DIFC Trusts – Implications outside the DIFC

Overview

Dubai Courts and DIFC Courts view each other as pillars of the Dubai legal system and agree that both courts should have full judicial cooperation.
This cooperation is intended to have a positive impact on effectively establishing and maintaining a strong judicial system in Dubai.
Properly structured, DIFC trusts present suitable private wealth vehicles for assets outside the DIFC.

LCIA: London Court of International Arbitration.
CRS: Common Reporting Standard.
RFIs: Reporting Financial Institutions.
UBOs: Ultimate beneficial owners. These are individuals who are not local nationals or nationals of a non-participating jurisdiction in the CRS arrangements.
ADGM: Abu Dhabi Global Market.
DFSA: Dubai Financial Services Authority.

There is no need to note a DIFC trust on register, so no registration issues.
The problems that are most likely to occur are:
- tax, transfer charge on charge of trustee, creation of trust, and transfer of beneficiary;
- property not separately held from personal property, so potentially not protected in cases of insolvency;