“Las Vegas on the Gulf”

It seems like every other headline in my inbox these days is about the flood of high-net-worth individuals (HNWIs) getting residency in the United Arab Emirates…

The UAE is a collection of sheikhdoms located at the entrance to the Persian Gulf. Dubai is the best known.

Henley & Partners, a migration consultancy to the global elite, estimates the UAE will see a net influx of almost 7,000 millionaires by the end of this year—the most of any country in the world.

The Emirate is famed for its low taxes and easy residency permits for well-heeled foreigners.

It’s popular with the elite—but does it have much to offer us middle-class commoners?

And how does it manage to treat the ultra-wealthy so well and still balance its books?

Let’s start with a startling fact…

97% of the native-born Emirati population is either unemployed or works for the government.

Initially that was due to the wealth generated by the country’s oil resources. More recently, it’s a byproduct of the huge influx of capital into the local finance and trading sector. Although the government doesn’t levy income taxes, corporations pay 9%.

Even though that’s one of the lowest rates in the world, it’s more than enough to keep government coffers full…

Expat businesspeople and their employees come to Dubai for its low tax rates and its strategic geopolitical position.

According to government statistics, just over half-a-million Westerners live in the UAE, 5% of the total population…

There are also rapidly increasing numbers of Russians, Chinese, Iranians, and Arab and African expats.

Overall, native born Emiratis constitute just 12% of the population; Western and other expats 8%; the other 80% is low-wage contract laborers from places like South and East Asia. The UAE has the largest nonnative population of any country on Earth.

It’s possible for an expat to live a life of relative luxury in the UAE. Even people of modest means can afford household servants, cleaners, and gardeners.

The downside—as I will cover in a future article—is that the recent influx of HNWIs looking to take advantage of this situation has driven up the price of property to astronomical levels.

Increasingly, what people save in taxes, they pay for in a place to live…

Is there a place for ordinary middle-class expats in this “Las Vegas on the Gulf,” as many call it?

I’ll have more to report on that very topic, very soon…

Stay tuned.