Dubai: the new residence for Russian oligarchs

Dubai is becoming a favourite destination for Russian oligarchs. The emirate, the financial and tourist capital of the United Arab Emirates, has seen a surge in demand for luxury properties and the arrival of numerous billionaires and businessmen from Russia. Property purchases by Russian nationals would have increased by as much as two-thirds by the first quarter of 2022, according to the BBC.

Following Western sanctions on Russia and all sorts of Kremlin-connected individuals in response to the invasion of Ukraine, Russian oligarchs are abandoning their traditional favourite destinations in Europe at the risk of losing assets. 

Since the fall of the Soviet Union, cities such as London and Geneva had become the main residences of Russian oligarchs, but sanctions have made the West no longer a safe destination for them. The freezing of all kinds of assets in these countries, from luxury properties to superyachts, has kicked off the flight of all these individuals, trying to save what they can along the way.

Dubai's good climate and living conditions, as well as its lax banking and financial system, make it an ideal alternative and safe haven for their financial assets. Several Russian billionaires have even sought to exchange their luxury homes in London directly for property in Dubai, according to the Financial Times. 

Several Russian companies and start-ups have also reportedly done the same, seeking to save Russia's financial isolation, as well as several multinationals such as Google, JP Morgan and Goldman Sachs, which have moved their operations and some of their workers from their headquarters in Russia to Dubai.

According to George Hojeige, CEO of Virtuzone, a consultancy that helps businesses set up in Dubai, "they fear that an economic collapse is looming. That's why they are moving here to secure their wealth".

Not only has the UAE not joined Western sanctions, but it has been careful to maintain a neutral position towards the invasion, avoiding condemnation and abstaining on condemnatory votes against Moscow in both the Security Council (of which it is a non-permanent member) and the UN General Assembly. 

Even before the invasion, the emirate had become a favourite destination for Russian billionaires and businessmen. According to an investigation coordinated by the Norwegian financial media E24, involving up to 19 organisations and media outlets, based on data leaked by the US Centre for Advanced Defense Studies (C4ADS), by 2020 dozens of Russian politicians and businessmen linked to United Russia (Vladimir Putin's party) would have luxury properties in Dubai.

These include Ruslan Baisarov, a Russian businessman close to Ramzan Kadyrov, the president of Chechnya, and Alexander Borodai, former prime minister of the self-proclaimed Donetsk People's Republic (one of the separatist Ukrainian republics supported and recognised by Russia) and a deputy in the State Duma (the lower house of the Russian parliament). Citing the same data, a report by the EUTAX Observatory found that up to 6% of properties in the city's most exclusive neighbourhoods were then in Russian hands. 

This has only increased since the invasion, with the arrival of high-profile oligarchs. Several superyachts linked to oligarchs under Western sanctions have already docked in the Emirati port, such as the Madame Gu of Andrei Skoch, a United Russia State Duma deputy and steel magnate, or the Hermitage of Anatoli Sedyj, owner of one of Russia's leading metallurgical companies, according to Alex Finley, a former CIA officer who has monitored the movement of Russian oligarchs' superyachts since the beginning of the invasion. 

Several private jets belonging to figures such as Roman Abramovich, the oil tycoon and former Chelsea owner, and Arkady Rotenberg, Putin's childhood friend and one of the richest people in the country, have also reportedly arrived at the Emirati airports of Dubai and Abu Dhabi, according to a Forbes investigation.

"Having a Russian passport or money right now is toxic. Nobody wants to accept you, except in places like Dubai," a Russian businessman told the New York Times.