Your lawyers since 1722

10 Nov 2020

Number of HNW Gulf nationals living in the UK reaches five-year high

The number of High Net Worth Gulf nationals living in the UK has reached a five-year high of 11,742* – despite the economic uncertainty posed by Brexit, says Boodle Hatfield, the leading private wealth law firm.

Boodle Hatfield says High Net Worth Individuals from Gulf countries continue to be drawn to the UK for its investment opportunities, its wealth of private schools and internationally renowned universities and for the cosmopolitan lifestyle in London. Despite the economic uncertainty of Brexit, the number of Gulf nationals has continued to rise.

The latest figures mark an increase of 28% from the previous five years when there were 9,183 Gulf nationals with homes in the UK (see graph below).

The countries with the highest numbers of HNW Gulf nationals living in the UK are: United Arab Emirates with 6,943 people and Saudi Arabia with 1,342 people. The number of Kuwaitis increased by 12% in the last year, from 605 to 680 (see table below).

High Net Worth individuals from the Gulf countries make substantial contributions towards the Treasury’s coffers through the large amounts of income tax they pay on their UK-based assets. They also pay National Insurance contributions for employees. Boodle Hatfield says that investment from overseas HNWIs such as those from the Gulf countries, will also go a significant way in aiding the UK’s economic recovery following coronavirus.

Boodle Hatfield says historic ties between the UK and Gulf countries have made the UK a popular destination for internationally mobile Middle Eastern people. Up until the first Gulf War, the United States was also a popular destination. Restrictions on entry to the US for citizens of countries including Iran and Iraq will likely cause the number of Gulf HNWIs to drop.

Gulf nationals have traditionally been key investors in prime and super prime property, particularly in London. In recent years they have also increasingly invested in technology and fintech businesses within the UK.

Boodle Hatfield says that the UK’s reputation as being Europe’s leading hub for innovation in technology, particularly fintech, has made it a magnet for investment by wealthy Gulf nationals, who are keen to diversify their interests away from purely oil and gas.

The Abu Dhabi state investment fund Mubadala announced plans to invest $400m into tech start-ups in Europe last year, with a significant proportion earmarked for UK businesses.

Another sector in which Gulf nationals have invested heavily is luxury hotels, including a Qatari-backed £1bn five-star hotel which is currently being built in Mayfair.  The sports sector has also been another popular investment area for HNWI investors in recent years. Manchester City FC was purchased by the Abu Dhabi United Group for £210m in 2008.

Kyra Motley, Partner at Boodle Hatfield says: “The rising number of HNW Gulf nationals making a home here shows the UK has lost none of its appeal amongst wealthy overseas investors.”

“Brexit has not been a deterring factor whatsoever. These investors are taking a long-term view and have decided that despite any short-term instability, the UK remains one of the most stable jurisdictions in which to invest capital.”

“Due to its multicultural nature, Gulf nationals feel very at home in London. The more moderate climate and multitude of dining and shopping options are also appealing to the younger cosmopolitan generation.”

Even changes to the UK tax system in 2017 making the regime for non-domiciled individuals less favourable has not had a negative impact on the number of Gulf nationals living in the UK.

Boodle Hatfield says that many Gulf nationals who come to the UK to be educated decide to stay on after they’ve completed their schooling with many eventually becoming domiciled within the UK.

Kyra Motley explains: “The international reputation of Britain’s private schools and universities is a major attraction. People who come to the UK ostensibly for a couple of years become established, have families of their own and many end up staying for longer than anticipated.”

“With strict coronavirus lockdowns in the Middle East and the fallout from fluctuations in oil prices, life in the UK will be even more appealing to many from the Gulf.”

This article first appeared in Arab News, The i Newspaper and International Advisor in November 2020.