Dubai lures ultra-high-net-worth family offices as Switzerland loses its lustre

A general view of high rise buildings, including the Burj Khalifa tower, in Dubai. (Courtesy: Reuters photo)

More and more ultra-high-net-worth families are relocating their family offices from Switzerland to Dubai, as increasing regulatory oversight, tax controversy, and political instability chip away at Switzerland's long-time reputation as the world centre for private wealth management, the Financial Times reported.

Ronald Graham, managing partner at Taylor Wessing’s Dubai office, said at least two large family offices—one with billions in assets—have already initiated the shift to the United Arab Emirates, with one completing the relocation. He cited Dubai’s more relaxed regulatory environment and greater privacy as key attractions.

"There is more regulation, definitely more disclosure in confidential terms," Graham explained. "Dubai family offices are not under the same standards—they can be quieter. That's more desirable to the world's rich."

Swiss taxation and regulation politics drive uncertainty

Instead of a single triggering factor, industry observers speak of a "pile-up of obstacles" that is causing family offices to rethink their Swiss domicile. Switzerland's changing regulatory environment now subjects some family offices to registration as portfolio managers if they have more than 20 clients for whom they manage assets or cross specific income and asset thresholds. This adds increased scrutiny and compliance burdens.

Swiss bank Julius Baer has cautioned that even family offices handling wealth within a single extended family might be caught in this wider net. Dubai, however, has a more relaxed definition of "family," lowering the risk of setting off stricter regulation.

Compounding the uncertainty is Switzerland's imminent referendum on whether to levy a 50 percent tax on big gifts and inheritances. Although the measure is largely expected to be voted down, the uncertainty it has caused has been sufficient to cause some high-net-worth families to rethink their Swiss plan.

A beneficiary of a Swiss family office told the Financial Times, “The insecurity it has caused in the past two years has obviously motivated some families to reconsider Switzerland as a financial hub.”

Dubai’s rise as a family office magnet

Dubai’s appeal is being bolstered by broader shifts in global wealth patterns. In 2023 alone, more than 200 new family offices joined Dubai’s offshore financial centre, bringing the total to 800, according to the Dubai International Financial Centre (DIFC).

Reto Gareus of KPMG in Switzerland verified the trend, saying numerous multi-family offices are currently moving after clients into the Middle East. "The level of living in Dubai is gigantic and the economic system is orientated towards entrepreneurs and ultra-high-net-worth persons," he stated.

Along with its beneficial regulatory landscape, Dubai is luring affluent families with investment schemes and government subsidies—advantages Swiss families largely lack. Deloitte's Thomas Hug underscored that Middle Eastern jurisdictions are providing "compelling subsidies" which Switzerland cannot match.

Dubai is also gaining traction as European nations clamp down on tax regimes and the UK does away with its non-domicile tax status. Sanctions on Russian assets have also made it more difficult to manage wealth strategies in Europe, making the UAE a more sought-after alternative.

Swiss prestige intact—for now

Despite the transformation, Switzerland continues to be the world's wealth management centre of excellence, per Deloitte's 2024 rankings. But the report cautioned that "recent developments … pose a risk to Swiss competitiveness," citing the damage from Credit Suisse's collapse, tax changes, and declining investor confidence.

Notably, while international and European families look to leave Switzerland, some of the very rich Americans are considering it as a haven in the face of increasing uncertainty in the US during President Trump's second term. One such Alpine village is Andermatt, where property regulations for foreigners have become relatively open.

As family offices more and more value stability, privacy, and tax effectiveness, the flight from Zurich to Dubai could portend a profound transformation of the global wealth architecture.