RISK MITIGATION THROUGH TRUST AGREEMENT
A Trust is a legal agreement created to secure assets and capital of the expatriate whereby the expatriate appoints a UAE National to act is the capacity of a Trustee via a Holding Structure incorporated within Abu Dhabi Global Market (ADGM).
ADGM is a Financial Free Zone established in the UAE with its regulations governed by English Common Law. A Holding Structure established in ADGM allows the expatriate business owner to beneficially hold the assets and capital of the UAE National via an arrangement registered with the Authority and enforceable under Law.
Risks as per Existing Companies Law in the UAE
- Requires a Local Emirati Partner holding 51% shares of the company and entitled to a minimum of 20% profit share
- Expatriate business owner does not have full control over the business
- Expatriates are exposed as there is no precedence as per the existing civil law
- Threat of enforceability of Nominee Side Agreements
- Exposure to succession risks in case the local sponsor is incapacitated
Sanctuary offers bespoke solutions to eliminate the common challenges faced by expatriate business owners in the UAE. The Federal Law on Commercial Companies in the UAE requires that a Limited Liability Company shall have Local Emirati Partner(s) holding at least 51% of the ownership in the company. This leaves the expatriate lacking full ownership over their assets and lacking full control over the profits of the company.
Our Risk Mitigation Solution not only secures capital and assets of the expatriates, but also guarantee complete freedom to retain 100% beneficial ownership and decision-making control while staying in compliance with the UAE Laws.
Benefits of Sanctuary Solution
- All profits and assets are protected through ADGM’s SPV incorporation process
- The share capital comprising the Nominee Shares is protected under legally binding agreements registered with ADGM
- The expatriate will have full control over the company’s assets, finance and share capital.
- Share transfers and restructuring can occur without obtaining the consent of the Emirati Local Partner.
- The risks associated with the potential application of inheritance rules under Shariah, if the UAE sponsor dies or becomes incapacitated, are either eliminated or considerably mitigated.