Establishing an Arabian Trust in the UAE

An Arabian Trust is a time-tested and globally recognized instrument that provides anonymity and safeguards the property rights of the owner. Traditional jurisdictions in Europe and the UK, which have trust legislation, no longer guarantee the confidentiality of their owners due to stricter disclosure requirements. The Arabian Trust in the UAE has emerged as a highly reliable and guaranteed tool for maintaining anonymity.

How Does an Arabian Trust Work?

The principle of nominal ownership, which underpins most business registrations in the UAE, is crucial to the functioning of the Arabian Trust. In practice, many businesses are owned by foreigners, and the state judicially protects the interests of these beneficial owners, forming the basis of trust relations in the Emirates.

What is an Arabian Trust and How is it Structured?

The Arabian Trust operates within the framework of UAE legislation, based on Sharia principles. Legally, it is established by signing a series of agreements and contracts that rely on the commercial law of the Emirates and are certified in the Dubai courts.

Who Establishes an Arabian Trust?

An Arabian Trust is established with the participation of a settlor, trustee, and a beneficiary. The settlor is the nominal shareholder, the beneficiary is the investor who reaps the benefits from the trust, and the trustee is a managerial agent or nominal director who follows the ultimate beneficiary’s instructions.

What Guarantees the Anonymity of Beneficiaries?

The UAE adheres to all international standards for information disclosure. However, these standards apply to non-residents. Trust participants, who can attain resident status (investors), are therefore protected from the automatic exchange of information (CRS). Emirates courts, where trust relations are formalized, do not participate in the automatic exchange of information.

Are There Any Tax Consequences Associated with an Arabian Trust?

The UAE’s state policy is fully oriented towards creating favorable conditions and equal rights for foreign investors, thus providing ideal conditions for successful business operations. There is no taxation on financial and investment operations, and international activities are also tax-free. Business owners are exempt from corporate taxes (with the exception of a 5% VAT on certain domestic operations).

Opportunities Provided by the Arabian Trust for Business Solutions

• Data Confidentiality: Complete anonymity for asset owners, account signatories, and decision-makers.
• Freedom of Interdependent Operations: Ability to conduct tax-free transactions and asset transfers due to the anonymity of the trust owners.
• Protection of Investor Assets: The confidentiality of the trust allows for the protection of business and assets with the possibility of effective management.
• Concealment of Real Estate Ownership: Re-registering real estate to a trust ensures ownership rights without the need for declaration.
• Collective Investment Organization: Accumulating funds in a trust-managed fund for their guaranteed investment.
• Guaranteed and Tax-Free Inheritance: Enables the stipulation of property and asset inheritance by the trust owners’ decision.