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Living or settling in the United Arab Emirates: investment, taxation, and wealth protection
Ali Janoudi
Partner and Head of New Markets, Lombard Odier Group
Joëlle de Cerjat Santa Cruz
Senior Wealth Planner - Middle East
The Middle East has become the world’s fourth-largest wealth hub, home to a growing community of ultra-high-net-worth individuals (UHNWIs). Dynamic and outward-looking, the region is asserting its confidence on the global stage, while also offering residents a steadily improving quality of life. Much of this transformation stems from the rise of private wealth and the central role played by family businesses.
For families in the United Arab Emirates (UAE), issues relating to family protection, wealth transfer and succession are therefore crucial – whether for family-owned enterprises or for safeguarding and growing privately held wealth. Succession matters: it underpins business continuity, preserves family legacies and, more broadly, contributes to the region’s economic prosperity.
In this article, we outline the key legal, fiscal and governance considerations for families residing in – or considering a move to – the UAE, alongside selected insights from our latest survey of 300 high-net-worth individuals (HNWIs) and UHNWIs in the Middle East (‘Time to Talk’).
Succession matters: it underpins business continuity, preserves family legacies and, more broadly, contributes to the region’s economic prosperity
Wealth transfer and succession: a priority in the Emirates
In a constantly evolving legal environment, succession and estate planning in the UAE are a strategic priority for anyone seeking to structure their assets effectively and ensure their wealth is transferred in line with their personal wishes.
Despite recent reforms to inheritance laws, the absence of a will or clear arrangements can still result in the automatic application of local provisions – which may diverge from individual or family expectations.
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On 1 February 2023, the UAE enacted a landmark federal reform of family law applicable to certain expatriates, moving away from the automatic application of Shariah principles when it comes to inheritance. This reform introduces a more universal legal framework, aligned with international standards.
Even with this succession law system in place, proactive succession planning remains essential to ensure that assets are distributed in line with the deceased’s wishes, rather than according to local default provisions. Planning tools such as wills registered with the appropriate authorities, lifetime gifts, foundations and trusts must be carefully tailored in order to:
avoid ambiguity or disputes among heirs
designate or exclude specific beneficiaries
provide for special arrangements (legacies, guardianship, business continuity)
strengthen legal certainty and international recognition of the succession process.
Research by Lombard Odier reveals that only 18% of families have a formal estate plan1 – a striking figure highlighting a critical gap in long-term planning.
New personal status law: implications for expatriate families
In April 2025, Abu Dhabi updated and broadened its Law No. 14 of 2021 on Civil Marriage and Effects Act (CMEAD), establishing a modern legal framework for marriage, divorce and succession for foreign residents. This reform reflects a clear intent to promote legal inclusiveness and alignment with international legal standards.
The law aims to simplify personal status disputes, offer accessible procedures, and provide expatriates with the ability to benefit from clear family law provisions.
With regard to inheritance, expatriates may freely dispose of their assets, provided their will is valid and properly registered. Without such a document, assets are distributed under default rules: 50% to the surviving spouse and 50% to children in equal shares – or to parents or siblings if there are no children.
This reform provides families with an alternative to religious marriage and inheritance frameworks, while streamlining legal processes in cases of divorce, child custody or succession based on legal principles rather than religious law.
Joëlle de Cerjat notes:
“According to local lawyers and practitioners, although Abu Dhabi’s civil courts now allow the registering of wills under the civil system, this does not guarantee that testamentary provisions will be upheld in their entirety if they conflict with Shariah principles and the testator originates from a jurisdiction where Shariah Law underpins family law. A careful prior analysis of the personal legal context therefore remains essential.”
Family businesses form the backbone of the UAE’s economy, making a significant contribution to the non-oil GDP
Family governance: from theory to practice
Family businesses form the backbone of the UAE’s economy, making a significant contribution to the non-oil GDP. As these businesses navigate the challenges of growth and succession, as well as increasingly complex structures, effective family governance has become a strategic priority for ensuring continuity and intergenerational cohesion.
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Family governance encompasses more than just established family rules. It includes formal mechanisms for decision-making, conflict resolution, succession planning and the preservation of shared values. By clarifying roles, professionalising management and preparing the next generation for leadership, governance frameworks provide clarity and stability.
