Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
Over the past few years, the UAE has become a popular destination with the world's richest families, with Abu Dhabi and Dubai proving to be ideal locations for setting up "family offices."
Joe Ives, a UK policeman turned Commercial Director for global corporate services provider IQ-EQ, has worked in the UAE for more than a decade and deals with these offices daily. He says that as wealth is passed down through generations, the type of investments and the behaviour of his clients are changing, which he believes is beneficial to the UAE.
"Traditionally, a lot of their parents would have looked at real estate, but their children are moving away from traditional assets," Ives told Aletihad.
"They're looking more at what aligns with their values on sustainability and inclusion, but also into different assets, such as digital assets and crypto - all points of focus here in the UAE."
Ives says that as younger generations slowly take the helm of their family businesses, he is seeing increased interest in setting up at Abu Dhabi Global Market (ADGM) and Dubai International Finance Centre (DIFC) for their favourable regulations and embrace of fintech and digital assets.
According to a report by KPMG, financial wealth in the UAE, driven by ultra-high net-worth individuals and family offices, is projected to grow at a compound annual rate of 6.7%, reaching $1 trillion by 2026, accounting for 46% of the nation's financial wealth by that time.
In recent years, the UAE has sought to establish itself as a global leader in digital assets, with initiatives like Dubai's Virtual Asset Regulatory Authority (VARA) and Abu Dhabi's blockchain-friendly ADGM framework.
Supportive regulations, a growing number of licensed crypto exchanges and strategic investments have highlighted the UAE's commitment to building a robust digital economy and solidifying its position as a hub for blockchain and cryptocurrency.
At Abu Dhabi Finance Week, Circle Internet Group, a global digital technology firm and one of the world's largest distributors of "stable coins", which are dollar-backed cryptocurrency, established an entity in ADGM as part of its Middle East and Africa expansion. It also partnered with LuLu Financial Holdings to enable USDC-powered remittances and cross-border payments.
Speaking to Aletihad prior to the announcement, Chief Strategy Officer and Head of Global Policy at Circle, Dante Disparte, affirmed why the UAE was set to be a leader in this field.
"I think you know the expression 'the future is already here'. It's just not evenly distributed. I think most money in the future will take this type of form," he said.
"But it can only really occur in a world where you have legal and regulatory clarity, which we now are having here in the UAE."
For Ives, this phenomenon will give the younger and savvier investors who are increasingly assuming control of massive family-owned portfolios even more incentive to set up shop in Abu Dhabi and Dubai.
"Of course there are all the common reasons to set up here, no personal income tax, no capital gains tax, you've got no inheritance tax," he said.
"But it's more than that, It's a bridge between the East and the West. It offers families and investors opportunities to look at other cross-border investments, especially in emerging markets, and to invest in the future of finance."
