From its emergence back in the 6th century to being the leading players in private wealth management advisory, Family offices in the uae have undergone a remarkable revolution. With their operational flexibility, family offices are now reshaping global trade opportunities. In recent times, many countries worldwide have supported family businesses with institutional and policy backing, raising awareness, educating, and ensuring regulatory frameworks to ensure their continuity.
An introduction to family offices in the UAE
The growth of family offices in the UAE has been organic. The country holds the potential to influence the future of global business in the years to come. High Net-Worth Individuals (HNWIs), businesses, and family business owners are increasingly considering migration to the UAE. Backed by several factors, the UAE makes an ideal destination for your entrepreneurial dreams.
The UAE government is dedicated to supporting family offices by providing legislative, structural, and regulatory tools essential for the private sector’s success, crucial to the broader UAE economy’s health.
Family Offices in the UAE – a legislative revolution
A new UAE Federal Decree Law No.37 of 2022 on Family Businesses (the “Law”) was issued in October 2022 and came into force on 11 January 2023.
- Establish a robust legal framework for ownership and governance of family businesses.
- Facilitate smooth transfers of ownership between generations.
- Support the continuity and sustainability of family businesses in the private sector.
- Introduce mechanisms for resolving family disputes effectively.
- Enhance the economic contribution and competitiveness of family businesses in the UAE.
Top freezones for your Family office in the UAE
- Abu Dhabi Global Market (ADGM)
The Abu Dhabi Global Market (ADGM) is one of the premium destinations for family offices. ADGM allows Single Family Offices (SFOs) under its Commercial Licensing Regulations, even though specific SFO regulations are absent. SFOs function as private companies with limited liability for shareholders. They provide services such as wealth and asset management, legal and accounting support, and administrative services exclusively to the family and their entities. This setup aids in protecting wealth tax-efficiently, alongside other ADGM wealth management options like SPVs and foundations.
- Dubai International Financial Centre (DIFC)
The Dubai International Financial Centre (DIFC) has introduced new regulations for family offices under the Family Arrangements Regulations 2023. These regulations, effective from 31 January 2023, replace the previous Single-Family Office Regulations (SFO Regulations) of 2011. One significant change is the removal of the requirement for family offices to register with the Dubai Financial Services Authority (DFSA) as a Designated Non-Financial Business or Profession. This update aims to enhance the regulatory framework for family offices within the DIFC, supporting the initiatives of the Global Family Business and Private Wealth Centre.
DIFC Family Wealth Centre
The DIFC Family Wealth Centre (DFWC) supports family businesses and Ultra High Net Worth Individuals (UHNWIs) by offering tailored solutions aligned with the UAE’s commitment to these sectors. Their “Family Arrangements Regulations” aim to sustain and expand family enterprises and wealth, providing personalized services, education, networking opportunities, and advisory to guide families effectively.
Government initiatives for Family offices in the UAE
1)Unified Family Business Registry
The UAE Ministry of Economy introduced a unified registry for family businesses, supported by four cabinet resolutions aimed at enhancing governance and competitiveness. This initiative aims to establish the UAE as a preferred destination for local, regional, and global family enterprises.
They play a crucial role in driving the national economy forward, supporting its shift towards a knowledge-based future. The unified registry launch marks a significant step in enhancing governance and streamlining registration processes for family enterprises in the UAE. It’s about creating a cohesive system that builds on their existing strong legislative and technological foundations.
2)Dubai Family Business Management Programme
The Dubai Family Business Management Programme is designed to support the growth of Dubai’s business community by nurturing innovative leaders capable of addressing future challenges. This program supports Dubai’s business community by developing innovative leaders in Dubai capable of addressing future challenges. It focuses on preparing the next generation of family business leaders by enhancing governance, sustainability, global trade strategies, legal education, social responsibility, networking, media presence, and overall success preparation.
3)Abu Dhabi Family Business Index
The Abu Dhabi Department of Economic Development (ADDED) on a collaboration with the United Emirates University (UAEU) has signed an MoU to launch the Abu Dhabi Family Business Index.
An initiative to rank and evaluate family-owned and family-controlled businesses in Abu Dhabi, this index will assess factors like revenue, industry impact, employment, governance structures, leadership diversity, succession planning, longevity, and socio-economic contributions. By combining the expertise of UAEU and the economic development focus of ADDED, this initiative aims to enhance Abu Dhabi’s reputation as a hub for innovation and economic prosperity. It’s about understanding and improving how family businesses operate and contribute to the local economy.
The UAE has become a top spot for Family offices, with financial assets growing fast, especially from UNHWI’s. With projections indicating further expansion by 2026, the country’s appeal is strengthened by its progressive regulatory frameworks, legal innovations, and favorable tax policies. As global interest intensifies, the UAE is on track to be a key place for family offices offering great chances for wealth management and growth in the years ahead.