Commitment and Protection – the increasing importance of DIFC Wills amid economic change
By Sean Hird
Dubai, UAE, June 19, 2018: The UAE has always been an engine for change in the Middle East and the next big transformation is just around the corner.
Changes in business and residency law are planned which will have sweeping effects on the lives of non-Emirati residents.
They will affect how we do business, where we live, how we invest and, ultimately, how we plan our futures and those of our families.
At the DIFC Will Service Centre we are watching closely. We believe these developments will further commit foreign residents to the UAE.
In turn, that means business owners and residents will seek extra security, looking for the certainty of a DIFC Will to safeguard their assets for the next generation and allowing them to distribute their wealth as they think fit.
In short, we see two strong themes emerging - a likely growth in long-term commitment and a requirement for security for the wealth that successful people accumulate over decades.
Last month’s Cabinet announcement may have come as a surprise, but for years there has been a steady building up of the governmental institutions needed to underpin the national leadership’s vision of a world-class, competitive and diversified economy.
At the DIFC Wills Service Centre, we are part of that. Last year we saw the passage of Dubai Law No. 15 of 2017, designed to deliver legal clarity and significantly accelerate the process of inheritance cases. Like the legislative change for expat visas, Dubai Law No. 15 was introduced to instil confidence amongst investors and residents of the Emirates.
That allows us to offer non-Muslims in Dubai and Ras Al Khaimah the opportunity to protect their legacy by allocating their estate through a DIFC Will, choosing their own beneficiaries, rather than through the sharia system of distributing assets in fixed proportions to family members.
This flexible and tolerant arrangement means foreign residents can be certain that the wealth they have accumulated during their life will be passed on just as it might in their home country, part of a far-sighted government strategy designed to attract and reassure global business and global citizens.
The next step in that strategy is the Federal Government’s review of two main policy areas – the creation of onshore companies and the issuing of long-term residency.
On company registration, it seems that some onshore companies will be eligible for 100 per cent foreign ownership, bringing them into line with freezone companies.
On residency, a new 10-year visa will be introduced for investors and medical, technical and research specialists, encouraging the brightest and best to settle here.
Similarly, students who study at UAE universities will automatically receive a five year visa, and “exceptional” students will be granted a 10-year residency. It’s likely that family members will be included in at least some of the new visa categories.
These are the most generous, business-oriented residency regulations in the region. They demonstrate a commitment by the national leadership to its population, not just Emiratis, but all those who make their lives here and contribute towards the UAE’s extraordinary story of growth and progress.
In return, it seems likely that the country will receive greater commitment from its new long-term residents.
If you and your family are here for that long, you are more likely to buy a home than to rent. You’re more likely to set up a business and invest with long-term loans and a business plan. And you will probably keep more of your savings here, reducing the massive DH164.3 billion remitted overseas from the UAE in 2017.
So more commitment can be expected. But how do you pass on the benefits to future generations?
As they accrue wealth, long-term residents will wish to protect and preserve their good fortune for the next generation, according to their cultural norms.
A DIFC Will does just that for residents of Dubai and Ras Al Khaimah, and we expect to see further uptake of our services as the new visa and residency provisions kick-in.
Those holding real estate property, free zone company shares and financial assets will have the added advantage of being able to make use of the free-of-charge will templates that are available from our website – making it even easier for them to secure and pass on what they own to their chosen beneficiaries.
Rising home ownership will attract people to register a DIFC Property Will (which is specific to real estate assets) covering up to five real estate properties.
As internal investment increases, our Financial Assets Will comes into play. It protects liquid assets, up to ten bank or brokerage accounts including cash, shares, stocks and government securities.
Our Company Will covers freezone companies, allowing owners and shareholders to ensure that, in the event of an untimely death, the company can continue to prosper and the interests of family members will be secured.
And covering all assets is our Full Will, which can also include provisions for the guardianship of children and for spouses to “mirror” each other’s wishes.
We await with great interest the details of the new legislation, probably later this year. But we are confident that, as the UAE swings towards a new domestic economic model, a strong supporting structure is already in place. The safety and certainty of the unique DIFC Will is one of that structure’s keystones.
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