Why Asian Wealth Managers are setting up offices in Dubai ?
Asian Wealth Managers are relying on China’s ties with the Middle East.
They are also betting on rising demand from clients for geographical diversification.
Wealth managers say that Dubai is the main financial center in the Gulf region.
It is also emerging as a preferred wealth hub for many businessmen and wealthy families in Asia.
Particularly China, as they look to benefit from favorable policies and expand their businesses.
The UAE has recently introduced incentives such as the “golden visa” scheme.
Dubai launched a “Family Wealth Center” last year to help wealthy individuals and corporations deal with cultural and governance matters.
As a result, Western wealth managers.
Including Switzerland’s private bank Lombard Odier Darier Hentsch, are looking to expand their commercial presence in the region.
In order to capitalize on the influx of expatriates and the growing number of wealthy individuals.
In Asia, Hong Kong and Singapore have long been the preferred offshore wealth centers for wealthy individuals.
But wealth managers say some clients are now looking to diversify into other markets and explore new investment opportunities.
According to the 2023 Wealth Report from Capgemini, the global number of high-net-worth individuals fell by 3.3% to 21.7 million in 2022.
But the number of wealthy individuals in the Middle East rose by 2.8% in the same year.
Why Asian Wealth Managers See Dubai as a hub to strengthen their commercial presence ?
Qing Pan, chief financial officer of Noah Holdings, one of China’s largest wealth management firms overseeing some $23 billion in client assets.
He is expecting to obtain a business license in Dubai by the end of this year.
Moreover, he said that Dubai office will serve Chinese businessmen who are setting up shop in that market.
“Noah’s strategy is to follow the growth of our clients’ wealth; that’s why we will need to be there and take care of locally generated wealth,” he said.
Adding that the firm plans to send some staff from China first and hire local employees later.
“Many Chinese entrepreneurs are looking for new markets and diversifying their supply chains.
Also many are excited about the opportunities the Middle East offers,” he added.
The Middle East is becoming increasingly important for Beijing as its relations with Washington sour amid disagreements over a range of issues.
The economic recovery after the Covid-19 pandemic, ease of doing business and convenient time zones.
In addition to the exemption from personal income taxes.
which have attracted a large number of wealthy individuals in recent years.
The United Arab Emirates saw the highest net inflow of millionaires in the world in 2022.
UAE is estimated to have received a net inflow of 4,500 millionaires in 2023.
This is according to data from Dubai-based wealth and immigration consultancy Henley & Partners.
Betting on this trend, Singapore-based multi-family office Faro Capital set up an office in Dubai last month.
Patrick Tsang, chairman of Hong Kong-based Tsang family group, said:
“We have firm plans to launch new offices in Abu Dhabi and Riyadh this year after establishing a presence in Dubai in 2022.”
The numbers speak for themselves with complete accuracy, and the comprehensive statement presented by His Highness Sheikh Mohammed bin Rashid of the achievements of the UAE government during 2023, paints a more than wonderful picture of the extent of the success it has achieved. pic.twitter.com/vwZEuBitBo
— UAE Voice (@uae_voiceeng) January 7, 2024
Hong Kong-based Landmark Family Office is also planning to set up an office in Dubai in the coming months.
Cameron Harvey, founder and CEO of Landmark, said:
“The firm’s Dubai office will be used to help clients based in China, Southeast Asia, and Australia find investment opportunities in the Middle East.”
Plans to increase allocations.
A recent study of 76 single and multi-family offices in the Asia-Pacific region by Campden Wealth and Rafles Family Office found that the average allocation of assets to the Middle East is only 1%.
But 7% of respondents plan to increase that.
Manish Tibrewal, co-founder of Singaporean firm Faro Capital said:
“We live in very interesting times, where geopolitics has become more important for families than ever before.
And Dubai’s push to regulate virtual assets and the golden visa scheme, among other things, have boosted its attractiveness.”
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