Dubai is scrambling to salvage its reputation as a haven for the wealthy

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to high-net-worth investors and consumers. subscription To receive future issues, directly to your inbox.

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

Over the past decade, Dubai has successfully marketed itself as a safe haven for the global elite. Drawn to sun, security and tax-free income, the number of millionaires in Dubai has doubled since 2014 to more than 81,000, according to Henley & Partners. Dubai’s luxury real estate market has grown for five consecutive years, with 500 properties sold last year for more than $10 million – compared to just 30 properties in 2020.

But now, Dubai’s reputation for safety has been shattered.

Last week, the five-star Fairmont The Palm hotel in Dubai, located on its famous palm-shaped archipelago, suffered an explosion. The wreckage of the Iranian drone set fire to the Burj Al Arab Hotel, and Dubai Airport was damaged by a missile attack. On Tuesday, the US Consulate in Dubai was attacked by a drone, causing a fire nearby.

“The US-Israel war on Iran is upending that critical security aura in Dubai,” said Jim Crane, a fellow at the Baker Institute at Rice University. “Dubai’s economic model relies on expatriate residents providing the brains, brawn and investment capital. We need stability and security to bring in smart foreigners.”

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

Other centers of wealth in the region – including Abu Dhabi, Doha and Riyadh – also fell under the brunt of the war. Like Dubai, they have made attracting the wealthy a major economic policy. However, Dubai’s rise and reliance on wealth capital stands out in the region. Kane said this is because Dubai no longer relies on oil revenues like its neighbours, and instead relies on the trust of foreigners.

“The city cannot continue if everyone holding a foreign passport flees,” he said. “Dubai will literally close its doors. Dubai is more at risk of an exodus of expatriate workers.”

Dubai is now home to 237 millionaires (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 in wealth worth $63 billion – more than any other country in the world, according to Henley. Most of Dubai’s wealthy people come from the United Kingdom, China, India and other parts of Europe and Asia. As the ruling Maktoum family began to diversify the economy away from oil decades ago, Dubai established special economic zones and golden visa programs to effectively industrialize wealth attraction as a national strategy.

Dubai has no personal income tax, no capital gains tax, and no inheritance tax, making it ideal for family offices and the wealthy. The Dubai International Financial Center (Special Economic Zone) reported in early January that the 120 largest families in the economic zone collectively managed more than $1.2 trillion. Last month, the Dubai International Financial Center reported that it had 1,289 “family-related entities”, an increase of 61% from last year.

Right now, many wealthy families and wealth professionals are focusing on exit. Charter airlines report that demand for private jets far exceeds available seats and flights. Amira Naran, CEO of Vimana Private Jets, said on Tuesday that the broker received more than 100 inquiries from clients overnight. He said he hasn’t seen such demand since the pandemic. He said that the cost of the plane from Riyadh to Europe could reach $350,000.

He added that the Dubai residents he spoke to travel to attend business meetings, and do not flee to safety.

“They don’t feel unsafe,” he added. “It’s pretty much a normal life, and there’s just a little extra noise in the background with all these missiles. But life has to go on. They need to travel.”

Dale Buckner, CEO of security firm Global Guardian and a former Green Beret member, said the exodus shows no signs of slowing down. By Tuesday morning, Buckner had seven corporate clients including large finance and consulting models looking to furlough 1,000 to 3,000 employees.

“This is very similar to Ukraine,” he added.

“I think everyone has realized that the Iranians are successfully targeting five-star hotels and airports on a large scale, and now they are starting to shut down the oil infrastructure,” he said. “I don’t think anyone believes it’s possible.”

Many companies and professionals in Dubai said the business case for staying remained strong. They ensure that the government does not overstep the bounds in times of crisis. Hedge funds and family offices are mainly attracted to Dubai’s stable tax, regulatory and banking systems, said Hasnain Malik, who leads equity strategy and emerging markets geopolitics at Dubai-based Telimer. All of these qualities remain in place, he said.

“These reasons have not changed,” he said. “It is only one aspect of the lifestyle, pristine security, that recent events have called into question.”

Henley & Partners, which helps wealthy people obtain visas to other countries, said Dubai has always proven its resilience in times of uncertainty. The attacks in Dubai are also a reminder of the importance of geo-hedging, said Dominic Volek, head of the private sector client group at Henley & Partners.

“Situations like this reinforce a core principle we often discuss with clients: the value of global choice,” he said. “Internationally mobile families typically diversify their residency and citizenship exposure across multiple regions – including the Americas, Europe, the Middle East and Asia – so that they maintain flexibility in the face of geopolitical uncertainty, wherever and whenever they may arise. These decisions are generally of a strategic, long-term nature rather than reactions to short-term events.”

One sector that may come under pressure in the long term is Dubai’s real estate market. Property prices in Dubai have risen for five consecutive years, boosted by the Golden Visa program that gives foreigners a 10-year, renewable visa to buy a property worth $550,000 or more. Last year, a 47,200-square-foot penthouse apartment in the new Bugatti Residences set a price record in Dubai and the UAE when it sold for AED 550, or about $150 million.

However, even before the Iran war, there were some signs that Dubai’s rapid building spree, soaring prices, and widespread speculation, might be starting to subside. In September, UBS estimated that Dubai had the fifth-highest bubble risk among 21 major cities, second only to Zurich and Los Angeles. In the spring, Fitch Ratings forecast a correction in late 2025 and in 2026 with prices falling by up to 15%.

The impact on property values ​​will depend on the scope and duration of the conflict, said Anton Lopatin of Fitch Ratings. He said the departure of expatriates at the present time may “put pressure” on Dubai’s housing market.