Making a will is often a sensible way for an individual to put his or her affairs in order. But the administration of a deceased’s estate can often be costly, can result in long delays and very often involves a large bill, especially in the UAE. Setting up a trust, on the other hand, can eradicate delays, costs and protect assets from future creditors as well as provide anonymity.
What is a trust and how does it work? Setting up a trust is a better alternative to making a will during one’s lifetime. A trust is a financial tool whereby property is transferred from one person (the settler) to another (the trustee), who holds and administers it for the benefit of specific beneficiaries. The assets are managed by the trustee or the team of trustees, as per the terms and conditions of the trust deed, which also lays down the rights and interests of the beneficiaries.
What are the merits of setting up a trust? With a trust, you can make any number of arrangements for the distribution of your assets in a very convenient and flexible way. You may wish to provide a course of income for your spouse or make provision for the education of your children. A trust can also be used to overcome forced inheritance claims, a particular problem in countries of Islamic tradition.
How far does a trust assist in asset protection? A common motivation for establishing a trust is to preserve family assets against mismanagement and spendthrifts. An individual may want to ensure that the wealth accumulated over a lifetime is not dissipated or divided up, but is preserved as one fund. The fund can then accumulate further with provision for payments to the members of the family as necessary, preserving some assets for later generations.
How is the trust structure relevant for family business? Setting up a trust may ensure that the business built by the settler will continue after their death. If the company shares are transferred into a trust prior to the death of the settler, the unnecessary liquidation of the family business can be prevented. In case family members have little business experience, the trustees can be instructed to retain the business, keep the company running and provide payment to members of the family from dividend income.
Will a trust assist in holding international property? A portfolio of international property can be held under one single trust. In some circumstances, depending on local laws, a ‘local company’ may be required to set up under the trust (i.e. it’s common for a Jebel Ali Offshore company to hold Dubai Freehold property, and have a Trust acting as a shareholder of the company).
How does one determine the credentials of trustees? Reputable and well-regulated jurisdictions such as Gibraltar have been found at the forefront of best practices in the area of trusts. Professional trustees are required to be licensed, use the Financial Services Ordinance 1989 and are regulated by the Financial Services Commission (FSC). Sovereign Trust International Ltd is one such licensed professional trustees. The company is regulated and covered by professional indemnity insurance. Vikrant Pangam is a Trust and Estate Planning Specialist and Managing Directory at Sovereign Group’s office in Abu Dhabi. The opinions expressed by the author are his own.
Showing posts with label Jebel Ali. Show all posts
Showing posts with label Jebel Ali. Show all posts
Thursday, March 21, 2013
Wednesday, August 1, 2012
Are you aware of the role of offshore companies in property investment?
Introduction:
Dubai Land Department have recently announced, (as of January 1st, 2011) that it is has banned the registration of Dubai property in the name of virtually all "offshore companies" or companies not registered onshore in Dubai. The one exception to this "offshore company ban" is the Jebel Ali Offshore Company. This new rule does not affect individuals, only foreign or "offshore" companies looking to purchase property.
The following Q&A is to inform non GCC purchasers and investors, of the implications of the Land Department’s new rules, and how the recent changes will affect foreign companies purchasing and registering property in Dubai:
Why would one use a company to purchase a property in Dubai:
There are a number of good reasons why the use of Offshore Companies has become so popular when buying local Dubai property. The most obvious reason would be the avoidance of complicated inheritance procedures. A company does not die. If your property is held in a low cost offshore company, you (and your partner or partners) can own the shares of the company as you see fit. So rather than have your individual names on the title of the property, you have a company name. This is a very easy method for joint investment, for confidentiality, and for organising ones assets under a manageable structure (and in many cases, in a Common Law structure).
So the only "Offshore Company" that I can currently use to buy property in Dubai, is the Jebel Ali Offshore Company?
Correct. This applies only in Dubai. For example, you can still buy property in Abu Dhabi through a BVI company.
The Dubai Lands Department decision of Jan 1st 2011, has confirmed that it will NOT register property title to any foreign company, unless that company is registered offshore with the Jebel Ali Freezone.
But can a foreign company own the Jebel Ali Offshore Company?
