Dubai / WAM
In his capacity as Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, has enacted two new laws that aim to improve and expand the Dubai International Financial Centre (DIFC’s) already successful private wealth management and succession planning platforms.
Both the Trust Law and Foundations Law are in line with the previous recommendations of the DIFC’s Wealth Management Working Group and are the product of global benchmarking and extensive consultation with industry professionals and family business networks both regionally and globally.
The new laws have been welcomed by academics and practitioners alike in setting a new global standard. In addition to serving families in their wealth and succession planning, the laws will be equally adept at serving the financial services community in structured financing transactions in creating insolvency remote and orphan structures.
Essa Kazim, Governor of DIFC, commented: “Providing a world-class legal and regulatory environment has always been a key priority for us at DIFC. We constantly explore new ways to shape the financial landscape in the region. Insights from our clients, industry and Wealth Management Working Group have been reflected in the laws which have been enacted to ensure the DIFC community, which is the largest in the MEASA region, can continue to explore new ways to grow.”
The new Trust Law No. 4 of 2018 is a self-contained enhancement of the DIFC Trust Law in line with international best practice. The new law provides an appropriate environment for the operation of trusts in DIFC, taking into account the requirements of local families, particularly in the context of succession planning. It contains significant enhancements and refinements to promote better trust administration and provides greater certainty and flexibility for settlors, trustees and beneficiaries, as well as certain technical amendments.
The new Foundations Law No.3 of 2018 introduces a completely new regime, alongside the existing DIFC Companies Law and Trust Law, to promote better creditor protection, succession planning and lifetime private wealth planning solutions for family businesses. It also provides greater certainty and flexibility for private wealth management and charitable institutions.
The new law is in line with international best practice and takes into account specific factors relating to DIFC and the need to provide an appropriate regulatory environment for Foundations to be established in or act from the Centre. The Foundations Law also contains provisions relating to the powers of the Registrar of Companies who will administer the Law on behalf of the DIFC Authority, which is in line with the Registrar’s administrative powers under the Companies Law.
The Centre’s commitment to instilling best practices in order to continuously develop the financial services sectors is an important element of its ambitious 2024 growth strategy, through which DIFC is positioned as the leading centre for private wealth management, and one of the world’s top 10 financial centres.