First with Financial Comment from Arabia

Dubai becoming the Monte Carlo of the Middle East

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Monte Carlo is a low-tax haven for the super-rich of Europe. Dubai has become something similar in the Middle East, and some of the super-rich are taking advantage of the recent real estate crash to buy property relatively cheaply.

According to The Washington Post the president of Azerbaijan is the latest super-rich investor to discover the advantages of buying property in Dubai and has allegedly bought 11 waterfront mansions on the iconic Palm Jumeirah Island in two weeks under his son’s name.

Famous residents

If the report is true then he is far from being alone. Fugative former Thai prime minister Thanksin Shinawatra has made Emirates Hills his home, as did the late Benazir Bhutto and her family.

Dubai is not just low-tax like Monte Carlo. The city is no-tax as far as capital gains on property or income from rentals is concerned. Even transfer fees on property are very modest. And rental returns are traditionally high in Dubai.

The lifestyle also has its plus points. Nightlife and restaurants are lively. The city has beautiful beaches. Shopping is good. The climate is not. It is far too hot for seven months of the year. But indoor facilities are excellent and the air-conditioning works.

But for the super-rich traveling is also usually a lifestyle choice. Dubai has its excellent Emirates Airline with swift connections all round the world, and an airport hub unmatched in the region.

There is not even a system to attempt monitoring income among Dubai residents, or any plans to introduce one. This is clearly very attractive to super-rich persons who feel they are being hounded out of tax jurisdictions by over-zealous officials applying ever more onerous taxes.

Lifestyle city

Other cities in the Middle East can boast similar tax regimes. But nowhere else has the multi-cultural, tolerant lifestyle of Dubai with its 90 per cent plus expatriate population.

The new waterfront development along the Jumeirah Beach looks remarkably similar to the high-rise towers of Monte Carlo. Yet the similarities are far deeper than mere architecture.

Dubai has become the Monte Carlo of the Middle East, and in future its financial services sector can only grow to service this client base whatever the vagaries of the ongoing Dubai debt restructuring. But there will be no casino, that would be too much.


Written by Peter Cooper

March 6, 2010 at 10:09 am

Posted in Dubai Property

One Response

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  1. There was a casino that is now firmly closed…the off-plan properties market. And the house did not always win.

    Sam Dubai

    March 7, 2010 at 10:16 am

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