Yes. You can for example, use a BVI company, or a common law Trust, to hold the shares of your Jebel Ali Offshore Company. You will still need to clearly show the Lands Dept evidence of the ultimate individual owner(s), with attested share certificates and passport copies.
What about if my property is not yet delivered? I have signed the purchase agreement before January 2011 in my personal name, can I now switch to a company name?
The Dubai Lands Department have an interim property register, and main property register. Until your property is listed on the actual main property register (which happens after handover), then
it is possible to change the title from an individual name to a Jebel Ali Offshore Company, providing you can show that there is no change in the beneficial ownership (i.e. the same individual on the initial agreement, is the same owner behind the company).
But will there be an additional transfer fee, if the sale and purchase agreement is not currently in the name of a Jebel Ali Offshore company?
In order for the registration of title to take place, the developer of the property must issue a No Objection Certificate consenting to the registration in the name of the Jebel Ali Offshore Company. As mentioned above, normally the developer will want to see clear evidence that the person named on the sale and purchase agreement, is the same person as the beneficial owner behind the new Jebel Ali Offshore company. The developer normally charges an administration fee, which should not be more than Dh3-5,000, to issue the No Objection Certificate.
If the developer and Jafza both issue NoCs to the Land Department authorising the registration in the name of the Jafza offshore company, it is normal that the registration can be completed without charging an additional transfer fee, again provided that the ultimate beneficial owners of the new Jafza offshore company are the same as those mentioned in the original sale agreement.
What if my BVI company already holds the title deeds to my property in Dubai?
The recent changes to the policy only apply to registrations of titles taking place from January 1, 2011, and do not affect any that took place prior to that date.
Does Jafza allow offshore companies to own property anywhere in Dubai?
From the 2006 Circular that Jafza issued, it stated that Jebel Ali offshore entities could own property in any project in Dubai that were owned by Dubai World, Dubai Holdings and Emaar Properties.
Whilst we understand that there is no restriction on any freehold property, Jafza offshore companies must still obtain a "No Objection Certificate" from Jafza, in order to register title at the Land Department.
To date, we have not ever had a refusal for an "NOC", when clients are looking to own property outside the projects listed on the 2006 circular.
How is the Jebel Al Offshore Company set up, how much will it cost me?
Set up is fairly straightforward, with the normal due-diligence required on all proposed Directors and Shareholders. It will take about 4-5 days in incorporate, and requires the shareholders of the company to visit the freezone and sign (or provide a Power of Attorney to someone to act on their behalf).
The cost at set up is USD$4,950, and annually there is a registered agent fee of $1950. Sovereign Dubai is one of the oldest registered agents with Jafza, and we have a dedicated corporate services department of 25 people who are there to assist with all company formation enquiries.
What if I want to sell my property, and it is owned by the company, how do I do it?
You have two choices here, you can either sell the property OUT of the company, by simply signing the sale documents as a Director of the company, or you can sell the shares of company, (assuming the company only holds one asset, which is the house). The Lands Dept WILL need to be notified of the change in beneficial ownership of the company, with certified documents to be provided from Jebel Ali Freezone (all of which we can assist with).
Dubai Land Department have recently announced, (as of January 1st, 2011) that it is has banned the registration of Dubai property in the name of virtually all "offshore companies" or companies not registered onshore in Dubai. The one exception to this "offshore company ban" is the Jebel Ali Offshore Company. This new rule does not affect individuals, only foreign or "offshore" companies looking to purchase property.
The following Q&A is to inform non GCC purchasers and investors, of the implications of the Land Department’s new rules, and how the recent changes will affect foreign companies purchasing and registering property in Dubai:
Why would one use a company to purchase a property in Dubai:
There are a number of good reasons why the use of Offshore Companies has become so popular when buying local Dubai property. The most obvious reason would be the avoidance of complicated inheritance procedures. A company does not die. If your property is held in a low cost offshore company, you (and your partner or partners) can own the shares of the company as you see fit. So rather than have your individual names on the title of the property, you have a company name. This is a very easy method for joint investment, for confidentiality, and for organising ones assets under a manageable structure (and in many cases, in a Common Law structure).
So the only "Offshore Company" that I can currently use to buy property in Dubai, is the Jebel Ali Offshore Company?
