Since the start of the Russian offensive in Ukraine on February 24, the United Arab Emirates have opted for neutrality. This federation of seven emirates notably abstained in the vote at the United Nations General Assembly last week that ended with Russia being expelled from the Human Rights Council. Nor has it currently joined the package of sanctions that the West has passed against Moscow. The commercial center of Dubai has therefore become a kind of safe haven for wealthy Russians and their financial assets.
Less than six hours flight from Moscow
George Hojeige is one of the direct witnesses of this influx. The boss of VirtuZone, a company specializing in SME start-up support, has received five to ten times the number of new installation requests from Russia since the war began. “We used to only get between five and ten a week”, he believes from his office near the Burj Khalifa, the tallest tower in the world. At the same time, in the lobby, two new clients – Russian passports in hand – are discussing the terms of relocating their company with their advisor.
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“We tend to think that all Russians are oligarchs. It’s not the case at all”, exclaims George Hojeige and puffs on his electronic cigarette. The Emirate of Dubai has been accused by certain NGOs of harboring a handful of Russian businessmen close to Vladimir Putin seeking to evade US and European sanctions. “Our customers are ordinary people, I assure you, who sometimes have savings and want to protect their families because they are worried about the future of their area.”he continues while remembering them ” many “ Control procedures carried out by local authorities to start a business.
Russian businessmen are not the only ones migrating to Dubai. Bankers, journalists and artists based in Russia have also settled in the dazzling city-state, which is just under a six-hour flight from Moscow. The flight connections between the two countries were not suspended.
444,000 Russian tourists last year
“The Russians have lived here for a long time, they know the Emirates. They used to come here as tourists or as investors.”, explains Thiago Caldas, head of the agency Modern Living Real Estate. Around 40,000 Russian nationals lived in the Arabian Peninsula state before the war in Ukraine began. 444,000 Russian tourists also traveled to the emirate last year.
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“However, when Russians buy real estate here now, I notice that they only do so for the pure return. Most of the time they are looking for a stable place to stay.”, analyzes the real estate agent. Buying a property in Dubai worth 750,000 dirhams or just under €200,000 makes it possible to obtain a residency visa that is valid for three years and is renewable. Longer visas are also granted if the investment amount is higher. The emirate has also been offering a telework visa for two years, subject to strict conditions.
Cryptocurrencies to bypass Swift
In order to win over this clientele, Thiago Caldas started a communication campaign even at the beginning of the war in Ukraine, especially in Russia – but also in the region. A campaign “successful”, Because his company has hired three new Russian-speaking real estate agents to meet the growing demand, which he also believes is about ten times larger than before.
Payment for these properties has been complicated by the disconnection of several Russian banks from the Swift interbank messaging system and the suspension of Visa and Mastercard business in Russia. Cryptocurrencies have therefore become one of the main channels for financing these commodities, he says. However, these new flows come at a sensitive time for the United Arab Emirates. The FATF, the international anti-money laundering body, last month placed the Gulf monarchy on a “grey list” of states under heightened surveillance.