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Tuesday , November 24 2020

New wealth management law is a welcome game changer

Khalaf Al Habtoor, Founding Chairman of Al Habtoor Group (AHG)

As a founder and chairman of a family business, I heartily welcome the decision taken by the Vice President and Prime Minister of the United Arab Emirates, the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum to adopt a decree law on the management of wealth. This futuristic law not only injects greater confidence in the UAE’s economy, it protects wealth for generations to come and allows for the continuity of local businesses well into the future.

I built my group of companies on a shoestring budget during the 1970s. I began with a small rented offi ce overlooking the Creek that permanently reeked of fi sh. I couldn’t afford a typewriter or a fax machine, only some steel furniture. I had no engineering portfolio to show prospective clients but thankfully after sitting around doing nothing for some months we were entrusted with our very fi rst project, the construction of a villa. Today, I head an international conglomerate that umbrellas hotels, vehicle distributorships and rentals, education, real estate and insurance.

My companies are my life’s work and, in truth, although I have toyed with the idea of launching an IPO on several occasions, until this moment, I have never gone through with it. I care deeply that they will live on as a family concern as my eternal legacy. The new law, which creates a legislative framework for businesses passed on to the second or third generations often in danger of collapse, goes a long way to allaying my concerns. Family businesses that constitute an integral part of the UAE economy are now assured of a long life.

Providing businesses with long-term sustainably will also attract greater Foreign Direct Investment. Further, it gives individuals and companies the opportunity to sign a financial covenant that gives custodial authority to trusted persons or institutions to manage the growth and investment of funds. Various types of covenants are listed in the decree among them a charitable covenant, a covenant establishing retirement funds and a covenant relating only to stock markets and securities.

A statement by the UAE Cabinet reads: “The law provides capital owners with an integrated system that enables them to manage their wealth as a financial trust by competent and qualified persons or institutions.” It further confirms that some of the biggest beneficiaries of the new law will be family-owned companies permitting owners to plan for the long-term future of their company’s assets. According to a statement by WAM, “The decree comes within the government’s continuous efforts to raise the efficiency of financial legislation and policies in the country and provides a competitive environment.” It will also “contribute to preserving capital and investing it inside the country and attracting foreign investments leading to the provision of a safe and developed economic climate, and the diversification of the tools available to exploit and protect wealth”.

Once again, the government of the United Arab Emirates has proven that it rules with wisdom and a visionary outlook. Our leaders prioritise their people’s welfare and their nation’s growth over policies designed to keep them glued to their seats no matter what. I feel privileged to call myself an Emirati. Whatever the challenges we face, mostly due to factors outside our control such as the 2008 economic downturn that was born in the United States and a deadly pandemic that was spawned in China, the UAE weathers these storms because its foundations are rock solid and its leadership is solution oriented.

On a personal note, I can now sleep soundly in the knowledge that my companies that flowered from seedlings over the past 50 years nurtured by hard work, dedication and the will to ‘try, try again’, will always be protected. My profound thanks to Sheikh Mohammed and all those involved with the drafting of this game changing law.

By Khalaf Ahmad Al Habtoor UAE Businessman

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