A cloud of black smoke over an industrial area in Dubai following Iranian attacks.Image: keystone
The United Arab Emirates has shaped Dubai into a global financial center with the promise of security and low taxes. Iran’s missile attacks are now shaking the successful model.
Mar 4, 2026, 4:45 a.mMar 4, 2026, 4:45 a.m
Simon Maurer / ch media
The SVP would hardly be happy with this concept: around 88 percent of Dubai’s residents are expats. They not only make up the vast majority of the population, but are also responsible for a large part of the added value. Around 75 percent of gross domestic product were generated from non-oil businesses in 2024. The money comes from sectors such as tourism, trade, real estate, logistics and financial services.
This economic success model was made possible by an attractive mix for corporations and wealthy people: no income taxes for private individuals, hardly any corporate taxes for a long time and lax regulations that facilitate capital flows. However, the promise of physical security is also central to this: for years, Dubai has been advertised as a location that is safer than large European financial centers such as London or Frankfurt.
After an Iranian air strike on the Fairmont The Palm Hotel in Dubai, emergency services secure the area.Image: keystone
This could be “catastrophic” for Dubai
However, there was a turning point in this regard at the weekend. After the Israeli-American attack on Iran, it unexpectedly fired on all Gulf states – including the financial metropolis of Dubai. Several luxury hotels were directly hit. Even one of the city’s landmarks, the Burj Al-Arab tower, caught fire due to debris from a blocked drone.
This development creates a fearful mood among the majority of the financial elite living there. “Half of Dubai is currently booking flights abroad,” was the headline “Financial Times» on Monday. The manager of a major global hedge fund with offices in Dubai told the newspaper:
“This will have consequences for some of my people. The agreement was not to expose oneself to geopolitical risks by moving to Dubai.”
Stock market analyst Marko Kolanovic, former chief strategist in the global research team at JP Morgan, provided a similar assessment. Developments in Dubai could be “catastrophic” if the US does not quickly defeat Iran or stop the attack. “The threat to expats, tourism, finance, aviation and shipping can even send shockwaves throughout the world,” writes the stock market expert X. This is perhaps also the reason why the United Arab Emirates has its stock exchange on Monday and Tuesday leave closed.
In the midst of this crisis, however, speculation began in business circles as to which locations could benefit if wealthy expats moved their center of life out of Dubai due to the tense security situation. Switzerland was mentioned strikingly often in this context.
The duration of the Iran conflict will be crucial
When asked by CH Media, Martin Hess, chief economist at the Swiss Bankers Association, stated:
“Experience shows that in phases of increased geopolitical uncertainty, stable location factors such as those in Switzerland become more of a focus for companies and investors.”
The long-term reliability of the rule of law, property protection, planning security and internationally compatible regulations are crucial. All qualities that would shape the Swiss financial center regardless of current geopolitical developments. “We cannot comment on short-term capital movements or specific inflows,” says Hess, pointing to the long-term nature of location decisions.
The Association of Swiss Asset Managers is similarly cautious. Managing director Patrick Dorner explains that the vast majority of Swiss asset managers are “small SMEs with three to five employees”. Only a few larger market participants are even represented in Asia or the Middle East. “If the current situation continues, individual companies could reconsider their local presence,” says Dorner. He does not expect their business model to be affected.
What is less clear is how the security situation in the Gulf states affects wealthy individuals. These usually react more sensitively to geopolitical risks than companies and are more mobile because they are less tied to infrastructure. Whether this results in noticeable capital movements ultimately depends on whether the current escalation is perceived as a temporary episode – or as a structural break. (aargauerzeitung.ch)