Offshore Trust Formation in Dubai: A Step-by-Step Guide to Setting Up a Trust in the UAE
Get in touch
Recent Posts
Offshore trust formation in Dubai offers a strategic way to protect assets and manage wealth. With its tax advantages and strong legal frameworks, Dubai, particularly through financial hubs like DIFC and ADGM, has become an ideal location for setting up trusts. This guide outlines the key steps involved in establishing an offshore trust in the UAE, ensuring compliance and securing your assets for future generations. In this blog, we will walk you through the entire process of setting up your trust.
What is Offshore Trust Formation in Dubai?
Offshore trust formation in Dubai enables individuals and businesses to create a legal entity that holds assets on behalf of beneficiaries. Set up mainly in financial free zones like the DIFC and ADGM, these trusts are governed by robust common law frameworks. They are popular tools for asset protection, succession planning, and international wealth structuring. They allow the settlor to maintain control through carefully drafted trust deeds while ensuring long-term security.
Dubai offers several advantages for offshore trusts, including no income or capital gains tax, political and economic stability, and strict confidentiality laws. These features make it a preferred jurisdiction for high-net-worth individuals and international investors seeking secure, tax-efficient solutions outside their home countries. Trusts in Dubai can hold a wide range of assets, including real estate, company shares, and investment portfolios, offering flexibility and legal protection in a well-regulated environment.
Also Read: How to Start a Sole Proprietorship in Dubai: A Complete Guide
How to Set Up an Offshore Trust in Dubai: Key Steps to Formation
Offshore trust formation in Dubai is a strategic way to safeguard assets, ensure privacy, and structure wealth for future generations. With its robust legal frameworks and less-tax advantages in jurisdictions like DIFC and ADGM, Dubai continues to attract global investors seeking efficient trust solutions.
Here are the essential steps involved in setting up an offshore trust in the UAE:
- Define Your Objectives
To determine the right structure and jurisdiction, clarify the trust’s purpose—whether it’s asset protection, estate planning, or wealth transfer.
- Appoint Key Parties
Identify and appoint a settlor (who creates the trust), the trustee (who manages it), and the beneficiaries. You may also include a protector to oversee the trustee’s actions.
- Draft the Trust Deed
Prepare a legally binding document that outlines the trust’s terms, duties of the trustee, and distribution plan. Legal assistance is recommended at this stage.
- Fund the Trust
Transfer assets such as property, shares, or investments into the trust. Proper documentation is crucial for legal and tax purposes.
- Register the Trust
Registration with the relevant authority (like the DIFC Registrar of Companies) may be required depending on the jurisdiction.
- Maintain Compliance
Ensure ongoing compliance with reporting, legal, and governance obligations to maintain the trust’s validity and benefits.
See Also: How to Create an SPV in Dubai
How SetupMate Can Help
As we’ve covered in this blog, setting up an offshore trust in Dubai involves several key steps, from defining your objectives to ensuring compliance with local regulations. At SetupMate, our experts can guide you through the entire process, ensuring your trust is set up efficiently and securely. Whether you’re looking to protect your assets or structure your wealth, we provide personalized assistance tailored to your needs.
Ready to take the next step? Visit our blog on DCA Approval in Dubai for more insights and information on business setup in the UAE.
FAQs
Yes, non-residents are permitted to set up trusts in the UAE, particularly in financial free zones such as the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), which are structured to support international investors.
The UAE imposes no income or capital gains taxes on trusts, making it a tax-efficient jurisdiction. However, individuals should assess potential tax liabilities in their country of residence, as foreign tax rules may still apply.
The setup duration varies depending on the trust’s complexity and the jurisdiction involved. In general, the process can take anywhere from a few weeks to several months.
Changes to a trust’s terms depend on its structure and the provisions outlined in the trust deed. Some trusts allow amendments, while others are more restrictive