Unlocking Business Success: Lemon Consultech Blog
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Unlocking Business Success: Lemon Consultech Blog

  • The new regime enables families to manage their businesses and preserve wealth through succession and legacy planning within DIFC.
  • The regulations also establish certification and accreditation programmes for family businesses and their advisors in DIFC to support benefits and incentives planned for family businesses in the UAE.
  • The certification regime aims to promote good conduct and governance among family businesses, while the accreditation regime ensures that advisors adhere to high levels of quality and expertise.

Dubai’s Family Business Laws have recently undergone a significant transformation with the announcement of the DIFC Family Arrangements Regulations. These regulations were passed by the Dubai International Financial Centre (DIFC), the leading global financial hub in the MEASA (Middle East, Africa and South Asia) region in early February of this year. The new regulations signify the opening of the first Global Family Business and Private Wealth Centre in the DIFC, following a 30-day public consultation term.

This initiative is a significant milestone in the DIFC’s 2030 plan, which aims to double its size and economic contribution to Dubai’s GDP. The new regulations offer a regulatory framework and a central location for international and regional family-owned businesses, ultra-high-net-worth individuals, and private wealth. The plan further reinforces Dubai’s role as a crossroad for top financial institutions and businesses worldwide, promoting steady economic expansion.

The DIFC Family Arrangement Regulations provide comprehensive provisions for the engagement of family businesses with DIFC. They remove the requirement for a Family Office to register with the Dubai Financial Services Authority (DFSA) as a DNFBP (Designated Non-Financial Business or Profession) and replace the Single-Family Office Regulations and DIFC’s Single Family Office regime with a new Family Office regime. This regime can offer services to a family unless providing such services to more than one family by way of business.

The new regulations outline the arrangements that families can make in the DIFC for the better running of their companies, the preservation of their wealth, and the planning of their succession and legacy. They also establish certification and accreditation regimes for family enterprises and their advisers in the DIFC, in accordance with the UAE Family Business Law, to promote the anticipated benefits and incentives for family businesses in the UAE.

The UAE Government published the Family Companies Law on October 3, 2022, with the aim of creating a comprehensive and understandable legal framework to control family business ownership and management in the UAE. Family-owned enterprises are essential to the economic success and future growth of the UAE, with up to 90% of private companies in the country being family businesses, accounting for roughly 70% of the nation’s GDP.

The Family Companies Law is designed to help family businesses with succession planning, as only 10 to 15% of family businesses survive into the third generation. The legal framework must give families the necessary resources and flexibility to ensure that succession is carried out smoothly and effectively to meet their goals. This law became effective on January 3, 2023, with financial free zones like DIFC establishing legal frameworks so that families may devise a succession plan that accomplishes their goals.

There is no universally agreed-upon definition of what a family business is because the term is used in many different contexts. According to the Family Companies Law, a Family Company is a business formed in line with the UAE Companies Law in which individuals who are members of a single-family possess the majority of the company’s shares. This Family Company is registered in the special register mentioned above.

It is noteworthy that the DIFC Authority’s definition of a “Single Family” may differ from the definition provided in the forthcoming Cabinet Resolution. According to the DIFC Family Office Regulations, a family qualifies as a “Single Family” if it consists of one person, a group of people who are all bloodline descendants of the same ancestor, or the couple who makes up that group (including widows and widowers, whether or not remarried).


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