Russia and the United Arab Emirates (UAE) have successfully concluded negotiations on a draft agreement to avoid double taxation, as reported by the WAM news agency. Over recent years, the UAE has emerged as a significant hub for Russian business and government elites, a trend that has only accelerated in light of geopolitical shifts.
A New Destination for Russian Elites
Since the onset of Russia’s war in Ukraine and the subsequent imposition of international sanctions, the UAE—particularly Dubai and Abu Dhabi—has become a preferred destination for Russian entrepreneurs, officials, and their families. This influx has transformed the region into a nexus for Russian activity abroad.
Reports indicate that permanent residents in Dubai now include the families of several high-ranking Russian officials. Notably, the wives and children of federal ministers, as well as the daughter of former Defence Minister Sergei Shoigu, have taken up residence in the emirate, a location they have frequented for years.
Surging Russian Presence in Dubai
By 2024, the Russian population in Dubai had grown to approximately 500,000, constituting nearly 15% of the city’s total population. Many Russians have leveraged the UAE’s ten-year residency visa program, which requires a minimum property investment of $545,000. According to Bloomberg, Russians accounted for the largest group of non-resident property buyers in the UAE in 2022. It is estimated that close to $1 billion has been transferred from Russia to Dubai alone.
A Safe Haven for Russian Assets
The Persian Gulf has also become a refuge for luxury yachts owned by Russian billionaires on the Forbes list. Notable examples include:
- Anna, owned by Dmitry Rybolovlev
- Madame Gu, owned by Andrei Skoch
- Quantum Blu, owned by Sergey Galitsky
- Nirvana, owned by Vladimir Potanin
- Motor Yacht A, linked to Andrey Melnichenko, who now resides in Dubai permanently.
The Financial and Investment Nexus
The UAE has also become a favoured destination for employees of Russia’s largest banks. Executives from Sberbank are increasingly relocating to Dubai, while Alfa-Bank has established a company in the emirate to assist Russians with investments and money transfers. Additionally, a growing number of Russians are engaging in cryptocurrency ventures, using the UAE as a platform to transfer funds out of Russia.
Strategic Encouragement from Moscow
Experts highlight that the Russian government has played a pivotal role in fostering this “elite hub” in the UAE. By creating favourable conditions for currency transfers and investments, Moscow has encouraged the movement of wealth and resources to the region.
Implications of the Double Taxation Agreement
The agreement to eliminate double taxation is seen as a significant development for Russia’s upper class, many of whom have established themselves along the shores of the Persian Gulf. This arrangement is expected to further solidify the UAE’s status as a critical destination for Russian wealth and influence.
The UAE’s growing role as a haven for Russian elites underscores the shifting dynamics of global finance and geopolitics. As both nations deepen their ties, the implications for the global economic landscape are yet to fully unfold.
