Two years ago, Dubai became a hot favorite with Russians looking to park money or build new lives after Russian President Vladimir Putin’s invasion of Ukraine. That allure is now dimming as the cost of living in the glitzy emirate surges and its banks get stricter in enforcing U.S. sanctions.
Russian money flows into the United Arab Emirates — which Dubai is part of — are showing signs of slowing, according to bankers, executives and investment professionals. None of them predict a widespread exodus of cash already in the UAE, yet executives say it seems to have absorbed most of the benefits of Russian money and is unlikely to see more large inflows.
Some Russian arrivals are considering moving to new jurisdictions or even returning home as an expat rush into Dubai drives up rents and daily expenses. Unlike the U.S. and the EU, the Gulf country doesn’t have sanctions on Russia. Still, Russian entities setting up bank accounts are now more likely to face scrutiny from local banks as the UAE comes under increased U.S. pressure to tackle potential sanctions evasion, according to people familiar with the matter, who asked not to be identified in discussing information that is private.