Single Family Office – Dubai World Trade Centre Free Zone

In Brief:

1. The Dubai World Trade Centre Authority (“DWTCA”) recently issued Circular No 12 concerning the Rules and Regulations Regarding Single Family Office Activities within the Dubai World Trade Centre Free Zone (“SFO Regulations”) which provides high net worth families a new solution, to establish a Single Family Office, to secure, consolidate and manage their wealth portfolios from Dubai.
2. A Dubai World Trade Centre Single Family Office (“DWTC SFO”) may be established as a free zone establishment or free zone company in the Dubai World Trade Centre Free Zone (“DWTC”) with a licence to carry out the following activities:
3. Management of Professional Services such as but not limited to wealth, assets, investment, succession, governance, financial and/or legal affairs of a Single Family.
4. Provision of Administrational (Compliance, Secretarial etc.) - and/or Concierge Services - rendered to the same Family only.
5. ‘Family’ in the context of a ‘Single Family’ constitutes an individual or a group of individuals all of whom are lineal descendants of a common ancestor, provided each descendant is able to legally prove lineage with the common ancestor regardless of his nationality and includes family members, family business, family entity, family trust or foundation.

Ownership of DWTC SFO

A DWTC SFO can be established in the DWTC by members of a Single Family for the purpose of owning and managing the affairs and assets of the Single Family. 

All shareholders of the DWTC SFO must be members of the Family where:

1. 100% shareholding of the DWTC SFO must be held by Lineal Descendants of the Family; and
2. 100% Ultimate Beneficial Ownership (“UBO”) must vest with the Family.

Lineal Descendants shall include individuals that are:

1. direct blood line descendants;
2. legal spouses; and
3. legal children.

The DWTC SFO is not permitted to sell shares to any third-party non-family member to ensure that 100% shareholder structure and UBO requirements are retained within the Family (however, a transfer of shares within the Family is permissible).

One of the main requirements to establish a DWTC SFO is to provide evidence of UAE Dirhams five hundred thousand (AED 500,000) in liquid assets, held by the Single Family for a period of twelve (12) months prior to the application for establishment.

Management of DWTC SFO

To allow the Family the flexibility to manage the DWTC SFO board with the desired level of professional independence, the mandatory minimum controlling interest required to be held by the Family shall be 51% where:

1. DWTC SFO board must be at least majority controlled by the Family;
2. No single non-family board member shall have greater controlling interest than the largest individual Family shareholder; and
3. The general manager or CEO (being the highest decision making executive) of the DWTC SFO must be a Family member.

Conclusion/Recommendation: Hadef & Partners’ Corporate team can assist and advise on the regulatory requirements to establish a SFO in accordance with the SFO Regulations, and assist with the establishment of a SFO.