Confusion over UAE Inheritance Law for Expats

By Vikrant Pangam

Sovereign Group, Abu Dhabi Office

There have been many conflicting views on inheritance laws in the UAE. "If I were to pass away in the UAE and my bank accounts are frozen, how is my wife to access my funds? What about my will written in the UK?" As these questions among others - were directed to a panel of legal experts at a symposium held at Abu Dhabi Chamber of Commerce and Industry (ADCCI) on 28th February 2011, not all elicited easy answers.

The panellists, who admitted to a gaping conflict of views on inheritance laws in the UAE, said they would persuade the government to bring about greater clarity on such matters.
"A lawyer can say to you we cannot guarantee you anything because in a civil code country, judges are not bound by judgments of previous cases," said Cynthia Trench, Principal of legal firm Trench & Associates, which organised the symposium at the ADCCI.

"We have a lot of conflicts here because of which courts are giving conflicting judgments, lawyers are giving conflicting advice and the press is giving conflicting articles," she said.

To illustrate her point, Trench referred to different sections of the law and said on the one hand, we can look to the law of domicile of expatriates, Article 17 (1), to determine the distribution of properties or assets. On the other, Article 17 (5) says the laws of the UAE shall apply to wills made by expatriates disposing of their property in the state. And there's Article 2 (Civil Transactions Code), which says the principles of Islamic jurisprudence shall be relied upon in interpreting these provisions. "What law should we apply?" she wanted to know.

Cynthia further cited recent Dubai Court Cases and explored that

1. Presently the majority of the judges apply Sharia Law and ignore any Foreign Wills;

2. Even if you manage to obtain the ears of a sympathetic judge, it would take over 12 months and could cost more than Dhs 50,000 (Advocate fees, notarisation and legalisation of the Foreign documents, translation costs and foreign lawyers’ fees).

Dwelling on a document issued by the Notary Public on wills for non-Muslims which says, "Write it, Attest it, Keep it", Trench referred to Para 12 which in effect notes that the decision would not be upheld by the competent court.

To avoid such unfavourable implications, the most certain way moving forward is to take the ownership of your assets, bank accounts and properties offshore. The UAE laws at the moment allow Expatriates to own any assets under an offshore company, which in effect takes the assets outside UAE jurisdiction for inheritance purposes.

KIZAD: Abu Dhabi's best kept secret

Khalifa Industrial Zones Abu Dhabi (KIZAD) unveiled to the Abu Dhabi and the rest of the world on November 13th 2010 and marks the emirates largest infrastructure project. The industrial Zone, which allows 100% foreign ownership and is situated at Taweelah (halfway between Abu Dhabi and Dubai) will prove to be an integral part of Abu Dhabi’s economy.

The magnitude of KIZAD is unprecedented since it’s 4 times bigger than Abu Dhabi Island, 2/3 size of Singapore, one quarter the size of Greater London (covering the distance from Canary Wharf to Slough) and has its own dedicated port. Its construction will continue until 2030 whereby over the years it will become a mega transport hub, linking its self to air, road, sea, and rail. It aims to become one of the largest industrial zones in the world, and by the year 2030 KIZAD aims to provide 150,000 jobs and to host around 100,000 residents-solidifying its importance to Abu Dhabi’s 2030 vision.

Access to local, regional and international markets

KIZAD is the ideal location for businesses to tap into huge regional and global markets. Its world central location means businesses in the Industrial Zone can tap into a market of more than two billion consumers within four time zones. Europe, Russia, India and Africa, are all easily reached while the markets of the Far East - Asia, Korea, China and Japan are readily accessible.

KIZAD will benefit from excellent access by sea though its ultra modern deepwater seaport, Khalifa Port. KIZAD is also directly connected to the markets of the UAE and the wider Middle East. The Industrial Zone and Khalifa Port have excellent access to the UAE’s excellent highway network which links to the Gulf Cooperative Council (GCC) and wider Middle East. Abu Dhabi International Airport and Al Maktoum International Airport in Dubai are both less than 30 minutes away, while the emerging freight and passenger rail networks will link tenants at KIZAD to the far corners of the Arabian Peninsula.

Low cost operating environment

KIZAD can create competitively priced infrastructure solutions tailored to address the specific utilities and logistics needs of major manufacturing projects. One of the major operating costs for industrial companies is utilities, which is why Abu Dhabi offers gas, water and electrical power at some of the lowest rates in the world.

