DISCLAIMER: This post was last modified on 17 July 2024. Some information in this article may not be updated.

In recent years, the Middle East has become a magnet for wealth managers from Asia. This growth is fueled by several factors, including the increasing number of the region’s HNWIs (2.8% increase in 2022, according to Capgemini’s data) and the influx of private wealth from other countries, such as China.

Quoted in a January 2024 Reuters report, China’s top wealth manager, Noah Holdings’ Chief Financial Officer, mentioned, “Many Chinese entrepreneurs are looking for new markets and diversifying their supply chains, and many are excited by the opportunities offered by the Middle East.”

The report further reads:

A post-COVID economic rebound, neutral political stance, ease of doing business, convenient time zones, and tax-free status have all contributed to the Middle East attracting droves of wealthy individuals in recent years.

In October 2023, London-based news site CityWire released a report about major single-family offices headquartered in Hong Kong, Singapore and India that planned to or have opened a shop in the Middle East. The reasons for this include the region’s potential to become a global financial hub and diverse investment opportunities in real estate, infrastructure and digital assets.

This article provides an overview of the factors that make the Middle East an attractive wealth hub for wealthy Asians and why wealth managers should consider bringing their businesses and expertise to the region.

Strategic location

The Middle East is located at the crossroads of three continents: Asia, Europe and Africa. This geographical position benefits companies and entrepreneurs looking to expand their businesses, tap new markets and access new customer segments.

Additionally, the Middle East bridges the time zone gap between Asia and significant financial centres in the West. Doing business from the Middle East allows wealth managers, fund managers and other entrepreneurs to conveniently communicate with their stakeholders and clients and execute business plans during regular business hours across these continents, maintaining connectivity to global markets.

Business-friendly landscape for foreigners   

The governments in the region have various programs that offer benefits and incentives to entrepreneurs, investors, and professionals coming to the Middle East for business.

For example, in the United Arab Emirates, the government offers the ‘Golden Visa’, which allows real estate investors, entrepreneurs, specialised talents, and executive directors (among others) to reside in the state for a certain number of years, with the opportunity for sponsorship. Here are the qualifications.

Furthermore, Dubai established the Dubai Family Wealth Centre (DFWC) to support UNHWIs and family-run businesses in preserving and growing their assets. The DFWC guides them “on their journey to achieve multi-generational success through a network of accredited service providers.”

Abu Dhabi’s international financial centre, Abu Dhabi Global Markets, continues to attract international corporations, investors, PE/VC capitalists and asset managers due to its rapidly growing and diverse business landscape. The ADGM offers various legal structures for investors and entrepreneurs and has a straightforward setup process.

Additionally, the UAE allows full foreign ownership of entities established in free zones.

Meanwhile, Egypt grants a ‘Golden License’, which offers comprehensive approval for setting up, operating, and managing a project. This also includes approval of building licenses for these projects and the real property required. More information about this incentive program can be found here.

Luxurious quality of life

The Gulf region remains a beacon of luxurious lifestyle, attracting wealthy individuals and families from Asia. The Middle East’s allure goes beyond the region’s investment opportunities. Major financial centres, like Dubai and Abu Dhabi, offer luxurious lifestyles thanks to fine-dining options, designer shopping districts, the hospitality industry and world-class infrastructure. All these make for a vibrant multicultural landscape.

For wealthy Asian families, the Middle East is a family-friendly environment, with reputable international schools and family-oriented neighbourhoods.

Wealth managers in the region are not left out of this luxurious Middle Eastern life either. Financial professionals based in the region’s economic hubs also experience a vibrant and cosmopolitan work environment while enjoying a high quality of life and leisure options.

Investment opportunities

The Middle East offers diverse investment opportunities to new market entrants, driving the burgeoning wealth management scene.

Asian investors who seek to diversify their portfolio beyond traditional assets may be interested in investing in new asset classes in the Middle East, such as real estate in booming cities, infrastructure projects or the region’s oil and energy industries. The potential of the Middle East is an opportunity for wealthy Asian investors, and to some extent, their wealth or fund managers, to establish themselves as the pioneers of this growing new market.

According to Bolder Group partner, Middle East-based law firm Levari Law, below are the top investment opportunities for foreign investors interested in doing business in the Middle East:

Agriculture & Food Processing

Saudi Arabia’s agricultural and food processing sector is well-established and poised to expand rapidly in the future years. Domestic, regional, and worldwide demand for Saudi food items is growing, with the seafood, dates and halal market segments leading the way.

