Dubai as a destination for Family Offices
The UAE, particularly Dubai, is experiencing a significant influx of high-net-worth (HNW) and ultra-high-net-worth (UHNW) clients. This trend is driven by both residency and relocation benefits, as well as advantageous wealth structuring opportunities.
Dubai's strategic location between East and West, coupled with excellent travel connectivity, makes it an ideal base for globally mobile families and their wealth management teams. The city offers a low-tax environment, a capital-friendly climate, and a proportionate and welcoming regulatory framework for single-family offices. Furthermore, Dubai provides connectivity to other family offices and private capital investors, along with access to high-quality professional service providers.
Options for Establishing a Single Family Office in the UAE
Dubai International Financial Centre (DIFC)
The DIFC is a specialised financial centre with its own regulatory environment. It hosts leading private banks, wealth managers, and professional service providers, including Cavenwell. Key features include:
- Commercial Licensing: Companies can be commercially licensed as a Single Family Office without additional regulatory or registration requirements from the Dubai Financial Services Authority (DFSA).
- Services: Capability to provide wealth management, asset management, concierge services, or other legal, accounting, or consulting services to a single family.
- Asset Requirement: A minimum net asset requirement of $50 million USD, which can be held by the family office itself, or in trusts, foundations, or holding companies within the DIFC or offshore.
Dubai World Trade Centre (DWTC)
The DWTC is a prominent free zone known for its business-friendly environment. Key features include:
- Capital Requirement: A minimal capital requirement of AED 500,000 (approximately $136,000 USD) in proven liquid assets.
- Proximity: Close proximity to the DIFC.
- Services: Ability to provide wealth management, asset management, concierge services, or other legal, accounting, or consulting services to a single family.
- Multi-Family Offices: Options for establishing multi-family offices also exist.
- Free Zone Benefits: Enjoy benefits including 100% foreign ownership, eligibility for qualifying freezone person tax status and non-family ownership of the SFO.
Dubai Multi Commodities Centre (DMCC)
The DMCC is a leading free zone for commodities trade and enterprise. Key features include:
- Services: Capability to offer wealth management, asset management, concierge services, or other legal, accounting, or consulting services to a single family.
- Asset Requirement: A minimum net asset requirement of $1 million USD, which can be held by the family office itself, or in trusts, foundations, or holding companies within the DIFC or offshore.
- Free Zone Benefits: Enjoy benefits including 100% foreign ownership, eligibility for qualifying freezone person tax status.
Cavenwell's Insights
We are witnessing an increasing number of clients pursuing family office structures in Dubai. Even when established outside of the DIFC, in free zones such as DWTC and DMCC, these structures can be combined with a DIFC Foundation or Prescribed Companies as ultimate holding vehicles for the family office entity. Some family office regimes allow part of the Single Family Office (SFO) entity to be owned by non-family members, which can be beneficial for equity incentives to attract and retain top talent.
The family office entity may own and manage assets directly or, more commonly, act as an asset manager, investment advisor, or administrator to family holding structures. These structures can be set up in the DIFC as well as prominent offshore private wealth jurisdictions, including Jersey and the Cayman Islands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.