The New Hub For Single Family Offices Is UAE

If you are a wealthy person, it is better to go to the United Arab Emirates. And if you want to become a super wealthy individual – it is a must-do.

This is how we can briefly describe how attractive destination the Emirates is for ultra-high-net-worth individuals or families.

In 2021, the wealth of people in the UAE increased by 20%. Out of this growth, 41% was contributed by high-net-worth individuals and Family Offices. Projections are even more optimistic: that share to rise to 46% in 2026, and total financial wealth to reach an impressive $1 trillion.

Add to this some of the UAE’s now classic advantages such as its attractive business environment, quality regulatory framework, diverse investment opportunities, world-class administrative services, and the destination becoming a magnet for many High Net Worth and Ultra-high Net Worth Individuals, and wealthy families.

Seven Emirates that attract tens of thousands of Millionaires

According to Henley & Partners, which tracks the migration of the world’s wealthy people, 110,000 people in the UAE currently have a net worth bigger than $1 million, with 300 of them worth more than $100 million. According to a recent report, the UAE is expecting an inflow of 4,500 millionaires in 2023 alone. A significant number are Indian Family Offices that are attracted by the relaxation of business ownership rules and residency options. Additionally, the country has become home to 20 billionaires in recent years.

This is the reason why the number and size of Single Family Offices in the country are continuously increasing. The latest survey by consultancy KPMG shows that 34% of them have 20 staff and another 37% have over 10 years of experience. Put another way, the UAE has an established asset management environment that is growing all the time.

“Middle East family offices are approaching 2023 with an educated outlook“, said Raajeev B. Patra, a partner and head of private enterprise at KPMG Lower Gulf. “Previously, many family offices focused heavily on investments and less on having a robust sophisticated operational infrastructure, but this trend has changed. The regulatory framework in the UAE more specifically has been a significant driver in attracting family offices to set up in the country“.

The UAE is actively positioning itself as an ideal destination for Family Offices. The country has been implementing favorable tax policies to lure Family Offices. With no estate and inheritance taxes in place, the UAE is a tax-efficient location for wealth management. The country is strategically located between Europe, Asia, and Africa, and has a thriving financial ecosystem that allows Family Offices to have access to a wide range of investment opportunities including popular asset classes such as private equity and real estate, the KPMG report added.

Dubai – the world’s financial Hub that is increasingly attractive to the wealthy People

No one will be surprised to hear that Dubai is where the most ultra-high-net-worth people and families have moved in the past few years. Many people prefer to manage their family business from this part of the world.

The city is home to many very wealthy people and families, and it has taken several steps to make it more appealing to Family Offices. Family Offices in the UAE can now work without registering with the Dubai Financial Services Authority as a “designated non-financial business or profession.” This is thanks to the new Family Arrangements Regulations from the Dubai International Financial Centre (DIFC). 

So, Family Offices in the area will no longer have to say who their shared ancestor was, where their money came from, or how much equity they have. The law in DIFC is built on English common law, which makes it easy for many foreign investors to understand and use.

The fact that 71% of Family Offices in the United Arab Emirates are in Dubai and only 29% are in the other 6 Emirates is not an accident. More than half of the companies manage portfolios worth between $250 million and $500 million, and another 20% handle portfolios worth between $2 billion and $5 billion. Another 7% are in charge of more than $5 billion in assets.

Top 3 of the Single Family Offices in UAE

A new report from familyofficehub.io confirms that most of the single-family offices in UAE are based in Dubai, but the top 3 you have are also from Abu Dhabi and Sharjah:

1) Daher Capital

Michel Daher started Daher Capital as a way for him to make private investments. After making Daher Foods, a very successful business that makes and sells food, in the 1990s. Michel Daher started investing in addition to running Daher Foods, which led to the creation of Daher Capital. Daher Capital is based in Dubai, and it deals in real estate, public stocks, and venture capital, among other things.

2) Sheikh Mohamed Bin Ahmed Bin Hamdan Al Nahyan’s (Abu Dhabi) private office.

The Al Nahyan family is one of the most important families in the Emirates because they run Abu Dhabi. Many of their family members have their own private offices where they do different kinds of investing. Sheikh Mohamed Bin Ahmed Bin Hamdan Al Nahyan’s private office spends most of its money on real estate and private equity. Sustainable technologies, healthcare, and agro-tech are where the family office puts most of its private equity money.

3) Al-Huraimel Investment

In the city of Sharjah, Al-Huraimel Investments is run by a single family. H.E. Issa Khalfan Al-Huraimel and his sons started it in 1988. Al-Huraimel Investments is focused on building homes and businesses in Dubai, Abu Dhabi, and Sharjah. The company also has other assets in the Middle East, including private equity and other types of businesses.

Working for Family Offices in UAE – Earnings and Benefits

With great investment and assets under management comes great responsibility, and with it, great financial perks for managers. KPMG research shows that the remuneration of various types of management staff is over $132,000 per year, with:

• Chief Executive Officers receive between $330,000 and $396,000, with up to 20% being from an annual bonus
• Chief Financial Officers receive between $132,000 and $330,000, with up to 150% being from an annual bonus
• Chief Investment Officers receive between $158,000 and $500,000, up to 40% being from an annual bonus
• Chief Operating Officers receive between $264,000 and $330,000, up to 40% being from an annual bonus

Separately, management personnel have several fringe benefits available such as private health insurance (69%), free flights home (54%), life insurance (43%), and several others such as travel expenses, retirement, housing, car, and fitness.

In the end, the United Arab Emirates has become a beacon for the ultra-rich. Their wealth will grow by 20% in 2021, mostly because of ultra-high-net-worth people and Family Offices. Projections show that this growth will continue, with the total wealth of the world hitting a staggering $1 trillion by 2026. The UAE has a lot going for it, including a good business climate, a strong regulatory framework, and many different investment chances.

Also, the UAE has been working hard to present itself as a great place for Family Offices. This is shown by the fact that it has good tax policies and is strategically located between Europe, Asia, and Africa.

Family Offices can invest in a wide range of things, such as private equity and real estate because the country’s banking system is strong. In a world that is changing quickly, the UAE continues to strengthen its position as the new global hub for Family Offices. It offers unmatched growth potential and a quality of life that appeals to the richest people in the world.