Dubai’s DIFC enacts new regulations for family-owned businesses, UHNWIs

Dubai International Financial Centre (DIFC) has enacted the DIFC Family Arrangements Regulations, following a 30-day public consultation period.

Bolstering the new DIFC Family Wealth Centre, the regulations have set a framework and hub for global and regional family-owned businesses, ultra-high-net-worth individuals (UHNWIs) and private wealth.

Jacques Visser, chief legal officer at DIFC, said, “With a focus on transparency, accountability, and stability, these regulations provide a comprehensive framework that will allow our clients to operate with confidence, knowing that their interests are protected by the highest level of legal and regulatory oversight.”

The Family Arrangements Regulations provide detailed guidelines for family businesses holding assets and operating in or from DIFC, in support of their succession and legacy planning for future generations.

The regulations were drafted to take advantage of the recognition of family business structures in free zones, and the authority provided in the newly enacted UAE Decree-Law No 37 of 2022 (UAE Family Business Law) to keep a special family business register to opt into the requirements and benefits that will be provided for family businesses under the UAE Family Business Law.

What the new DIFC Family Arrangements Regulations entail

The key aspects of the Family Arrangement Regulations are:

• • The regulations replace the previous Single-Family Office Regulations and DIFC Single Family Office regime with a new Family Office regime that can serve one or more families, eliminating the requirement for a family office to register as a designated non-financial business or profession (DNFBP) with the Dubai Financial Services Authority (DFSA), the independent regulator of financial services conducted in or from DIFC.
  • Multifamily offices will, however, require authorisation and licensing by the DFSA if they provide financial services to multiple families by way of business. Single Family Offices currently registered as a DNFBP with the DFSA will only be able to de-register with the DFSA in a manner to be prescribed by the DFSA in due course.
  • The guidelines 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 under the UAE Family Business Law.
  • The primary objective of the certification regime is for family businesses to adhere to principles of good conduct and governance, and for the accreditation regime to ensure that advisors adhere to high levels of quality and expertise when advising families.

#DIFC is pleased to announce the enactment the new Family Arrangements Regulations that provides guidelines for family businesses’ involvement with DIFC.

Read more: https://t.co/Tks2GR2EJV pic.twitter.com/D0sGwcS44v

— DIFC (@DIFC) February 1, 2023

Recent regulations at DIFC

In December, DIFC Courts also announced the launch of a new set of specialised rules for its recently formed Digital Economy Court division.

In addition, leading international judicial experts have been recruited to oversee and operate the new court’s digital infrastructure and service capabilities.

Newly launched platform

In recent news, DIFC  launched the DIFC Metaverse Platform. The platform is aligned with the Dubai Metaverse Strategy, which aims to add $4bn to Dubai’s GDP, support 40,000 virtual jobs by 2030 and attract 1,000 companies specialised in blockchain and metaverse technologies, according to the state news agency WAM.

Read: Dubai’s DIFC unveils ‘Metaverse Platform’

The platform includes three key initiatives. The first is an accelerator programme with a dedicated physical studio for metaverse technology that will promote the development of a creator community and venture building. It will address the metaverse policy development and legislation on open data, digital identity and company law frameworks in the metaverse.

The initiative will also foster the development of a metaverse community that will explore ways to enhance the metaverse experience for customers.