Analyzing the establishment of a micro-family office in Dubai: a new choice for wealth management for high net worth families

With its unique legal structure, tax advantages and flexible governance model, Dubai is becoming the preferred location for global growing families to set up micro-family offices ("micro-family offices") at a time when global asset allocation and family wealth inheritance demand is surging. This new home-based model, with "light assets, strong structure and high privacy" as its core, is reshaping the underlying logic of family wealth management.

Core advantage

1. Legal framework innovation:

the family foundation structure launched by the Dubai International Financial Centre (DIFC) combines the advantages of corporate law and trust law to provide families with innovative tools for asset segregation, risk segmentation and corporate structuring. This architecture not only has the asset protection and inheritance functions of a traditional family office, but also achieves risk isolation through legal entities to ensure that family assets are completely isolated from the founder's personal assets.

2. Significant tax benefits:

family offices registered with DIFC and eligible are fully exempt from personal income tax, capital gains tax and corporate income tax. In addition, Dubai does not mandate the disclosure of ultimate beneficiary (UBO) information, providing the family with the highest standards of privacy protection in the world.

3, the establishment of low cost:

compared to traditional family offices, Dubai Micro Home Office replaces manual teams with legal structures and replaces excessive human governance with compliance tools, significantly reducing set-up and operating costs.

4. High operational flexibility:

the family entity is not required to have a major business operation in DIFC, but is required to demonstrate a physical presence in the UAE and to appoint a corporate service provider as its registered agent in DIFC. This flexibility allows the family to flexibly adjust the operating model of the family office according to the global business strategy and future development vision.

Typical architecture and operation mode

dubai Micro Home Office usually uses a three-tier structure of "Foundation Holding Company Trust:

1. Top-level governance structure (foundation):

as the foothold of the family charter, governance system, equity control and beneficial right design, the foundation provides a "hidden and orderly" governance platform for the family. It does not affect the premise of compliance, the maximum protection of privacy, to ensure that after the death of the founder of the assets will be distributed in accordance with the wishes of the founder.

2. Middle-level asset structure (holding company):

as an overseas asset holding vehicle, the holding company integrates equity, real estate, securities and new assets. This structure allows the family to flexibly manage global assets and diversify and globalize their asset allocation.

3, the underlying inheritance mechanism (trust or will structure):

by constraining behavior, setting triggers, and isolating risk, the trust or will structure provides a flexible inheritance tool for the family. They can ensure the integrity and stability of family assets in the process of intergenerational transmission.

Identity Planning and Global Resource Docking

to set up a micro-family office in Dubai, family members can also apply for a 10-year Golden Visa in the UAE, covering three generations of the family and an unlimited number of domestic helpers. This visa policy not only provides long-term residence for the family, but also facilitates the mobility and resource allocation of family members around the world. In addition, as one of the top ten financial centers in the world, Dubai has rich financial resources and professional service institutions, which can provide all-round support and services for family offices.

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