Whose Assets Are They? The Question a Family Office Has to Answer First

The general prohibition sits at section 16(1) of the Financial Services and Markets Regulations 2015: no person may carry on a Regulated Activity by way of business in the Abu Dhabi Global Market, or purport to do so, unless he is an Authorised Person or an Exempt Person. Everything then turns on what counts as a Regulated Activity, and that is set out activity by activity in Schedule 1. This is particularly relevant when deciding which licensing route suits the operation for your business setup.

The activity a family office should be looking at is paragraph 56, and the words matter: "Managing on a discretionary basis assets belonging to another person" is a specified kind of activity where the assets include a Financial Instrument, Virtual Asset, Spot Commodity or rights under a Contract of Long-Term Insurance. Managing your own assets is not inside paragraph 56 at all. It is not relieved, waived or exempted — the definition never reached it.

There is a second gate in the same Schedule. "By way of business" is itself defined, and it turns on engaging in the activity in a manner that in itself constitutes carrying on a business, holding yourself out as willing and able to engage in it, or regularly soliciting others to engage with you in transactions constituting it. A family that manages its own capital quietly satisfies none of those limbs on its face. A family office that begins presenting itself to a market is a different set of facts about the same money.

Schedule 1 does not stop at the definitions. Paragraph 77, headed Groups and Joint Enterprises, is the part of the ADGM rulebook that reads as though it was drafted with group and family structures in view, though it never uses the word family. This is important for those looking into multi family office setup UAE options, as it provides guidance on structuring.

It excludes from Managing Assets any activity where the manager is a member of a Group and the assets in question belong to another member of the same Group, or where the parties are, or propose to become, participators in a Joint Enterprise and the activity is carried on for the purposes of, or in connection with, that enterprise. It does the same for Providing Custody of assets belonging to another member of the same Group. And it excludes principal dealing where two parties, each acting as principal, are group members or joint-enterprise participators. This is a key consideration for those incorporating within a designated zone authority in the UAE, as it affects regulatory obligations.

Read alongside paragraph 4, the picture is coherent rather than accidental. Dealing in investments as principal expressly names Virtual Assets alongside Financial Instruments and Spot Commodities, so principal dealing is in scope in principle — but the exclusion headed "Absence of holding out etc." takes the transaction back out unless the person holds himself out as willing, as principal, to buy or sell at prices determined by him generally and continuously; or holds himself out as buying with a view to selling; or holds himself out as underwriting; or regularly solicits members of the public and enters the transaction as a result of having done so. Every one of those limbs is about conduct and presentation. Not one of them is about whose money it is.

This is the part that unsettles principals who are used to permission being a document. There is no application, no form and no letter from the regulator confirming that the office sits outside the perimeter. The office is outside because the definition and the exclusions say so on the facts as they stand, which means the family holds the position rather than the regulator.

Two things follow. The first is evidential. The only record of why the office sits outside is the record the family keeps: the ownership topology, who the assets belong to at each layer, what the office does and for whom, and what it deliberately does not do. That is an ordinary structuring file and it is worth assembling before anyone asks for it, because a position that has never been put to a regulator has also never been agreed by one.

The second is that being outside the financial services perimeter is not the same as being outside ADGM. ADGM is four independent authorities, and registration, incorporation and licensing of legal entities is the Registration Authority's work while financial services regulation is the FSRA's. A commercial licence and a Financial Services Permission are two different instruments from two different bodies, and an office that needs the first and not the second still needs the first.

The exclusions in paragraph 77 are drafted around the Group and the Joint Enterprise. Those are defined terms, and they are the whole argument. A family whose entities sit under a single holding structure and a family whose branches hold separately through unrelated vehicles are not obviously in the same position, and which one you are is a fact about the family's ownership chart rather than a fact about the rulebook.

The other way the position ends is behavioural. Nothing in the holding-out or solicitation limbs depends on whose money is being managed. An office that starts quoting prices, introducing counterparties, publishing a track record or taking a fee for arranging something for someone outside the group has moved — and it can move while the capital stays exactly where it was.

