Why the United Arab Emirates have become the haven of Russia’s rich

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The UAE is increasingly attracting wealthier Russian nationals. Friendly relations between the two countries were strengthened by the war in Ukraine.

There was already a strong Russian community in the Emirates: around 60,000 residents, mostly owners of a beautiful villa. In this petromonarchy, a stone investment of 750,000 dirhams or about 200,000 euros automatically gives access to a residence permit. The duration varies depending on the amount invested. Real estate agents in Dubai saw this influx of clients as soon as Russian troops began massing on Ukraine’s borders. Since the beginning of the offensive, demand has exploded, tripling in some agencies and tenfold in others.

Dubai has become the haven of oligarchs?

The big Russian fortunes, but also the less big ones, value the Emirates very much. Most of the employees of Western investment banks such as Goldman Sachs, JP Morgan or Rothschild who are based in Moscow have moved to the Emirates since the Moscow offices were closed. In this small Gulf state, the newcomers benefit from an environment that is very favorable to the interests of their country. Emirates sovereign wealth fund Mubadala has cross-shareholdings in Russia’s economy with another Russian fund of up to $3 billion. And unlike Norway’s sovereign wealth fund, he has no intention of abandoning it for the time being.

Ties between governments outside their borders are also very strong.

The United Arab Emirates financed the intervention of mercenaries from the Russian Wagner Agency in Libya. In addition to the golden visa, other very fundamental reasons motivate its installation in the petromonarchy: it is one of the few countries that maintains its flights to Russia. It is also a country that does not feel bound by Western sanctions. Russians are no longer welcome in European countries, so they are now seeking shelter in the Gulf. And a safe to keep their capital safe.

How do they manage to transfer their wealth?

Some come with suitcases full of bills, so they pay cash for their villa or apartment. They also make extensive use of cryptocurrencies. Dubai just enacted legislation favoring virtual currency, and in December the emirate signed an agreement with Binance, the world’s leading bitcoin trading platform. When all of these payment alternatives fail, that’s ultimately the one that’s leftHawalaan ancient money transfer system common in Middle Eastern countries.

Abu Dhabi has a reputation for promoting money laundering and tax evasion.

This financial center is very accommodating with sophisticated facilities. His legislation lends itself to this. There are 39 company registers and the same number of free zones on this confetti from seven emirates. This sulphurous reputation and the influx of these newcomers has brought him increased surveillance from the Gafi. In early March, the international anti-money laundering organization put it on the gray list of suspect states.

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