DIFC Family Office Setup Guide 2025: Wealth Structuring for UHNW Families

A second-generation family with shipping interests across the Gulf, real estate in London, and a growing tech portfolio in Singapore sat across from their advisors last year with a deceptively simple question: where should we put the centre of gravity?

The answer, increasingly, is Dubai—and specifically, the Dubai International Financial Centre.

The numbers tell part of the story. More than USD 8 trillion in private wealth sits across the Middle East, Africa, and South Asia. Over 55,000 high-net-worth individuals call Dubai home. But statistics miss the texture of what's actually happening: families who built wealth across multiple jurisdictions are now consolidating oversight in a single, strategically positioned hub. The DIFC has become that hub.

This guide walks through what establishing a family office in the DIFC actually involves—the regulatory realities, the structural choices, the governance questions that matter, and the mistakes we see families make repeatedly.

What a DIFC Family Office Actually Does

At its core, a DIFC family office is a licensed entity registered with the DIFC Registrar, dedicated to managing a family's wealth, investments, and legacy planning. But that definition undersells what these structures accomplish in practice.

Think of it as the operational backbone of a family's financial life. Investment oversight, yes—but also real estate administration across multiple countries, succession planning that accounts for different legal systems, philanthropic coordination, tax structuring, and the mundane but essential work of consolidated reporting. One dashboard. One team. One jurisdiction with legal certainty.

Under DIFC rules, a "family" means individuals descended from a common ancestor, extending up to three generations. This shapes who can benefit and how governance must be structured.

The services typically include:

• Investment administration — portfolio management, asset allocation, monitoring across asset classes
• Real estate oversight — managing property holdings from acquisition through disposal
• Succession planning — structuring wealth transfers and preparing the next generation
• Philanthropic coordination — charitable giving strategies, foundation management, impact investing
• Financial administration — accounting, tax planning, expense management
• Lifestyle management — the practical side of wealth, from aviation to art collections

Why DIFC? The Real Reasons

The marketing materials emphasise tax efficiency and English common law. Both matter. But the deeper draw is something harder to quantify: predictability.

Legal Certainty

The DIFC operates under its own legal system, distinct from UAE federal law and based on English common law principles. Disputes go to the DIFC Courts, not local courts. The Dubai Financial Services Authority (DFSA) regulates authorised firms with standards that international banks and institutional investors recognise.

For families with assets and beneficiaries scattered across continents, this matters enormously. The legal infrastructure feels familiar to advisors in London, Singapore, or New York.

Tax Position

DIFC family offices can access 0% corporate tax on qualifying income as free zone entities. The UAE's network of Double Tax Avoidance Agreements helps manage cross-border flows efficiently. No jurisdiction offers a free lunch, but the UAE's position remains genuinely competitive.

Geography

Dubai sits eight hours from London, four from Mumbai, and within easy reach of African capitals where many Gulf families hold substantial interests. More than USD 3 trillion in private wealth lies within an hour's flight.

The DIFC itself hosts over 300 wealth and asset management firms, major banks, and the professional services ecosystem—lawyers, accountants, corporate service providers—that family offices need close at hand. For families seeking international corporate structuring, the concentration of expertise is difficult to match elsewhere in the region.

For broader context on establishing any DIFC entity, our comprehensive DIFC business setup guide covers the fundamentals.

Choosing a Structure: SFO, MFO, or Something Else?

This is where families often move too quickly. The choice of structure determines regulatory burden, cost, flexibility, and privacy—yet we regularly see families commit before fully understanding the options.

Single Family Office

A Single Family Office serves one family exclusively. Under the DIFC Family Arrangements Regulations 2024, SFOs can provide a broad range of services—investment administration, real estate oversight, succession planning, philanthropy—without obtaining additional DFSA licensing.

The regulatory simplification is significant. SFOs no longer need to register as Designated Non-Financial Businesses or Professions (DNFBPs). For families who value privacy and customisation, this is typically the preferred route.

The trade-off? You bear the full cost of the operation yourself.

Multi-Family Office

A Multi-Family Office serves multiple families, spreading costs and accessing shared expertise. The economics can be compelling—professional management, operational scale, lower per-family overhead.

However, MFOs face stricter regulatory requirements. Any MFO providing restricted financial activities—investment management, fiduciary services, financial advisory—must obtain DFSA licensing. The compliance burden rises accordingly.

