The Indian diaspora is present in most regions across the world as they migrate in search of better opportunities. Countries like the US, UK, Australia, and Canada are some of the preferred countries.
However, the latest preferred country for the ultra-wealthy to move to is the United Arab Emirates (UAE), as per a report by Henley & Partners, an international investment migration advisory firm.
The report mentions that approximately 4,300 millionaires are expected to leave India this year and a majority of them are headed for Dubai in the UAE.
"India continues to lose large numbers of millionaires, especially to the UAE. However, in our view these outflows are not particularly concerning as India continues to produce far more new HNWIs than it loses to emigration. Furthermore, the bulk of the millionaires who leave India tend to retain business interests and second homes in the country, which is a positive sign," said the report.
The UAE attracts more wealthy Indians than destinations like Australia, Singapore, and the US, with Dubai's property market earning 16 billion dirhams (Rs 35,500 crore) from Indian buyers last year, nearly double the 2021 figure.
A major chunk, which comes to 40% of homebuyers were from India, the majority being from Delhi-NCR, Ahmedabad, Surat, Hyderabad, and Punjab. The remaining were Indians living in the UAE (40%) and global Indians (20%) based in different parts of the world.
There is a growing trend of affluent Indians looking at cities such as Dubai, Singapore, and London to set up overseas family offices.
Members of the younger generation, particularly those who have studied abroad or recently returned from overseas campuses to join family businesses, are increasingly interested in setting up family offices in foreign countries.
Founders of various startups are also moving their operations abroad and establishing family offices there. Several factors motivate this trend. Firstly, they seek to protect part of their wealth from potential tax or regulatory issues in India.
Secondly, having a family office abroad provides easier access to foreign markets and supports business expansion in other regions. Thirdly, it allows for the diversification of investments and business ventures.
Typically, a family office is a privately owned entity that manages investments and wealth for a family with investable assets of approximately $100 million (around Rs 820 crore).
In addition to the ultra-wealthy, many professionals are now opting for Dubai as their destination. The Golden Visa programme, which was expanded in 2022 to include more workers, skilled professionals, scientists, and researchers, has made the UAE even more appealing to affluent Indians.
This programme offers a long-term residence visa, enabling foreign talent to live, work, or study in the UAE with exclusive benefits.
The UAE's cosmopolitan culture, excellent civic amenities, high-quality infrastructure, high standard of living, top-notch education, luxury shopping, world-class healthcare, and diverse entertainment options further attract the wealthy to the region.
Drawn by the simplicity of starting a business, the complete exemption from personal income tax, and a more supportive policy environment, many of India's tech entrepreneurs have been relocating to the UAE through its golden visa program.
This shift comes as India has become the world's third-largest startup ecosystem, following the US and China.
In Dubai, Indians make up over 30% of the startup community, and the city is keen to attract even more tech talent from India.
To achieve this, Dubai is offering 100,000 golden visas, which allow entrepreneurs and technology investors to reside in the country for up to 10 years, significantly longer than standard visas.
Additionally, Dubai has established a national small-business program to assist startups in securing funding, partnering with established companies, and marketing their products internationally.
Recently, the UAE has been shifting its economic strategy away from traditional models that tie residency to employment, especially prevalent in oil-rich regions.
The government has introduced reforms such as broadening the eligibility criteria for long-term 'golden' visas and removed the requirement for companies to have a majority local partner.
They have also transitioned to a Monday-Friday working week and legalised unmarried couples to live together.
These changes are aimed at transforming Dubai from a transient city to one that attracts and retains expatriates, encouraging them to establish businesses. The results have been promising.
Officials reported to Bloomberg that Dubai saw a rise in active business licences, reaching 411,802 in 2023. This marks a 30% increase from 2022 and a substantial 75% increase from 2021 levels.
According to the Dubai International Financial Centre, the number of registered entities in the free zone climbed by 26% in 2023 compared to the previous year, exceeding 5,500. Employment within the free zone has also seen growth, with approximately 41,600 people now employed there, reflecting a 15% increase.
