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Thousands of high-net-worth individuals (HNWIs) have set up special-purpose vehicles (SPVs) in the Abu Dhabi Global Market (ADGM) in recent years, making the UAE capital the newest hub of billionaires looking to safeguard their assets, Bloomberg reported.
Abu Dhabi’s financial centre now has more than 5,000 SPVs, compared with just 46 in 2016, the news agency said, quoting data compiled by wealth advisory firm M/HQ.
A study of “hundreds” of corporate filings in the UAE also revealed that this year alone, ADGM has seen “dozens” of HNWIs setting up SPVs in Abu Dhabi. These wealthy investors include the richest person in the crypto industry, Chagpeng “CZ” Zhao; India’s Adani family; hedge fund billionaire Ray Dalio and Russia steel magnate Vladimir Lisin.
Egyptian billionaire Nassef Sawiris also said last week he will move his family office to ADGM.
SPVs are business entities, subsidiaries or holding companies created by a parent company. They are established with their own balance sheet to isolate financial risk.
According to Bhaskar Dasgupta, a former corporate adviser for the Abu Dhabi free zone, the number of SPVs in Abu Dhabi is “increasingly sharply.”
“We’re seeing more high-net-worth individuals moving from BVI, Caymans, Mauritius and Singapore to here.”
The Israel and Gaza conflict could also lead to more wealth influx in Abu Dhabi. According to Yann Mrazek, M7HQ’s Dubai-based managing partner, he recently received a request from a Palestinian entrepreneur who plans to set up an SPV to protect assets.
The UAE has been attracting HNWIs since the pandemic, according to various studies.
In Henley & Partners' study, the UAE emerged as among the top five destinations for net inflows of HNWIs in 2023, along with Australia, Singapore, United States and Switzerland.
Around 4,500 millionaires are expected to move to the UAE this year, one of the highest on record. Prior to the pandemic, the UAE traditionally saw net inflows of around 1,000 HNWIs per year.
Most migrating millionaires this year are likely to come from India, with large numbers also coming from the UK, Russia, Lebanon, Pakistan, Turkey, Egypt, South Africa, Nigeria, Hong Kong and China, Henley & Partners said.
The UAE’s safe haven status is one of the top reasons HNWIs are drawn to the UAE. HNWIs are also drawn to the UAE due to its highly diversified economy, low tax rates, first-class healthcare system, prime real estate, top-class shopping and restaurants and good international schools.
(Writing by Cleofe Maceda; editing by Seban Scaria)