Human Capital Innovation

The Kingdom values its people as its most crucial resource. Under Vision 2030, a key focus is building a Vibrant Society, which aims to reduce unemployment to 7% and increase SME contribution to GDP from 20% to 35%. The Kingdom expects significant population growth, a 6% annual increase in the Saudi workforce, and a rising presence of women in the private sector (up 29%). Private sector investment in Human Capital and innovation is a top priority, emphasising education, entrepreneurship, and lifelong learning. The Human Capability Development Program aims to develop skills, instil values, and empower citizens to compete globally by 2030.

Energy

Thanks to a large and well-established industrial base, Saudi Arabia’s energy sector is the country’s economic backbone. The Kingdom’s booming economy is set to drive exceptional demand across all market segments, coupled with a renewed focus on energy efficiency and sustainable growth. Vision 2030 sets the ambitious goal of meeting over 50% of the energy mix with renewable energy sources, boosting market demand for solar, wind, tidal and other renewables through significant government backing and private sector investments.

Financial Service

Saudi Arabia is home to one of the world’s most developed, liquid, sound, well-capitalised and efficient financial services sectors. As a key enabler of Vision 2030’s ambitions, the sector is expected to play an even more significant role in supporting the development of the national economy, diversifying its sources of income, providing different sources of financing, attracting foreign capital, and stimulating savings and investments.

The government actively supports financial institutions to enable public and private sector growth, develop an advanced capital market, and increase funding for micro, small and medium enterprises (MSMEs).

Information and Communication Technology

The ICT sector is vital in driving growth, innovation, and economic diversification in the Kingdom. Aligned with Vision 2030, Saudi Arabia aims to become a leading global hub for ICT. This vision encompasses several key investment areas, such as digital content and media development, telecommunication system expansion, national digitisation efforts, and the establishment of high-tech and smart industries.

The government is collaborating with the private sector to modernise ICT infrastructure, improve the regulatory framework to facilitate innovative investments and create a conducive ecosystem to support entrepreneurs and digital talents. These efforts are geared towards positioning Saudi Arabia as a modern and competitive player in the ICT landscape.

According to the experts from Levari Law, there are several strategies to improve and diversify their portfolios in the Middle East through the following:

Market Research and Local Expertise Inquiry

Conducting comprehensive research on the Middle East region is vital, as each sector and country has regulatory developments and its own laws. Thus, seeking local financial, investment and legal advisors with expertise in the Middle East market is essential. Their knowledge and understanding of the local landscapes can provide valuable insights and help tailor investment strategies to suit specific goals and risk appetites.

Venture into Infrastructure Projects

The Middle East has been investing heavily in infrastructure development, including transportation, utilities, and the energy sector.

Private Equity and Venture Capital

The Middle East has a growing ecosystem of startups and entrepreneurial ventures. This provides exposure to high-growth sectors and potential investment opportunities in innovative companies.

Embrace Technology and Innovation

The Middle East is experiencing rapid digital transformation and technological advancements. There may be opportunities in investing in technology-focused sectors like fintech, e-commerce, and cybersecurity to capitalise on the region’s evolving business landscape.

Conclusion

There is a surge in interest in the Middle East’s business landscape amongst Asian wealth and wealth managers. This shift is driven not only by the region’s access to global markets but also by its lifestyle appeal and relaxed business regulations. These benefits prove to be irresistible to HNWIs and wealthy families from Asia, specifically China, and their wealth managers who are seeing the potential of the region to redefine the financial landscape on a global scale.

How can Bolder Group help?

As an international service provider of financial services, including corporate and funds administration, governance and private wealth solutions, Bolder Group has the knowledge and experience to assist investors from various jurisdictions in entering and tapping opportunities in new emerging markets.

In partnership with Levari Law, our team assists entrepreneurs and HNWIs/wealthy families from Asia and other regions in further exploring business opportunities in the Middle East and successfully establishing their businesses in the region.

Contact us at info@boldergroup.com to learn more about how we can help you enter the Middle East’s business scene smoothly.

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

Bolder Group refers to the global network of independent subsidiaries of Bolder Group Holding BV. Bolder Group Holding BV provides no client services. Such services are provided solely by the independent companies within the Bolder Group which are each legally distinct and separate entities and have no authority (actual, apparent, implied or otherwise) to obligate or bind Bolder Group Holding BV in any manner whatsoever. The operations of the Bolder Group are conducted independently and have no affiliation with third party financial, tax or legal advisory firms or corporations.