New UAE wealth management law a welcome game changer

Family businesses that constitute an integral part of the UAE economy are now assured of a long life

  
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Image courtesy Dubai Media Office Twitter handle.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Image courtesy Dubai Media Office Twitter handle.

 

As the founder and chairman of a family business, I heartily welcome the decision taken last week by Sheikh Mohammed bin Rashid Al-Maktoum, the vice president and prime minister of the UAE and ruler of Dubai, to adopt a decree-law on the management of wealth. This futuristic law not only injects greater confidence into the UAE’s economy, it also protects wealth for generations to come and allows for the continuity of local businesses well into the future.

I built my group of companies on a shoestring budget during the 1970s. I began with a small rented office overlooking Dubai Creek that permanently reeked of fish. I could not afford a typewriter or a fax machine, only some steel furniture. I had no engineering portfolio to show prospective clients but, thankfully, after sitting around doing nothing for some months, we were entrusted with our very first project — the construction of a villa.

Today, I head an international conglomerate that umbrellas hotels, vehicle distributorships and rentals, education, real estate, and insurance. My companies are my life’s work and, in truth, although I have toyed with the idea of launching an IPO on several occasions, I have never gone through with it. I care deeply that they will live on as a family concern and as my eternal legacy.

The new law, which creates a legislative framework for businesses passed on to the second or third generations and are often in danger of collapse, goes a long way to allaying my concerns. Family businesses that constitute an integral part of the UAE economy are now assured of a long life. Providing businesses with long-term sustainability will also attract greater foreign direct investment.

Further, it gives individuals and companies the opportunity to sign a financial covenant that gives custodial authority to trusted persons or institutions to manage the growth and investment of funds. Various types of covenant are listed in the decree, among them being a charitable covenant, a covenant establishing retirement funds, and a covenant relating only to stock markets and securities.

A statement by the UAE Cabinet read: “The law provides capital owners with an integrated system that enables them to manage their wealth as a financial trust by competent and qualified persons or institutions.” It further confirms that some of the biggest beneficiaries of the new law will be family-owned companies, permitting owners to plan for the long-term future of their company’s assets.

According to a statement by WAM, the decree “falls within the government’s continuous efforts to enhance the efficiency of financial legislation and policies in the country and provides a competitive environment.” It will also “contribute to protecting capital, drawing foreign investments, creating a safe, business-friendly environment, and diversifying tools to protect wealth and catalyze the investment environment.”

Once again, the government of the UAE has proved that it rules with wisdom and a visionary outlook. Our leaders prioritize their people’s welfare and their nation’s growth over policies designed to keep them glued to their seats no matter what.

I feel privileged to call myself an Emirati. Whatever the challenges we face, mostly due to factors outside our control, such as the 2008 economic downturn that was born in the US and a deadly pandemic that was spawned in China, the UAE weathers these storms because its foundations are rock solid and its leadership is solution-oriented.

On a personal note, I can now sleep soundly in the knowledge that my companies, which have flowered from seedlings over the past 50 years, nurtured by hard work, dedication and the will to “try, try again,” will always be protected. My profound thanks to Sheikh Mohammed and all those involved with the drafting of this game-changing law.

  • Khalaf Ahmad Al-Habtoor is a prominent UAE businessman and public figure. He is renowned for his views on international political affairs, his philanthropic activity, and his efforts to promote peace. He has long acted as an unofficial ambassador for his country abroad.
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