Correct. This applies only in Dubai. For example, you can still buy property in Abu Dhabi through a BVI company.
The Dubai Lands Department decision of Jan 1st 2011, has confirmed that it will NOT register property title to any foreign company, unless that company is registered offshore with the Jebel Ali Freezone.
But can a foreign company own the Jebel Ali Offshore Company?
Yes. You can for example, use a BVI company, or a common law Trust, to hold the shares of your Jebel Ali Offshore Company. You will still need to clearly show the Lands Dept evidence of the ultimate individual owner(s), with attested share certificates and passport copies.
What about if my property is not yet delivered? I have signed the purchase agreement before January 2011 in my personal name, can I now switch to a company name?
The Dubai Lands Department have an interim property register, and main property register. Until your property is listed on the actual main property register (which happens after handover), then
it is possible to change the title from an individual name to a Jebel Ali Offshore Company, providing you can show that there is no change in the beneficial ownership (i.e. the same individual on the initial agreement, is the same owner behind the company).
But will there be an additional transfer fee, if the sale and purchase agreement is not currently in the name of a Jebel Ali Offshore company?
In order for the registration of title to take place, the developer of the property must issue a No Objection Certificate consenting to the registration in the name of the Jebel Ali Offshore Company. As mentioned above, normally the developer will want to see clear evidence that the person named on the sale and purchase agreement, is the same person as the beneficial owner behind the new Jebel Ali Offshore company. The developer normally charges an administration fee, which should not be more than Dh3-5,000, to issue the No Objection Certificate.
If the developer and Jafza both issue NoCs to the Land Department authorising the registration in the name of the Jafza offshore company, it is normal that the registration can be completed without charging an additional transfer fee, again provided that the ultimate beneficial owners of the new Jafza offshore company are the same as those mentioned in the original sale agreement.
What if my BVI company already holds the title deeds to my property in Dubai?
The recent changes to the policy only apply to registrations of titles taking place from January 1, 2011, and do not affect any that took place prior to that date.
Does Jafza allow offshore companies to own property anywhere in Dubai?
From the 2006 Circular that Jafza issued, it stated that Jebel Ali offshore entities could own property in any project in Dubai that were owned by Dubai World, Dubai Holdings and Emaar Properties.
Whilst we understand that there is no restriction on any freehold property, Jafza offshore companies must still obtain a "No Objection Certificate" from Jafza, in order to register title at the Land Department.
To date, we have not ever had a refusal for an "NOC", when clients are looking to own property outside the projects listed on the 2006 circular.
How is the Jebel Al Offshore Company set up, how much will it cost me?
Set up is fairly straightforward, with the normal due-diligence required on all proposed Directors and Shareholders. It will take about 4-5 days in incorporate, and requires the shareholders of the company to visit the freezone and sign (or provide a Power of Attorney to someone to act on their behalf).
The cost at set up is USD$4,950, and annually there is a registered agent fee of $1950. Sovereign Dubai is one of the oldest registered agents with Jafza, and we have a dedicated corporate services department of 25 people who are there to assist with all company formation enquiries.
What if I want to sell my property, and it is owned by the company, how do I do it?
You have two choices here, you can either sell the property OUT of the company, by simply signing the sale documents as a Director of the company, or you can sell the shares of company, (assuming the company only holds one asset, which is the house). The Lands Dept WILL need to be notified of the change in beneficial ownership of the company, with certified documents to be provided from Jebel Ali Freezone (all of which we can assist with).
Tuesday, October 25, 2011
Are you aware of the role of offshore companies in property investment?
Introduction:
Dubai Land Department have recently announced, (as of January 1st, 2011) that it is has banned the registration of Dubai property in the name of virtually all “offshore companies” or companies not registered onshore in Dubai. The one exception to this “offshore company ban” is the Jebel Ali Offshore Company. This new rule does not effect individuals, only foreign or “offshore” companies looking to purchase property.
The following Q&A is to inform non GCC purchasers and investors, of the implications of the Land Department’s new rules, and how the recent changes will affect foreign companies purchasing and registering property in Dubai:
Why would one use a company to purchase a property in Dubai:
There are a number of good reasons why the use of Offshore Companies has become so popular when buying local Dubai property. The most obvious reason would be the avoidance of complicated inheritance procedures. A company does not die. If your property is held in a low cost offshore company, you (and your partner or partners) can own the shares of the company as you see fit. So rather than have your individual names on the title of the property, you have a company name. This is a very easy method for joint investment, for confidentiality, and for organising ones assets under a manageable structure (and in many cases, in a Common Law structure).
