The trust is one of the oldest arrangements through which wealthy families used to protect their assets. It first appeared in the United Kingdom, however it rapidly expanded all over the world. The Sharia Law in the UAE does not provide for the creation of trust, but considering its emirate has its own regulations Dubai has acknowledged the trust and enabled the Trust Law in 2005. This law was first amended in 2007 and then 2010. One can set up a trust only in Dubai International Financial Centre (DIFC), one of the most reputable free zones of the emirate.
Creating a trust in Dubai is not difficult, as the DIFC Authority, the main body in charge with the recognition and registration of trusts, does not impose restrictions to those interested in using this type of entity to protect their estates. Both local and foreign citizens are welcome to establish trusts in the Dubai International Financial Centre Free Zone. Moreover, they can set up the following types of trusts:
- Charitable Trusts;
- Non-Charitable Trusts;
- Express Trusts;
- Protective Trusts.
Our lawyers can explain the differences between the types of trusts enumerated above.
A trust is formed when someone (the settlor) places their assets in the legal custody of someone else (the trustee) for the benefit of a third party (the beneficiary). The assets no longer belong to the settlor and are the responsibility of the trustee, who controls these assets on behalf of the beneficiary. Once a foundation is registered and the assets have passed from the settlor to the foundation, it is the foundation itself that owns and has legal responsibility for those assets.