In Dubai, the Family Business Centre has recently issued new guidelines to support families in developing robust governance frameworks. Yet, despite their critical role, fewer than one in six family businesses in the region have such frameworks in place2. Key obstacles include intergenerational disagreements, unclear decision-making processes and an absence of agreed protocols.
In today’s ever-changing legal and economic landscape – particularly with the introduction of corporate tax and family law reforms – entrepreneurial families in the Emirates can proactively address succession challenges by establishing formal governance structures, documenting succession processes, and ensuring that strategic decisions align with their long-term family and business objectives.
Home country taxation: an expatriate blind spot
The UAE offers an exceptionally favourable fiscal environment for individuals (0% tax on passive income, capital gains, gifts and inheritance). Yet, relocating does not necessarily eliminate obligations towards one’s home country. Departing one’s home jurisdiction can have major tax consequences, making pre-expatriation planning essential.
It is crucial to ensure full compliance with the tax rules of the country of departure, while also anticipating any ongoing liabilities that may persist after relocation. Many jurisdictions continue to tax certain assets – most notably real estate – regardless of the owner’s place of residence. Moreover, a predominance of assets located in the country of departure could even result in unlimited tax liability being maintained despite leaving the country.
A comprehensive relocation plan to the UAE should therefore cover not only tax compliance but also the transfer of one’s centre of vital interests, taking into account cultural, social and economic ties. According to the Lombard Odier study, fewer than one-third of expatriates are fully aware of this3.
Risks include double taxation, ongoing reporting requirements and penalties for non-compliance. Astute UHNWIs typically adopt a proactive approach, conducting a pre-move tax audit, reviewing double taxation treaties, and establishing appropriate international structures to ensure a smooth transition.
Doing business in the Emirates: a tax overview for new arrivals
On 1 June 2023, the UAE introduced a federal corporate tax. The rate is set at 9% on taxable income above a defined threshold (currently AED 375,000), with income below this level remaining exempt.
Contrary to popular belief, corporate tax also applies to individuals conducting business activities in the UAE. Any commercial activity that generates regular income, even if it is not conducted through a formal legal entity, may be deemed taxable. This means that entrepreneurs must maintain proper accounts, file returns and comply with local tax rules.
The law also extends corporate tax to entities incorporated outside the UAE if their effective management is exercised within the country. Offshore companies, though registered abroad, could therefore be reclassified as UAE tax residents if strategic decisions or administration are carried out locally.
Joëlle de Cerjat observes:
“It’s not uncommon to encounter situations where a shareholder residing in Dubai retains control and power over an offshore company he owns. Even if incorporated offshore, such a company could be reclassified as a UAE tax resident if management decisions are made locally. The UAE tax authorities consider ‘effective management’ the key criterion for corporate tax residency. In practice, this could expose the company to a 9% corporate tax liability – underlining the importance of reviewing offshore governance structures to avoid unplanned taxation.”
Dubai has become a leading international hub for wealth management
Private banking and family offices: a maturing ecosystem
Dubai has become a leading international hub for wealth management. The Dubai International Financial Centre (DIFC) now hosts more than 400 firms specialising in asset management and estate structuring4. This concentration of expertise attracts international families seeking both operational proximity and tax efficiency.
For UHNWIs, the appeal lies not only in local private banking, but also in the ability to establish a family office anchored in the region. These offices benefit from access to skilled professionals and best-in-class services ranging from discretionary portfolio management and estate planning to arbitration and governance advisory.
With over half a century of experience operating in the Middle East, Lombard Odier combines the prudence of its Swiss heritage with in-depth regional expertise. From our local office we provide bespoke onshore solutions to clients that reflect both local opportunities and global perspectives. Increasingly, families are turning to us not only for investment management, but also for support with cross-border wealth structuring, family governance and sustainable investment strategies – areas that are becoming central to wealth preservation across generations.
Ali Janoudi remarks:
“What has most impressed me is the way the DIFC has targeted the different global players across the range of services they provide, from banking to private equity and hedge fund managers to family offices, most recently. By focussing on each type of organisation, they have been able to ensure that they have the right infrastructure in place to attract them and create an ecosystem geared for growth.”
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1 Lombard Odier 2025 “Time to Talk” report 2 The Middle East WealthTech Landscape Report 2023 – The Wealth Mosaic 3 Lombard Odier UAE Expat Study 2024 – Tax and Succession Data 4 According to the Dubai International Financial Centre (DIFC)
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