Abu Dhabi, the capital of the United Arab Emirates, has emerged as a favored destination for affluent individuals to place their assets in specialized entities called special-purpose vehicles (SPVs). One notable figure who has taken advantage of this opportunity is Changpeng “CZ” Zhao, the ex-CEO of Binance, the world’s leading cryptocurrency exchange.
SPVs: A New Trend for Wealth Protection
According to Bloomberg, Abu Dhabi is becoming a new center of wealth for the world’s wealthiest individuals. There are more than 5,000 offshore private vehicles in the Abu Dhabi Global Market- an increase from just 46 two years ago.
Some of the high-net-worth individuals who have set up SPVs in Abu Dhabi this year include Changpeng Zhao, the former CEO of Binance; Gautam Adani, the Indian tycoon; Ray Dalio, the hedge fund billionaire, and Vladimir Lisin, the Russian steel magnate.
The data does not reveal the origin of the assets transferred by these billionaires, but the report suggests that the wealth influx reflects global shifts in how the world’s rich “are protecting their money.”
Bhaskar Dasgupta, a former corporate adviser in Abu Dhabi’s free zone, praised the Abu Dhabi Global Market as an ideal place for setting up SPVs, noting a significant upward trend.
“We’re seeing more high net worth individuals moving from the BVI, Caymans, Mauritius, and Singapore to here,” said Dasgupta.
Abu Dhabi is an appealing destination for ultra-high-net-worth individuals due to robust protections to shield assets from seizure by foreign governments and tax advantages made possible through the UAE’s extensive network of double taxation treaties and agreements.
Binance’s Strategic SPVs In Abu Dhabi
One of the most prominent examples of SPVs in Abu Dhabi is Binance, the world’s largest cryptocurrency exchange. Zhao, the former CEO of Binance, set up multiple SPVs in Abu Dhabi this year, such as Binary Finance Group Holdings, Alphanest Holdings, and CZ Labs Holdings.
However, Binance has recently announced the withdrawal of a license application that allowed the platform to operate a collective investment fund in Abu Dhabi. Previously, the Abu Dhabi Global Market granted Binance permission to offer cryptocurrency custodial services to clients in Abu Dhabi in 2022.
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