Here is the new playground for the super-rich: billionaires invest in tax havens

By RockedBuzz 3 Min Read

The emirate of Abu Dhabi is more and more changing into a popular wealth heart for billionaires, who’ve historically stored their fortunes in abroad areas equivalent to the Cayman Islands, Switzerland and the British Virgin Islands. High-net-worth people together with Changpeng “CZ” Zhao, the richest man amongst crypto-billionaires, India’s Adani household, Ray Dalio, and Russian metal magnate Vladimir Liszin have this 12 months arrange particular objective automobiles (SPVs) in Abu Dhabi, the worldwide monetary hub.

The variety of SPVs working in the Abu Dhabi Global Market has elevated from 46 in 2016 to greater than 5,000 at the moment. These types of separate authorized entities are fashionable amongst rich people who want to handle their wealth and isolate monetary dangers. Assets held in these SPVs could embody actual property and shares.

This development displays how the world’s rich defend their cash.

The development is $509 billion economy additionally means a new function for the United Arab Emirates. This comes at a time when conventional, low-tax jurisdictions equivalent to the British Virgin Islands and the Cayman Islands are dealing with elevated scrutiny and a decline in new firm registrations.

The capital of the Emirates affords an a variety of benefits that make it engaging to excessive internet value people. These embody safeguards to guard property from international jurisdictions and alternatives to reap the benefits of the UAE’s double taxation treaty community. The latter may help decrease the tax payments of firms inside the SPV, relying on whether or not they do enterprise with international locations which have agreements with the UAE.

Investors who make massive investments in Abu Dhabi are entitled to long-term residency and, in some circumstances, even a passport from the United Arab Emirates. They even have entry to Abu Dhabi’s sovereign wealth funds, which handle greater than $1 trillion in property.

However, it is not attainable to publicly know the place and why particular person billionaires transferred their wealth.

Also, whereas the metropolis’s strategic location, political stability and proximity to capital make it a sexy different to conventional havens like the Cayman Islands, it has come below scrutiny from the Financial Action Task Force (FATF), particularly because it was graylisted in March 2022.

Cover picture supply: Rustam Azmi/Getty Images

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