Dubai scrambles to save its reputation as haven for rich

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high net worth investor and consumer. Sign up to receive future editions, straight to your inbox.

The Iran war has shaken Dubai’s status as a global wealth hub, as legions of expatriates scramble to escape and family offices and wealth managers reconsider their Middle East footprint.

For the past decade, Dubai has successfully marketed itself as a safe haven for the global elite. Attracted by the sun, safety and tax-free income, Dubai’s millionaire population has doubled since 2014 to more than 81,000, according to Henley & Partners. Dubai’s luxury real-estate market has grown for five straight years, with 500 properties selling last year for more than $10 million — up from just 30 in 2020.

Now, however, Dubai’s reputation for safety has been shattered.

Over the past week, Dubai’s five-star Fairmont The Palm Hotel, on its famed man-made, palm-shaped archipelago, was struck by an explosion. Debris from a downed Iranian drone set fire to Burj Al Arab hotel, and the Dubai airport was damaged by a missile strike. On Tuesday, the U.S. Consulate in Dubai was targeted by a suspected drone strike that caused a fire nearby.

“The U.S.-Israel war on Iran is upending that crucial aura of security in Dubai,” said Jim Krane, a fellow at Rice University’s Baker Institute. “Dubai’s economic model is based on expatriate residents providing the brains, brawn and investment capital. You need stability and security to bring in smart foreigners.”

Dubai and the United Arab Emirates sought to quickly reassure investors. The UAE’s National Emergency Crisis and Disasters Management Authority announced Saturday that the situation was “under control.” Dubai’s police force this week threatened to arrest and jail social media influencers who share social content that “contradicts official announcements or that may cause social panic.”

Other wealth hubs in the region — including Abu Dhabi, Doha and Riyadh — are also caught in the fallout of the war. And like Dubai, they’ve made attracting the wealthy a key economic policy. Yet Dubai’s ascendance and dependence on wealth capital stand out in the region. Kane said that’s because Dubai no longer relies on oil revenue like its neighbors do, instead banking on the confidence of foreigners.

“The city cannot function if everyone with a foreign passport flees,” he said. “Dubai will literally shut down. Dubai is more exposed to the risks of an expat exodus.”

Dubai is now home to 237 centimillionaires — those worth $100 million or more — and at least 20 billionaires, according to Henley & Partners. An estimated 9,800 millionaires moved to Dubai in 2025, bringing $63 billion in wealth — more than any other country in the world, according to Henley. Most of Dubai’s wealthy are arriving from the U.K., China, India, and other parts of Europe and Asia. With the ruling Maktoum family starting to diversify the economy…