Asset protection and privacy at DIFC in UAE

For the last time, the Dubai International Financial Centre or to be short, DIFC, has enhanced its Trust Laws adopted back in 2018. The move has further cemented the ultimate position of the financial center as the number one area to establish trusts. The Middle East Commercial Director, Leevyn Isabel, and Kenny Curpen Director of Private Client and Corporate Service put much value on the major features provided by the DIFC trust regime. They point to its enormous advantages for those planning to use the trust regime for their asset protection.

The DIFC trust regime’s major features

It is no wonder the trust regime keeps attracting new followers. They can count on the following benefits:

• Greater privacy: With this regime, you can enjoy greater confidentiality because here you may afford to remain unregistered. Since any central registry is not present here, you can’t have your confidential data disclosed. In turn, you are granted a certificate that proves the very existence of the trust, and beneficial ownership alongside control, not to mention the fact you can always request beneficiaries.
• Greater asset diversification: You can decrease the overall level of your risk at the cost of a greater choice of assets varying from intellectual property, real estate, art to bonds, shares, etc. What’s more, they don’t necessarily need to be located in the DIFC. You may hold them in other jurisdictions.
• Enhanced confidentiality: The trust information is protected by corresponding laws. It also applies to such sensitive details as beneficiaries and assets.
• Corporate trustees won’t embarrass you: It is because their physical presence in the DIFC is not required.
• Cryptos are welcome: The DIFC regulations are crypto-friendly, so feel free to earn money from the growing value of various digital coins.
• Flexible duration options: It’s up to you to determine how long your DIFC trust is going to exist. At any time you may have it revoked as a settlor.
• Have your assets segregated: Of course, there might be personal assets and others and it would be logical to separate them from each other. It’s crucial not to mix trust assets with anything else to protect trust ones from extra financial risks, legal claims, and creditors. Families having business interests would definitely appreciate that because it provides them with protection against their venture’s liabilities.
• Easier asset transfer: Timelines and distribution plans related to certain events in the life of legatees or ages. Thus, one may evade probate difficulties, in particular, when local probate legislation contradicts what the settlor wants or there’re cross-border interests.
• Greater flexibility: With the latest updates, DIFC trusts demonstrate higher flexibility. Now settlors have greater possibilities in terms of having trusts tailored as they wish them to be.  Besides this,  settlors have the right to remove and assign trustees, change the trust deed, and manage investments.
• Arbitration and DIFC courts: If there are any trust-related disputes, they can be clarified in the DIFC courts. If settlors need arbitration for their administrative disputes, they need to specify it in the trust doc.
• Legacy control: DIFC laws offer a good alternative to legacy control. In contrary to foreign laws, these ones don’t find claims coming from outside jurisdictions plausible.
• Integration with UAE legal framework: Those interested in running businesses in the UAE can benefit from DIFC trusts this country’s legislation recognizes them.
• Make the most from tax optimization: The UAE offers a very attractive tax regime for trusts. So, opting for this offer gives them an opportunity to have their global tax obligations optimized.
• Greater asset protection: Within DIFC trusts, legal disputes about property transfers have a limitation term of three years. Unless proved insolvent or fraudulent, transfers can’t be invalidated. Furthermore, if creditors have something to argue against the trust, they can’t go beyond the founder’s initial interest in the property to be transferred.
• DIFC laws dominate: Foreign judgments over DIFC trusts can’t be superior to the DIFC laws. If foreign verdicts, in particular, those having to do with legacy issues, contradict DIFC legislation, they can’t be enforceable.

As mentioned above, this trust regime would be a smart solution for those seeking ultimate asset protection and legacy planning. It keeps attracting new foreign investors with a sturdy legal foundation, and enhanced confidentiality.

Making the most from Ocorian assistance

A corporate service provider integrated in the DIFC, Ocorian can back undertaking with its top-notch leadership, accounting, secretarial as well as company formation services. The provider’s deep knowledge of local pitfalls and rich experience will help you to adapt to the trust regime’s legal framework.