UAE is proving to be such a magnet for world’s family offices

A lot of changing for family offices, and UAE is primed to take on more of them

The UAE has emerged as a leading hub for family offices looking to manage and preserve wealth across generations. A number of prominent families are strategically relocating their family offices to the UAE due to the favourable business climate, tax advantages, and world-class financial infrastructure.

According to a recent report, over two-thirds of family offices in the Middle East are expected to be based in the UAE by 2026, with financial wealth under management set to rise by nearly 50% in the next five years. This growth underscores how the country provides a strategic platform for global families seeking effective wealth management and succession planning.

A key factor driving the influx of family offices is the tax-friendly environment. For ultra-high-net-worth individuals managing multi-billion dollar fortunes, minimizing tax liabilities is a major priority. The UAE allows family offices to operate in a fiscally efficient manner, enabling generational wealth consolidation.

Also, the UAE offers top-tier lifestyle amenities coupled with premier healthcare and education options. The country’s infrastructure, luxury offerings, and recreational facilities make relocation attractive for family principals accustomed to sophisticated lifestyles.

Specialized wealth management services

In response to rising demand, the UAE has developed a sophisticated ecosystem of firms offering specialized wealth management expertise. For ultra-high-net-worth families, customized services are essential to manage complex multi-asset portfolios and navigate sensitive family dynamics.

Investment management is a core offering, with advisors creating tailored strategies aligned to each family’s investment philosophy, risk tolerance, and geographic asset distribution. Services include portfolio construction, manager selection, performance monitoring, and risk management.

Estate planning is another priority, requiring strategies that balance succession goals with family values. Effective estate planning can minimize tax burdens associated with intergenerational wealth transfers while avoiding conflicts over inheritance.

Compliance considerations

Family offices must navigate the country’s regulatory requirements. Recent enhancements have made this process more efficient. The DIFC introduced updated regulations that remove the need for single-family offices to register with regulators. This provides flexibility to serve multiple families under a multi-family office structure without licensing constraints.

Succession planning

For family offices in the UAE, succession planning is vital to ensure continuity and minimize disruptions when wealth and control transition to heirs. This process involves assessing the family’s capabilities, relationships, assets, and goals before designing governance structures, communication channels, and mentorship programs that prepare successors.

Key steps include auditing the family’s balance sheet, formulating policies and procedures, documenting processes, and identifying gaps that could derail succession.

Leaders must manage complex family dynamics sensitively yet decisively when implementing generational transitions. Ensuring unity and avoiding conflicts require proactive engagement with individual members to address concerns.

Pegging UAE currency to the US dollar helps minimize exchange rate risks associated with managing international investments and transferring wealth globally. This monetary policy brings currency stability to families handling assets, businesses, and heirs across multiple geographies. The UAE offers speed and efficiency in processes related to trade licenses, paperwork, and immigration. This facilitates the rapid establishment of family offices.

For multi-generational wealth preservation, the UAE provides the right mix of stability, security, and sophistication.

Johnson Rajan

The writer is Partner at IMC Group.