Fiduciary services is defined as possession or control over assets for and on behalf of actual owner.
In the UAE there is no particular law on fiduciary services and nominal / actual owners, for this reason, facilitation of nominee services in terms of ownership of companies is rarely used.
When incorporating offshore and onshore companies in Free Trade Zones of the UAE the most frequent solution, if it is necessary to provide additional privacy, includes appointment of nominees as directors of the company, who in fact has no rights to manage the company.
In terms of ownership, instead of classic fiduciary services, the most common solution – incorporation of a newly formed subsidiary of another company, in which the beneficiary owns 100%. In this case, the access to registers of companies in the UAE is restricted and disclosure information about the owner is limited.
When incorporating onshore companies on the mainland, in those cases when it is imperative to have a local nationals who owns at least 51% of the company, in essence, fiduciary ownership is applied - a local national is appointed as owner of the company who signs agreement stating that in fact he is not the effective owner of the company and for his services he receives only a small annual fee without any rights with respect to the company.
In our practice, we have also faced cases when some consulting and law firms in the UAE act as owners of clients’ companies without informing even banks about it. Thus, both registrar and bank, where such company opened an account, consider such fiduciary in fact as real owners without any rights to assets of company of actual owners. At the same time if bank discovers such format of fiduciary services, then most likely funds available on the company’s accounts will be frozen.
For this reason, and also because of our approach to ensure maximum protection of client’s assets we offer only those services which are fully in line with regulations and allow clients to have complete and sole control over assets of their company.
In case, for example, if appointment of a local director of the company is a compulsory requirement for the client - we offer this service in a limited number of cases and only when all account transactions of the company may only be signed by second signatory - owner of the company.
In summary, although the laws of the United Arab Emirates relating to trust management and fiduciary ownership have some peculiar features, of course, there is a scope for structuring business using such options.
At the same time, only those solutions are used that fully comply with the laws and regulation of the UAE in order to implement the tools of nominal ownership, such solutions are reliable and allow owner of assets to have complete control over their assets and ensure protection and reliability.