Looking for a fresh start, Russian professionals move to Dubai
Dubai (AFP) – As the war in Ukraine drags on, more and more Russian professionals are moving to Dubai, the business-friendly Gulf emirate that offers an escape from the impact of Western sanctions.
Entrepreneurs, lawyers and art dealers are among those flocking to the financial hub of the oil-rich United Arab Emirates, which has frustrated Washington and other Western allies by refusing to join a Security Council vote. UN security condemning Russia’s war.
The United Arab Emirates, which maintains diplomatic and economic relations with the United States and Russia, has long welcomed Russians, whether they are middle class or millionaires, especially in Dubai, known as the playground of the rich.
The number of Russian entrepreneurs and start-ups has “increased tenfold” compared to last year in the International Free Zones Authority (IFZA), said IFZA CEO Jochen Knecht, one Dubai’s many free trade zones created to attract foreign investment.
“It actually started with IT companies, software companies, but now we see all types of businesses – art galleries, resale and parts trading,” he said. “They come with employees, requiring offices and warehouses.”
Knecht said Russian investors were “very welcome” in the United Arab Emirates, where foreigners make up the majority of the population of around 10 million.
They are attracted by the ease of setting up a business and the prospect of better opportunities as sanctions bite at home – and a more welcoming environment as attitudes harden towards Russians elsewhere.
Dubai is one of the seven emirates of the United Arab Emirates, whose advantageous tax system and strategic location between Europe and the rest of Asia have long made it attractive for business.
The city, with its luxury hotels and tourist facilities, is well known to Russians as an upscale destination for the wealthy, especially those interested in real estate.
Among them are oligarchs, including former Chelsea football club owner Roman Abramovich, who was house hunting in Dubai in March, according to the Bloomberg news agency.
– Not just millionaires –
There are also “many Russian celebrities – actors and singers – who already owned properties here but are now moving to Dubai, applying for the available investor visas”, said Valeria Zolotco, of real estate agency AX Capital.
Since the war in Ukraine broke out in February, the emirate has become a fallback base, and not just for millionaires.
“We are seeing more and more small and medium-sized businesses and start-ups looking to relocate (to Dubai) to ensure business continuity,” said Georges Hojeige, CEO of Virtugroup, which helps businesses relocate to Dubai. Dubai.
The sanctions imposed on Moscow pose major challenges for Russian companies, whether in terms of suppliers, customers, labor or logistics.
Speaking in parliament in April, Russian central bank governor Elvira Nabiullina warned of “hardship” and “structural transformation” of Russia’s economy due to debilitating sanctions.
“Difficulties arise in all sectors, in large and small companies alike,” she said.
Daria Nevskaya, partner of the Russian law firm FTL Advisers, can attest to this.
“Many of our customers have difficulty doing business with foreign countries,” she said, referring to “normal” and unlicensed businesses seeking to establish themselves in “neutral jurisdiction.”
“Don’t feel like a criminal”
“I am a lawyer working in international law. I think that soon there will be no more international projects in Russia,” said Nevskaya, who left Moscow to open an office in Dubai.
But for her, like for many other Russian citizens, starting a new life elsewhere is not easy.
With Russian credit cards blocked abroad and Moscow’s restrictions on foreign currency outflows, relocation is a challenge.
For more than a month, Nevskaya said she had been trying to recover 5,000 euros she had transferred from Moscow to Dubai, but which got stuck in the financial system due to European banking restrictions.
“I don’t consider it fair for me because I’m not a sanctioned person and all my money has been frozen in Russia,” she said.
“We couldn’t take a lot of money with us, we could only take $10,000 to live here for several months. It’s not enough.”
Global sanctions typically affect members of the upper middle class, who, unlike oligarchs, rarely have alternative passports or foreign accounts, Nevskaya said.
But she said she was grateful to be in Dubai, adding there were many “business opportunities”.
“I don’t feel like a criminal here, I’m treated like a normal person,” she said. “There is no anti-Russian sentiment.”
© 2022 AFP