The Allure of the UAE: A Guide for British Expats

Many Brits are drawn to the much-vaunted "tax-free regime" and the lure of a luxury lifestyle in the UAE.

The Great Migration

The statistics tell the story. A recent report by Henley & Partners highlights that in 2024 alone, 9,500 millionaires left the UK for better options across Europe and Asia, with 6,700 of them landing in the UAE. As the trend continues into 2025, it’s clear that the Gulf state has become a "millionaire magnet."

Economic Incentives

The UAE’s appeal is easily understandable. According to World Bank data, the UAE’s Gross National Income (GNI) per capita reached $76,780 (£57,879) in 2023 — a significant 35% higher than the UK’s $56,780. The combination of a "tax-free regime" and a luxurious lifestyle offering everything from waterfront villas to world-class dining makes relocating to the UAE an enticing proposition. Moreover, low crime rates and increasingly liberal social norms ease the transition for many Westerners.

The Expat Community

If the UAE dream seems too good to be true, it often is. In a nation where Emiratis constitute only 12% of the population, UK nationals have long been a familiar presence. Recent economic challenges, a fluctuating dollar, and a weakening pound have further fueled the aspirations of both affluent individuals and middle-class professionals, with an estimated 240,000 Brits currently residing in Dubai — surpassing the population of Oxford.

Cost of Living

Dubai’s cost of living is reported to be about 28%-30% lower than London’s, making essentials like groceries, dining, and utilities much more affordable. With a VAT of just 5% compared to the UK’s 20% and no property taxes, the financial environment appears to support the mantra of "work hard, save more, live large."

Managing Lifestyle Inflation

Vijay Valecha, chief investment officer at Century Financial, issues a warning regarding lifestyle inflation. Without income tax, expats may find themselves with more disposable income, which could lead to overspending. Valecha outlines typical monthly costs, including food for a family of four (approximately £700), mandatory health insurance (£600), private transport (£500), and utilities (£300), highlighting that the hidden costs of car ownership and lifestyle can derail newcomers’ financial plans.

Valecha’s strategy for maintaining financial health includes:

• Automating savings: Allocate 20%-30% of income to investments in equities, fixed income, and UAE real estate.
• Building an emergency fund: Plan for retirement through International Self-Invested Personal Pensions (SIPPs) or UAE-specific pension schemes.
• Currency hedging: Utilize multi-currency accounts and strategically time remittances.
• Estate planning: Register wills with the DIFC Wills Service or local authorities to avoid complications.

Real Estate Investments

The UAE’s residential real estate market, valued at around $390 billion, offers compelling investment opportunities. With average apartment prices in Abu Dhabi and Dubai rising nearly 11% and 18% year-on-year, respectively, alongside villa values increasing by about 12% and 20%, there’s no shortage of potential for growth. UK nationals were responsible for approximately 15% of all foreign real estate transactions in 2024, drawn by the steady growth driven by immigration and substantial public investment in infrastructure.

Ben Crompton, managing partner at Crompton Partners, mentions strong performance in luxury segments, especially in areas like Saadiyat and Yas Islands. He cautions expats to consider their options carefully in the "renting versus buying" debate, emphasizing that ready-built units can offer immediate returns.

Business Landscape in the UAE

The UAE has evolved into an expat playground for entrepreneurs, bolstered by a 5% VAT, investor-friendly policies, and world-class connectivity. Ananda Shakespeare, founder of Shakespeare Communications, notes the UAE’s recent transition to a Monday-Friday workweek, aligning more closely with Western business practices.

While initial setup costs may be higher, involving visa expenses and licensing fees, the convenience of online renewals and diverse company formation options, including the 10-year Golden Visa, offer substantial long-term benefits.

Free Zones and Compliance

Free zones, which allow 100% foreign ownership and no personal taxes, are particularly attractive. Shakespeare advises obtaining solid HR and legal support to remain compliant and emphasizes comprehensive cost breakdowns before launching a business.

Education Opportunities

For British families relocating to the UAE, world-class education facilities that reflect familiar curriculums are readily available. Schools like Nord Anglia Education, Swiss International Scientific School, and the GEMS network offer everything from GCSEs to the IB Diploma. The demand has surged among UK parents, especially in light of increased VAT on private school fees back home.

While UAE private schooling fees tend to be high—ranging from £11,000 to £18,000 annually—they still offer relative value when compared to UK counterparts, particularly in regulatory standards.

Job Market Insights

The UAE job market offers a mixed landscape. While specialist fields such as tech, AI, cybersecurity, and e-commerce are thriving, the competition is fierce due to a large influx of international talent. Justin McGuire, CEO of MCG Talent, notes that niche skills and regional understanding are essential.

Employers increasingly seek individuals with local knowledge, as simply having qualifications isn’t enough. McGuire expresses that salary expectations should be aligned with local benchmarks rather than former UK salaries, with the current landscape valuing local experience more than ever.

McGuire advises against relocating without securing a job first, emphasizing the importance of networking and building connections within industry circles.

Overall, the UAE presents an array of opportunities for British expats considering a move in search of a better lifestyle. With attractive financial incentives, a robust real estate market, and varied educational opportunities, the Emirates continues to stand as a beacon for those seeking a fresh start.