Economic uncertainty and political turmoil in parts of Latin America is driving many of the region’s wealthy to seek opportunities to invest in the UAE and take advantage of the country’s 10-year Golden Visa programme, according to UAE-based Damacorp.
Damacorp, which is based in Dubai, works with companies in Latin America and the UAE to assist with entity establishment, registered addresses, local agents and ongoing business management services, as well as citizenship and residency planning.
In an interview with Arabian Business, Damacorp residency expert Carlos Leggio said that between 2019 and 2021, the firm has seen an 800 percent increase in clients from Latin America.
“[These are] especially from Argentina and Mexico, followed by Brazil in Chile,” he said. “I started with about 10 clients in 2019, and now I have about eight to 10 clients per month, many of them with European and Lebanese passports.”
“Wealthy Mexicans have been slowly leaving the country since 2019 fearing political crisis and economic debacle. The same with Brazil since 2018 and since last year, Peru,” Leggio added. “There is no official data, but millionaires are leaving the region. There are the same problems in all Latin American countries: citizen insecurity, poor health systems and skyrocketing inflations.”
The firm’s typical clients, he added, are millionaires, multi-millionaires, entrepreneurs and investors seeking to escape legal uncertainty and tax regulations in their own countries, as well as those escaping political crisis and growing insecurity across Latin America.
“Their main interest in Dubai and the UAE is to protect their wealth and at the same time, undoubtedly, security for their families,” he said.
The UAE, he added, has replaced countries such as Switzerland, Spain and Portugal as a preferred destination for Latin American investors searching to relocate through visa programmes.
Switzerland
“They used to prefer Switzerland, but its new legislation introduced major changes like tax cooperation between the EU and USA,” Leggio said. “[In the UAE] there is currently no income tax, no corporate tax, no withholding and no capital gain tax. For almost a decade the UAE has had a very attractive tax framework for foreign investment.”
In many cases, wealthy Latin Americans are looking to Dubai as an option to move ‘money away’, rather than take all their money out of their home countries.
“They still have their businesses back home,” he added. “The high-net worth individuals are often the first people to leave but they still keep their businesses there to see if the situation changes.”
Additionally, Leggio noted that the ongoing Covid-19 pandemic – which has overburdened the health system of many Latin American countries – has accelerated the flow of Latin Americans looking towards the UAE.
“The uncertainty caused by the pandemic crisis affected all aspects of life, including personal finances,” he said. “It has led many people to rethink their immediate present and future and look for new opportunities to invest.”
Ahead of the pandemic, Dubai was steadily building economic and travel links with countries across the region.
According to a study from the Dubai Chamber of Commerce and the Inter-American Development Bank, trade flows between Latin America and the Caribbean and the GCC amounted to $16.3bn in 2018, with Gulf countries importing $10.9bn and exporting $5.4bn worth of products.
Of the total, the UAE accounted for 27 percent of exports to Latin America, as well as 46 percent of all imports from the region, making it the most significant growth market for trade with the Americas.
In Dubai alone, non-oil trade grew 71 percent to $6.29bn, compared to $3.68bn in 2010. More than 400 Latin American countries are now registered with the Dubai Chamber.
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