Numerous Swiss financial institutions are vigorously expanding their presence in the United Arab Emirates. They're attracted by the prospect of lucrative business with wealthy families and businessmen from the Arab economic region. Will it work out?

Nowhere else is wealth management flourishing as it is currently in the United Arab Emirates (UAE). This upswing hasn't escaped the attention of international private banks and wealth managers who are following the boom and vigorously expanding their presence in the Gulf region. Business with ultra-rich families and businessmen from the Arab economic region is considered very lucrative.

In addition to Wall Street giants JPMorgan and Goldman Sachs, more and more Swiss banks and finance companies are stepping up their involvement in the Middle East by adding staff, new services, or even branch offices. The list of Swiss institutions attracted to the Arabian Gulf is growing from month to month. And it's not just the big players that are focusing on Dubai, the new El Dorado of high finance.

More and More Swiss Firms

Geneva-based Lombard Odier plans on doubling its workforce in the UAE within three years. Edmond de Rothschild, the private bank in western Switzerland, also wants to more deeply tap the financial source in the Gulf. UBS has also strengthened its business in the region and plans to increase the number of ultra-high-net-worth individuals it serves.

Zurich-based bank Julius Baer is planning to expand its crypto asset management operations in Dubai, while Deutsche Bank recently hired a ten-strong team of former Credit Suisse bankers to drive its expansion in the Middle East. These are just a few recent examples. Swiss family offices are increasingly drawn to the Gulf without making a big fuss about their ambitions. Alternative investment companies from the hedge fund and private equity sectors are on the move.

Numerous Trump Cards

In addition, crypto companies such as Swiss specialist Laser Digital, a subsidiary of Japanese investment bank Nomura, are setting up shop in the UAE to offer virtual asset services. Dubai is not only a vibrant financial center for traditional banks and asset managers, but also one of the fastest-growing crypto hubs in the world. Early on, the emirate promoted crypto projects with its «Dubai Blockchain Strategy.» The UAE, like Switzerland, is one of the most attractive locations for the blockchain industry.

Dubai in particular boasts numerous advantages in international high finance, while Abu Dhabi has emerged as a regional and international geopolitical force and decision-making center. The Golden Visa system has made the UAE much more attractive to foreign investors. In turn, the high price of oil has driven up the wealth of domestic companies and family offices, keeping petrodollars flowing, while market turmoil in other wealth centers is drawing talent and investors to the Middle East at a rapid pace.

City of Superlatives

Dubai, the Eldorado, the city of superlatives, not only impresses with its extravagance and forward-looking ambitions but has become the leading center for cross-border bookings in the region in recent years by far.

The Gulf Emirates is a great attraction for the super-rich, talent, investments, and capital. The UAE benefits from being considered a safe haven in the region and its diversified economy is strong in many key sectors, including financial services, oil and gas, real estate, technology, and tourism. Tax rates that are among the most competitive in the world, on par with Bermuda and Monaco, a good healthcare system, and top-notch international schools, make the UAE an attractive location.

Showplace for Millionaires

Data from Henley & Partners shows how attractive the Gulf Emirates are, especially for high-net-worth individuals. Last year, the UAE recorded the world's highest net inflow of millionaires, with 5,200 more high-net-worth individuals (HNWIs) with investible assets of $1 million or more moving there than wealthy individuals leaving it. A net influx of 4,500 millionaires to the new financial mecca is expected this year.

While most new millionaires are expected to arrive from India this year, a strong influx is expected from the UK, Russia, Hong Kong, and China. Before the Corona pandemic, the UAE traditionally saw a net inflow of around 1,000 wealthy individuals per annum.

New Income Sources

It's estimated that 55,000 HNWIs currently live in Dubai. According to the Dubai International Financial Centre (DIFC), private wealth in the Middle East, Africa, and South Asia is estimated at a staggering $8 trillion. Global and Swiss asset managers will continue to expand their market position in the Gulf Emirates to tap new sources of income.