- Notable high-net-worth individuals, including Changpeng Zhao, are choosing Abu Dhabi’s international financial center to establish SPVs.
- Bloomberg reports a remarkable surge in the number of SPVs in the Abu Dhabi Global Market, with the count surpassing 5,000.
- High-net-worth individuals are reportedly drawn to Abu Dhabi due to its safeguards for ring-fencing assets from foreign jurisdictions.
Changpeng Zhao, Gautam Adani, hedge fund billionaire Ray Dalio, and Russian steel magnate Vladimir Lisin are among the high-net-worth individuals who have established special purpose vehicles (SPVs) in Abu Dhabi’s international financial center this year.
According to Bloomberg, Abu Dhabi is emerging as a “new wealth hub” where the world’s wealthiest individuals secure their assets overseas. Furthermore, data reveals that the number of SPVs in the Abu Dhabi Global Market has surged to over 5,000, compared to just 46 in 2016.
For the uninitiated, SPVs are separate legal entities that can be used to isolate financial risk, securitize assets, and perform separate financial transactions.
While the data does not disclose the source of the assets transferred by individual billionaires, the report suggests that the wealth influx reflects global shifts in how the world’s rich “are protecting their money.”
Bhaskar Dasgupta, a former Abu Dhabi free zone corporate adviser, lauded the Abu Dhabi Global Market as an ideal destination for setting up SPVs, noting a significant upward trend. “We’re seeing more high net worth individuals moving from the BVI, Caymans, Mauritius, and Singapore to here,” said the adviser.
People familiar with the matter stated that Abu Dhabi appeals to high-net-worth individuals “because of its safeguards to ring-fence assets from foreign jurisdictions and the ability to benefit from the UAE’s double tax treaty network.”
According to reports, the former CEO of Binance, Zhao, set up multiple SPVs in Abu Dhabi. Binary Finance Group Holdings, Alphanest Holdings, and CZ Labs Holdings are some of the SPVs that Zhao set up this year.
In related news, Binance has announced the withdrawal of a license application that allowed the platform to operate a collective investment fund in Abu Dhabi. Initially, the Abu Dhabi Global Market permitted Binance to offer cryptocurrency custodial services to clients in Abu Dhabi in 2022.
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