In order to protect their assets, local or foreign citizens can choose to set up trusts in Dubai, UAE, through the Dubai International Financial Centre. For a better understanding of the rules when setting up a trust in Dubai, it is recommended to talk to one of our lawyers in Dubai, who can offer legal advice throughout the entire process.
| Quick Facts | |
|---|---|
| Specific law applicable to trusts (YES/NO) | The 2020 Trust Law |
|
Participants in a trust |
– settlor, – beneficiaries, – trustee |
|
Types of trusts available for creation in Dubai |
– charitable, – non-charitable, – express, – protective trusts |
| Documents required for establishment | Trust deed |
| Assets to be held in a trust |
– real estate, – jewelry, – company shares, – money and various valuable assets |
| Requirements to create a trust |
The creation deed must specify the following: – the name of the trust, – the properties held in trust, – the powers of the trustee, – the name of the settlor and beneficiaries, – the duration of the trust. |
| Possibility to create offshore trusts in Dubai |
Yes, offshore trusts are also available for creation in Dubai. |
| Taxation of trusts |
Trusts are not taxed in Dubai. |
| Recognition of foreign trusts in Dubai |
Yes, foreign trusts are recognized in Dubai. |
| Possibility to create international trusts (YES/NO) | Yes |
| Other means to create trusts (if available) |
Wills are another way to establish a trust in the UAE. |
| Lifespan |
Trusts can be created for limited or unlimited time. |
| Advantages of opening a trust in Dubai |
– tax-friendly environment, – modern legislation, – enhanced asset protection, – great tool for estate planning |
| Trustee services availability (YES/NO) |
Yes, trustee services are available with our law firm in Dubai. |
| Trust creation services availability (YES/NO) | Yes, you can rely on our Dubai lawyers for support in creating a trust. |
Table of Contents
Who can establish a trust in Dubai?
Natural persons, foreigners, as well as companies, can set up trusts in Dubai. The main conditions to respect refer to the participants (the settlor, trustee, and beneficiary(ies)) and the legal capacity of the settlor to create it.
Trusts in Dubai are categorized as:
- onshore trusts, established under the UAE law;
- offshore trusts, created under the Dubai law.
You can rely on our law firm in Dubai for the settlement of both types of trusts.
The provisions of the 2020 Trust Law in the UAE
If you want to set up a trust in Dubai, you must follow specific laws that apply at national and emirate levels. The main acts to respect are:
- the UAE Trust Law enabled in 2020, which provides for the creation of trusts in the country;
- the Dubai Trust Law which is older, as it was created in 2018, and which provides for the establishment of trusts in Dubai International Financial Center (DIFC) (please note that this is the only place to settle a trust in this Emirate).
An important fact to consider is that in the UAE, trusts are considered legal entities, compared to some of the most popular jurisdictions in the world, among which are the USA and the UK. This means that the assets can be registered in the name of the trust, not of the settlor, and the trustee has the role of a manager, just like a limited liability company. Also, the national law does not apply in the Dubai International Financial Center Free Zone.
Our lawyers in Dubai are at your service if you want to create a trust under the national or emirate legislation.
The main ways to set up trusts in the UAE
There are two ways, or better said, documents to provide for the establishment of a trust in the UAE:
- the trust deed;
- the testament.
No matter the type of document, after drafting, the trustee must file an application for its registration with the Trusts Registrar, coordinated by the Ministry of Finance. Following that, the Register will issue the trust certificate alongside a list of the assets held in it.
Requirements for setting up a trust in Dubai, UAE
Individuals can set up charitable or non-charitable, express, and also protective trusts, under the strict supervision of the Financial Services Authority in Dubai, where the residence terms are not taken into consideration. A DIFC (Dubai International Financial Centre) trust does not require a certain capital, as a starting point, in order to be registered, and 100% foreign ownership is allowed. It is good to know that trusts in the UAE can be better controlled than registered wills. Furthermore, trusts in Dubai are tax-free and are highly protected, regardless of the Sharia Law succession rules. A Dubai trust can be set up by will or by drafting a codicil, which is known as a deed of trust made by a settlor or an administrator.
Please remember that our attorneys in Dubai can help you set up a trust in the UAE and can also explain the laws and the rights in this matter. Here is also an infographic on this topic:
Why you should set up a trust in Dubai
The tax-free environment in Dubai is the main reason why foreign entrepreneurs decide to establish their activities here.
A trust in Dubai, the UAE, allows foreigners with residence in the Emirates to have a clear idea about their wealth, which at a certain point is going to be passed on in accordance with the terms mentioned. Investors can create trusts in Dubai as part of their investment strategies, especially if they are interested in opening companies in the Emirates.
How long does it take to set up a trust in Dubai?
The creation of a Dubai trust depends on the means of establishment, however, here are the main aspects to consider:
- the creation of the trust deed/testament takes around 5 days, as it must also be notarized;
- in Dubai, the registration in DIFC takes between 2 and 4 weeks.
With respect to the taxation of trusts, such structures usually benefit from exemptions from the recently introduced 9% income tax. Our local specialists can offer detailed information about the tax treatment applicable to trusts.
Other services we provide
Apart from helping clients who want to create trusts in Dubai, we can also offer support in immigration issues. Our lawyers can assist foreign citizens seeking to relocate to the UAE on a short or long-term basis. For entrepreneurs, we recommend the freelance visa for Dubai, which is a great option for independent contractors who want to enjoy the great living conditions this Emirate has to offer while carrying out a trade or activity the respective person specializes in. With a validity of 2 to 10 years, this residence permit is an advanced alternative to a digital nomad visa for those who enjoy mixing work and travel.
If you are a foreign investor who wants to set up a trust in Dubai, we invite you to solicit complete guidance and also legal support in this matter from our law firm in Dubai by contacting us.