He skyline It may be Dubai’s most recognizable feature, however in recent decades the city has gained something much more important (and complicated) than its skyscrapers: prestige. For years the expats half the world has seen in the United Arab Emirates (UAE) a destination in which to settleattracted by their tax advantagesadministrative facilities, luxury and stability of the country. Now the shock wave of the Iran war is erasing some of that image and has led some expats to look for alternatives in safer cities.
An Italian city already appears on the horizon.
The other bill of war. As with all wars, that of Iran It looks a lot like a set of dominoes. Operation ‘Epic Fury’ launched on February 28 by Washington and Tel Aviv on Iran ended the life of Ayatollah Ali Khamenei, supreme leader of the Islamic regime; but that was only the first step of the war. The first in a long chain of pieces.
Since then the conflict has escalatedaffecting international markets, skyrocketing the price of crude oil and infecting the rest of the Persian Gulf. We had the most graphic proof in the first days of the war, when Iran harshly punished some US allies in the region, including the UAE. Their attacks blocked Gulf airspace, unleashed the biggest crisis of aviation since the pandemic and left images that until recently were unimaginable, such as luxury residences attacked by Iranian drones.
Reputation blow. The casualty toll in the UAE is relatively low (the Emirati authorities numbered at 13 those killed during the attacks launched by Iran), but the reputational damage has yet to be measured.
For decades, the Emirates knew how to carve out a niche for itself as a favorite destination for expats from other countries. As explained a few months ago Guillaume Giroux, of the Dubai Inmo firm, in cities like Dubai, fortunes found tax facilities, bureaucratic agility, stability, an attractive real estate market and a high standard of living, especially for people accustomed to luxuries. Some of that magnetism remains, but the Iran war has tarnished the image of a safe, reliable and ‘boring’ (in a good way) destination created by the UAE.
Has it changed that much? Public discourse certainly has. If it is news for hosting more than 81,000 millionaires or attract thousands of residents wealthy in just one yearDubai has made headlines for the chaos unleashed by the Iranian war. At the beginning of March Financial Times spoke of people driving 10 hours to cross the border into Oman, desperate to leave the region. In Guardian even they assured that a jet company was asking 85,000 euros (triple the normal amount) for a flight to Istanbul.
They are specific cases, but they punish the UAE’s global projection.
Looking for alternatives. It is unlikely that Dubai will suddenly lose the image that has been built up for years and it remains an unknown what the effect of the war will be in the medium and long term. there are those already warn that he is not considering leaving the Emirates. None of the above means that there are already millionaires looking for alternatives. I confirmed it recently Guardian in a chronicle explaining that as Dubai sees its reputation as a safe haven erode, there is expats thinking about the best way to return to Europe.
The article, signed by Lauren Almeida, focuses on British billionaires, but still leaves out an interesting idea: when looking for European destinations, there is one in particular that seems to be winning. Which? Milan. “Those leaving the UAE can easily imagine themselves living in Rome or Milan, metropolitan and international centres,” point Armand Arton, who is dedicated to advising millionaires on citizenship and investment plans.
Why’s that? For a sum of factors. In a way, Milan offers the rich a package similar to the one they find in Dubai: a attractive tax regimea rising real estate market (something especially interesting for those who buy with an investment mentality) and above all luxury. It’s nothing new. In September the Italian edition of Idealista explained that Milan was becoming one of the most attractive destinations in Europe to attract great fortunes.
“Italy offers the best advantages: single tax and good quality of life,” insist Arton. “It’s a beautiful country. Milan has a very developed financial services sector, many of the things that are attractive in London, Milan also has them,” adds Marc Acheson of Utmost Wealth Solutions. This sum of factors, added to its environment, schools, services and cosmopolitan lifestyle, explains that the Italian city be home now from some of Europe’s biggest investors and bankers. Also the increase in price of your home.
Luxury and something more. The attractiveness of Italy as a city is not the only factor that explains its ability to attract expats. Another is its tax policy. In 2017 the country introduced the “single rate”also known as “Ronaldo tax” and that it is designed precisely to attract wealthy foreigners. In summary, the regime allows new residents (foreigners and returned Italians) to pay 300,000 euros annually for income obtained outside the country.
It may seem like a high tax, but as its name indicates, it is applied in a fixed manner, regardless of the base amount, which makes it an interesting option for large fortunes. Until recently, its amount was also lower, making it even more attractive. When it was introduced, the “single rate” amounted to 100,000 euros annual. In 2024 that figure rose to 200,000 and did not reach its current level, of 300,000 euros, until this year. This tax advantage can be enjoyed for only 15 years, but it has extras.
Marking distances. It’s not just about what Italy has done. As explains the Golden Visas platform, the Italian system gained attractiveness after in 2024 United Kingdom review its tax regime for non-domiciled residents and for Portugal to also rethink its system. Reuters precise that in 2023 around 1,500 people took advantage of the single rate regime in Italy, which left 315 million euros in public coffers between 2020 and 2023 alone.
Beyond Italy (and Europe). Milan is not the only option that sounds like an alternative to the Emirates among the expats who want a change of scenery. A few weeks ago the British newspaper Daily Mail pointed out another country: Switzerland. “Whenever there is a crisis, whether during the Cold War or today, we see Switzerland’s value reflected in the strength of the franc,” says analyst Bernhard Bauhofer.
own Guardian warned already in mid-March that the expats Britons who were fleeing the Persian Gulf sought refuge in Ireland or France to avoid the taxes they would have to pay if they returned to their country. Other experts they point even beyond Europe, to Australia or Canada.
Images | Eugene Chystiakov (Unsplash), Christoph Schulz (Unsplash) and Đorđe Pandurević (Unsplash)
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