Protecting your assets is a crucial step in protecting yourself in the UAE. If you own property, business or have minor children and live and work in the UAE as a resident or an overseas investor then it is essential to plan ahead and safeguard for the future. As expats living in the UAE it is important to be mindful of the UAE Federal Laws and the Personal Status Law that governs succession in the UAE.
The best options available are:-
1. DIFC Will -
A DIFC Will gives you the testamentary freedom and the option to pass on your assets and appoint guardians for minor children in accordance with your wishes. As a non-Muslim if you die without a DIFC Will your assets in the UAE will be distributed according to Shar’iah (Islamic) law and not necessarily according to your wishes. The DIFC Wills Registry mirrors the common law jurisdiction of England and Wales and provides for testamentary freedom.
2. DIFC Foundation –
The DIFC introduced the DIFC Foundation concept in 2018 ( DIFC Law No.3 of 2018) as an alternative wealth structuring vehicle for both Muslim and Non- Muslim expatriates living and working in the UAE. It has proved very popular with the expat Muslim community who are unable to register DIFC Wills. A Foundation can be set up to hold a family business, property or a charitable purpose.
A Memorandum of Understanding exists between the DIFC and the Dubai Land Department allowing the DIFC Foundation to purchase property registered with the Dubai Land Department. This is a very exciting prospect for expatriates who want to own property in Dubai.
DIFC Foundations are legal entities that hold assets on behalf of beneficiaries. These can include non residents or residents of the UAE.
The benefits of a DIFC Foundation are numerous,
particularly to the expat Muslim community, as they include –
• No corporation tax
• Succession and legacy planning
• Asset preservation
• A means to mitigate forced heirship rights
3. Gifting Property-
if you gift your immediate family members property, this attracts a much lower transfer fee of 0.125% of the deemed value of property from the Land Department . Usually property transfers attract a transfer fee of 4%. In this manner a family member can pass the property, which is usually the most valuable asset they hold, to a son/daughter or spouse without attracting a high transfer fee and also retaining the property in the family.
The DIFC Wills Registry is always available to assist in the case of any difficulties. Their email ID is WillsInfo@difccourts.ae
Soma Gardi is the founding partner of SG Legal Consultants FZC, a specialised niche firm providing a bespoke service for clients requiring a DIFC Will. Please contact soma@sglegalconsultants.com for any further information.
