Five-minute interview with Andrew Young, head of private client services, Davidson & Co Legal Consultants
Andrew Young is head of private client services, Davidson & Co Legal Consultants, Dubai, and director and co-founder of Balmor Family Office Advisory, Dubai. We caught up with him to talk about the growth of single family offices in Dubai and local clients who seek offshore structures to avoid sharia succession law applying.
What is your role at Davidson & Co Legal Consultants?
I joined Davidson & Co at the beginning of 2016 to spearhead the firm’s expansion into the private client sector in the UAE . The firm’s team looks after the wealth and succession planning needs of wealthy expats, local UHNW families, and international clients with a UAE connection. Alongside my role at Davidson & Co, I am also a director and co-founder of Balmor Family Office Advisory, which is a local consultancy company offering a range of succession management services, UAE-based structuring solutions, and ancillary support for larger families and their private offices.
Tell us about your clients
We are often asked whether it is possible for local clients to place domestic assets into an offshore structure to avoid sharia succession law applying. Traditionally, the barriers to doing this are the fact that sharia law will always prevail for domestic assets, plus the fact there have always been practical and legal issues preventing the transfer of ownership of assets to offshore entities. However, with the introduction of more flexible local asset holding vehicles, there may now be workable routes. Local law will always prevail in the event of a dispute over succession, but this still appeals to Middle Eastern families who are unlikely to be in dispute.
How has the private client industry changed?
The global wealthy have become wealthier, and more numerous, whilst the financial, regulatory and fiscal world in which they live in has become ever more complex. Advisers need to educate clients so that they understand and appreciate the global push for greater transparency and to prevent tax evasion and must plan their affairs accordingly. Compliance and regulation have become so onerous for some clients that experienced advisers are now absolutely necessary to navigate that process.
Will Dubai benefit from Brexit?
Dubai tends to benefit generally from political uncertainty elsewhere, as wealthy families reconsider their options, and some end up deciding to relocate to Dubai or make it their new principal home. Dubai has had many new economic immigrants from the region after the Arab Spring. Wealthy clients wishing to inward invest remains a large part of our business at Davidsons. Dubai has now established itself as an attractive destination for the wealthy, globally mobile individual or family. The UK, and London in particular, will always be one of the most attractive locations for the world’s wealthy, Brexit or not. However, recent tax changes will no doubt have deterred some. I am specifically aware of some large South Asian families who have moved away from the UK to Dubai for this reason.
What are the main challenges your clients face?
Many of our local clients have traditionally been invested in super prime London residential property. However, successive tax changes for overseas owners have left them irritated at the way there seems to be little tax certainty in the UK and so some are considering alternative jurisdictions for future investment. That said, even if they do this, compliance and regulatory matters remain the main challenge for clients, from considering their future residence in the light of CRS to remaining banked. I never thought at the beginning of my career that clients would retain law firms, and be willing to pay hefty fees, just to help them with their bankers to either open or continue with their banking arrangements.
What was the last book you read?
The Gift of Rain, by Malaysian author Tan Twan Eng. It’s an epic tale, set in Malaysia pre and during the Japanese occupation during WW2. It was Man, Booker prize, long listed, but I hadn’t heard of it until Tan’s UK publisher, who is an old friend, recommended it. I enjoyed the book tremendously.
What trends have you spotted?
The continued growth of single family offices. This is a global trend, but this sector is hot in Dubai, where SFO incorporation is permitted in specific free zones, offering cost-effective platforms to be set up to deal with family asset management and administration. There is growing recognition among wealthier families that they need structural elements in the broader management of their wealth, with their SFO acting as the hub of that structure.
What do you do to unwind?
We are a very social bunch here in Dubai. One of the things I get involved with is a local veterans’ rugby team, The Arabian Gulf Legends. We field a team at the annual Dubai Sevens rugby tournament, go touring once or twice a year, and meet up in between times. All expats of various rugby playing nationalities, mostly non-playing members, as I am.