Dubai has become a sanctuary for affluent Russians fleeing the consequences of Western sanctions over the Ukraine conflict.
According to business executives, Russian millionaires and entrepreneurs are flocking to the United Arab Emirates (UAE) in unprecedented numbers.
According to a research, Russian property transactions in Dubai increased by 67 percent in the first three months of 2022.
It also issues visas to non-sanctioned Russians, despite the fact that several Western nations have banned them.
Hundreds of thousands of individuals are thought to have departed Russia in the previous two months, however specific data are unavailable.
According to one Russian economist, 200,000 Russians fled in the first ten days of the war.
Virtuzone, which assists businesses in establishing operations in Dubai, has witnessed a significant increase in Russian clients.
“Since the conflict began, we’ve had five times more inquiries from Russians,” stated CEO George Hojeige.
“They are concerned about the impending economic collapse. That is why they are relocating here to protect their assets “he continued.
The inflow of Russians has increased demand for luxury villas and flats around the city. Real estate agencies are reporting an increase in property prices as Russians flock to Dubai to buy properties.
Russian property transactions increased by two-thirds in the first three months of 2022, according to Betterhomes, a Dubai-based real estate business.
Modern Living, another real estate firm, told the media that it has employed numerous Russian-speaking brokers to meet increased demand. Thiago Caldas, the company’s CEO, said they were getting a lot of calls from Russians who wanted to go to Dubai right away.
“Russians coming down aren’t just looking for an investment; they’re searching for a second home,” he added.
Employees from several global corporations and Russian start-ups are also migrating to the UAE.
WeWay, a blockchain technology business with operations in Russia and Ukraine, co-founded Fuad Fatullaev. He and his partners relocated hundreds of staff to Dubai once the war broke out.
“Our operations were severely impacted by the conflict. We couldn’t keep on like this since we needed to relocate hundreds of individuals outside of Ukraine and Russia “Mr. Fatullaev, a Russian citizen, adds
He goes on to say that they opted to relocate their personnel to the UAE because it provides a secure economic and political environment in which to conduct business.
He said that Russian enterprises were leaving because sanctions were making it extremely difficult for them to function. Because most western corporations had broken links with Russian-based organizations, the difficulty was much more acute for companies working with foreign clientele and brands, he added.
Global corporations such as Goldman Sachs, JP Morgan, and Google are transferring part of their personnel to Dubai after closing headquarters in Russia.
“There is undoubtedly a brain drain taking place. Many individuals are leaving since there are now many business constraints “Mr Fatullaev remarks
Russia’s central bank is unable to access billions of dollars in foreign reserves held by international institutions. The Swift financial communications technology has been disabled from several Russian institutions.
To preserve its reserves, Russia imposed capital controls and prohibited citizens from leaving the country with more than $10,000 in foreign currency.
Due to the difficulty of transferring cash, many Russian purchasers are opting for cryptocurrency payments. Some buyers use an intermediary that accepts cryptocurrency payments and then transfers the funds to the seller on their behalf.
Western nations have called for sanctions against Russia, but Gulf powers such as the UAE and Saudi Arabia have refused.
The UAE was one of just three nations, along with China and India, to vote against condemning Russia’s invasion of Ukraine in the United Nations Security Council in February. It also voted against suspending Russia from the UN Human Rights Council at the General Assembly on April 7.
The increase in Russian investment comes just months after the Financial Action Task Force (FATF), a global financial crime watchdog, placed the UAE on a “grey list.”
It implies the country’s efforts to combat money laundering and terrorism funding will be closely scrutinized. The UAE government claims to have made considerable steps to control incoming investment and says it will continue to work closely with the FATF on areas where it can improve.