Dubai's Financial Hub: A Magnet for Global Family Offices

Dubai is rapidly becoming a global hotspot for financial services, thanks to its thriving free zones like the Dubai International Financial Centre (DIFC). The latest numbers for 2024 show a 25% year-on-year rise in registered businesses, now totaling 6,920. This growth is largely driven by wealth and asset management firms, including a notable presence of hedge funds—75 in total, with 48 managing assets over USD 1 billion. The city is clearly committed to non-oil growth, with fintech and innovative tech activities surging by 38%.

The Rise of Family Offices in Dubai

Family offices (FOs) are gaining traction in the United Arab Emirates, particularly in Dubai. The UAE is home to more than 75% of the region's family offices, with a significant concentration in Dubai. These offices manage a staggering USD 1.2 trillion in assets, with the DIFC alone hosting over 120 family structures.

Amit Jain from Ashika Global Family Offices notes that many of their Indian ultra-high-net-worth clients are looking to diversify into the UAE. Dubai is increasingly seen as a prime location for succession planning and global investments, surpassing even London in popularity for Indian family offices.

Why Dubai?

According to Bhaskar Dasgupta from Sun Family Office Foundation, Dubai has always been a hub for traditional family offices from the Gulf and Indian subcontinent. Recently, it has also become attractive for offices from Asia, Europe, and Africa due to various factors.

Dubai's appeal lies in its business-friendly environment, diverse society, and favorable policies like zero taxes and long-term residency options, including the 10-year golden visa. Sandeep Jadwani of H Capital highlights these advantages, along with access to global markets and ease of setting up operations.

Structuring and Investment Opportunities

Dubai offers a variety of structuring options for family offices, tailored to their wealth and asset needs. The DIFC provides robust regulatory protection, while the 2023 Family Arrangements Regulation allows more flexibility. For those seeking lower costs, foundation and prescribed company models in the DIFC, along with licenses from the Dubai World Trade Centre, are viable options.

Family offices contribute significantly to Dubai's economy, investing in real estate and priority sectors like tech startups and climate initiatives. Sharia-compliant solutions are available for GCC-based offices, while others explore opportunities in the US, UK, and Indian markets.

Investing in the Future

A common theme among family offices is investing in startups, particularly those aligned with their core businesses. This includes sectors like fintech, prop-tech, and e-commerce. Startups that address tangible business challenges are more likely to attract funding, with developed tech solutions preferred over early-stage ideas.

Despite significant progress, there is still room for growth. The financial landscape in Dubai is becoming more sophisticated, aligning with developed markets. The city is also working on creating more affordable free zones and mainland options to encourage further expansion.

Family offices are set to play a crucial role in Dubai's non-oil economy and diversification efforts. As wealth is transferred to the next generation, investments in future technologies and local infrastructure are expected to grow, supporting Dubai's ambitious "D33" economic agenda to double its economy by 2033.