A second family is not a variation on the first. It is a different structure. The useful question is never whether to accept the mandate; it is what has to change before it can be accepted. Which entity would carry a permission if one is needed, what the office may say and to whom, and whether the existing arrangement has to be re-papered rather than extended.

There is a second axis that family offices run into, and it is easy to conflate with the first. Whether the office needs a permission is one question. How the office is classified by the regulated firms it deals with — banks, managers, platforms — is another.

ADGM's Conduct of Business Rulebook has two client categories, Retail and Professional, and Retail is the residual: a person who cannot be classified as a Professional Client in accordance with the Rules is a Retail Client. Classification has to be made with respect to each Regulated Activity, service, product or transaction, so the same person can be Professional for one and Retail for another. The rulebook also contemplates a legal structure set up solely for the purpose of facilitating the management of an investment portfolio of a qualifying individual being classified as a Professional Client in its own right.

That last provision is the family-office hook and it is worth designing towards, because it changes what counterparties are able to offer the structure. It says nothing whatever about whether the office needs a permission. Different tests, different consequences, answered separately — and conflating them is how an office ends up with a licence it did not need or a mandate it could not take.

None of the above transplants. The regimes a UAE family office is likely to be choosing between are structured for different things, and their drafting shows it.

VARA's general prohibition also runs on "by way of business", but VARA makes that a discretionary test rather than a definitional one. It has regard to whether the entity holds itself out, to the regularity, scale and continuity of the activity, and to whether there is any commercial element — remuneration, commercial benefit or value in kind — and states that it has sole and absolute discretion in deciding. Its activity definitions are drafted around someone else's assets in the same way ADGM's are: VA Management and Investment Services is acting on behalf of an Entity as agent or fiduciary, or otherwise taking responsibility for the management, administration or disposition of that Entity's Virtual Assets, and Custody Services is safekeeping Virtual Assets for or on behalf of another Entity.

Where the two regimes diverge is in what they do with group and own-account activity. ADGM excludes it from the definition. VARA keeps it out of the licence: licensed VASPs are prohibited from actively investing their own or their Group's portfolio, subject to a carve-out for prudent management of the required net liquid assets and of the firm's treasury and balance sheet, and VARA states that a separate company must be set up for proprietary trading, with a No Objection Certificate obtained through the commercial licensor rather than a licence from VARA. Above a certain scale of own-portfolio activity, registration with VARA becomes mandatory — and VARA states that trigger in more than one place, by more than one measure and in more than one currency, which is a reason to settle it with VARA rather than off a page.

One trap worth naming while we are here: VARA's "Exempt Entity" is not a private-sector exemption. The defined term covers entities of the federal government and the government of Dubai, and their public, non-profit and charitable bodies. A family office is not one, however privately it operates.

Onshore, the federal regulator has been renamed — the Securities and Commodities Authority is now the Capital Market Authority, under Federal Decree-Law No. 32 of 2025 — and both names remain live across the regulator's own estate and its current instruments. Its virtual-assets perimeter reaches the state including ordinary free zones but expressly not the financial free zones, so an ADGM office sits outside it by construction. Portfolio management is one of the activities in the framework the Authority issued in April 2026, but the operative instrument, Chairman's Resolution No. 04 of 2026, is not among the items on the regulator's published regulations listing and its regulations search is not open to an unauthenticated reader. The activity names are public. The definitions behind them are not.

Everything above is the part you can read. The part you cannot read is the part that decides your answer.

None of the questions above is a filing question, and none of them has a published answer. They are questions about how a particular family is assembled and how its office actually behaves, and the cost of getting them wrong is an unlicensed-activity exposure rather than a penalty on a late return.

That is the whole case for taking structuring judgement seriously before the office is built rather than after the first outside mandate is offered. Bring us the ownership chart, the asset perimeter and an honest description of what the office does day to day, and we will tell you where the line runs for your structure and what would move it. This is structuring commentary rather than legal advice, and it is not an opinion on how any regulator will read a particular set of facts.