UAE Emerges as Haven for Global Wealthy Seeking Tax Evasion
The American Bloomberg Agency reported that the UAE has become a hub for wealthy, corrupt tax evaders globally in recent years.
The agency noted that this group might soon be joined by high-net-worth individuals from Britain looking to safeguard their assets.
Sources indicated that the emirate’s financial center is experiencing a surge of inquiries from the UK, following the ruling Conservatives’ withdrawal of preferential tax treatment for residents.
The opposition Labor Party has vowed to go further if it wins, as expected, the election scheduled for July 4.
The free zone – Abu Dhabi Global Market – is already working on a range of incentives, including lifestyle support and visas, to attract financial professionals, Bloomberg News reported.
In recent weeks, representatives have conducted meetings in London with some of these individuals, according to sources who requested anonymity due to the private nature of the information. The aim was to explain the benefits of moving to a wide range of wealthy individuals in Britain.
A spokesman for the free zone said: “Abu Dhabi continues to attract high-net-worth individuals from all over the world.”
He continued, “ADGM has developed a strong regulatory framework and environmental system with progressive regulations based on the direct application of English common law, which enhances the attractiveness of the capital of the United Arab Emirates.”
This outreach to the emirate follows UK Chancellor Jeremy Hunt’s announcement of plans to reform the preferential tax treatment system for both residents and non-residents, including wealthy foreigners living in the country. Labour’s Keir Starmer has also committed to closing further “loopholes.”
Abu Dhabi is already a favored destination for billionaires, drawn by the city’s assurances of protecting assets from foreign jurisdictions, sovereign wealth funds exceeding $1.5 trillion, and the UAE’s extensive network of double taxation treaties.
Bloomberg News reported that numerous high-net-worth individuals, including crypto billionaire Changpeng “CZ” Zhao, India’s Adani family, billionaire hedge fund manager Ray Dalio, and Russian steel magnate Vladimir Lisin, have established special purpose companies in Abu Dhabi.
Additional advantages, such as tax-free income, sunny weather, and a time zone conducive to trading across Asian, European, and American markets, also make the city and neighboring Dubai attractive to individuals and businesses from London, Hong Kong, and Singapore.
Months ago, the United Kingdom added the UAE to its list of high-risk countries for money laundering, marking the latest international controversy over Abu Dhabi’s declining reputation. The UAE appeared on this British list alongside Yemen, Syria, and Iran, making them the only Middle Eastern countries included.
This is the first time that the UAE has entered the British list after the last list issued in May 2020.
This aligns with the Financial Action Task Force (FATF), which places countries under heightened scrutiny. All nations listed by the FATF exhibit significant deficiencies in addressing money laundering, terrorist financing, and anti-proliferation financing controls.
A research study showed that the UAE ranks very advanced in the Arab world and globally in money laundering and terrorist financing crimes, which has repeatedly made it vulnerable to international sanctions.
The UAE ranked second in the Arab world and 44th globally in money laundering crimes, according to a study issued by the Al-Zaytouna Center for Studies and Consultations, entitled: “Money Laundering in the Global Political Economy.”
The study revealed that money laundering is more widespread in the global economy than previously thought, with projections suggesting that between 3 to 5% of the total global gross domestic product will be involved in laundering activities by 2022.
That is, approximately 3-5 trillion dollars, and this number exceeds the gross domestic product of all Arab countries.
According to the study, numerous specialized reports documented shortcomings in the performance of the Financial Action Task Force (FATF), the international regulatory body tasked with combating money laundering, encompassing a total of 187 countries.
