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Single Family Office in Dubai

Single Family Office in Dubai by Johnson K.Rajan TEP


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Single Family Office in Dubai

For those families who want to manage their own affairs with confidentiality and control, a Single Family Office (SFO) would be an ideal organizational structure. A SFO typically manages a single family’s own financial, real estate, insurance, trusts & holding structures, philanthropy, taxes, legal, education, lifestyle, concierge and everything else the family would want to be done in an efficient manner.

Key features of an SFO are as below;
  • The SFO manages varied types of assets and investments which could be both business and personal.
  • The founder of the SFO usually lays down the guidelines or draws a family charter on the management of the family’s affairs with the use of legal and fiduciary professionals.
  • All decisions are taken with a long-term focus for multiple generations of the family
  • Having an SFO brings about centralization of decision making for the family while also ensuring the continuity of business and transfer of wealth to future generations.

Some major advantages of an SFO could be listed as follows;

  • Coordinated and integrated management of all interests related to the family
  • Control, privacy and confidentiality
  • Total understanding and focused efforts to meet the needs and requirements of the family keeping in mind the family values and vision for the future generation
  • Tailor made services as per the needs of the family
  • Possibility of having third party service providers on board
  • Management of risk and compliance

Over 70 percent of businesses in the region are family owned and only over 5 percent of such businesses survive to the fourth generation which is primarily due to lack of proper planning on all fronts that affect the family and its businesses. As families and their businesses grow customized services are needed through professional advice in protecting and securing their assets.

Structuring an SFO will depend primarily upon the objectives of the family, the jurisdiction from which it will operate and the various matters the family wants to manage. Usually SFO’s are structured as LLC’s;the SFO entity does not own any of the assets it manages; rather, it is a service entity that provides services on a contract basis.

Having a family office based out of Dubai has great advantages from a tax perspective, infrastructure, ease in operations, geographic location, regulatory framework etc…Let’s look into the two SFO licenses offered in Dubai. The first being the DIFC and the second is at the DMCC where SFO was recently introduced as a licensing category.

The criteria for families to have a SFO at DIFC and DMCC are as follows;
  • 100% of the ultimate beneficial ownership of the SFO should be members of a same family.
  • 100% of the principal beneficiaries / controlling individuals need to be members of the same family when the ultimate beneficial owner is a trust or other holding entity.
  • Such an SFO company cannot provide services to third parties; it manages a single family’s assets only;
  • Family’s minimum net wealth required is USD 10 million at DIFC & USD 1 million at DMCC.
  • The SFO Company needs to have a physical presence within the DIFC or a registered address within DMCC.

Intuit’s Private Client & Family Advisory services include assistance in setting up, administering, providing professional directors along with compliance, book keeping, accounting and audit of an SFO in Dubai.

The author is a professional trust estate practitioner with several years of experience in advising clients on estate planning and structuring offshore trusts, foundations and holding companies.

For more details reach us at [email protected]

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