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The Iran war has shaken Dubai’s status as a global wealth center, as legions of expatriates scramble to escape and family offices and wealth managers reconsider their Middle Eastern footprint.
Over the past decade, Dubai, in the United Arab Emirates, has successfully marketed itself as a safe haven for the global elite. It’s sunny, safe and mostly tax-free. Its ever-growing array of luxury villas, condo towers and 1% creature comforts make Dubai the ultimate playground of worry-free wealth.
However, now Dubai’s safety reputation is under threat.
Dubai’s five-star Fairmont The Palm hotel, on its famous man-made, palm-shaped archipelago, was hit by the explosion. Debris from a downed Iranian drone set the Burj Al Arab hotel on fire and a missile attack damaged Dubai Airport. On Tuesday, the US consulate in Dubai was targeted by a suspected drone strike, causing a fire nearby.
“The US-Israel war over Iran is raising a critical aura of security in Dubai,” said Jim Crane, a fellow at Rice University’s Baker Institute. “Dubai’s economic model is based on expatriate residents who provide brains, guts and investment capital. You need stability and security to bring in smart foreigners.”
Dubai and the United Arab Emirates quickly sought to reassure investors and play down the violence. The UAE’s National Emergency Crisis and Disaster Management Authority announced on Saturday that the “situation is under control”. Dubai’s police force this week threatened to arrest and jail social media influencers who share social content that “contradicts official publications or causes social panic”.
Other wealth centers in the region – including Abu Dhabi, Doha and Riyadh – are also caught up in the fallout from the war. Like Dubai, they have made attracting the rich a key economic policy. Yet Dubai’s rise and dependence on wealth capital stands out in the region. Kane said Dubai is no longer as dependent on oil revenue as its neighbours, but rather on the confidence of foreigners.
He said the city would not function if all those with foreign passports fled. “Dubai will literally shut down. Dubai will be more exposed to the risks of expatriate exodus.”
Dubai is now home to 81,200 millionaires, 237 centimillionaires (those worth $100 million or more) and at least 20 billionaires, according to Henley & Partners. An estimated 9,800 millionaires are expected to move to Dubai in 2025 and 2026, according to Henley, with demand coming mainly from the UK, China and other parts of Asia. When the ruling Maktoum family began to diversify the economy away from oil decades ago, Dubai created special economic zones and golden visa programs to effectively industrialize the attraction of wealth as a national strategy.
Dubai has no personal income tax, no capital gains tax and no inheritance tax, making it ideal for the ultra-rich and family offices. The Dubai International Finance Center (Special Financial Sector) reported in early January that the top 120 households in the financial sector managed more than $1.2 trillion. Last month, the DIFC said it was home to 1,289 “family-related entities”, up 61% from a year ago.
For now, many wealthy families and wealth professionals are focused on getting out. Charter companies report that demand for private jets outstrips available seats and flights. Aamir Naran, CEO of Vimana Private Jets, said the broker had received more than 100 client inquiries on Tuesday night. He said he had not seen such demand since the pandemic. A jet from Riyadh to Europe can cost up to $350,000, he said.
The Dubai residents he spoke to were traveling to business meetings, not fleeing for safety, he said.
“They don’t feel unsafe,” he said. “A little extra noise in the background of all these missiles is normal. But life has to go on. They have to travel.”
Dale Buckner, CEO of security firm Global Guardian and a former Green Beret, said the exodus shows no signs of slowing. As of Tuesday morning, Buckner had seven corporate clients, including large financial and consulting firms that plan to relocate 1,000 to 3,000 employees.
“It looks like Ukraine,” he said.
“I think everyone realizes that the Iranians have been successfully targeting five-star hotels and airports, and now they’re starting to shut down the oil infrastructure,” he said. “I don’t believe anyone thought this was possible.”
Many companies and professionals in Dubai say the business case for staying is strong. And they are careful not to cross the government in times of crisis. Hasnain Malik, who leads emerging markets equity and geopolitics strategy at Dubai-based Telemer, said hedge funds and family offices are mainly drawn to Dubai’s tax, regulatory and stable banking regimes. All those symptoms remained the same, he said.
Those reasons have not changed, he said. “It’s a driver of lifestyle, just one aspect of ancient security challenged by recent events.”
Henley & Partners, which helps the wealthy secure visas in other countries, said Dubai has always proven resilient in times of uncertainty. Dominic Volek, head of private clients group Henley & Partners, said the attacks in Dubai were a reminder of the importance of geographic hedging.
“Situations like these reinforce a key principle we often discuss with clients: the value of global optionality,” he said. “Internationally mobile families typically diversify their residence and citizenship status across multiple regions – including the Americas, Europe, the Middle East and Asia – so they retain flexibility in the face of geopolitical uncertainty, where and when it may arise. These decisions are often short-term responses to rather than strategic and long-term events.”
One sector experiencing long-term pressure is Dubai’s real estate market. Dubai’s real estate prices have been rising steadily for five years, boosted by its Golden Visa program, which gives foreigners a 10-year renewable visa to buy property worth $550,000 or more. Last year the 47,200-square-foot villa set a price record in the new Bugatti Residences for Dubai and the UAE when it sold for AED 550, or about $150 million.
Even before the Iran war, there were few signs that Dubai’s steep building spree, skyrocketing prices and rampant speculation were starting to cool. In September, UBS estimated Dubai had the fifth highest bubble risk among 21 major cities, behind Zurich and Los Angeles. In the spring, Fitch Ratings predicted a correction with prices falling by 15% in late 2025 and 2026.
The impact on real estate values depends on the scope and duration of the conflict, said Anton Lopatin of Fitch Ratings. For now, he said, the exodus of expats could put “pressure” on Dubai’s housing market.
(tags to translate) Breaking News: Politics
