Some wealthy Asians look to move Dubai assets closer to home on Iran war fears

• Summary

• Companies

• Dubai has become a preferred wealth hub for the rich in Asia, mainly from China

• Singapore wealth sector sees increased client interest in asset transfers

• UAE’s stability questioned, but some investors remain confident

• UAE banking and financial sector resilient, central bank governor has said

SINGAPORE/DUBAI, March 6 (Reuters) - Soon after ​the first Iranian missile and drone attacks on Dubai last week, two Indian entrepreneurs based there tried to move more than $100,000 each from their local bank ‌accounts to Singapore to hedge risk.

Technological glitches in the aftermath of the Iranian attacks initially scuppered those plans, the entrepreneurs, who did not wish to be identified due to the sensitivity of the matter, told Reuters.

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One of them said he managed to subsequently transfer the sum to his Singapore bank account via another Emirates-based bank.

Scores of other wealthy Asians are making enquiries or taking similar steps to move their Dubai-parked assets to the regional financial hubs ​of Singapore and Hong Kong, industry advisers and lawyers said, as the U.S.-Israel war on Iran clouds the Gulf’s safe-haven aura and rattles investors.

While the rich typically diversify their ​investments across regions and asset classes, they choose where to be based depending on tax, regulatory, privacy and operational considerations.

Towards that end, Dubai has ⁠emerged in recent years as a preferred wealth hub for entrepreneurs and rich families in Asia, mainly from China, as they look to take advantage of its favourable policies.

Moreover, with a property ​and infrastructure boom, the Gulf region has also become an investment destination. Total assets of the United Arab Emirates (UAE) banking and financial sector exceeded 5.42 trillion dirhams ($1.48 trillion), according to its central bank.

The ​trend is now under sharp scrutiny, as the attacks on Dubai and Abu Dhabi have thrown into doubt the UAE’s reputation for stability.

Singapore-based private wealth lawyer Ryan Lin said six or seven of his 20 Dubai-based clients, each holding an average of $50 million in assets, contacted him this week, with three planning immediate asset transfers to the city-state.

One client is “checking how quickly they can transfer everything to Singapore”, Lin said.

Iris Xu, principal at global ​corporate and fund services provider Anderson Global, said 10 to 20 family offices have enquired this week with her firm about moving assets back to Singapore from the Middle East on ​worries the conflict might drag on.

Family offices are one-stop firms that manage the portfolios of the wealthy.

“Dubai was always about tax benefits but now I think the tax benefits may not be the top priority ‌for them,” she ⁠said.

A wealth management adviser in Singapore, who did not wish to be identified because they were not authorised to talk to the media, said they had spoken to 13 UAE-based clients so far with more than half serious about moving assets to Singapore.

“Flying back and forth will be a challenge even if the conflict ends tomorrow. It is a confidence thing,” said the adviser.

Grace Tang, CEO of Phillip Private Equity, said her predominantly Asian clients are skittish, with 10 to 20 asking about moving their wealth to Singapore and looking to preserve their capital.

WAITING AND WATCHING

Not all ​wealth managers, however, view the ongoing Middle East ​conflict as prompting immediate capital flight.

Dhruba Jyoti ⁠Sengupta, CEO of Dubai-based WRISE Private Middle East, a wealth management group, said the firm has not seen “serious capital flight discussions”, as clients were confident about the UAE’s long-term resilience.

“They are sophisticated global investors, already diversified internationally, but deeply invested … in the UAE’s growth story,” he said. “Despite the ​broader geopolitical turmoil in the region, clients are feeling safe and secure.”

The UAE’s banking and financial sector was resilient, strong, stable, and well-positioned to ​navigate regional developments, its central ⁠bank governor Khaled Mohamed Balama said on Thursday, adding that banks, financial firms, and insurers were operating normally and without disruption.

Leading Singapore-based wealth managers, Bank of Singapore and DBS Group (DBSM.SI), opens new tab said their clients were closely observing the developments in the region and were taking a wait-and-watch approach, for now.

As the UAE scrambled to maintain its safe-haven status, some were going ahead with their expansion plans in the Emirates.

Jeremy Lim, ⁠co-founder of ​GrandWay Family Office, is in the process of opening a family office in Abu Dhabi and said his plans ​have not changed - as long as the UAE does not become directly involved in the conflict and barring any further escalation from Iran.

“The real deal-breaker for businesses would be if the UAE were to…become directly involved alongside one side ​in a conflict,” said Lim.

Reporting by Xinghui Kok, Rae Wee and Yantoultra Ngui in Singapore; Jayshree P Upadhyay in Hong Kong and Hadeel Al Sayegh in Dubai; Editing by Sumeet Chatterjee and Muralikumar Anantharaman

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Xinghui Kok

Thomson Reuters

Xinghui leads the Singapore bureau, directing coverage of one of the region’s bellwether economies and Southeast Asia’s main financial hub. This ranges from macroeconomics to monetary policy, property, politics, public health and socioeconomic issues. She also keeps an eye on things that are unique to Singapore, such as how it repealed an anti-gay sex law but goes against global trends by maintaining policies unfavourable to LGBT families.

Xinghui previously covered Asia for the South China Morning Post and has been in journalism for a decade.

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Yantoultra Ngui

Thomson Reuters

Yantoultra Ngui is the Southeast Asia Deals Correspondent of Reuters in Singapore, covering M&A and capital market activities in a region that is fast emerging as one of the world’s biggest economies. He previously was a reporter at Bloomberg and The Wall Street Journal (WSJ). Notably, he was part of WSJ’s team that covered the financial scandal at Malaysian state fund 1MDB, and that won SOPA Excellence in Breaking News award for the coverage of the assassination of Kim Jong Nam, the half-brother of North Korea’s leader Kim Jong Un, in Malaysia in 2018. Yantoultra graduated with an MBA in Finance from Universiti Putra Malaysia (UPM) in 2010.

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