Iranian Strikes on Dubai Shake Investor Confidence and Challenge the Emirate’s Safe-Haven Reputation

In the aftermath of Iranian missile and drone strikes targeting Dubai last week, concerns among investors have intensified, prompting some wealthy residents to move funds out of the emirate as geopolitical tensions escalate.

Two Indian entrepreneurs living in Dubai attempted to transfer more than $100,000 each from their local bank accounts to Singapore shortly after the attacks, seeking to reduce their exposure to potential instability.

Their efforts initially ran into difficulties due to technological disruptions that followed the strikes, according to the entrepreneurs, who spoke to Reuters on condition of anonymity because of the sensitivity of the matter. One of them later succeeded in moving the money to his Singapore account through another bank based in the Emirates.

They are not alone. Advisers and legal professionals say a number of affluent Asian investors have either begun shifting assets away from Dubai or are exploring options to move wealth to established financial hubs such as Singapore and Hong Kong. The developments come as the ongoing US-Israel war with Iran raises questions about the Gulf region’s reputation as a stable destination for global capital.

While wealthy individuals typically spread their investments across multiple regions and asset classes, their choice of residence or operational base is often guided by factors such as taxation, regulation, privacy, and logistical convenience. In recent years, Dubai has become a favored hub for entrepreneurs and wealthy families from Asia, particularly from China, drawn by its favorable policies and business-friendly environment.

The Gulf region’s booming real estate sector and large-scale infrastructure expansion have also enhanced its appeal as an investment destination. According to the central bank, the total assets of the United Arab Emirates’ banking and financial sector exceeded 5.42 trillion dirhams, or approximately $1.48 trillion.

However, the recent strikes on both Dubai and Abu Dhabi have cast doubt on the country’s longstanding reputation for stability, leading some investors to reconsider their exposure.

Ryan Lin, a Singapore-based private wealth lawyer, said the events have prompted several of his clients to reach out. Of his 20 clients who maintain assets in Dubai—each holding roughly $50 million on average—six or seven contacted him within the week. Three of them are preparing to move their assets to Singapore immediately.

One of those clients, Lin said, is “checking how quickly they can transfer everything to Singapore”.

Similar concerns are emerging among family offices—specialized firms that manage the wealth of affluent families. Iris Xu, a principal at the global corporate and fund services provider Anderson Global, said her firm has received enquiries from between 10 and 20 family offices seeking advice on moving assets back to Singapore from the Middle East as uncertainty surrounding the conflict grows.

“Dubai was always about tax benefits but now I think the tax benefits may not be the top priority for them,” she said.

A Singapore-based wealth management adviser, who also declined to be identified because they were not authorized to speak publicly, said they had already spoken with 13 clients based in the United Arab Emirates. More than half of them are seriously considering shifting their assets to Singapore.

“Flying back and forth will be a challenge even if the conflict ends tomorrow. It is a confidence thing,” the adviser said.

Grace Tang, chief executive of Phillip Private Equity, reported similar anxieties among her largely Asian clientele. Between 10 and 20 of them have approached her to discuss transferring wealth to Singapore and focusing on capital preservation amid rising geopolitical risks.

Not everyone in the wealth management industry believes the tensions will lead to an immediate outflow of capital from the UAE, however.

Dhruba Jyoti Sengupta, chief executive of Dubai-based WRISE Private Middle East, said his firm has not observed widespread concern among clients.

“They are sophisticated global investors, already diversified internationally, but deeply invested … in the UAE’s growth story,” he said. “Despite the broader geopolitical turmoil in the region, clients are feeling safe and secure.”

Officials have also sought to reassure investors. UAE central bank governor Khaled Mohamed Balama said on Thursday that the country’s banking and financial system remains resilient and stable despite regional developments. Banks, financial institutions, and insurers, he added, are operating normally without disruption.

Major wealth managers in Singapore, including Bank of Singapore and DBS Group, echoed the view that many investors are currently adopting a cautious approach. Clients, they said, are monitoring the situation closely but are largely taking a wait-and-see stance.

At the same time, the UAE continues efforts to preserve its status as a safe haven for global capital. Some investors and business leaders are still proceeding with expansion plans in the Emirates despite the uncertainty.

Jeremy Lim, co-founder of GrandWay Family Office, said he is continuing with plans to establish a family office in Abu Dhabi. For now, the unfolding conflict has not altered his strategy.

“The real deal-breaker for businesses would be if the UAE were to…become directly involved alongside one side in a conflict,” Lim said. “As long as that doesn’t happen, our plans remain unchanged.”

By fLEXI tEAM