News

UAE targets family offices with private trusts law

RegulationsThe UAE has introduced legal recognition for private trusts in a bid to support its growing wealth management market. The Ministry of Finance’s (MoF) Decree Law 19 allows capital owners to manage their wealth as a financial trust and to appoint qualified wealth managers. According to the ministry, the move will create greater investment protection, which will in turn make the make the country’s wealth management sector more attractive and more competitive. While the concept of an investment trust that recognises the separation of legal and beneficial ownership is well established in common law, it is a new feature in UAE’s legal framework. According to a MoF statement, the decree is designed to appeal to family offices especially. “The MoF issued the trust law to create legal tools that enable companies or people who own various capital and financial rights to hand over these wealth and rights as a financial trust to a trustee who is entrusted with managing and developing said funds,” said Younis Haji Al Khoori, undersecretary at the MoF. “This is done through a special document called a trust deed, and it is recorded electronically to reflect the assets – whether movable or property. After that, the existence of trust rights is indicated in the official records of those assets.” The latest law follows the October 2020 introduction of the Federal Decree Law on Financial Covenants, which was also designed to bolster the wealth management industry by aligning its regulatory framework with global practice. © 2021 funds global mena

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