digital Lab.
‘For the first time, new single-family offices or proprietary investment entities can directly interact with their Middle Eastern peers, in a new phase of intergenerational structural optimisation’..
Additionally, the Emirates Family Office Association (EFOA) [5] is one more organisation that supports this ecosystem. The EFOA is a group established by and for UHNW people and their families, with the active support of the ADGM. In a new stage of intergenerational structural optimisation, this exceptional local initiative enables incoming single-family offices or proprietary investment entities to engage in direct dialogue with their Middle Eastern peers for the first time.
In conclusion, all the essential elements are present in the UAE, including safety, political stability, a high GDP, a responsive and forward-thinking administration committed to upholding international standards of AML / CFT, and a responsive and progressive government focused on ensuring continued growth and investment in the UAE. International UHNW people now have unhindered access to the UAE due to recent changes to long-term residency schemes and business ownership requirements, as well as a government that actively encourages their migration and development. The ADGM provides for a smooth landing when combined with financially advantageous policies, top-notch connectivity, and cutting-edge technology. The time has come for international UHNW individuals to realise what some of their peers have already realised: move, restructure, and profit.
[1] “Millionaires Are on the Move Again,” Henley & Partners, accessed June 8, 2023, https://www.henleyglobal.com/newsroom/press-releases/henley-global-citizens-report-june-2022-millionaires-on-the-move.
[2] “Centi-Millionaire Report 2022,” Henley & Partners, accessed June 8, 2023, https://www.henleyglobal.com/publications/centi-millionaire-report-2022.
[3] “UAE GDP to Grow at 4.3% in 2024, Forecasts Central Bank,” Arabnews, March 28, 2023, https://www.arabnews.com/node/2277036/business-economy.
[4] Abu Dhabi Global Market, “ADGM Al Reem Island Expansion,” Abu Dhabi Global Market (ADGM), May 12, 2023, https://www.adgm.com/alreemisland.
[5] “The Emirates Family Office Association Launches at ADGM,” Zawya, March 21, 2023, https://www.zawya.com/en/press-release/companies-news/the-emirates-family-office-association-launches-at-adgm-ktjpxsqd.