Kavan Choksi on Why Russians Are Investing in UAE Real Estate and Cryptocurrencies

Although the blockchain uses decentralized technology, local government agencies and financial institutions can still exercise their authority to sanction illicit crypto transactions. The situation isn’t different in the UAE. Sheikh Mohammed bin Rashid Al Maktoum, the UAE Vice President and Prime Minister, passed its first law regulating crypto assets last March 2022.

 

One reason behind this new law is the influx of incoming Russian fortunes. Reports indicate that millions of Russians have invested in UAE real estate and cryptocurrencies in the past few months. These transactions sparked controversy among Western diplomats. As a result, global finance regulators and agencies urged the UAE to break down these transactions.

 

Do all these transactions involve laundered money? Kavan Choksi doesn’t seem to think so, and he listed some of the reasons why your average Russian citizen might want to purchase UAE assets.

 

Weakening Russian Ruble

The Russian ruble has hit an all-time low these past weeks. Russian investors can only hedge their investments and minimize losses by converting their money to a different currency.

 

Frozen Assets Under Russian Sanctions

Kavan Choksi shares that several Swiss and UK banks froze billions of dollars worth of Russian accounts over the past few months under sanctions against Russia. For this reason, Russian firms are rushing to liquidate and transfer their funds. Note that these accounts belong to millions of innocent civilians, many of which have no direct involvement with the ongoing conflict.

 

Better Tax Rates

The UAE offers one of the best tax rates in the world. If you utilize tax deductions and tax breaks correctly, your investments can grow virtually tax-free in UAE countries like Dubai.

 

Bottom Line

Overall, Kavan Choksi discourages stereotyping Russian investors. Some citizens might use crypto assets to launder money, but these illicit transactions occur worldwide—not just in Russia or the UAE. 

 

Also, not all citizens share the same political views. Many peace-loving civilians want an efficient way to hedge their funds and keep their family’s finances safe during these turbulent times.