So the only “Offshore Company” that I can currently use to buy property in Dubai, is the Jebel Ali Offshore Company?
Correct. This applies only in Dubai. For example, you can still buy property in Abu Dhabi through a BVI company.
The Dubai Lands Department decision of Jan 1st 2011, has confirmed that it will NOT register property title to any foreign company, unless that company is registered offshore with the Jebel Ali Freezone.
But can a foreign company own the Jebel Ali Offshore Company?
Yes. You can for example, use a BVI company, or a common law Trust, to hold the shares of your Jebel Ali Offshore Company. You will still need to clearly show the Lands Dept evidence of the ultimate individual owner(s), with attested share certificates and passport copies.
What about if my property is not yet delivered? I have signed the purchase agreement before January 2011 in my personal name, can I now switch to a company name?
The Dubai Lands Department have an interim property register, and main property register. Until your property is listed on the actual main property register (which happens after handover), then it is possible to change the title from an individual name to a Jebel Ali Offshore Company, providing you can show that there is no change in the beneficial ownership (i.e. the same individual on the initial agreement, is the same owner behind the company).
But will there be an additional transfer fee, if the sale and purchase agreement is not currently in the name of a Jebel Ali Offshore company?
In order for the registration of title to take place, the developer of the property must issue a No Objection Certificate consenting to the registration in the name of the Jebel Ali Offshore Company. As mentioned above, normally the developer will want to see clear evidence that the person named on the sale and purchase agreement, is the same person as the beneficial owner behind the new Jebel Ali Offshore company. The developer normally charges an administration fee, which should not be more than Dh3-5,000, to issue the No Objection Certificate.
If the developer and Jafza both issue NoCs to the Land Department authorising the registration in the name of the Jafza offshore company, it is normal that the registration can be completed without charging an additional transfer fee, again provided that the ultimate beneficial owners of the new Jafza offshore company are the same as those mentioned in the original sale agreement.
What if my BVI company already holds the title deeds to my property in Dubai?
The recent changes to the policy only apply to registrations of titles taking place from January 1, 2011, and do not affect any that took place prior to that date.
Does Jafza allow offshore companies to own property anywhere in Dubai?
From the 2006 Circular that Jafza issued, it stated that Jebel Ali offshore entities could own property in any project in Dubai that were owned by Dubai World, Dubai Holdings and Emaar Properties.
Whilst we understand that there is no restriction on any freehold property, Jafza offshore companies must still obtain a “No Objection Certificate” from Jafza, in order to register title at the Land Department.
To date, we have not ever had a refusal for an “NOC”, when clients are looking to own property outside the projects listed on the 2006 circular.
How is the Jebel Al Offshore Company set up, how much will it cost me?
Set up is fairly straightforward, with the normal due-diligence required on all proposed Directors and Shareholders. It will take about 4-5 days in incorporate, and requires the shareholders of the company to visit the freezone and sign (or provide a Power of Attorney to someone to act on their behalf).
The cost at set up is USD$4,250, and annually there is a registered agent fee of $1950. Sovereign Dubai is one of the oldest registered agents with Jafza, and we have a dedicated corporate services department of 25 people who are there to assist with all company formation enquiries.
What if I want to sell my property, and it is owned by the company, how do I do it?
You have two choices here, you can either sell the property OUT of the company, by simply signing the sale documents as a Director of the company, or you can sell the shares of company, (assuming the company only holds one asset, which is the house). The Lands Dept WILL need to be notified of the change in beneficial ownership of the company, with certified documents to be provided from Jebel Ali Freezone (all of which we can assist with).
Dubai Land Department have recently announced, (as of January 1st, 2011) that it is has banned the registration of Dubai property in the name of virtually all “offshore companies” or companies not registered onshore in Dubai. The one exception to this “offshore company ban” is the Jebel Ali Offshore Company. This new rule does not effect individuals, only foreign or “offshore” companies looking to purchase property.
