Can you include offshore companies and bank accounts in a Dubai Will?
For many expatriates residing in the UAE, wealth is not limited to property or assets located in Dubai alone. It is often spread across businesses registered in Free Zones, offshore jurisdictions, and numerous overseas bank accounts. This gives rise to a pertinent question pertaining to estate planning: Can offshore companies and overseas bank accounts be included in a Dubai Will?
Offshore companies in the UAE context:
A UAE offshore company, like those registered under RAK ICC or Jebel Ali Free Zone Authority (JAFZA), is often utilized as a channel by investors to hold international assets, structure global businesses, and secure wealth beyond the mainland. While the strategic advantages of these offshore units are indisputable, they pose complexities when it comes to succession planning.
UAE federal inheritance laws apply Sharia principles by default in the absence of a Will. For non-Muslim expats, this means that in the absence of a registered Will, they risk their offshore company shares or bank accounts being frozen or being distributed in a way that does not align with their original intentions. For this purpose, legally recognized Will structures like the Dubai International Financial Centre (DIFC) Wills have become non-negotiable essentials.
So, can you include offshore companies in a Dubai Will?
Yes, you can include offshore company shares in a Dubai Will. A DIFC Will – which operates under common will principles – allows non-Muslims to specify how their offshore assets should be allocated. This is because the jurisdiction of the DIFC courts extends to shares in offshore and Free Zone entities, like:
- JAFZA Offshore
- RAK ICC
- International holding companies that have listed UAE residents as shareholders.
This legal framework ensures that business partners and companies have a clearly outlined structure to take over company ownership or management requirements.
What about overseas bank accounts?
Overseas bank accounts can also be included in a DIFC will, provided they are explicitly referenced to be included. However, it may be prudent to note that for overseas or international accounts, their enforceability typically depends on the jurisdiction. Many countries today recognize DIFC Wills and Wills in Dubai owing to common law principles and international treaties. However, it is best practice to create a UAE Will in combination with parallel arrangements in the specific jurisdictions where the accounts exist.
Why DIFC Wills are the preferred choice for offshore assets
Not all Will options in the UAE provide uniform coverage. The Dubai Court Wills and the Abu Dhabi Judiciary Department (ADJD) have credible legal standing; they primarily provide coverage to UAE-based assets and conduct proceedings primarily in Arabic. In contrast, a DIFC Will:
- It is drafted primarily in English and avoids delays arising due to translation.
- Acknowledges offshore company shares and foreign assets.
- Offers a faster probate process and a common law structure familiar to most expats.
In this manner, the clarity offered by DIFC Wills to expats with overseas assets and bank accounts assumes paramount importance.
Best practices to implement
- Ensure that offshore assets and financial references are listed out explicitly in your DIFC Will.
- Maintain documentation of incorporation papers, share certificates, and bank account credentials.
- While a DIFC Will is a powerful tool to have in your arsenal, it may not always be capable of overriding inheritance laws in every foreign jurisdiction. Having a complementary Will abroad can help avoid legal conflicts.
- Estate planning that covers offshore company structures and international holdings is complex. Getting professional advice from experts in estate planning helps ensure compliance with DIFC rules and provides better results with cross-border enforcement.
The modern expat’s wealth is seldom confined to just a single jurisdiction. With offshore company structures, global investments, and international banking, the domain of estate planning also needs to rise to a global level. Offshore companies and overseas bank accounts can certainly be included in a DIFC Will. The key, however, lies in selecting the right framework.
