16 November 2023

Ghandi Alminaj

The legislative update marks the repeal of the previous law, No. 19 of 2020, which governed trusts. The newly enacted law, published in the official gazette, is now in effect.
Dubai: On September 25, 2023, a significant legal development unfolded in the United Arab Emirates as His Highness the President, Sheikh Mohammad Bin Zayed Al Nahyan, issued Federal Decree-Law No. 31 of 2023 concerning trusts. 

Continuity of Existing Regulations
All provisions from prior regulations and decisions related to trusts remain valid, provided they do not conflict with the stipulations of the new law.

Amendments for Clarity and Practicality
The updated law incorporates amendments to existing provisions, aiming to enhance clarity and address practical shortcomings identified in the previous law. A notable addition is the introduction of a regulatory framework for the administration of trusts at the Emirate level, streamlining the governance of trusts across different Emirates.

Trust Registration Process
The new law mandates a trust registration process before the competent government authority in each Emirate. A “validity certificate” must be issued along with an “incorporation certificate” once the Trust is established. Trusts gain legal personality upon completion of the preliminary registration, with subsequent amendments requiring registration for legal effect. 

Recognition and Independence of Trusts
The law explicitly recognizes trusts in all the Emirates, irrespective of the location of trust assets. It reaffirms the separate legal personality of trusts, with the trust holding legal title to the conveyed assets.

Roles of Settlor and Trust Protector
Specificity is added regarding the roles of the settlor and trust protector, including the court's role in matters concerning their powers. The express terms of the registered trust instrument are highlighted as binding rules.

Trustee's Duties and Liabilities
Additional details are provided on the duties and obligations of trustees, along with specifics on their liabilities concerning these duties.


To sum up the UAE has showed a commitment to onshore alternatives: The issuance of the new law underscores the UAE government's commitment to providing an onshore alternative to existing trust laws in financial free zones. This aligns with ongoing efforts to support businesses and bolster the overall economy of the UAE. As the legal landscape constantly evolves in the UAE, remaining vigilant is key. 


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