During the last two decades, a sizeable chunk of the expatriate population has relocated to Dubai for both employment and investment opportunities. Undoubtedly, many have made significant economic gains in terms of purchasing luxury houses and other assets, and in some instances, setting up business empires for their successors’ benefit. However, until recently, Dubai did not have a comprehensive law governing expatriates’ inheritance issues and as a result, expatriate families of a deceased could end up facing a complex process, consuming much money and time, as they navigate the aftermath of the death. Furthermore, a vast majority of expatriates are not conversant with the Shari’ah principles governing the distribution of a deceased’s assets in Dubai. Due to these ambiguities, many expatriates have historically been keeping funds offshore and holding assets, including real estate properties, through offshore companies.

Fortunately, these legal uncertainties, where inheritance issues are concerned, could become a thing of the past with the launch of the Dubai International Financial Centre (DIFC) Wills & Probate Registry (Registry) earlier this year. Now, non-Muslims satisfying various criteria will be able to register their wills under common law principles at the Registry. The intention of the Registry is to facilitate testamentary freedom for non-Muslims owning assets in Dubai.

Advantages to Expatriates in Dubai

Subject to certain conditions, non-Muslim expatriates with assets in Dubai will be able to execute and register a will under the jurisdiction of the DIFC and its courts and upon the testator’s death, the executors will be able to apply to the Registry for a grant of probate. As the grant is issued by the DIFC Court, it will be directly enforceable in Dubai, thus bypassing the procedure and time associated with going through the Dubai Courts and the resulting uncertainty it can bring.

Another common concern among expatriates living in Dubai has centered around guardianship of minor children residing with parents in Dubai. In order to address this, testators will also be able to appoint guardians in respect of any minor children within their DIFC will. Notably, a guardianship clause can, however, only be included if the testator has minor children residing in Dubai. Also, any guardian appointed by a DIFC will must not be contrary to public order or give rise to a criminal offence.

Key Requirements

The testator must have reached the age of legal majority, and most importantly, the testator must not be a Muslim. A declaration to this effect is made in the will, but this status will also be tested on death and to ascertain whether the deceased converted to Islam after making the will.

Although the testator must own assets in Dubai, there is no residency requirement. In other words, even non-Dubai residents can register a DIFC will. The assets dealt with under a DIFC will can also be onshore or free zone assets, however, it is critical to note that if there are assets held in any other Emirate or outside the UAE it cannot be dealt with under a DIFC will.

How can we help?

As an international law firm with an office in the DIFC, Diaz Reus | Dubai is well placed to provide advice on the new succession and inheritance rules in the DIFC, as well as, to assist in the preparation and registration of wills for non-Muslim expatriates in Dubai.

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DIFC Court Claims Jurisdiction in Indian Bank LawsuitDIFC_arti_carlos

For Immediate Release. DUBAI, Nov. 3, 2014 – In a judgment issued on October 30, 2014 by the Dubai International Financial Centre (DIFC) Court of First Instance, the court confirmed its jurisdiction over a lawsuit by an expatriate investor, resident in Dubai, United Arab Emirates, against the Indian-based, ICICI Bank, registered in the DIFC.

In May, Indian citizen Kishanchand Gangaram Bhatia filed suit in the DIFC Court of First Instance alleging that ICICI Bank induced him to invest in an unsuitable fund and had not disclosed material information relating to the fund despite documented requests. The defendant bank then filed a June application to challenge the DIFC court’s jurisdiction over the suit. The defendant bank’s application was primarily made on three grounds: (1) that the claim is time-barred; (2) that the claim does not disclose a valid or viable claim or action; and (3) that the parties had contractually opted out of the DIFC jurisdiction and had executed a jurisdiction agreement for the laws and courts of Singapore.

Justice Roger Giles considered all three grounds raised by the defendant bank and upon hearing counsels for the parties, concluded that the Defendant’s application to challenge the DIFC court’s jurisdiction should be dismissed.

“That the court dismissed the defendant bank’s application despite contractual documents that contained opt-out provisions has significance beyond Diaz-Reus-Partners-_-arti-sangar---carlos-gonzalezour case,” said Arti Sangar, Diaz Reus (Dubai) partner and lead attorney for Bhatia. “This decision should encourage investors to initiate lawsuits against banks registered in the DIFC if they suffer losses on their investments due to negligent advice or misrepresentations made by such financial institutions.”

“Since its establishment in 2004 the DIFC has steadily grown in stature,” said Carlos F. Gonzalez, Diaz Reus partner. “Its growing reputation enhances Dubai’s standing as a global hub in trade, finance and commerce.”

About Diaz Reus:

Diaz, Reus & Targ, LLP is a full-service international law firm offering comprehensive legal services, including international banking and financial matters, to international and U.S.-based clients from offices strategically located in 14 dynamic business centers, including the U.S., Latin America, the Middle East, Asia, and Europe. For more information, visit www.diazreus.com

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Mexico is the second largest economy in Latin America, while the United Arab Emirates (UAE) is the second largest economy on the Gulf peninsula. Mexico and the UAE share common attributes, two of which are a dry climate and a strategic location for business trade. In the past several years, both countries have increased their efforts to pursue treaties to open new markets for their businesses and investors. In line with that trend, in 2012 the UAE and Mexico signed a double taxation avoidance treaty and an agreement on reciprocal protection for investment is in the process of being finalized. These treaties are expected to have a tremendous economic impact and strengthen mutual trade relations between the two countries.

