The Dubai World Trade Centre Authority (DWTCA), which deals with offshore licences for businesses, has announced new regulations to attract firms managing the fortunes of millionaires and ultra-high-net-worth individuals.
The emirate has been drawing a lot of interest from the world’s wealthy in recent years. During the first six months of the year, about 2,000 high-net-worth individuals (HNWIs) moved to Dubai, bringing the total number of millionaire population in the city to 54,000, according to New World Wealth.
In a statement on Sunday, DTWCA said their new regulations will encourage family businesses to establish single and multiple family office (SFO and MFO) licenses with the free zone.
The SFO rules will enable offshore entities, founded directly by members of a single family, to own and manage their collective wealth, assets, businesses and investments through incorporating a new free zone establishment (FZE) or free zone company (FZCO), subsequently licensed to operate from DWTCA’s designated free zone.
MFO rules will cater to international professional and wealth management and advisory service industry providers who are looking to operate and expand their market presence in the Middle East, North Arica and South Asia (MEASA) region.
DWTCA said Dubai has indeed emerged as one of the most popular cities in the world for ultra-wealthy families.
"The city's population of HNWIs rose 3.8 percent to 54,000 [in first six months of 2021]," the authority noted.
“The emirate’s business-forward outlook and low-risk environment make it an excellent prospect for single and multiple family offices, trusts and foundations."
About family offices
Family offices cater to ultra HNWIs, offering services such as wealth transfer, insurance and budgeting, among others.
Most family offices were established in the last 20 years, with more than half of the wealth generated by finance and insurance, manufacturing and real estate, according to a 2020 report by graduate business school INSEAD.
According to Helal Saeed Almarri, director general of DWTCA, family businesses have been resilient and are a “highly significant segment within today’s global economic landscape”.
“Following an exceptionally challenging year, family businesses worldwide have shown extraordinary resilience and agility, and are eager to diversify and expand into new markets,” Almarri said.
“DWTC Authority recognises the need for a specialised legal and regulatory framework that offers distinct flexibility and fundamental benefits for setting up single and multiple family offices in Dubai, providing an attractive environment that supports family offices to operate successfully.”
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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