The UAE is a global hub for family businesses. It is estimated that around 90% of the country’s organizations are family-owned. Together, these businesses contribute as much as 60% to the country’s GDP and 80% of its workforce.
To meet this demand, Dubai makes it easy to establish and operate a family office. These legal entities, designed to meet the specific needs of family-owned operations, allow for easy preservation, succession and management of family assets.
Dubai International Finance Centre (DIFC) is a popular location for such businesses thanks to its clear and comprehensive legal frameworks, world-class facilities and seamless incorporation and management processes.
So, if you’re looking to relocate your existing family business or wish to establish a new one in the UAE, below is an overview of how to start a family office in DIFC.
What is a family office?
In short, a family office is a private entity that allows families to incorporate, manage and grow their businesses interests, financial assets and general wealth. Designed specifically for family-owned and -run enterprises, it incorporates specific and tailored financial and administrative support for high-net-worth families.
As well as making it easier to oversee day-to-day financial affairs, family offices also help to streamline processes such as wealth and asset transfer, inheritance and tax planning.
How to start a family office in DIFC: Step by step.
DIFC offers several types of family office structures and the process of setting up differs slightly for each. Whatever your specific requirements, the expert team at Creative Zone can guide you through the following steps to ensure a fast and hassle-free way to start a family office.
Step 1: Eligibility
First we will check that you are eligible for DIFC’s family office services. This usually includes assessing the type and value of assets you wish to manage and ensuring that they are fully owned and controlled by family members.
Step 2: Legal structure
Next, you will need to decide on the type of legal structure that you wish your family office to take. This could be a foundation, trust or private limited company. The Creative Zone team will take the time to understand your circumstances and requirements before advising on the most suitable approach.
Step 3: Initial approval
With the key early decisions out of the way, you are ready to apply to DIFC for initial approval. Once again, the Creative Zone team will guide you through this step.
Step 4: DIFC registration
Once you have submitted your application for initial approval, you can start the process of completing your application to register with DIFC. However, you should not submit your application until you have confirmation from DIFC that you initial approval has been granted.
The documents required at this stage will depend on your legal structure and planned activities, but it may include proof of family ownership, confirmation of minimum net worth requirement, and director or shareholder details.
Step 5: Office space
Some DIFC family offices require physical premises within the jurisdiction. DIFC offers several office space options, including flexi-desk services and private offices.
Step 6: Banking
If you do not already have one, you will require a UAE corporate bank account to manage family assets in the country. There are many local and international options available including Standard Chartered and Emirates NBD.
Creative Zone has strong relationships with many financial institutions in the UAE and can advise on the ones most suited to your family’s requirements.
Types of family offices in DIFC
DIFC offers several appropriate structures for managing family businesses and financial affairs. These include family office, foundation, holding company, managing office, prop investment firm and prescribed companies.
The two most popular are:
Prescribed Company
This is a passive company structure designed to ring-fence assets and liabilities from financial and legal risk. These are classified as holding companies and therefore can only be used to hold and manage assets rather than conducting business activities.
Active Enterprise
This is a commercial structure that allows families to manage business activities more effectively. As well as holding companies, they are also available as managing offices and proprietary investments. Active enterprises can have employees providing they have a physical office space withing DIFC.
Benefits of starting a family office in DIFC.
Asset protection
As any assets held within a family office can be isolated from personal liability, such setups offer a great deal of protection against financial charges and legal challenges. All assets in a DIFC family office are protected by its international best practice procedures and regulations.
Tax planning
As DIFC levies 0% tax on both corporate and personal income, it is an attractive jurisdiction for wealth management and asset holding.
Trust
DIFC is one of the most trusted jurisdictions in international finance. Thousands of financial institutions, businesses, families and wealth management firms trust the centre to protect and grow their assets.
Partner network
Family offices registered in DIFC have access to its large and prestigious partner network of international financial institutions, wealth managers and investment advisors.
Tailored support
The DIFC Family Wealth Centre (DFWC) provides best-in-class, tailored services to family businesses and high-net-worth families – helping them overcome challenges and manage wealth and assets.
About Creative Zone.
Starting a family office in Dubai can be a complicated process – particularly if you’re new to working in the UAE.
That’s why selecting the right partner is a critical step when looking to launch or grow a business out here. As the most trusted business setup advisor in the Middle East, Creative Zone has been empowering entrepreneurs, SMEs and high-net-worth families with comprehensive support since 2010. With a strong reputation for assisting businesses locally and globally, we offer a complete range of solutions for all your business setup needs.
When you work with us, you get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
We’re here to assist every step of the way. No matter your chosen activities, legal entity or visa requirements, we’re on hand with support, guidance and expertise. So, if you’re looking to lay the foundations for life in the UAE, Creative Zone is your ideal starting point.
Contact us today to kickstart your business in Dubai.
