Inside the Surge: Why the UAE Is Winning Over World’s Top Alternative Asset Managers

Written by Tom Cole, Managing Director of EMEA at Abacus Group

As the global financial landscape continues to evolve, the United Arab Emirates (UAE) has emerged as a formidable attraction for the world's leading alternative asset managers. More generally, the UAE's non-oil foreign trade surged by 24% to 1.7 trillion dirhams in the first half of 2025, nearly doubling its value from five years ago, compared to global trade growth of 1.75%. At Abacus, we've witnessed growth firsthand, over the past year, we've seen a dramatic increase in existing clients with roots in Europe, North America, and Asia extending their operations to the UAE. Even more indicative of the region's success, we're now engaging with emerging managers who are choosing the UAE as their first and only office. Our observations correlate with a recent DIFC announcement, sharing a 32% YoY registration growth. The real question isn't if the UAE is a key player, but rather, what makes the region a compelling option.

The surge isn't accidental; it's the result of a deliberate and strategic transformation. Here's a look inside the factors driving this remarkable growth:

A Progressive and Robust Regulatory Ecosystem

The UAE has meticulously crafted a regulatory environment that balances innovation with stability and investor protection. Key financial free zones, such as the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), operate under independent common law frameworks, primarily based on English common law. Both the FRSA and the DFSA share a clear and well-aligned view that cybersecurity is a major business risk. The guidance from both regulators strikes a balance between providing specific, tactical instructions and broader, strategic direction.

Unbeatable Tax Incentives

For alternative asset managers and their professionals, the UAE's highly attractive tax regime stands out as a primary draw. They benefit from no personal income tax, corporate tax rates ranging from 0% to 9%, and the absence of capital gains tax. Furthermore, the UAE's extensive network of nearly 140 double tax treaties helps minimise withholding taxes on international transactions, boosting cross-border investment efficiency.

Access to a Deep and Expanding Capital Pool

As per the ADGM’s tagline, ‘capital of capital,’ the UAE is a gateway to immense wealth and a growing investor base. The Middle East is experiencing rapid growth in ultra-high-net-worth individuals (UHNWIs) and family offices, with projections of significant increases in wealthy residents. Abu Dhabi is home to some of the world's largest sovereign wealth funds, offering a substantial source of capital for alternative investments. Many fund managers are establishing a presence in Abu Dhabi specifically to forge or deepen relationships with these institutional powerhouses. From several visits to the UAE, it’s clear and refreshing to observe that relationships are critical to long-term success.

World-Class Infrastructure and Business Environment

Beyond the financial specifics, the UAE offers a superior operational environment: Unlike many traditional markets, the UAE allows full foreign ownership of certain business structures, providing greater control and flexibility. The UAE Dirham's peg to the US dollar offers exchange rate stability, crucial for international investors. Office spaces are new and modern, along with strong global connectivity, ensuring seamless operations. The UAE offers a high standard of living, attracting talent from around the globe. An internationally leading healthcare and diverse education system is something the UAE is rightfully very proud of.

Retaining and Attracting Leading Talent

It's clear why the UAE has become a powerful draw for professionals and their families: the four compelling reasons outlined. Bloomberg reported in an article that the UK is the primary source of this talent, with 76.7% of relocating professionals previously based there. While some may argue that the pandemic initially spurred a reassessment of work locations, clients consistently express that a UAE office achieves key objectives, such as allowing portfolio managers and front office teams to live in the region. This strong attraction of talent is a significant factor driving firms to establish a presence.

The success of the UAE's economic diversification is evident, with non-oil sectors, especially financial activities, demonstrating sustained growth. Having observed the region's development for a few years, we initially held some scepticism, recalling the large-scale, often temporary, staff relocations by sell-side firms a decade ago. Nevertheless, the current movement is different, the clear strategic direction and resolute execution is truly impressive and exciting.