UAE – Dubai as a destination for setting up Single Family Offices
Updated: Jul 29
Dubai has in recent times taken steps to bolster its position as a forward-looking jurisdiction for set up of Family Offices, Trusts and Foundations.
The key purpose of this article is to explore the different options available in the Emirate of Dubai for business succession planning and how Dubai is developing itself as the preferred jurisdiction in this region family offices, trust and foundations. While there are more than 20 different designated economic zones (“Free Zone”) in Dubai alone, for the purposes of this article we have relied on a snap analysis by comparing the options across the main Free Zones in Dubai including the Dubai Multi Commodities Centre (“DMCC”), Dubai International Financial Centre (“DIFC”) and Dubai Word Trade Centre (“DWTC”).
Top 6 reasons for choosing Dubai as the set up jurisdiction
Global destination with more than 90 airlines offering connectivity across 200 international destinations with more than 80 million passengers passing through Dubai annually.
Top ranked telecom infrastructure with all major tech and digital corporates.
Currency pegged to the dollar with strong financial resilience and economic fundamentals with highly competitive tax regime.
Forward looking independent federal and local government authorities with credible Courts and thriving legal system.
World leader in COVID-19 pandemic resilience and crises management.
Over 200 nationalities in Dubai with a diverse pool of job seekers for any organisation to source its work force from.
While we have picked the above as our top 6 favourite reasons for selecting Dubai there are a myriad of other awards and achievements Dubai has accomplished over the years which make Dubai a prime destination for family business owners.
Depending on the Free Zone, family corporations can benefit from setting up in any of the recommended Free Zones which would then allow the family business to use the Single Family Office (“SFO”) activity as a platform for providing wealth management, asset management, accounting, concierge & back-office support for a group of family businesses and ultimate beneficial owners. Under the DWTC licensing framework, multiple family businesses are also able to combine resources under one license with Multiple Family Office (“MFO”) activity to benefit from economies of scale and sharing of overheads. Each of the Free Zones have their own minimum capital requirements, as of January 2022, the licensing costs from lowest to highest are DWTC, DMCC to DIFC. There are also restrictions with regards to control which must vest within the family with direct lineal descendants controlling between 50 to 100% of the family business.
Trusts & Foundations
For high-net-worth individuals with significant assets, the Trust and Foundations offering in Dubai is also an available option. The DIFC has its own laws and regulation on Trusts and Foundation which are based on common law principles with DIFC Courts maintaining jurisdiction over the DIFC entities. For DMCC and DWTC, the onshore federal law regarding trusts dictates the regulation on Trusts with the onshore UAE Courts reserving jurisdiction on such entities.
As a destination, Dubai remains a pre-eminent jurisdiction for entrepreneurs and multinationals however with the more recent legislative developments for family offices and succession planning Dubai has successfully positioned itself as the go to jurisdiction for SFOs and MFOs. Given the diverse options to explore under the various Free Zones, it is well recommended to seek specific advice on setting up a family office license in Dubai. Our Corporate-Commercial department has advised a number of groups on setting up SFOs in Dubai and is familiar with the license regime for such activities in Dubai and across the United Arab Emirates.