The escalation of the Iran conflict sent shockwaves across the Gulf, not only halting business operations, but fracturing the unwritten security compact that had supported the region’s expatriate economy for two decades.
Two months and change down the line, what seemed like a temporary disruption is now viewed by many as the start of a structural reconfiguration of a key global mobility corridor.
The fallout for assignments in the Middle East
The conflict’s impact was immediate and severe – flight suspensions, restricted airspace, and reduced capacity that still hasn’t fully returned. Within days, embassies had suspended consular services and schools had switched to online learning. In the UAE, a spike in lease termination enquiries soon followed, ending 22 consecutive quarters of rental market growth.
Around 40 000 expatriates departed the country in the first month. And, going by the record number of pet relocation enquiries we continue to receive, many are still leaving. Permanently.
On the other hand, business carries on. Home searches are proceeding for organisations that have committed to maintaining their presence. But operations now run under materially different conditions – and at significantly higher cost and complexity – than three months ago.
As an example, to help keep projects on track amid airspace restrictions and service suspensions, AGS Dubai launched a dedicated chauffeur service as a reliable overland alternative for intra-Gulf travel. These journeys can cross multiple international borders, and depending on the assignee’s passport, often require additional visas and significantly more preparation than a flight to the same destination.
What companies are actually doing
International business has responded to events in two waves.
The first was an emergency response. Goldman Sachs and Citigroup told Dubai staff to stay home as security conditions deteriorated. Major employers began offering voluntary evacuation packages – flights, temporary accommodation in Singapore, Kuala Lumpur, or London, and 30-60 days of paid leave. Several firms went further, offering permanent relocation assistance to employees who did not wish to return.
The second wave – which is still unfolding – is a strategic repositioning. Many multinationals have already activated contingency plans, relocating parts of their operations to alternative hubs as a form of insurance against uncertainty.
The most widely reported example is Millennium Management, the US hedge fund exploring whether to allow its Dubai staff to relocate to Jersey. This is not an isolated case. Companies in all sectors are quietly restructuring their regional footprint, renaming Middle East hubs as regional centres and relocating primary infrastructure to Jersey, Singapore, or Switzerland.
In turn, assignees are not necessarily returning to their countries of origin but moving to alternative havens such as Switzerland, Spain, and Portugal. This strategic relocation, by families no longer willing to accept high salaries in exchange for high risk, is pressuring regional employers to offer risk premiums or evacuation plans to retain senior staff.
The mobility policy gaps the crisis has exposed
The conflict has revealed several structural gaps in how organisations design and manage international assignment programmes in the region.
Assignment insurance was optional. Companies that hadn’t built evacuation clauses into their assignment policies discovered they had no framework for managing the costs, decisions, and obligations that arise when a host location becomes unsafe.
The repricing and withdrawal of war-risk insurance in the region exposed the limits of standard private insurance coverage, and the same dynamic is playing out in the corporate assignment context. Insurance covering evacuation costs, emergency accommodation, and temporary relocation to a third country is moving from a discretionary expense to a mandatory component of any Gulf assignment policy.
Shadow relocation budgets did not exist. The organisations best positioned to respond quickly were those that had already calculated the cost of relocating assignees from their primary Gulf location to a backup destination before they needed to act.
The scramble to cost emergency relocations under operational pressure is both more expensive and more error-prone than having a budget established in advance. We are now having this conversation with clients who wish they had done this work in January.
The two-location family model has no standard policy. When advisories recommend that non-essential personnel leave while business operations continue, most assignment policies offer no framework for what follows.
The assignee remains, the family relocates to a safer location, and no one is clear on who bears the cost of two households in two countries, for how long, and under what conditions the arrangement ends. These questions are being answered ad hoc at high and unbudgeted cost.
Duty of care and business continuity are in direct tension. For organisations with employees still in country, the question of when business continuity starts to carry unacceptable personal risk is one they’re navigating it in real time.
If an organisation maintains operations after a government advisory recommends non-essential personnel leave, and something subsequently goes wrong, the financial and legal liability is material. If the business evacuates and the situation stabilises, the cost is equally real. Neither outcome has a clean answer, and most assignment policies offer no guidance on how to make the call.
The future of global mobility in the Gulf
Based on what our teams are observing on the ground, two scenarios are taking shape.
If the crisis de-escalates meaningfully in the coming months, the most likely outcome is a rapid return of business activity comparable to the post-pandemic rebound – compressed timelines, pent-up demand, and organisations rapidly re-establishing their presence. Companies that maintained their infrastructure and kept assignees in place will be best positioned to capitalise on that recovery.
If the current environment persists beyond 6-12 months, the structural shift already underway is likely to become permanent.
The Gulf’s status as a primary hub gives way to a regional centre model. Assignments to the region attract hardship premiums – 20–40% above standard rates according to some projections – and become increasingly reserved for essential business purposes. The assignee profile skews towards younger, single employees willing to accept the conditions. Family relocations become the exception rather than the rule.
Either way, the mobility framework for the Middle East has changed. The question is not whether your programme needs to be updated – it does – but whether you are adapting it to the reality that now exists rather than the one it was designed for.
How do you see the next 6-12 months unfolding for your organisation’s Middle East operations?
We would be interested to hear what you are seeing on the ground.
AGS has operated in the Middle East for over 20 years with offices in the UAE, Bahrain, Kuwait, Oman, and Qatar. If you need guidance adapting your programme, contact us for further assistance with your global mobility policy.