Family-Owned Firms New Regulations: On Thursday, the Dubai International Financial Centre (DIFC) declared about achieving its new Family Arrangements Regulations, followed by a 30-day public consultation period.
The new regulations will deliver a robust foundation for the new DIFC Family Wealth Centre providing a structure and junction for global and regional family-owned businesses, private wealth, and ultra-high-net-worth individuals.
Jacques Visser, chief legal officer at DIFC, said that “DIFC has offered a supportive and dynamic environment for global and regional family-owned businesses and private wealth for about 20 years. Introducing these regulations will be an important step towards our commitment to getting the standards for excellence in the industry”.
He further added, “DIFC is proud to be at the front of a positive change and helping the family businesses maximize their contribution to our economy by focusing on accountability, stability, and transparency in these regulations. Apart from that, these regulations provide a comprehensive structure that will enable our clients to operate confidently, knowing that the highest level of legal and regulatory oversight protects their curiosities.
What is new in these regulations
The Family Arrangements Regulations guide family businesses in holding assets and updating in or from DIFC to support their legacy and succession to plan for future generations.
The regulations were framed for taking advantage of the recognition of family business structures in free zones like DIFC, and also the authority which was provided in the newly laid down UAE Decree-Law No. 37 of 2022, which stated to keep a unique family business register for the benefits and requirements provided to the family businesses under the UAE Family Business Law.
The regulations replace the previous Single-Family Office Regulations and DIFC Single Family Office authority with a new rule that can serve more than one family, eradicating the requirements to register as a designated nonfinancial business with the Dubai Financial Services Authority (DFSA), which was an independent regulator of financial services operated from DIFC.
The new authority allows families to manage their businesses and preserve wealth through legacy and succession planning in the DIFC, which was executed based on the criteria of good conduct across and beyond the UAE.
The regulations also established certification programs for family businesses and their advisors in DIF to support the advantages planned for family businesses in the UAE under the UAE Family Business Law. The primary aim of the certification is for the family businesses to stick to the principles of good conduct and to ensure the advisors adhere to high levels of quality and expertise when advising the families.
The report mentioned above states that replacing the previous single-family office authority with a new simplified scheme will help eradicate the need for registering with the Independent regulator of the DIFC.