We cannot yet speak of an exodus. But the signs are becoming increasingly clear. “Funds are being transferred,” confirms Patrick Akiki, market leader for financial services at consultancy firm PwC Switzerland. But it takes time, he continues, because “regulatory constraints have changed. We are much stricter and the Swiss banks are doing what they need to do to ensure that cases are compliant, before proceeding with fund transfers”.
He knows this from his discussions with many banks. He is not alone; other consultants have made the same observation, although they prefer not to be named. Officially, most of the banks are not commenting, preferring to remain discreet, perhaps to avoid giving the impression that they are taking advantage of a delicate situation.
Nor are they commenting on another emerging trend: that of wealthy individuals who have moved to Dubai or the other Emirates in recent years and are now questioning their choice. They don’t just want to shelter their money, they want to shelter themselves.
New interest in Switzerland
Lorenzo Romano, a Geneva-based financier who often travels to the Emirates and who found himself stranded in Dubai at the start of the war, says that in recent days he has received “several requests to assess which places are recommended in Switzerland, how public schools work, how to buy property, how to rent it out and how lump-sum taxation works”. In his view, “we are not in a panic in the Emirates or Dubai, but we are clearly in a period of observation. Many wealthy people are re-evaluating their future residences”.
Switzerland is already a key location for clients from the Gulf. According to calculations by consultants Deloitte, almost a quarter of the wealth managed in Switzerland comes from this region, and its appeal is only growing in the current climate.
“The Emirates have an enormous amount to offer in terms of diversity, culture and so on. Switzerland, on the other hand, is often perceived as a little boring, but many people are now realising that this slightly monotonous side is an undeniable advantage in a highly polarised world with tensions such as those we are currently seeing in the Gulf,” continues Lorenzo Romano.
The Emirates seek to reassure
As for the Emirates, their model is shaken by the current tensions. The region has developed essentially on the principle of security, on the level of education, on medical support and also on quality of life,” adds Patrick Akiki.
But a number of large families are asking themselves: can we trust these countries again? Or would it be better to go back to countries like Switzerland, which are neutral, have a very high quality of life and have shown themselves to be very resilient over the last decade? For the PwC expert, “the appreciation of the Swiss franc does show that market confidence is there”.
Faced with these doubts, the Emirates are trying to reassure. Dubai has even eased up on the rules governing lump-sum taxation, in particular the number of days a person must be resident in the country. They know that the decisive factor will be the length of the dispute: the longer it goes on, the more the Emirates’ financial centre will be put to the test, to the benefit of other destinations.
Adapted from German with AI/rg/ts