The war, launched by the US and the Israeli regime against Iran, has introduced severe regional instability, undermining Dubai's appeal as a tax-free, low-cost alternative to high-expense Asian financial centers.
Until late February 2026, wealth managers and private bankers were flocking to the UAE at a rapid pace.
Abundant wealthy clients, tax exemptions, and lower rents compared to Singapore had made Dubai highly attractive.
But the outbreak of the war in the Middle East has seriously challenged this momentum.
Major global financial firms, including Goldman Sachs and Citigroup, have warned employees in the UAE to avoid their offices.
Other institutions have offered temporary exit options for staff, though uptake remains limited so far.
These developments have sparked deep concerns among high-net-worth clients.
Financial advisors report that some investors have postponed Middle East investment plans, while many others are considering reducing their regional exposure if the aggression continues.
Boston Consulting Group estimates put foreign assets registered in the UAE at around $700 billion in 2024.
In recent years, Dubai successfully attracted substantial wealth from countries like India, China, and Indonesia.
Approximately one-quarter of the 2,270 firms established in the UAE belong to Asian owners.
Analysts warn that reversing this inflow could impose heavy costs on the UAE economy.
If Asian tycoons decide to shift their capital, Singapore and Hong Kong emerge as the primary alternatives.
Nick Xiao, CEO of Hong Kong-based asset management firm Annum Capital, said: “Some Asian investors are in the process of reconsidering their decisions and are likely to move their money back to Hong Kong or Singapore.”
However, some banking sources indicate that a portion of clients still prefer to remain in the UAE.
The main reason is Singapore's stringent rules on identity verification and source-of-wealth confirmation, which can pose challenges for clients and bankers.
Opening accounts and managing assets in Dubai is generally seen as easier than in Singapore.
In this context, Singapore's Minister for Trade and Industry Alvin Tan noted that financial centers like Dubai and Hong Kong complement each other, while emphasizing that Singapore has taken multiple steps to attract capital flows and businesses.
Given the contradictory messages from the US and Israel regarding the war's duration, those with family and investments in the Middle East now face a difficult choice between staying or leaving the region.
The US-instigated aggression has directly threatened the stability that once drew massive Asian capital to Dubai, accelerating a potential exodus that could reshape Persian Gulf financial dynamics.