Opening a Family Office in Dubai: Your Comprehensive Guide

Dubai has become a premier destination for family offices for entrepreneurs and affluent families. By setting up a family office in Dubai, individuals and families can benefit from a tailor-made wealth management approach, centralised administration, and access to diverse investment avenues. With its thriving business environment, strategic location, favourable tax regime, robust economy, stability, and world-class infrastructure, Dubai provides a solid foundation for opening a family office.

In this article, we’ll look at the following:

  • Brief overview of the concept of a family office
  • Understanding family offices
  • Why Dubai?
  • Steps for setting up a family office in Dubai
  • Key benefits of establishing a family office in Dubai
  • Successful family offices in Dubai
  • Opening a family office with Trade License Zone

Brief overview of the concept of a family office

Family offices are private wealth management entities that cater to affluent families or individuals. These offices provide comprehensive services, including investment management, financial planning, estate planning, and administration tailored to the unique needs of wealthy families or individuals.

Family offices have gained prominence in Dubai thanks to the emirate’s thriving business environment and strategic location, as well as its appeal as a global financial hub, favourable tax regime, and business-friendly regulatory framework.

Understanding family offices

A family office in Dubai is a specialised entity that provides comprehensive wealth management services to affluent families and individuals in the UAE. Family offices in Dubai go beyond traditional financial services, offering personalised solutions that align with the specific goals and values of the families they serve. These offices serve as a centralised hub to handle the financial, investment, and administrative needs of high-net-worth individuals (HNWI) and their families.

Types of family offices: Single Family Office (SFO) and Multi-Family Office (MFO)

In Dubai, there are primarily two types of family offices: Single Family Offices (SFOs) and Multi-Family Offices (MFOs). SFOs cater exclusively to a single wealthy family, providing bespoke services tailored to their unique requirements. MFOs extend their services to multiple affluent families, allowing for cost-sharing and resource-pooling among clients.

Various Free Zones provide a platform to open an SFO or several family enterprises under a single trade license with MFO business setups in the UAE.

An SFO can be established as a Free Zone Company and does not need to be registered with the Designated Non-Financial Business or Profession (DNFBP) under the newly launched Dubai International Financial Centre’s (DIFC) Family Arrangements Regulations. In contrast, an MFO must register with the DNFBP with the Dubai Financial Services Authority (DFSA).

The role and functions of a family office

Family offices in Dubai play a pivotal role in managing and preserving the wealth of affluent families. Their functions include traditional financial advisory services, investment management, asset allocation, financial planning, tax optimisation, estate planning, philanthropy, and family governance. By employing skilled professionals with expertise in various fields, family offices in Dubai provide comprehensive and tailored solutions to ensure the long-term financial well-being of the families they serve.

Why Dubai?

Highlighting the strategic location of Dubai

Dubai’s strategic location at the crossroads of Europe, Asia, and North Africa positions it as a prime global business hub. It is a gateway for international trade and investment, offering unparalleled connectivity to key global markets. The city’s world-class infrastructure, including airports and seaports, facilitates seamless travel and logistics, making it an ideal location for family offices seeking a strategic advantage in managing global wealth.

Discussion of Dubai’s robust economy and stability

Dubai boasts a robust and diversified economy that has demonstrated resilience over the years and shows no sign of slowing down in the future. The city’s commitment to economic diversification, focusing on the finance, trade, tourism, and real estate sectors, has created a stable and robust business environment. Dubai’s proactive government policies, investor-friendly regulations, and world-renowned legal framework ensure a secure and transparent business climate, instilling confidence among family offices seeking long-term stability and growth.

The benefits of Dubai’s tax regime for family offices

One of the key attractions for family offices in Dubai is the favourable tax regime. The UAE is known for its tax-efficient environment, with no personal income or capital gains tax. This enables family offices to optimise their wealth management strategies and maximise returns on investments. Dubai also offers a range of double taxation avoidance agreements, providing further benefits and flexibility for international operations and cross-border investments.

Steps for setting up a family office in Dubai

Step 1: Partner with Trade License Zone

If you want to open a family office in Dubai, you should partner with a company formation expert such as Trade License Zone. We will walk you through the steps required to open the office, get your family office license and other requirements, and liaise with government agencies and municipalities for approvals to launch your business.