The following Q&A is to inform non GCC purchasers and investors, of the implications of the Land Department’s new rules, and how the recent changes will affect foreign companies purchasing and registering property in Dubai:
Why would one use a company to purchase a property in Dubai:
There are a number of good reasons why the use of Offshore Companies has become so popular when buying local Dubai property. The most obvious reason would be the avoidance of complicated inheritance procedures. A company does not die. If your property is held in a low cost offshore company, you (and your partner or partners) can own the shares of the company as you see fit. So rather than have your individual names on the title of the property, you have a company name. This is a very easy method for joint investment, for confidentiality, and for organising ones assets under a manageable structure (and in many cases, in a Common Law structure).
So the only “Offshore Company” that I can currently use to buy property in Dubai, is the Jebel Ali Offshore Company?
Correct. This applies only in Dubai. For example, you can still buy property in Abu Dhabi through a BVI company.
The Dubai Lands Department decision of Jan 1st 2011, has confirmed that it will NOT register property title to any foreign company, unless that company is registered offshore with the Jebel Ali Freezone.
But can a foreign company own the Jebel Ali Offshore Company?
Yes. You can for example, use a BVI company, or a common law Trust, to hold the shares of your Jebel Ali Offshore Company. You will still need to clearly show the Lands Dept evidence of the ultimate individual owner(s), with attested share certificates and passport copies.
What about if my property is not yet delivered? I have signed the purchase agreement before January 2011 in my personal name, can I now switch to a company name?
The Dubai Lands Department have an interim property register, and main property register. Until your property is listed on the actual main property register (which happens after handover), then it is possible to change the title from an individual name to a Jebel Ali Offshore Company, providing you can show that there is no change in the beneficial ownership (i.e. the same individual on the initial agreement, is the same owner behind the company).
But will there be an additional transfer fee, if the sale and purchase agreement is not currently in the name of a Jebel Ali Offshore company?
In order for the registration of title to take place, the developer of the property must issue a No Objection Certificate consenting to the registration in the name of the Jebel Ali Offshore Company. As mentioned above, normally the developer will want to see clear evidence that the person named on the sale and purchase agreement, is the same person as the beneficial owner behind the new Jebel Ali Offshore company. The developer normally charges an administration fee, which should not be more than Dh3-5,000, to issue the No Objection Certificate.
If the developer and Jafza both issue NoCs to the Land Department authorising the registration in the name of the Jafza offshore company, it is normal that the registration can be completed without charging an additional transfer fee, again provided that the ultimate beneficial owners of the new Jafza offshore company are the same as those mentioned in the original sale agreement.
What if my BVI company already holds the title deeds to my property in Dubai?
The recent changes to the policy only apply to registrations of titles taking place from January 1, 2011, and do not affect any that took place prior to that date.
Does Jafza allow offshore companies to own property anywhere in Dubai?
From the 2006 Circular that Jafza issued, it stated that Jebel Ali offshore entities could own property in any project in Dubai that were owned by Dubai World, Dubai Holdings and Emaar Properties.
Whilst we understand that there is no restriction on any freehold property, Jafza offshore companies must still obtain a “No Objection Certificate” from Jafza, in order to register title at the Land Department.
To date, we have not ever had a refusal for an “NOC”, when clients are looking to own property outside the projects listed on the 2006 circular.
How is the Jebel Al Offshore Company set up, how much will it cost me?
Set up is fairly straightforward, with the normal due-diligence required on all proposed Directors and Shareholders. It will take about 4-5 days in incorporate, and requires the shareholders of the company to visit the freezone and sign (or provide a Power of Attorney to someone to act on their behalf).
The cost at set up is USD$4,250, and annually there is a registered agent fee of $1950. Sovereign Dubai is one of the oldest registered agents with Jafza, and we have a dedicated corporate services department of 25 people who are there to assist with all company formation enquiries.
What if I want to sell my property, and it is owned by the company, how do I do it?
You have two choices here, you can either sell the property OUT of the company, by simply signing the sale documents as a Director of the company, or you can sell the shares of company, (assuming the company only holds one asset, which is the house). The Lands Dept WILL need to be notified of the change in beneficial ownership of the company, with certified documents to be provided from Jebel Ali Freezone (all of which we can assist with).
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