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Tags: abu dhabi | tax haven | high net worth | billionaire

Abu Dhabi World's Newest Tax Haven for Billionaires

Abu Dhabi World's Newest Tax Haven for Billionaires
Bridgewater Associates Chairman Ray Dalio speaks during the Economic Summit held for the China Development Forum in Beijing. (Ng Han Guan/AP/2019 file photo)

By    |   Monday, 11 December 2023 12:55 PM EST

Many of the world’s billionaires are choosing state-of-the-art emirate Abu Dhabi as their wealth haven of choice, including hedge fund magnate Ray Dalio, Russian steel tycoon Vladimir Lisin and cryptocurrency king Changpeng “CZ” Zhao, Bloomberg reports.

More than 5,000 holding companies, or special purpose vehicles (SPVs), which junk bond baron Michael Milkin popularized in the late 1980s, are now registered in Abu Dhabi Global Market (ADGM) — up from a mere 46 in 2016, according to wealth advisory firm M/HQ and a review of hundreds of corporate filings in the United Arab Emirates by Bloomberg News.

As regulatory oversight has begun to emerge in the Cayman Islands, Bermuda, Switzerland and the British Virgin Islands, the world’s high-net-worth have begun to set their sights on the Persian Gulf capital to protect their finances in SPVs, which can protect both liquid and illiquid assets, including real estate.

Tax and regulatory breaks are the biggest draws: Companies registered as a SPV in ADGM can take advantage of UAE’s double tax treaty to minimize their taxes.

Furthermore, the haven has become a bona fide, skyscraper-studded global city offering economic stability, culture and the opportunity to do business with the Abu Dhabi royals. The availability of visas and passports is also convincing some HNW individuals to take advantage of the eligibility for long-term residency.

The attraction of the super rich is all part of the ruling AL Nahyan family’s goal to diversify the United Arab Emirates $509 billion economy away from oil.

“ADGM is a great place to set up SPVs, and it’s increasing sharply,” says Bhaskar Dasgupta, a corporate adviser who was formerly employed by the Abu Dhabi free zone. “We’re seeing more high-net-worth individuals moving from the BVI, Caymans, Mauritius and Singapore to here.”

Dalio made headlines earlier this year when he set up an office within ADGM and reportedly plans to open a branch of his family office there, too.

Egyptian billionaire Nassaf Sawiris just revealed last week that his family office is also going to set up shop as a SPV in ADGM.

Zhao, formerly the CEO of Binance, bought his first home in Dubai in 2021 due to its pro-crypto policies.

Before Zhao pled guilty to U.S. anti-money laundering violations last month, a representative for Zhao called ADGM “a great place to domicile companies.”

Lisin, the fourth-wealthiest Russian on the Bloomberg Billionaires Index, set up SPVs Serenity II Holdings and Nebula II Holdings this past May. Lisin said he was attracted by Abu Dhabi’s stock exchange and the fact that global investors like Dalio had moved there.

“ADGM’s strategic location, policy stability and proximity to capital are key attractions for high-net-worth individuals, offering a secure alternative to the traditional but currently less predictable BVI and Caymans,” says Sam Blatteis, CEO of The MENA Catalysts, which consults on government relations for companies in the Persian Gulf.

An ADGM spokesperson said international financial free zone, set up in 2015, is attractive for its the use of English common law, investor protections and low taxes. SPVs there, the spokesperson continued, have no minimum share capital requirement and no restrictions on the nationality of shareholders. Further, shares can easily be transferred, the rep said.

“We see this trend of more billionaires moving to the country,” says Armond Arton of Arton Capital, which consults the ultra wealthy on where to establish citizenship.

“Once they feel welcome and safe, they then look to relocate their businesses and assets, with ADGM being one of the preferred places.”

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StreetTalk
Many of the world's billionaires are choosing state-of-the-art emirate Abu Dhabi as their wealth haven of choice, including hedge fund magnate Ray Dalio, Russian steel tycoon Vladimir Lisin and cryptocurrency king Changpeng "CZ" Zhao, Bloomberg reports.
abu dhabi, tax haven, high net worth, billionaire
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2023-55-11
Monday, 11 December 2023 12:55 PM
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