Practical Steps to Better Manage Legal Risks Overseas

Companies in the two countries are expected to work immediately to identify key products and services that are, or could be, traded, as well as specific regulatory policies, standards, or practices that affect the cross-border trade. Yet, with all of the potential upside of doing trade deals, there are also key risks. That is why, when doing cross-border trade, all parties must understand and closely manage the potential legal risks to determine their best approach.

One | Select The Right Local Partner

Choosing the right local partner can mean the difference between having a significant asset or a major liability. The goal of vetting and selecting is to ensure that a partner can not only meet quality and delivery requirements but also comply with regulatory standards. Careful vetting and selecting is even more important in emerging markets as it can be difficult to verify issues like ownership, financial solvency and criminal histories. To overcome these challenges, one should ask potential suppliers and partners whether they have previously done similar work and get references to verify the quality of their work. As a starting point, prospective local partners should be interviewed to get a sense of how they operate and whether they have the capacity to handle the volume and complexity of cross border business procedures.

Two | Be Careful With Contracts

Sometimes parties lock themselves into exclusive relationships to save on price but it is a mistake to give an overseas distributor or partner exclusivity without a real need to do so. The ideal approach is to start small and scale slowly. Most importantly, be aware of the basic ways in which one can manage risk through appropriate contract provisions. A contract provides an opportunity to manage that exposure by limiting the liability that a party would have to the other party under the contract. For example, in a sales contract, a seller may limit its liability to the sale price of the product sold rather than become exposed to much larger damages. Among other things, parties should consider very carefully how disputes under the contract would be resolved—by litigation or arbitration—where they would be resolved and in what forum.

Three | Be Mindful Of Employment Matters

If you hire an employee in a foreign land, it will become subject to the foreign labor laws. This is a complicated area even for domestic companies and any employer needs to understand the basic labor laws applicable to employment issues as hiring, management, incentives and discharge of employees. Unfortunately, this may be a particular risk for companies that have smaller overseas offices since they cannot generally afford the sort of human resources professionals that larger companies have. Smaller offices managed by executives sent from overseas may have the highest risk of making mistakes in this area, where the resulting potential liability can be huge.

Four | Educate And Train Employees

Selecting the right employee to send to the overseas office may be the most important risk- management step. In many cases, legal problems could be directly attributed to employees who were simply not suitable for the job they were sent to the overseas office to do. It makes sense to select employees who are well-suited for the environment in which they will be working and to give such employees the basic training they will need to help them deal with the risks that they can encounter. That will obviously require a considerable investment of time and money.

Five | Engage Experienced Legal Counsel

Finally, when establishing overseas operations it is crucial to have the advice of local counsel experienced with the laws of the foreign country. Licensed legal counsel in the foreign jurisdiction can help you to identify specific risks and offer appropriate counsel on how best to manage those risks even before problems arise.

Diaz Reus has an active cross-border transaction team with offices in both the UAE and Mexico, as well as offices in the U.S., South America, Europe and Asia. Corporate Intl Magazine recently selected founding and global managing partner, Michael Diaz Jr., to receive their Global Award for 2014, ‘Cross Border Attorney of the Year in Florida.’ Should you need counsel or assistance, please call us for more information.

 

 

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Qatari Firm Buys Miami Hotel: Key Considerations For Hotel Acquisitions

by Arti Sangar March 3, 2014

St. Regis Bal Harbour, a luxury high-rise hotel and condominium residences, sits majestically on the edge of the Atlantic oceanfront in the desirable county of Miami-Dade, Florida. Just two years after its grand opening, the luxury hotel—which is estimated to have cost $1 billion to develop—under the Starwood Resorts & Hotels flag was sold to […]

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Middle East Investment in Latin America: Key Legal Issues

by Arti Sangar February 13, 2014

Latin America offers vast opportunities for Middle East investors looking to expand their presence in the region. As a result, Middle East investors are increasingly looking to Latin America for both yield and diversification. For example, in 2009, Abu Dhabi Investment Authority undertook construction of two towers in Rio de Janeiro and the United Arab […]

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What you need to know about IP laws in the GCC

by Arti Sangar December 5, 2013

Protecting and monitoring intellectual property (IP) is challenging almost anywhere in the world, but it is particularly challenging within the Gulf Cooperation Council (GCC) countries. Currently, a patchwork of laws attempts to address technological advances and the differing needs of producers, owners and users of intellectual property. Yet, despite a host of IP laws in […]

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Data Protection In The Era Of Snowden And Manning

by Arti Sangar August 17, 2013

Recent headlines featuring unauthorized data leaks of state secrets by wannabe whistleblowers—U.S. citizens Edward Snowden and Bradley Manning—have demonstrated how significant the ramifications can be when employees who have access to classified information leak it publicly. In this day and age, any employer can face a similar situation—and potential liability—should an employee disclose confidential information […]

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Venezuela’s Black Currency Exchange Market: Reasons and Risks

by Arti Sangar July 9, 2013

The Venezuelan financial system is completely isolated from the rest of the world. The exchange control system in Venezuela prohibits making any kind of payment between a bank account abroad and one inside the country, or to use local credit cards abroad or online without the approval from the Commission of Foreign Exchange Administration. As […]

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