Ultra-rich expats are fleeing Dubai for the Swiss town of Zug as they look to protect their fortunes and avoid the ongoing war in the Middle East.
Locals have reported seeing queues stretching around the block outside apartment viewings as former Dubai residents descend on the picturesque canton.
Iran pummelled the Emirati city with missiles and drones in response to US-Israeli attacks and thousands of residents have now turned to Switzerland to shield their wealth and dodge tax bills.
Zug, a town of just 135,000 south of Zurich, has proved popular with the wealthy elite, as individuals, family offices and companies look for a new home.
Local bankers and wealth managers say clients from Dubai view the town as a stable base in Europe.
‘We are seeing increased enquiries,’ Heinz Tännler, Zug’s finance director, told the Financial Times.
‘Of course, we regret the circumstances, but the reality is Zug is benefiting.’
Switzerland is vastly popular with the world’s most wealthy as it allows people to pay a flat tax rate based on their living expenses rather than their income.
Ultra-rich expats fleeing Dubai for the Swiss town of Zug (pictured) as they look to protect their fortunes and avoid the ongoing war in the Middle East
Iran pummelled the Emirati city with missiles and drones in response to US-Israeli attacks. (Pictured: The Burj Al-Arab hotel ablaze)
Zug was already renowned as a global economic hub, hosting hundreds of commodity traders and cryptocurrency firms, and has been boosted by the war in Iran.
Simon Incir, of luxury estate agent Engel & Völkers, said: ‘Since the war started, we’ve noticed demand from foreigners living in Dubai – Italians, French, Swiss, British. Now they are considering moving away [from Dubai].’
One local banker said there was a queue ‘around the block’ at an open viewing for a rental apartment in the town.
‘The person behind me had flown in from Dubai that morning,’ they added.
Wealth managers in Switzerland say the more money clients have, the more urgently they are trying to move it out of the Gulf.
Reputation expert Bernhard Bauhofer said anxiety among the world’s wealthiest is intensifying.
‘The ultra-rich are worried. The more money they have, the more they fear losing it,’ he said.
‘Whenever there is a crisis, whether during the Cold War or today, we see Switzerland’s value reflected in the strength of the franc,’ pointing to its political stability and neutrality.
Switzerland, long considered by investors as a safe haven, has faced growing competition from financial hubs in the Middle East, but has been boosted by the latest conflict.
It gained momentum after US-Israeli attacks on Iran in June last year, said Patrik Spiller, head of wealth management at consultancy Deloitte Switzerland.
Patrik Spiller, head of wealth management at consultancy Deloitte Switzerland, said Switzerland was ‘expecting more assets from the Middle East’.
Thousands of expats, including Rio and Kate Ferdinand (pictured), are said to have fled Dubai after Iran attacks on the city
Zug, a picturesque town of just 135,000, has proved popular with the wealthy elite, as individuals, family offices and companies look for a new home
He said: ‘Due to recent events, we expect that assets from the Middle East will increasingly be booked in Switzerland. We’re hearing from banks, family offices, and other high-net-worth individuals that discussions are currently underway.’
The Swiss Bankers Association said it could not comment specifically on asset flows from the Middle East since the recent strikes on Iran, but noted Switzerland had long positioned itself as an attractive place for wealthy investors.
‘It’s now to our advantage that we can score points with Swissness, namely secure conditions, political stability, and the rule of law. I believe this is particularly valued in times like these,’ said SBA chief economist Martin Hess.
After the US-Israeli strikes on Iran, the Swiss franc hit its highest level against the euro in a decade.
Although it would likely take weeks or months for inflows to register, Switzerland could eventually see ‘several dozen billion’ dollars coming in from the region, Spiller said.
‘But that will depend a great deal on how the war develops, and how long it lasts,’ he added, noting cash usually came first followed later by assets such as stocks or bonds.