The Middle East is restructuring and diversifying in response to local and international regulatory, tax and law changes, Ocorian has revealed.
The firm, which works with more than 60 family offices globally, said that its services are attracting ‘significant’ families, including one looking to develop a governance structure on a par with FTSE-100 or FTSE-250 companies.
It also said that major changes include new local Kingdom of Saudi Arabia companies’ law aimed at modernising and simplifying the corporate code, increasing flexibility, and attracting inward investment.
The firm reported that changes in UAE corporate tax and the implementation of global minimum standards are increasing the focus on improving governance at family offices and ensuring they are compliant with regulation.
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It said that, in response to this, family businesses across the region are increasingly separating business and personal assets, both domestically and internationally, as well as reducing complex layers of special purpose vehicles in multi-jurisdictional structures.
Businesses are also looking to diversify local investments through UAE foundations and international investments using new institutional style structures such as private funds and cell companies to optimise their investment strategies.
The firm has also observed that some institutional and family-owned structures are moving to top-tier jurisdictions such as Jersey and Guernsey.
Lynda O’Mahoney, global head of business development private client at Ocorian, said: “In the Middle East, family businesses are being driven to adopt stronger governance practices, professionalise operations, simplify structures and address family governance issues.
“This is crucial for ensuring the long-term sustainability, stability and success of these businesses in the region.
“Families are conducting assessments of their current situation regarding local and international assets, investments and businesses. These assessments are shedding light on long-standing issues that require attention.
“Traditionally, family offices in the region have operated with a single decision-maker structure and viewed generational wealth as inherited, leading to a conservative mindset of maintaining the business legacy and core values.
“However, with the increasing involvement of third and fourth-generation family members, there is a greater openness to diversification and non-traditional investment strategies.”
