Property & Estate Planning
Dubai Freehold Property / Property in the UAE
Expat Wills now offer expat legal will services relating to estate planning on a global basis from our newly opened head office location in Hong Kong.
Our Middle East clients should note that certain expatriates have the right to elect to have the laws of their country of nationality or domicile apply to their UAE property. However it is not clear if this rule can be applied to immovable property (real estate) or it applied to just movable assets such as cash money etc.
Although it is important not to die without a Will, having one may not be sufficient to avoid Sharia law being applied to your real estate (immovable property) under the current legal system due to conflicts and ambiguities between UAE laws.
This can result in Sharia law being applied to immovable property (real estate); however there are alternative methods of assigning your assets to avoid this situation.
The Dubai Land Department has not indicated that any legislation is in the pipeline to clarify whether an expatriate’s Last Will and Testament safeguards their real property inheritance from distribution as per Islamic Sharia law.
If an investor does not have full confidence investing in the UAE as an individual, then they always have the option of opening an off-shore company and buying the property under the off-shore company’s name. In this respect, we recommend setting up offshore companies located in common law jurisdictions such as the British Virgin Islands, Cayman Islands or the Isle of Man.
Notably, almost all lawyers in Dubai will tell you that setting up an offshore company is one way of bypassing the Islamic Sharia law provisions on inheritance. Such an arrangement is set up by the offshore company acquiring the UAE property. If the investors are a husband and wife, then both spouses are made equal shareholders in the company, and the Memorandum of Association (MOA) of the offshore company must contain a clause that is triggered upon the death of one of the shareholders. The trigger clause states that in the event of one of the shareholders dying, the other shareholder becomes the sole owner of the company, who then automatically “owns” the UAE property.
Also, additional directors can be appointed to the company at anytime, so children could be included in due course as a means of passing on the assets through the offshore company. This, advised by legal experts abroad, technically bypasses the provisions of the UAE civil code regarding real estate inheritance.
Shares in a company are not considered to be real property, so they pass under the UAE civil code restrictions on inheritance of real property owned in the UAE. Certain other provisions have to be included in the MOA which will allow the company to bypass the applicability of the local laws. There are certain restrictions on setting up offshore companies that need to be addressed correctly to make sure the vehicle is effective for the individual client’s needs.
Registration of a person’s interest on the title of a property provides conclusive evidence of his ownership. Article 22 of the new Law provides that the Land Department shall issue a title deed of real property rights in accordance with the current records in the Real Property Registers. Article 24 goes further to say that the title deed referred to under Article 22 shall have absolute power of evidence to establish real property rights
Expat Wills' network of lawyers in countries outside the emirate of Dubai can draft legal expat wills and offer advice on moving your paid-up property assets into off-shore companies to avoid the issues relating to Sharia law and therefore our lawyers abroad do not offer to write just wills but also offer a more comprehensive service associated with property matters.