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Dubai's new registry for non-Muslim wills to be launched on 30 April

Monday, 13 April, 2015

STEP Lead

A new succession regime for non-Muslim owners of assets in Dubai has received official approval and will launch on 30 April.

Traditionally the jurisdiction's courts have automatically imposed the standard rules of Shari'a succession on all estates, as embodied by United Arab Emirates' (UAE) federal laws. This made Dubai an unattractive domicile for many non-Muslims, especially as the UAE has no right of survivorship concept under which jointly owned property can automatically pass to the surviving owner. The executors of an estate could still apply to a probate court to establish a will left by the deceased, but the process was expensive and uncertain, and in the meantime assets located in Dubai would probably be frozen.

The fixed distribution of a deceased's assets set out in UAE law led many foreign residents to transfer their funds out of the jurisdiction, holding cash offshore and owning property through a foreign company.

Recognising the problem, the Dubai authorities last November issued draft rules to allow non-Muslims to register a will leaving their Dubai assets to their chosen heirs under internationally recognised common-law principles, without regard for Shari'a custom. These rules have now been confirmed, making Dubai the first jurisdiction in the region to allow this.

'The current dilemma of the contradictory legislation means such a move is welcome', commented Nita Maru of TWS Legal Consultants, a solicitor who worked on the consultation. She noted that the reform also allows expatriate parents freedom to nominate guardians of minor children, a common anxiety for expatriates living in Dubai.

Dubai International Financial Centre (DIFC) has set up a Wills and Probate Registry which is taking appointments for registering wills from 3 May. It will work with the DIFC courts for the production of grants and court orders for the distribution of assets and guardianship of dependants. Such grants will be directly enforceable in Dubai without the need to go through the Dubai courts, although there are likely to be difficulties where the testator's home country has forced heirship rules of its own.

According to Alastair Glover TEP of law firm Wragge Lawrence Graham, the move should result in capital retention in Dubai, as well as growth in direct investment.

Sources

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