Dubai and Abu Dhabi

Two financial free zones

The United Arab Emirates have become the fastest-growing competitor for internationally mobile wealth. Their two financial centres are organised as free zones with their own laws, regulators and courts, separate from the civil law system of the federation and of the individual emirates. The Dubai International Financial Centre (DIFC) has operated since 2004. Its courts, created by Dubai Law No. 12 of 2004 and DIFC Law No. 10 of 2004, administer a common law jurisdiction in English, and since an amendment of 2011 parties without any connection to the DIFC may agree in writing to submit their disputes to them.¹ The Abu Dhabi Global Market (ADGM), established in 2013 and operational since 2015, went further and applies English common law directly in its jurisdiction.²

The growth of both centres has been remarkable. At the end of 2025 the DIFC counted 8,844 active registered companies after 2,525 new registrations in the year, as well as 50,200 employees. Its community included more than 500 wealth and asset management firms, 102 hedge funds and 1,289 family-related entities, an increase of 61 per cent within a year.³ The ADGM reported an increase of 36 per cent in assets under management for 2025, 12,671 active licences, 171 asset and fund managers and a workforce of 44,339, which was 51 per cent larger than a year earlier.⁴ In the GFCI of September 2026, Dubai ranked ninth and Abu Dhabi thirteenth, both ahead of Frankfurt, Paris and Amsterdam, and Abu Dhabi only one place behind Geneva.⁵

Tax, residence and virtual assets

The attraction of the Emirates for individuals rests on the absence of personal income tax, on residence programmes such as long-term golden visas and on a lifestyle that combines security with proximity to India, the Gulf, Africa and Europe. The federation has levied a corporate income tax of nine per cent since financial years beginning on or after 1 June 2023, with preferential treatment for qualifying income of free zone companies.⁶ The Henley report projected a net inflow of 9,800 millionaires to the Emirates in 2025, the highest of any country, many of them from the United Kingdom, Iran, Lebanon and Pakistan. As noted above, such projections are uncertain, but the direction of the movement is confirmed by the growth of the family office population in the DIFC.⁷

Dubai was also among the first jurisdictions to create a dedicated regulator for virtual assets. The Virtual Assets Regulatory Authority (VARA) was established in March 2022 under Dubai Law No. 4 of 2022. It supervises virtual asset activities throughout the emirate, including its other free zones, with the exception of the DIFC, which has its own regulator.⁸ The Emirates thus offer providers of crypto-assets and Digital Assets a choice between several licensing regimes within a single country. The Swiss model described in Part J, by contrast, integrates tokens into general financial market law and relies on a single supervisor. For institutional clients who value legal certainty, the Swiss approach has advantages. For start-ups seeking speed and a tailored licence, Dubai and Abu Dhabi have proved attractive.

The FATF grey list and its end

The weakness of the Emirates has long been their reputation for lax controls against money laundering and sanctions evasion. On 4 March 2022 the Financial Action Task Force placed the country under increased monitoring. The Emirates responded with an executive office for combating money laundering and the financing of terrorism, a specialised court for money laundering and financial crime, revised guidelines and a new penal code, as well as more investigations and enforcement actions by their supervisors. On 23 February 2024 the FATF removed them from the list.⁹ The removal has made it easier for European banks to deal with clients and institutions in the Emirates and has strengthened Dubai’s position as a booking centre.

For Zurich the Emirates are both a competitor and a market. Since the Russian invasion of Ukraine in 2022, a part of Russian wealth that could no longer be held in Switzerland under the sanctions regime described in Part I has moved to Dubai. Wealth from India, Pakistan, Iran, Lebanon and Africa that would once have been booked in Geneva or London now often remains in the Gulf. At the same time, Gulf families with long-standing relationships to Swiss banks continue to value Switzerland as a place of safety, and the BCG study noted that geopolitical uncertainty reaffirms Switzerland’s role as a core booking centre attracting flight-to-safety flows from volatile regions such as the Middle East.¹⁰ Zurich banks have opened offices in the DIFC or the ADGM to serve these clients locally while booking part of their assets in Switzerland. UBS, for example, operates branches in both centres.¹¹

Notes

1. DIFC Courts, “DIFC Courts”, https://www.difccourts.ae/about/difc-courts. The courts describe themselves as independent from but complementary to the Arabic-language civil law system of the UAE. ↩
2. “Abu Dhabi Global Market”, English Wikipedia, https://en.wikipedia.org/wiki/Abu_Dhabi_Global_Market: the ADGM was “established in 2013 and operational since October 2015” and is “the only jurisdiction in the region to apply English common law directly, including precedent from England and Wales, without codification or translation”. The legal basis is the Application of English Law Regulations 2015. ↩
3. Dubai Media Office, “Dubai International Financial Centre announces landmark annual results for 2025”, 5 February 2026, https://www.mediaoffice.ae/en/news/2026/february/05-02/dubai-international-financial-centre-announces-landmark-annual-results-for-2025. The DIFC also reported 135 insurance and reinsurance companies and more than 290 banks and capital markets institutions. ↩
4. Abu Dhabi Media Office, “ADGM records asset management licensing and workforce growth in 2025”, 30 March 2026, https://www.mediaoffice.abudhabi/en/economy/adgm-records-asset-management-licensing-and-workforce-growth-in-2025/. The ADGM hosts 347 financial institutions, 80 of which were licensed during 2025. ↩
5. GFCI 40 (n. above), rankings table. ↩
6. UAE Ministry of Finance, “Corporate Tax”, https://mof.gov.ae/en/public-finance/tax/corporate-tax/, on Federal Decree-Law No. 47 of 2022 and its application to financial years beginning on or after 1 June 2023. ↩
7. Khaleej Times, “UAE to attract over 9,800 millionaires in 2025, many from UK, Pakistan, Iran, Lebanon”, June 2025, https://www.khaleejtimes.com/uae/millionaires-migration-2025-fromuk-pakistan-iran-lebanon. The article names the United States, Italy and Switzerland as the other main destinations of millionaires leaving the United Kingdom. ↩
8. Virtual Assets Regulatory Authority, “About VARA”, https://www.vara.ae/en/about-vara/. ↩
9. Norton Rose Fulbright, “UAE removed from the FATF grey list”, February 2024, https://nortonrosefulbright.com/en-me/knowledge/publications/eb06aa7c/uae-removed-from-the-fatf-grey-list. ↩
10. The Standard (Hong Kong), “Hong Kong overtakes Switzerland as world’s top cross-border wealth hub on China ties, report shows” (n. above), quoting the BCG study. ↩
11. UBS, United Arab Emirates website, https://www.ubs.com/ae/en.html: office at ICD Brookfield Place, DIFC, Dubai, regulated by the DFSA (reference F000321), and office at Al Sila Tower, ADGM Square, Abu Dhabi, regulated by the FSRA (reference 250076), both serving professional clients and market counterparties only. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.