Why India’s millionaires are flocking to Dubai and Singapore

Political stability, low taxation, and personal freedom are the top three  metrics for India’s millionaires when it comes to deciding where to live. About 6,500 Indian high-net-worth individuals are expected to move out of the country in 2023, according to the Henley Private Wealth Migration Report. 

This number is 13% less than that of 2022 when 7,500 high-net-worth individuals are estimated to have left India, the report said. An HNI is a person with investable wealth of $1 million (or Rs 8.22 crore).

The report said that prohibitive tax laws coupled with convoluted and complex rules on outbound remittances that are open to misinterpretation and abuse are among the problems that have triggered the migration of investment from India.

The exodus of big money from India: Where are these HNWIs going? 

Dubai and Singapore have emerged as the top two destinations for wealthy Indians when it comes to migration. 

“One of the main reasons for the Indian startup founders flocking their way to either Dubai or Singapore is because the taxes that a startup may incur while setting up a business is substantially lower as compared to India, especially in Dubai. Another reason for Indians moving to Dubai is the fact that leases for residential/commercial properties are taxed at a flat 5-10% and since the demographic of Dubai is more or less similar to India, that only adds to the attraction of setting up a startup business in Dubai,” said Suhael Buttan, Senior Associate, SKV Law Offices.


What’s so attractive about the UAE?

Dubai, also known as the “5th City of India”, is particularly attractive for Indians because of its government-administered global investor “Golden Visa” program, favorable tax environment, robust business ecosystem, and safe, peaceful environment, noted the report. Indians represent the largest demographic of expatriates at 27.49% in Dubai.

The Golden Visa scheme permits wealthy nationals from other countries to acquire residency in the UAE, provided they invest in this territory and meet several requirements.

Several Indians have taken the real estate route to obtain the golden visa especially after the government approved new conditions for securing a 10-year Golden Visa which saw a minimum investment of AED five million in real estate decrease to AED two million:

Real estate investors may obtain the Golden Visa if they fulfil one of the following conditions: 

purchase a property worth no less than AED 2 million, 

purchase a property with a loan from specified local banks, or

purchase one or more completed or off-plan properties of no less than AED 2 million from a list of approved local real estate companies

This golden residency scheme is renewable and reserved for certain categories ranging from investors to individuals with exceptional talents.

“India’s ultra-high-net-worth individuals (UHNWI) with net worth over USD 30 million is estimated to rise by 58.4 per cent in the next five years from 12,069 in 2022 to 19,119 individuals in 2027,” said a recent wealth report by Knight Frank, which means that this wealth migration to business hubs like Dubai would only grow. 

Dubai was leading the league tables last year in the net millionaire inflows. That trend is likely to continue because of the UAE’s reputation for low taxes, high-quality healthcare, a luxury lifestyle, and personal safety, said they Henley Private Wealth Migration Report. 

“UAE has long been a favorite destination of HNWIs from around the world. The reasons are obvious: zero taxation rates; highly developed infrastructure; low levels of street crime; a great deal of sun; affordable apartments aplenty; and increasingly cultural attractions such as the Louvre in Abu Dhabi and the Dubai International Book Festival that boasts some of the world’s top-selling authors. As a hub for the wealthy and business from all corners of the world, the opportunities to expand one’s professional activities are significant,” said Misha Glenny,  an award-winning journalist and a former BBC Central Europe Correspondent.

Henley estimates a net inflow of 4,5000 millionaires in UAE in 2023.

The many reasons millionaires are drawn to the Emirates include:

Safe haven status — the UAE is considered a safe haven in the volatile Middle East and Africa region.

Highly diversified economy — the Emirates is strong in many key sectors including financial services, healthcare, oil and gas, real estate, technology, and travel and tourism.

Low tax rates — along with Bermuda and Monaco, the UAE has the most competitive tax rates in the world.

First-class healthcare system — the UAE has a top-class healthcare system, and many foreigners opt to be treated there.

Luxury hub — the Emirates offers top-class shopping and restaurants.

Prime real estate — top-end apartments and luxurious villas are available throughout the country.

Good international schools — there are over 200 international schools in the Emirates.

All-year-round leisure activities — the UAE offers a wide choice of beaches, water parks, and yachting marinas.

“The wealth management solutions that UAE offers private clients, be they HNWIs, UHNWIs, or prominent business families, are truly remarkable. With access to two common law international financial centers (that also host a range of highly active sovereign wealth funds), a variety of freezones including those that regulate the ownership of virtual assets, a liberalised economy facilitating independent ownership in most sectors and choices as to where family offices can be established, the UAE undisputedly provides a holistic solution for many,” said Sunita Singh-Dalal, Partner, Private Wealth & Family Offices at Hourani in the UAE.

Why Singapore is Asia’s biggest wealth magnet

Singapore has a strong and stable political system with a robust legal framework that cultivates a conducive business environment. Its strategic geographical location attracts investors from across the globe to base themselves here and gain easy access to the region’s emerging markets, noted the report.

“Singapore’s Global Investor Program has a streamlined visa application process and offers several benefits, including the ability to bring family members to Singapore and a faster path to permanent residence. Successful applicants gain access to Singapore’s business-friendly environment, strong intellectual property protection, and attractive tax policies for companies and investors. Singapore’s banking sector is well developed and regulated, and the city-state has a burgeoning asset management industry. Singapore is also a vibrant hub for venture capital and private equity investments and is home to a growing number of family offices thanks to the rolled-out tax incentives,” said Jacky Poh is Deputy Head Southeast Asia at Henley & Partners Singapore.

“Singapore, Switzerland, and the UAE have all built their reputations on the premise of being safe havens not only for living but also for preserving wealth. They have also established themselves as highly attractive business hubs where companies can thrive in fiscally advantageous jurisdictions with favorable corporate tax rates as well as zero wealth and inheritance taxes,” said Dr. Juerg Steffen, CEO of Henley & Partners.

One of the reasons countries such as Singapore attract private wealth is the level of economic freedom they grant. This year, Singapore ranked 1st  in the Heritage Foundation’s 2023 Index of Economic Freedom. The primary aspects of economic freedom measured in the index encompass the rule of law, which impacts property rights and the effectiveness of courts, the tax burden, the size of the government, and the nation’s fiscal health, business, labor, and monetary freedoms, and the openness of financial markets, said the report.

What about Portugal?

” Portugal has also been the recent recipient of significant wealth from the Indian diaspora, but perhaps that too has reached its maximum potential, considering the announcement regarding the termination of the illustrious Portugal Golden Residence Permit Programme, which had attracted significant investment in Portuguese real estate and other ventures by HNW Indians,” said Sunita Singh-Dalal, Partner, Private Wealth & Family Offices at Hourani in the UAE

Nevertheless, it is worth noting that golden visas for entrepreneurial pursuits will continue to be accessible for those with a keen interest in such opportunities.