For families comfortable with shared infrastructure and less concerned about absolute privacy, MFOs offer genuine value. For those who aren't, they create friction.

When a Family Office Isn't the Answer

Here's what advisors sometimes hesitate to say: not every wealthy family needs a family office.

For families with simpler asset structures or less complex administration needs, the DIFC offers alternatives:

DIFC Foundation — An independent legal entity useful for wealth protection, philanthropy, and holding structures. Foundations have separate legal personality and no shareholders, making them effective for succession planning where family office overhead isn't justified.

DIFC Prescribed Company — A lighter-touch structure for passive holding and asset structuring, with lower setup fees and minimal ongoing filing. Useful as a building block within larger arrangements.

Holding Company — Straightforward vehicles for holding assets—real property, company shares—across jurisdictions.

The right answer depends on what you're actually trying to accomplish. Our corporate structuring team works through these trade-offs with families before any paperwork begins.

The Regulatory Reality

DIFC Family Arrangements Regulations 2024

The current framework replaced the previous Single Family Office regime, bringing clearer procedures and reduced administrative burden. The regulations complement UAE Federal Decree Law No. 37 of 2022 (the UAE Family Business Law).

What changed in practice:

• SFOs no longer register as DNFBPs
• A private register exists for family entities and family offices
• Certification frameworks govern family business advisers
• The overall process is more straightforward than before

The USD 50 Million Threshold

To establish a DIFC family office, the family must demonstrate aggregate net assets of at least USD 50 million. This was raised from USD 10 million under previous rules.

Crucially, the requirement covers aggregate net assets—not just liquid investments. Real estate, operating business interests, and other holdings count. Assets can be held directly by the family office, or through trusts, foundations, and holding companies in the DIFC or offshore jurisdictions like Jersey or the Cayman Islands.

For families who meet this threshold comfortably, the requirement is administrative. For those near the boundary, structuring conversations become more involved.

Restricted vs. Non-Restricted Services

This distinction determines whether you need DFSA licensing beyond basic DIFC registration.

Non-restricted services (no additional DFSA licensing): investment administration, real estate oversight, accounting, succession planning, philanthropic coordination, lifestyle management.

Restricted services (DFSA approval required if offered beyond a single family): investment management, dealing in investments, arranging deals, custody, managing collective investment funds, trust services.

In plain terms: if your family office manages investments solely for your family, you likely avoid DFSA licensing. The moment you serve other families or provide regulated financial services externally, the regulatory position changes materially.

Setting Up: What Actually Happens

The timeline runs four to six weeks for straightforward applications, extending to several months for complex structures or those requiring DFSA licensing.

Early Decisions

Before paperwork begins, fundamental questions need answers. Single or multi-family? What services will the office actually provide? How complex is the asset structure? What are the long-term governance objectives?

These decisions cascade through everything that follows—licensing requirements, staffing, costs, compliance burden. Getting them wrong means restructuring later, which is expensive and disruptive.

Corporate Service Provider

A DIFC-licensed Corporate Service Provider handles incorporation mechanics and serves as liaison with the DIFC Registrar. Selecting the right CSP matters—they'll be involved in ongoing compliance, not just initial setup.

Documentation

The application requires:

• Details of the common ancestor and family members served
• Overview of proposed services and expected staffing
• Explanation of source of wealth
• Verification of source of funds
• Information on controllers and ultimate beneficial owners
• Evidence of meeting the USD 50 million threshold

The source of wealth documentation receives particular scrutiny. Families with complex or multi-generational wealth creation stories should prepare detailed narratives supported by documentation.

Approvals and Licensing

Applications go through the DIFC portal. The Registrar reviews thoroughly—incomplete submissions cause delays. MFOs or offices offering restricted services require separate DFSA licensing applications.

Our business formation services guide families through both tracks.

Physical Presence

The family office needs registered office space within the DIFC and a corporate bank account. Physical presence is mandatory—this isn't a jurisdiction for brass-plate arrangements.

Once the Certificate of Incorporation and operating license issue, operations can begin.

Governance: Where Families Succeed or Fail

The statistics are sobering and well-documented: approximately 70% of wealthy families lose their wealth by the second generation. By the third generation, 90% have lost it.

The cause is rarely investment performance. It's governance—or the lack of it.

The Family Charter

Before organisational charts and committee structures, successful families articulate why the wealth exists and what it should accomplish. A family charter captures core values, decision-making principles, approaches to philanthropy, and expectations for next-generation involvement.

