Aerial view of the Sheikh Zayed Road in Dubai.
Credit: Reuters
By Alexander Sazonov, Archana Narayanan and Shruti Srivastava
Adel Sajan is witnessing one of the biggest booms his firm has ever seen, as a flood of wealthy Indians snap up $250,000 apartments in the luxury Dubai skyscrapers built by his family.
His family’s own home is a 26,000-square-foot villa in Emirates Hills — a gated residential neighborhood often dubbed the Beverly Hills of Dubai. “I think every second house is an Indian house over here,” the 34-year-old managing director of Danube group said in an interview at his mansion, where the marbled living room is the size of a mini soccer field and the glass-walled garage shows off more than 15 cars, from Bentleys to Range Rovers and Lamborghinis.
The Sajans aren’t new money, but the family’s growing wealth and business are now being fueled heavily by money flooding in from the subcontinent. Indians make up 32 per cent of the firm’s customers in the UAE, and they are contributing to some of the largest gains for Danube since Adel’s father founded it in the United Arab Emirates three decades ago.
For years, China’s rich have dominated global wealth flows but Dubai now offers one of the earliest signs yet of the potential impact India’s new millionaires and affluent families can have overseas. Reflecting one of the world’s most profound financial shifts, India saw a 4.6 per cent jump in total household wealth last year, UBS estimates, even as North America and China saw declines. The UAE’s easy visa policies, low taxes, and proximity are making it the biggest overseas beneficiary of the South Asian country’s ascent on the money charts.
Immigration firm Henley & Partners estimates that the Middle Eastern country is expected to be the top destination for migrating high net worth Indians in 2023. Billionaire Mukesh Ambani bought beach-side real estate on the emirate’s swanky Palm Jumeirah archipelago last year, people familiar with the matter told Bloomberg at the time. Actor Vivek Oberoi has invested in a home and a property firm in the city, and has pictures of his Rolls Royce in Dubai on Instagram.
In India, Bollywood personalities or sports people often have a crowd of people standing outside their home in the middle of the night just to get a glimpse of them, said Atul Muchhala, executive director of India operations at IQ-EQ, which provides services to Indian family offices in many countries including Dubai. “If they have real estate properties in Dubai or one of the islands there, they get privacy, while still being able to hop on a short flight back to Mumbai.”
The flow of money from wealthy individuals comes at a time when Middle Eastern governments are strengthening ties with Prime Minister Narendra Modi’s government as they look for new global allies beyond their long term partnership with the US.
Wealthy Chinese who had been investing from Vancouver to Sydney have been hit by plunging stock and property values. Yet India is expected to see an 80 per cent surge in ‘centi-millionaires’ worth more than $100 million over the next decade or so, the second-highest growth globally after Vietnam, Henley estimates. It expects the US to be the second most popular destination for rich Indians after Dubai, followed by Australia, Canada and Singapore.
Still, much of India’s new billions are expected to stay within its borders due to capital controls and a traditional caution in taking savings too far from home. Also, for those making a rush to Dubai or elsewhere, getting money out could start getting harder.
India already limits how much money its wealthy can take out of the country, with individuals allowed to wire only $250,000 each year. But since October those transfers are taxed at 20 per cent, barring cash used for education and medical expenses.
At the same time, Indian tax officials have also grown concerned that some of the money flowing out of India may be landing in Dubai because of its easier regulatory regime, people familiar with the matter said. Though India and the UAE have a mechanism to share information on suspected unaccounted money, India has found it increasingly difficult to get information from the Middle Eastern country, a person dealing with the matter said. Despite being persistent with its demands on getting details of high net-worth individuals and Indian companies operating from the UAE, there has been very little information flow, that person said.
A representative for India’s tax department didn’t respond to an email seeking comment. A UAE government spokesperson said in a statement that the Middle Eastern government upholds international conventions related to tax cooperation, is fully compliant with global standards and works closely with bilateral partners. “The UAE and India have long-established strong and robust strategic relations,’’ the statement said.
Many Indians say Dubai’s attraction extends well beyond low taxes, pointing to the better infrastructure and quality of life at a time when many Indian cities are grappling with snarling traffic, deadly train accidents and some of the world’s worst air quality. The UAE golden visa program also allows foreigners making substantive investments to stay for 10 years.
Rich Indians also like Dubai because it gives a base with easy access to use of their wealth globally, and a way to diversify their investments,’ said Daksha Baxi, an international tax expert and founder of Mumbai-based consultancy firm SRI Solutions. "Good infrastructure, and the fact that Dubai offers a luxurious lifestyle is another reason for HNIs going there,” she said.
For Dubai, the funds rolling in from wealthy Indians are also helping shore up the luxury property market because they come at a time when inflows from rich Russians —- which had surged after the Kremlin sent troops into Ukraine —- are tapering off. By Henley’s estimates more millionaires will come to the Middle Eastern country from India than any other this year.
For more, read: Russians Lose Taste for Pricey Dubai Property After Ruble Tumble
Dubai brokerage Betterhomes says Indians are the top buyers of real estate in the city, and have remained so even as Russians hit by a weaker ruble have dropped out of the rankings of top three buyers.
About 3.5 million Indians currently live in the UAE, according to the Indian Ministry of External Affairs. For many, Dubai feels like home because of decades of cultural ties with India.
Indian actor Vivek Oberoi made Dubai his second home three years ago and established the Bricks n Woods real-estate firm in the heart of the emirate. The business has a team of over 300 experts working with family offices and individuals. Oberoi also runs a lab-grown diamond business called Solitario, besides investing in start ups globally, out of Dubai. The convenient time zone, social life and global sports make Dubai really attractive for his family, he said.
“In the building of Dubai as we see it today, one of the biggest contributions has been of Indians. We have so much respect here and Hindi is almost like a second language,” Oberoi said.
Also read: Hamptons of India Rises as Nation’s Wealth Boom Eclipses China’s
Harvard educated Vishal Goel, a serial entrepreneur with interests in K-12 schools and healthcare, escaped rounds of lockdowns and Covid measures in India by relocating to Dubai.
“My wife established her company in the DIFC fintech hub and I could take my fund management business beyond India,” Goel, who runs JV Ventures, a venture capital and private equity investment firm, said.
The Sajan company, Danube, is now targeting revenue of $2.5 billion this year from $1.5 billion a year earlier, aided by the the flow of Indian money. Three years ago Rizwan Sajan — Adel’s father and the founder of Danube — was granted the Emirati citizenship. Adel now is in the process of get his.
“I am a proud Indian,” Adel said. “Having said that, the way Dubai has spoiled us, especially me, somebody who’s been here all my life, to imagine myself to live in India is very challenging,”