Russia-Ukraine war: Russian businessmen settled in Dubai to escape sanctions

Affected by the sanctions against Russia for the invasion of Ukraine, more and more Russian businessmen, lawyers and artists are living in Dubai, where they are welcomed by the wealthy Gulf emirate, which is always on the lookout for wealthy expatriates.

At IFZA, one of many free zones created to attract foreign investment“The number of Russian entrepreneurs and start-ups (emerging companies) has increased tenfold compared to last year,” said its CEO, Jochen Knecht.

“It started with technology companies, software companies. Now there are all kinds of companies, art galleries, resellers, parts suppliers,” he lists.

The companies “include employees, rent offices, warehouses,” added the expatriate from Dubai, one of the seven emirates that make up the United Arab Emirates.

Embarrassed by the economic sanctions imposed on Moscow, the heads of the companies were attracted by Dubai’s business and financial center, with lucrative taxation, but also with the country’s declared neutrality in the face of the conflict. Ukraine, Knecht explained.

“Russian investors are welcome,” he insisted, in a country with nine million inhabitants —90% foreigners—, most of whom are low -skilled workers from Asia.

Dubai is also looking attract investments in full recovery after covid-19.

A luxurious tourist destination and often accused as a tax haven, Dubai has always been visited by a wealthy Russian client, mainly interested in the real estate sector.

These include tycoons now sanctioned by Westerners, such as former Chelsea club owner Roman Abramovich, who visited homes in Dubai in March, according to the Bloomberg agency.

attractive destination

There are also “many Russian celebrities, singers and actors who previously owned homes in Dubai and now want to live there,” said Valeria Zolotco of real estate agency AX Capital.

“We are seeing more and more SMEs, emerging companies looking to move to guarantee the continuity of their business,” said Georges Hojeige, president of Virtugroup, which advises companies at its Dubai facility.

Ang financial and trade sanctions against Russia pose major challenges to Russian companies, whether in terms of suppliers, customers, labor or logistics.

“We need to create a (new) infrastructure, we have a way, but it will also take time,” Russian Central Bank president Elvira Nabiullina acknowledged in April. “Difficulties are emerging in all sectors,” he stressed.

Daria Nevskaya, who is associated with Russian law firm FTL Advisers, said many of her clients “find it difficult to work abroad.”

He himself decided to leave Moscow to open an office in Dubai. “I am a specialist in international law, and I believe that soon there will be no more international projects in Russia,” he laments.

obstacles

But for many Russian citizens, the move is an obstacle, with credit cards not working abroad, uncompromising banks, and restrictions imposed by Moscow on money withdrawals.

Nevskaya said he had been trying for a month to recover the amount of 5,000 euros ($ 5,350) transferred from Moscow to Dubai, which was blocked by the European -based correspondent bank.

“It seems unfair to me, I am not a sanctioned person but my money is frozen, I have no access to my money in Russia,” the lawyer explained. Because of the restrictions, Nevskaya said, she only managed to bring in “$ 10,000” when she left.

International sanctions particularly affect members of the wealthy middle class, who, unlike the oligarchs, rarely have foreign passports or foreign accounts, Nevskaya explains.

Dubai offers “business opportunities,” he continues, saying he sees an “international city” with no anti-Russian sentiment. “I don’t look like a criminal here. They consider me a normal person.”

Source: AFP

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