This isn't a legal document. It's a statement of intent that gives operational governance something to build on. Without it, family offices drift toward pure asset management, losing the cohesion that justifies keeping wealth together across generations.

Governance Bodies

Board of Directors — Clear selection procedures, defined terms, representation across family branches. Many families benefit from including non-family independent directors who bring objectivity and external perspective.

Family Council — For larger families, a separate body that facilitates communication between family members and the board. Not everyone wants or needs board involvement; the council creates structured engagement for the broader family.

Advisory Committees — Specialised groups for investment oversight, risk management, and philanthropic activities. These allow focused expertise without overloading the main board.

The common thread: defined roles, clear authority, explicit accountability. Ambiguity in governance creates space for conflict.

The Next Generation Problem

We see this repeatedly: families invest heavily in investment management and lightly in successor development. The imbalance catches up with them.

Effective preparation includes mentorship, financial literacy education, board apprenticeships, and leadership development. But it also requires genuine responsibility—not ceremonial positions, but actual decisions with real consequences.

The families who manage generational transitions well start early and tolerate some mistakes along the way. Those who shield the next generation from meaningful involvement until the transition arrives find themselves with unprepared successors and resentful incumbents.

Compliance and Risk

Operating a DIFC family office means ongoing regulatory obligations. Our regulatory compliance guidance helps families stay current.

Ongoing Requirements

• Accurate financial records and regular DIFC reporting
• Anti-money laundering and Know Your Customer frameworks
• Annual license renewal (due within 30 days of expiry)
• Appointed compliance officer

Risk Landscape

The threats facing family offices have multiplied. Cybersecurity incidents targeting wealthy families increased substantially over the past five years. Data protection obligations grow more complex. Regulatory environments shift across jurisdictions where assets are held.

Families often underestimate cyber risk in particular. A family office holds concentrated information about wealth, movements, family members, and vulnerabilities—exactly what sophisticated attackers seek. Robust security isn't optional.

What It Costs

Establishing and operating a DIFC family office involves several cost categories:

Registration and licensing — DIFC fees typically range from AED 18,000 to AED 90,000 depending on structure and activities.

Office space — Varies by location and requirements within the DIFC.

Professional fees — Legal structuring, tax advisory, CSP services.

Staffing — Compliance officers, finance professionals, administrative support.

Ongoing compliance — Annual renewals, audits, regulatory reporting.

First-year costs run higher due to setup requirements. Families should budget accordingly rather than treating ongoing costs as the baseline.

Where Families Go Wrong

After advising numerous families through DIFC family office establishment, certain patterns recur.

Skipping governance fundamentals. The eagerness to get operational overwhelms the discipline to establish proper governance first. Two years later, the family faces disputes that a charter and clear decision-making framework would have prevented.

Ignoring cross-border complexity. A family with assets in four jurisdictions structures their DIFC office without mapping tax and regulatory obligations elsewhere. The result: unexpected liabilities, compliance failures, reputational damage. International structuring requires international thinking from the start.

Choosing the wrong structure. Sometimes families want the prestige of a full family office when a foundation or holding company would serve their actual needs better. Sometimes they underestimate complexity and choose structures too light for their requirements. Either mistake is expensive to correct.

Treating cybersecurity as an afterthought. Family offices are high-value targets. Waiting until after an incident to implement proper security is a choice—and a poor one.

Communicating poorly across the family. When decisions concentrate in a few hands without transparency, trust erodes. Family members outside the inner circle feel excluded; the office loses legitimacy. Communication disciplines matter as much as investment disciplines.

Working with Kayrouz & Associates

Establishing a family office requires legal structuring, regulatory navigation, and ongoing compliance management. We've guided families through this process across varying levels of complexity.

Our Corporate & Commercial Law team provides:

• Structure selection advice based on actual family circumstances
• Licensing application preparation and submission
• Governance document and family charter drafting
• Ongoing compliance support
• Coordination with tax advisors and corporate service providers
• Cross-border structuring for families with international assets

The firm has more than 25 full-time lawyers and legal consultants, with over 570 cases resolved and a 96% client satisfaction rate. We understand what DIFC family office establishment involves—not in theory, but in practice.

This guide provides general information about DIFC family office setup. For advice specific to your family's circumstances, consult qualified legal counsel.

Questions about establishing your family office? Contact us to speak with our corporate structuring team.