Ease of doing business

At KIZAD support for your business starts even before your operations begin. For example KIZAD’s development of a long term “bankable” agreement ensures easy access to project and investment finance. KIZAD’s Business Development and Customer Relationship Teams include industry people who will help find the right plot for your business, ease you through set up and government certification and ensure that your business’s on-going administrative and business service needs continue to be met.

To make this happen Kizad has refined the One Stop Shop business services concept to deliver unprecedented value and convenience by facilitating relationships with Government and Licensing Authorities as well as utility companies to ensure rapid processing and approvals.

Please feel free to contact our Abu Dhabi office more information: AD@SovereignGroup.com or Free Local Call 800 Offshore

International Defence Exhibition (IDEX) 2011 promises to be the biggest ever arms exhibition in the Middle East

Abu Dhabi: Come February 2011 the 10^th edition of the International Defence Exhibition (IDEX), IDEX 2011 promises to be the biggest ever defence systems exhibition outside the US. With exhibitors flocking to IDEX, largely due to its ability to attract business not only from the U.A.E., but also from the larger Middle East and North African region besides Asia.

Defense spending in the Middle East has been constantly growing, because all countries want to stay abreast with modern military technology to ensure that their military capabilities are wider and more effective. A recent study by Frost & Sullivan on 'The Middle East Defense Market' reveals that the defense spending in the Middle East region is expected to surpass $100 billion by 2014.

The substantial chunk of spending in Middle East is going to come from Saudi Arabia, Iraq and the UAE. Faced with internal security challenges, plus the need to solidify its borders, Baghdad will invest an average of $12.5 billion annually through 2015 towards the advancing development of the Iraqi Security Forces (ISF). While Iraq provides a robust market opportunity due to the ongoing ISF rebuilding process, the scale of investment in the Gulf region is spearheaded by Saudi Arabia’s $60 billion package of approved U.S. Pentagon’s government-to-government Foreign Military Sales (FMS) agreements to upgrade its air fleet with new and refurbished F-15 jet fighters and new helicopters. Mirroring the Saudi efforts, the UAE is also undertaking a modernization of its Air Force. This modernization includes an approved FMS agreement for the purchase of 60 AH-64D Apache helicopters. The UAE is also in the process of considering successors for its fleet of Mirage 2000 jet fighters in what may ultimately prove to be a 60-unit buy worth up to $10 billion. Additional areas that the UAE may seek to upgrade include littoral protection and air defense.

For 2010 combined GCC defense/security investment was $68.3 billion. Forecast International, market research company, expects that total to increase to $73.4 billion in 2011 and continue growing to $82.5 billion by 2015.

As the Middle Eastern economies emerge from recession and oil price nudges the $100 mark, IDEX 2011 is expected to announce series of defence contracts over the five-day event in Abu Dhabi in February 2011.

Abu Dhabi to raise FDI to 23% of GDP by 2030

Abu Dhabi to raise FDI to 23% of GDP by 2030

Abu Dhabi economy in recent years has made major steps to diversify its economy away from oil revenues into petrochemicals, steel and aluminum. The multi-billion dirham projects are in line with Abu Dhabi's Economic Vision 2030 that aims for sustainable growth on a solid economic basis.

According to Abu Dhabi's Urban Planning Council some $200 billion (Dh734 billion) will have been pumped by 2013 into various infrastructure projects. The idea behind Abu Dhabi's economic diversification is that if oil prices go down, there will be other sources of income to compensate for the loss in oil revenue.

However, oil revenues are still an important source of revenue for the emirate, contributing 49 per cent to the GDP. Experts say that Abu Dhabi's economic growth momentum will gain traction in 2011 from surging international oil prices and fast-improving global business confidence which will help boost the emirate's non-oil income as well.

Abu Dhabi also has identified aviation and high-end business and leisure tourism as key elements in its economic growth strategy and is judiciously investing income from oil exports to become a major regional aviation hub.

If you are a potential investor, Abu Dhabi does offer lucrative investment opportunities. Many foreign and local investors are using offshore structures to ride the wave of Abu Dhabi’s Economic Vision 2030. Contact us if you already have investments in Abu Dhabi or planning to invest, we will assist you in protecting your investments through offshore structures.