Setting Up a DIFC Family Office Guide

In the Dubai International Financial Centre or DIFC, a family office serves as a center?for handling the money of a wealthy household. It includes charitable giving, investments, estate planning, tax strategies, and wealth management.

The main aim is to protect and increase wealth for generations to follow while adhering to the family's principles.

Family offices are backed?by a solid regulatory and legal structure provided by the DIFC.

Recent changes to the DIFC Family Arrangements Regulations enhance family business administration and offer customized options to suit their particular needs. This allows for operational flexibility while guaranteeing adherence to international standards.

Who owns a family office?        

High-net-worth families who want to effectively monitor their assets and wealth usually own a family office.

In terms of DIFC family office ownership structure, a single family office is owned by the family members who share a common ancestor, usually no more than three generations. It is designed to meet the needs of one family.

Meanwhile, ownership of multifamily offices is split?among the participating families. Here, resources and knowledge are combined to offer services to several families.

DIFC Family Office Regulations        

The Dubai International Financial Centre has put in place a thorough legal system for family offices through the Family Arrangements Regulations.

The Dubai Financial Services Authority no longer requires single family offices to register as designated non-financial businesses or professions under the new family office rule.

The Family Arrangements Regulations set up procedures for resolving disputes through legally binding arbitration. It also?offers?guidelines for ethical management among family businesses.

These regulations seek to ensure local law observance while promoting inheritance planning and asset protection.

Along with replacing the previous single family office regime, the new regulations also give family offices a more simplified arrangement.

Both single and multifamily offices can now be established under a single set of rules.

It is possible for a family office to be organized as a foundation, partnership, private company, or a recognized business.

Notably, a DIFC Family Office?must have a sizable presence in the UAE albeit?is not obliged to execute?its main operations within the financial center.

DIFC Family Office Requirements        

How much wealth for a family office?

Families must have at least $50 million worth of?net assets so as?to be eligible for DIFC family office registration.

Assets owned by the family office directly or through different arrangements?like offshore structures, trusts, foundations, or holding companies in the DIFC may be subject to the minimum prerequisite.

Such?requirement guarantees that there's?enough money for sustainable family office operations and efficient administration of wealth.

The DIFC's regulations must be followed by the family office.

Steps for DIFC Family Office Setup        

• Choose between a single or multi-family office. The decision will impact organizational structure and?focus.
• Send in an application via the DIFC portal for preliminary go-ahead.
• Gather the required paperwork.
• Register the family office with the DIFC Registrar as soon as the initial nod is given.
• Being physically present in the DIFC is required.
• Create an administrative framework that describes what the family office's duties are?and how decisions are executed.
• Comply with legal requirements and keep accurate records.

DIFC Family Office Register        

The DIFC Registrar requires families to apply with comprehensive details about their members, entities, and wealth source.

Due diligence is necessary to validate ancestral links and the ultimate heirs.

Family offices in the DIFC are typically required to have office space. However,?if the family has a significant presence in the UAE and designates a corporate service provider to serve as its registered agent, such requirement may be lifted.

Since the Dubai International Financial Centre offers a safe?environment for managing wealth, investments, and estate planning, many affluent families are opting to establish family offices there.

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me ([email protected]) or WhatsApp (+44-7393-450-837).

This includes if you are looking for a second opinion or alternative investments.

Some of the facts might change from the time of writing, and nothing written here is formal advice.

For updated guidance, please contact me.