In 2024, the Middle East is experiencing a significant surge in investment funds and family offices focusing on digital infrastructure. This trend is driven by increasing wealth, strategic geographical advantages, a favourable regulatory environment, and a burgeoning digital economy.
Rising Wealth and Family Offices
Knight Frank’s 2024 Wealth Report highlights a 6.2% increase in the number of ultra-high-net-worth individuals (UHNWIs) in the Middle East, reaching approximately 18,800 in 2023. This rising wealth is driving the growth of family offices, which manage investment portfolios while addressing crucial issues such as succession planning, intergenerational wealth transfer, and philanthropy.
Strategic Financial Hubs
The Middle East boasts several emerging financial hubs attracting family offices and investment funds. The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) lead the way with their world-class services and vibrant investment ecosystems. Riyadh and Tel Aviv also contribute with their developed financial sectors and growing fintech industries.
Favourable Regulatory Environment
The regulatory landscape in the Middle East is conducive to the establishment and operation of family offices. DIFC’s ‘Family Arrangements Regulations’ and UAE’s ‘Family Business Law’ support family businesses, ensuring sustainability, smooth intergenerational transfer, and effective dispute resolution. These regulations foster a more attractive environment for wealth management.
Tax Benefits
The UAE offers an appealing tax landscape with no personal income tax, capital gains tax, or inheritance tax. This tax regime is highly attractive to wealthy families looking to preserve and grow their wealth, making the region a prime location for family offices and investment funds.
Digital Infrastructure Investments
Investments in digital infrastructure are surging as the Middle East positions itself as a hub for technological innovation. The region’s strategic location between Europe and Asia makes it ideal for digital infrastructure projects, including data centres, broadband networks, and smart city technologies. These investments support economic growth and diversification.
Embracing Technology
Middle Eastern family offices are increasingly embracing technology to enhance their investment management practices. The adoption of advanced technology solutions, including cybersecurity measures, is crucial for safeguarding financial data and improving operational efficiency. This technological shift is key to maintaining competitive advantage and achieving long-term success in the rapidly evolving digital landscape.
Attractive Long-Term Outlook
The outlook for family offices and investment funds in the Middle East remains robust. The region’s growing wealth, strategic investment in digital infrastructure, and favourable regulatory and tax environments are set to drive continued growth. Knight Frank’s 2024 Wealth Report predicts that the number of UHNWIs in the Middle East will increase by nearly 30% between 2023 and 2028, indicating sustained demand for family office services.
Conclusion
The surge in Middle Eastern investment funds and family offices investing in digital infrastructure underscores the region’s strategic positioning and favourable business climate. At Inachus Ventures, we are dedicated to bridging the gap between businesses seeking funding and investors looking to capitalise on these opportunities. Through our bespoke investment services, we connect investors with clients globally, facilitating digital infrastructure projects via our extensive network of associated investment partners. By leveraging our expertise and connections, we help businesses thrive in the dynamic digital landscape while providing investors with unparalleled growth opportunities.
For more information on how Inachus Ventures can assist with your investment needs, contact us today at enquiries@inachus.ventures.
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