Some wealthy Asian investors are considering moving assets out of Dubai following Iranian missile and drone attacks on the city, raising concerns about the Gulf’s reputation as a stable financial hub, according to a report by Reuters.
The report said that shortly after the attacks last week, two Indian entrepreneurs based in Dubai attempted to transfer more than $100,000 each from their local bank accounts to Singapore as a precautionary measure. Their initial attempts were delayed due to technical issues at banks following the attacks, but one of them later managed to transfer the money through another Emirates-based bank.
According to Reuters, advisers and lawyers say several wealthy Asians are either making inquiries or actively planning to shift assets from Dubai to other financial centres such as Singapore and Hong Kong. The concerns come as the ongoing US-Israel war with Iran casts uncertainty over the Gulf’s safe-haven image and unsettles investors.
Dubai has in recent years become a preferred wealth hub for entrepreneurs and affluent families in Asia, particularly from China, drawn by favourable tax policies, privacy protections and business-friendly regulations. The city has also benefited from a boom in property and infrastructure investment across the Gulf.
The total assets of the UAE’s banking and financial sector exceeded 5.42 trillion dirhams ($1.48 trillion), according to the country’s central bank.
However, the attacks on Dubai and Abu Dhabi have led some investors to reassess the risks.
Singapore-based private wealth lawyer Ryan Lin said several of his Dubai-based clients had already reached out to discuss moving funds.
“One client is ‘checking how quickly they can transfer everything to Singapore,’” Lin told Reuters.
Iris Xu, principal at global corporate and fund services provider Anderson Global, told Reuters that between 10 and 20 family offices had contacted her firm about moving assets back to Singapore from the Middle East due to fears that the conflict could drag on.
“Dubai was always about tax benefits but now I think the tax benefits may not be the top priority for them,” she said.
A Singapore-based wealth management adviser said they had spoken with 13 UAE-based clients so far, with more than half seriously considering transferring assets.
“Flying back and forth will be a challenge even if the conflict ends tomorrow. It is a confidence thing,” the adviser said.
Grace Tang, CEO of Phillip Private Equity, also noted growing anxiety among investors.
“They are skittish,” Tang said, adding that between 10 and 20 of her predominantly Asian clients had asked about shifting wealth to Singapore in order to preserve capital.
Despite these concerns, some wealth managers say they have not yet seen widespread capital flight from the UAE.
Dhruba Jyoti Sengupta, CEO of Dubai-based WRISE Private Middle East, said clients remained confident in the country’s long-term outlook.
“They are sophisticated global investors, already diversified internationally, but deeply invested … in the UAE’s growth story,” Sengupta said, quoted by Reuters. “Despite the broader geopolitical turmoil in the region, clients are feeling safe and secure.”
UAE Central Bank Governor Khaled Mohamed Balama also emphasised the resilience of the country’s financial system.
He said the UAE’s banking and financial sector remained “resilient, strong, stable, and well-positioned to navigate regional developments,” with banks, financial firms and insurers continuing to operate normally.
Major Singapore wealth managers, including Bank of Singapore and DBS Group, told Reuters that most clients were currently taking a wait-and-watch approach.
Meanwhile, some investors are continuing with expansion plans in the Emirates. Jeremy Lim, co-founder of GrandWay Family Office, said he was proceeding with plans to open a family office in Abu Dhabi, provided the conflict does not escalate further.
“The real deal-breaker for businesses would be if the UAE were to…become directly involved alongside one side in a conflict,” Lim said.