Trust and Assets

Offshore Trust- How to Protect Your Assets

Use of trusts for asset protection in the Dubai

To create trust in Dubai, you must meet all of the following conditions. The founder of the trust property must transfer its assets / personal fortune to the trust. It is necessary to appoint a trustee who is responsible for managing the trust and enforcing the provisions of the declaration of trust in the interests of the beneficiaries (a person or group of persons who benefit directly from the trust). The trustee must be an adult in his right mind and must conscientiously execute a trust declaration. The guarantor controls the activities of the trust, ensures compliance with its trust declaration (trust agreement) and ensures satisfactory management of the trust.

The founders need to understand the main difference between a non-offshore and an offshore trust, namely: in an offshore trust, assets are stored in another country, and the trust is created under the laws of an offshore jurisdiction. The trustee manages the trust on behalf of the founder (who transferred his assets to the trust) in the interests of the designated beneficiaries.

Why create an offshore trust in Dubai?

Dubai is an attractive jurisdiction to create trust. This is the 7th Emirate in the OAU, and very rich. There is reliable political stability here, which offshore investors greatly appreciate. Emigrants here account for 83% of the total population. In Dubai, there is no tax on the company, there is no need to provide tax information. Confidentiality is highly valued and there is no need to disclose the names of the owners of the trusts.

Dubai adopted a new law on investments in trusts (2006), providing a legal framework for individuals and companies wishing to establish trusts in Dubai, in particular, investment trusts.

What is an offshore trust in Dubai?

Trusts are mainly used by rich people who have the opportunity to plan their financial affairs and provide for their descendants and future generations. An attractive feature of the trust is that potential heirs cannot sue the trust and that the assets of the trust cannot be seized. A trust in Dubai allows you to avoid the right to an obligatory share in the hereditary mass, which allows the founder to choose to whom and in what amount he wishes to leave his assets. Many people want to protect their assets and become founders of trust. As a last resort, you have the right to transfer any assets to the trust and legally declare that you do not own them.

The most popular trusts in Dubai

Investment trusts are the most popular in Dubai. This is not surprising since the main purpose of trusts is to protect wealth and assets. Dubai’s economy is known for its exceptional stability and is rapidly developing in particular due to its excellent international financial ties with the whole world.

Advantages of offshore trusts in Dubai

Dubai’s generally recognized reputation as a profitable and productive financial center encourages the opening of trusts here.

Advantages of trusts in Dubai:

– no requirement for a minimum amount of capital to establish a trust

– 100% tax exemption

– the possibility of owning foreigners

– high degree of anonymity, which most founders aspire to

– the absence of inheritance tax and the avoidance of the right to an obligatory share in the inheritance mass, which allows you to control the distribution of the state

– avoidance of approval of the will

– lack of currency control

– A high degree of asset protection offshore and condition management.

Creating an offshore fund in Dubai

What is a foundation in Dubai?

Funds in Dubai are well-known as an alternative asset protection tool for trusts. A foundation in Dubai requires for its creation the existence of the founder who creates the fund, who is an individual / organization, company, guarantor providing the management of the fund, as is done in trusts, the beneficiary who, like trusts, is a person or group who benefits from the fund and, finally, board members.

After the foundation is created, it becomes a legal entity and, therefore, the owner of the fund’s assets. As a result, the fund does not have a specific owner and is created, as a rule, in the interests of the company’s offshore clients. Funds can own a wide variety of companies and assets and can issue instructions, which, as in the case of trusts, are binding. Requirements instructions are included in the registration document of the fund and its charter. Foundation in Dubai is created in accordance with the wishes of the founder, which can be both an individual and a company.

Funds in Dubai can be used for a variety of purposes, mainly commercial, charitable, or private. Funds are an excellent asset protection tool and are highly valued by businessmen of all sizes. In addition, funds can be created for a specific period.

Types of Funds in Dubai

There are 4 types of funds in Dubai:

– Public fund – created by families, groups, etc.

– Private fund – created by private individuals, usually they are represented by private investment funds.

– State Fund

– Mixed Fund – can be created by any of the above.

Purpose of offshore funds in Dubai

– Private goals when the founder’s requirements are not publicly registered

– Protection of personal and corporate status

– Property management and condition planning

– Tax planning of inherited assets

– Corporate control, ensuring good fund manageability

– separation of voting and economic benefits

– Schemes of employee participation in profits and pension schemes

– Charity groups.

What assets can be held in an offshore fund in Dubai?

You can keep several types of assets in an offshore fund, such as:

– Shares and securities

– Bank deposits

– Life insurance policies

– Investment portfolios

– Real Estate

– Intellectual property

Advantages of the fund in Dubai

– Dubai offers tax haven for offshore investors

– Dubai does not participate in any tax information sharing agreements with other countries.

“The banking system in Dubai adheres to strict confidentiality rules and is very flexible. Many investors and residents of Dubai are very rich people, and the banking system is adapted to the needs of just such people.

– Privacy laws attract offshore founders.

– Geographical location facilitates international communication and access to other jurisdictions of the world.

– High asset protection

– Payment of reasonable compensation for your services to the fund

– Contributors have the right to exclude the deposited amount from income taxation

– The Fund may own many corporations and assets without limiting the nature of the assets.

– The possibility of implementing the prescribed instructions, as is the case with trusts

– No tax on the sale of property

– Lack of capital gains taxes or corporate income taxes.

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