Fleeing sanctions, many Russian businessmen migrate to Dubai

Businessmen, businessmen, lawyers, artists… more and more Russians are settling in Dubai. Affected by sanctions linked to the Russian invasion of Ukraine, they are the “to receivein the wealthy Gulf emirate in search of wealthy expats. At IFZA, one of the many free zones created to attract foreign investment, “the number of Russian entrepreneurs and start-ups increased tenfold compared to last year“says its executive director Jochen Knecht.

It started with technology, software companies. Now we find all kinds of companies, art galleries, dealers, spare parts suppliers“, he lists. Companies “come with employees, office rentals, warehousesadds this expat in Dubai, one of the seven emirates that make up the United Arab Emirates.

Strangled by the economic sanctions imposed on Moscow, businessmen are seduced by Dubai’s business and financial hub, with advantageous taxation, but also by the country’s neutrality in relation to the Ukrainian conflict, Knecht believes. THE “Russian investors are welcome“, he insists, in a country of nine million inhabitants with 90% foreigners, most of whom are low-skilled workers from Asia. Dubai is also looking to attract investors amid a post-Covid recovery.

Luxury tourist destination Dubai, often accused of being a tax haven, has always been frequented by an affluent Russian clientele, particularly interested in real estate. Among them are oligarchs now sanctioned by Westerners, such as former Chelsea club owner Roman Abramovich, who visited homes in Dubai last March, according to Bloomberg.

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There are also “many Russian celebrities, singers and actors who already owned Dubai and now want to live there“says Valeria Zolotco, from AX Capital real estate. The emirate has become an alternative base, and not just for millionaires. “We see more and more SMEs, start-ups looking to migrate in order to guarantee the continuity of their business“says Georges Hojeige, CEO of Virtugroup, which supports companies in its Dubai facility.

Financial and trade sanctions against Russia pose major challenges for Russian companies, whether in terms of suppliers, customers, labor or logistics. “We need to create a (new) infrastructure, we have the means, but it will also take time.“, acknowledged at the end of April the president of the Russian Central Bank Elvira Nabioullina before the Parliament. “Difficulties appear in all sectors“, she pointed out. Associated with Russian law firm FTL Advisers, Daria Nevskaya can testify to this. “Many of our customers find it difficult to work abroad“, she says, speaking of companies “ordinary“, unsanctioned, seeking to establish themselves in “neutral jurisdictions“.

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The young woman herself decided to leave Moscow to open an office in Dubai. “I am an expert in international law and I think that soon there will be no more international projects in Russia“, she regrets. But for Nevskaya, like many Russian citizens, starting a new life elsewhere is not easy. With credit cards that don’t work abroad, intransigent banks and Moscow’s restrictions on currency outflows, change is an uphill battle.

Daria Nevskaya says she has been trying for more than a month to recover a sum of 5,000 euros transferred from Moscow to Dubai, but blocked by the correspondent bank based in Europe. “I don’t think it’s fair, I’m not a sanctioned person, but my money is frozen, I don’t have access to my money in Russia“, explains the lawyer. Due to restrictions, says Nevskaya, she was unable to takeof 10,000 dollars from“.

International sanctions particularly affect members of the affluent middle class, who, unlike oligarchs, rarely have foreign passports or accounts abroad, Nevskaya believes. Dubai dealsbusiness opportunities“, she continues, saying that she sees a “international city” without “anti-russian sentiment“.”I don’t feel like a criminal here. I’m treated like a normal person“.

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