The UAE continues to remain one of the most sought-after destinations for expats who wish to work and settle overseas.
According to a new study, the UAE is a strong draw for Western expats, more than 40 percent of whom cite high quality of life and investment opportunities as the primary drivers for moving to the region. Younger HNWs primarily locate for business purposes, for example to benefit from the region’s strong regulatory or legal framework (29 percent) or to create a startup (25 percent), the 2024 UAE Expat Study by Lombard Odier showed.
A quarter of expats also stated their desire to settle in the region permanently, a figure that rises to 49 percent among those aged 51 and above, the study added.
Demand for expertise
Key findings of the study reveal a strong and growing demand for sophisticated wealth management advisory services, fuelled by low levels of familiarity with local regulations and existing wealth planning arrangements, as well as a growing intent from HNW individuals to remain and/or retire in the region.
The survey pointed to certain challenges faced by expats in transferring wealth across borders, including difficulties in finding the right wealth manager (cited by 48 percent of respondents), overcoming language barriers and differences in business culture (37 percent) – particularly for younger expats aged 18-34 (67 percent) – and concerns over losses due to market fluctuations or geopolitical risks (23 percent). This underscores the need for personalised private banking services that help expats acclimatise to their surroundings and understand the region’s regulatory landscape and cultural norms and sensitivities, as well as a demand for products and strategies providing downside protection in volatile markets.
Planning for the future
In addition to these challenges, expats’ knowledge still holds scope for improvement, as evidenced by only 27 percent feeling “very familiar” with the tax implications of holding wealth assets outside the UAE. Moreover, a notable 61 percent of expats have yet to make any tax or estate planning arrangements for their children abroad, indicating a keen interest in discovering tax-efficient wealth transfer solutions. Private banks are well positioned to strengthen their understanding, given that a third (32 percent) of expats place value on advice regarding international laws and tax regulations.
“In the dynamic wealth management landscape of the UAE, the growing HNW expatriate community is increasingly seeking sophisticated and trusted advisors to help strengthen their knowledge across a range of issues, from wealth preservation and international wealth transfer to the taxation and regulatory implications of a relocation to the UAE,” Amer Malik, head of Middle East International at Lombard Odier Group, said.
“Our latest study identifies a marked preference among HNW expats for private banks as advisors of choice. At Lombard Odier, we are dedicated to providing our clients with customised solutions which integrate their goals and needs over different timespans and generations, enabling them to fully leverage the unique financial landscape and quality of life the UAE offers,” he added.
Preference for private banks
The report highlighted an uptick in demand for expert wealth management among expats in the UAE, with over half (53 percent) showing a preference for private banks for their estate planning needs, a figure that increases to 65 percent among those in higher wealth brackets and aged 51 plus, highlighting a deep trust in these institutions.
Indeed, the allure of sophisticated wealth management services is cited by a quarter (24 percent) of Western expats as a driver behind their move to the UAE.
There is also a growing interest within the expat community towards environmental, social, and governance (ESG) investments, with plans to increase sustainable allocations from 14 percent to 20 percent within the next five years. The large proportion of expats looking to purchase property in the UAE suggests that investing in sustainable real estate may also hold appeal, both areas where a trusted banking partner can provide valuable guidance.
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