European family offices are increasingly shifting their capital – and in many cases, their operations – toward the UAE. The Emirates now hosts an estimated 75 percent of all Middle Eastern family offices, with over half based in Dubai. This relocation trend, driven by both push and pull factors, marks a historic reallocation of capital away from traditional wealth centers in Europe toward the Gulf.
A surge in relocations
European family offices face a new reality: Persistently low investment returns, increasingly adversarial regulation, and geopolitical uncertainty not seen in decades. In real estate specifically, declining rental yields, restrictive legislation (such as rent controls or short-term rental bans), and unfavorable demographic outlooks are prompting many real estate-heavy investors to diversify into new markets.
As a result, in the past year alone, around 200 family offices have established themselves in Dubai’s financial free zone (DIFC), bringing the total to approximately 800.
Ultra-high-net-worth advisors and wealth managers have pivoted quickly to serve this clientele. For example, Switzerland’s Lombard Odier, a 225-year-old private bank, obtained a new advisory license in the DIFC in 2023 and plans to double its headcount in the UAE within three years.
Abu Dhabi Global Market (ADGM) is not far behind in appeal – it has drawn high-profile names like U.S. investor Leon Black and hedge fund billionaire Ray Dalio to open branches of their family offices in the emirate.
This influx reflects a broader demographic shift: The UAE was the world’s top destination for migrating millionaires in 2024, attracting more than 6,700 high-net-worth individuals in that year alone. Many are Europeans relocating their wealth and residency.
In total, the number of family offices worldwide has grown by approximately 30 percent in five years to over 8,000. While Europe still hosts about 2,000 of them, Middle Eastern family offices currently manage around $159 billion – still a fraction of the $949 billion overseen by European family offices – but this gap is closing fast.
Industry research predicts that total assets under management by Middle Eastern family offices could triple to $500 billion by 2025, underscoring the significant reallocation of capital underway.
Tax efficiency remains a major incentive. The UAE imposes no personal income tax, capital gains tax, or inheritance tax. Although a 9 percent corporate tax was introduced in 2023, many investment entities remain exempt.
In contrast, traditional family office jurisdictions such as Switzerland and the UK face mounting political pressure: Switzerland has debated a 50 percent inheritance tax on large estates, while the UK is ending longstanding non-domicile tax advantages.
Moreover, the UAE’s network of over 140 double taxation agreements (as of 2025) further enhances its appeal, enabling international investors to minimize withholding taxes on global investments. In short, families can legitimately pay zero or very low taxes on their worldwide income by basing themselves in the UAE.
Structuring wealth in the UAE
Most family offices in the UAE operate under the jurisdiction of either DIFC or ADGM – two English common law-based financial free zones. While both support robust legal infrastructures, their frameworks differ.
Wealth structuring in the UAE often revolves around foundations and trusts for estate planning, combined with special-purpose companies for investments. Families from civil law countries appreciate foundations as they provide control and continuity beyond the founder’s lifetime.
Many European family offices relocating to the UAE establish a DIFC foundation to hold global assets or shares of underlying companies – leveraging recent enhancements in the DIFC’s foundation law, which simplified registration and strengthened governance provisions.
Trusts are another tool, though in practice many opt for foundations due to their flexibility and the fact that UAE foundations can be recognized in ways analogous to familiar offshore trusts.
DIFC’s new Family Arrangements Regulations 2023 explicitly allow single-family offices to operate without registering with the financial regulator, as long as they only serve one family. This results in a reduced compliance burden and greater confidentiality. Moreover, the definition of “family” in the UAE’s jurisdictions is flexible, enabling these entities to consolidate wealth for extended family branches without triggering additional regulation.
ADGM’s Restricted Scope Company (RSC) is the premier vehicle for family offices. It offers enhanced privacy – for example, it need not publicly disclose shareholders or financial statements. ADGM regulators have been consulting on formalizing their family office regime (including possibly introducing minimum asset or capital requirements), so new rules may soon further align ADGM’s offering with the DIFC’s.
Shifting investment behavior
The primary asset class for European family offices remains developed market equities, with private equity and real estate close behind. However, many are reallocating their portfolios in line with regional opportunities and trends.
UAE-based family offices have historically shown a strong preference for real estate. On average, family offices in the Middle East allocate about 15 percent of their portfolios to real estate, compared to around 10 percent globally.
European offices moving to the UAE often increase their property holdings, attracted by robust rental yields and the country’s ongoing real estate upswing. This tangible asset class offers steady returns and serves as a hedge against inflation, aligning with the conservative-yet-opportunistic mindset of many family investors.
This also reflects confidence in the region’s markets, bolstered by population growth, large-scale infrastructure projects, and the continued appeal of UAE cities as global business and lifestyle destinations.
About the author
Dr. René Lohrbach is a managing partner at German Partners Real Estate LLC, advising European family offices on real estate investments and capital strategies in the UAE. He regularly contributes insights on global wealth trends and cross-border portfolio structuring in leading financial publications.