Step 2: Choosing a family office name

Trade License Zone can assist you in choosing an appropriate name for your family office. Following the UAE’s Registry Office guidelines, your business name should not contain offensive or blasphemous language and should not reference Islam or Allah. If you wish to include your name in the company name, it must be written in full and not abbreviated to just initials or surname. You are required to submit three names in order of preference, and the Registry Office will verify which one is available.

Step 3: Select a business jurisdiction

Dubai offers two primary business jurisdictions, each with business, financial and legal frameworks for business entities to flourish: Free Zones and Mainland companies.

The city has over 40 Free Zones, each catering to specific industries and offering tax benefits, support services, and other advantages. For family offices, a Free Zone setup allows the family to hold 100% of the business entity and its profits and boasts zero income or corporate tax regimes.

A Mainland company can trade directly within the UAE without the need for a branch office, unlike Free Zone companies that require more steps to be eligible to trade within the UAE.

Which one is best for a family office setup? Each has its benefits, but you’ll need to understand both types before making an informed decision.

Choosing the most suitable setup for your company can be challenging, but the experts at Trade License Zone can guide you through the process.

Step 4: Choose your trade license and business activities

As we’ve mentioned, trade licenses are compulsory for all businesses in the UAE. Trade licenses determine the types of services and operations companies can offer. There are specific trade licenses applicable to family offices to choose from for managing family wealth and investment services.

You must select business activities related to your family office’s services. A company may only conduct business activities as selected for its trade license. If a business fails to do so, it may face severe penalties from UAE’s authorities.

It is essential to consult a trade license expert, such as Trade License Zone, to guide you in choosing the most suitable one for your business entity.

Step 5: Apply for your family office license

You must apply to the DIFC, the DFSA, and the DNFBP in the case of MFOs. The selected Free Zone (should you opt that way) will also assist with these approvals.

Once you’ve completed the previous steps, you’re eligible to apply for a family office trading license to open a family office in Dubai.

Key benefits of establishing a family office in Dubai

Customised wealth management and investment strategies

Establishing a family office in Dubai provides the opportunity for tailored wealth management and investment strategies. With a dedicated team of professionals well-versed in the local market dynamics, regulations, and investment opportunities, family offices in Dubai can design and implement personalised strategies that align with affluent families’ unique goals and risk appetites. This level of customisation allows for optimised portfolio management, asset allocation, and investment decision-making, ensuring the preservation and growth of family wealth.

Understanding the benefit of centralised family wealth management

A significant advantage of setting up a family office in Dubai is the centralisation of family wealth management. By consolidating financial planning, investment management, and administrative functions under one roof, family offices provide a holistic approach to managing family wealth. This centralised approach streamlines operations, enhances efficiency, and facilitates better coordination and communication among family members, ensuring a unified vision and strategy for wealth preservation and succession planning.

Highlighting the networking and co-investment opportunities in Dubai

Dubai’s vibrant business ecosystem offers numerous networking and co-investment opportunities for family offices.

The city is home to a diverse community of high-net-worth individuals, entrepreneurs, and investors worldwide. Family offices in Dubai can leverage this network to forge strategic alliances, explore joint investment ventures, and access exclusive deals.

The collaborative environment fosters knowledge sharing, idea generation, and the potential for wealth creation through synergistic partnerships, enhancing the overall investment prospects for family offices.

Successful family offices in Dubai
There are many successful family offices in Dubai, including the following:

  1. HB Investments
  2. Kaaf Investments
  3. El Daba Holdings
  4. Al Zarooni Emirates Investments
  5. Kasamar Holdings

Opening a family office with Trade License Zone

Opening a family office in Dubai provides numerous benefits for affluent families or individuals. The strategic location, robust economy, and stability of Dubai and the UAE offer a strong foundation for wealth management, preservation, and investment.

The emirate’s favourable tax environment means family offices can optimise financial strategies and maximise investment returns.

Partner with Trade License Zone to set up your family office in Dubai. With Trade License Zone, business setup and trade license application are streamlined. We help you save time and money and eliminate the frustration of unnecessary delays or rejections.

Getting started is as simple as sending us basic information about your company and family office needs, and our expert team will then take care of the rest for you.

We’ll manage your company registration and trade license application and liaise with various government authorities to register your family office so you can get started soon. It really is that straightforward.

Contact us to get a personalized quotation based on your business activity