The Swiss home office manages offices of very wealthy assets, hoping to move to Dubai, a convergence of factors ranging from regulation to political debate, eroding Switzerland's appeal.
Ronald Graham, managing partner of the Dubai office of law firm Taylor Wessing, said people at two large home offices, including a large home office with billions of dollars in assets, told him they were exploring the exploration of moving to the United Arab Emirates, and the regulation was the reason. One person has done this move.
"In Switzerland, there are more regulations and there will certainly be more disclosures in terms of confidential information. Dubai home offices do not comply with the same standards, they can be more private - which is more attractive to the rich in the world."
Graham said there was no single problem or “the road to the Damascus moment” that convinced these home offices to consider leaving Switzerland, but rather a bunch of obstacles, including the definition of “family.”
Swiss bank Julius Baer said that the Swiss home office has more than 20 clients, including a family member, or asset management assets with assets above designated restrictions, must be licensed as portfolio managers and attract more heavy regulations. By contrast, Graham said Dubai’s definition of “family” is broad, and that has not caused greater regulation.
Wealthy families are also concerned about the recent political debate in Switzerland, which will hold a referendum later this year to introduce a huge inheritance and gift tax of 50%.
A beneficiary of a Swiss home office said political debate and concerns about regulations prompted some people to leave the country.
Voters are expected to reject the proposal, but the person said: "The insecurity created in the past two years has clearly prompted some families to reconsider Switzerland as a financial center." He cited Norwegian families, who moved there to avoid Swiss and Swiss families who have businesses in their home offices.
Managing the wealth of a family, as well as two single home offices in the multi-family offices are transferring wholesale to Dubai or establishing branches there. According to DIFC, about 200 home offices joined Dubai’s maritime financial center last year, reaching 800.
Reto Gareus, a partner at Swiss consulting firm KPMG, said he has seen many multifamily offices move to the Middle East as their clients are relocating. “The standard of living in Dubai is huge and the economic system is directed towards entrepreneurs and ultra-high net worth individuals,” he said.
Thomas Hug, a tax partner in Deloitte, noted that Switzerland has not provided generous incentives to investment companies, while some governments in the Middle East have provided "engaging subsidies".
Dubai also benefits from other changes, from abolishing the UK's non-debt system to high taxes in other European countries and sanctions on Russian assets, industry data said.
Yann Mrazek, managing partner at M/HQ, said that home offices in Switzerland and exploring the UAE are “often established long, sophisticated, multigenerational (and) campaigns.”
Consulting firm Deloitte's 2024 International Wealth Management Center Rankings said Switzerland remains the world's leading hub, but "recent developments ... threaten to weaken Switzerland's competitiveness", citing the loss of taxation, regulation and trust among some investors after the bankruptcy of tax quality.
Meanwhile, as the Trump administration sows uncertainty, some wealthy Americans are developing contingency plans to transfer assets to Switzerland. Andermatt Ski Village proved particularly attractive due to loose rules surrounding foreign property ownership.