Sharia in a nutshell. Quran Holy book of Muslims Hadith the by-laws Sunnah the jurisprudence

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2 Sharia in a nutshell Quran Holy book of Muslims Hadith the by-laws Sunnah the jurisprudence

3 Sharia in the world

4 Influence of Sharia UAE Constitution Article 7: Islam is the official state religion Islamic Sharia the primary source of legislation In absence of UAE law provision UAE courts will pass judgment according to Sharia

5 Influence of Sharia Personal Status Marriage Divorce Child custody Inheritance

6 We need to talk

7 lets talk about Akshay Married, two minor children (a boy & a girl) Hindu religion Assets in Abu Dhabi, Dubai and abroad Parents alive, one brother

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10 What if Akshay passes away in the UAE? Probate Procedure in the UAE Local Courts in Charge (Civil Family Law Section) Which Law governs the Estate? High Courts Jurisprudence vs Lower Courts practice UAE assets temporarily frozen

11 Know your Sharia heirs Father Mother 16.67% 16.67% None Brother (Son blocks Akshay 12.5% Wife brother) 36.11% 18.06% (Half of the son s share) Son Daughter

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13 The Middle East Legacy Planning (R)Evolution Local Needs International Ambitions

14 The Middle East Legacy Planning (R)Evolution Local Needs International Ambitions Same Goal

15 GCC: Oil and Gas Powerhouse Oil Distribution of proved reserves in 2015 Middle East holds 48% of the oil reserves Natural gas Distribution of proved reserves in 2015 Middle East holds 43% of the natural gas reserves Oil & gas make up about 1/3 of GDP of GCC economies. GCC economies must diversify further if they want to be able to create more jobs for their nationals. (Source: BP Statistical review 2015)

16 Local needs USD 1 trillion to pass from second generation business families to millennials within 10 years (Source: The Gulf Family Business Council)

17 Local needs USD 1 trillion to pass from second generation business families to millennials within 10 years not accounting offshore assets! (Source: The Gulf Family Business Council)

18 Local needs Business-Owning Families Consolidated Accounting, tax & estate Europe 65% North America 52% Family Unity Family Education Philanthropy ASIA Pacific 71% DEVEC 81% (Source: UBS/ Campden Wealth Global Family Office Report)

19 Local needs Merchant families under attack! Demographic Economic Financial Educational

20 Local needs Only percent of family businesses are planning their succession (Source: The Gulf Family Business Council)

21 Local needs Western tool VS Regional assets

22 International Ambitions Consolidated Accounting, tax & estate Europe 65% North America 52% Family Unity Family Education Philanthropy ASIA Pacific 71% DEVEC 81% (Source: The Global Financial Centres Index 20)

23 International Ambitions Financial Centers on the Rise Shanghai Qingdao UAE Hong Kong Casablanca Singapore Shenzhen Luxemburg Toronto Gibraltar Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy ASIA Pacific 71% Europe 65% North America 52% DEVEC 81% (Source: The Global Financial Centres Index 20)

24 International Ambitions Most Competitive Centres UK Hong Kong BVI US Singapore Switzerland Cayman Islands Luxemburg Jersey Guernsey Netherlands UAE

25 International Ambitions Most Competitive Centres UK Hong Kong BVI US Singapore Switzerland Cayman Islands Luxemburg Jersey Guernsey Netherlands UAE Centres on the rise UK Hong Kong US UAE

26 International Ambitions DIFC VS Regional assets To become regional hub for wealth management and succession planning

27 International Ambitions DIFC VS Regional assets Independent regulatory framework Independent Courts Sharia compliance Horizontal Vertical Common Law

28 Targeting SFOs Europe 1995 North America 1994 ASIA Pacific 2001 DEVEC 1999 (Source: UBS/Campden Wealth Family Office Report)

29 Targeting SFOs Europe 52% North America 57% ASIA Pacific 76% DEVEC 65% (Source: UBS/Campden Wealth Family Office Report)

30 Solutions as of today 1. SPV ASIA Pacific 76% Europe 52% North America 57% 2. Foundation Regime (AGDM -> DIFC to come) 3. DIFC WPR 4. Trusts (DIFC and ) and PTCs DEVEC 65% (Source: UBS/Campden Wealth Family Office Report)

31 SPV IBC within tier 1 financial center Europe 52% North America 57% sophisticated framework / light requirement flexible shelf cos permitted, ability to morph portable migration regime available DEVEC 65%

32 SPV: Bringing SPVs closer to home Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy Bank account

33 SPV: Bringing SPVs closer to home Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy

34 SPV: Bringing SPVs closer to home Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy

35 SPV: Bringing SPVs closer to home Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy

36 SPV: Bringing SPVs closer to home Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy

37 SPV: Bringing SPVs closer to home IBC Co SPV Consolidated Accounting, tax & estate Bank account Family Unity Hold Co Bank account Bank Subsidiaries Family Education Family Contracts Education Philanthropy Bank account Bank Subsidiaries Contracts No substance (offshore jurisdiction) No physical premises No DTT benefits Substance (onshore jurisdiction) Physical premises DTT Benefits

38 Foundation Regime: Model No Shareholders Independent legal personality Assets donated are owned by the Foundation in its own name Parties: Founder Consolidated Accounting, tax & estate Foundation Council Guardian Beneficiaries Perception matters: cosmetically more acceptable?

39 Foundation Regime: Model (cont d) Guardian Foundation Council Founder Consolidated Accounting, tax & estate FOUNDATION Assets in (constituted by charter and bylaws) Distributions Beneficiaries

40 Foundation: Key Features Legacy planning and asset protection mechanisms to protect the founder s wishes Robust governance structure Founder maintains control Consolidated Accounting, tax & estate Additional security through Guardian supervision High level of discretion and flexibility Fully digitalized and efficient registration process Reputable, tier 1 financial center

41 Foundation Regime GCC families: strengthen control over assets that are key to the GCC economy facilitate succession no involvement of foreign entities income protection International Consolidated families: Accounting, tax & estate alternative to current foundation and trust arrangements foundation acting as PTC in local and international trust structures

42 Foundation Regime Key policy considerations: Client confidentiality Governance controls Asset protection Consolidated Accounting, tax & estate Philanthropy

43 Foundation Regime Documents: Charter & By-laws Minimum Assets : USD 100 Any assets Reservation of power Portable: Redomiciliation allowed Consolidated Accounting, tax & estate Registration Fee : USD 200

44 Express Firewall provision Any disposition of property determined under the law of its incorporation () Foreign law not recognizing foundation do not affect foundation s validity Rights asserted Consolidated Accounting, under foreign tax & estate heirship law or other claims do not affect foundation Foreign judgement purporting to give rights to heirship rights or claims not recognized Philanthropy

45 Parties Required Founder, Council, Beneficiaries Optional Registered agent Guardian Consolidated Accounting, tax & estate Philanthropy

46 Purpose No charitable purpose But useful in active philanthropy e.g. foundation in combination with company limited by guarantee Consolidated Accounting, tax & estate Philanthropy

47 Publicly available information Part A Charter Name and Registered Number Date of Establishment Registered address Name/Address of Councilors Consolidated Accounting, tax & estate Philanthropy

48 Publicly available information Part A Part B Charter Name and Registered Number Date of Establishment Registered address Name/Address of Councilors Consolidated Accounting, tax & estate By-laws Name/address of Beneficiaries Guardian Founder/UBO KYC Philanthropy

49 Publicly available information Restricted vs available No, unless Charter or By-laws provide otherwise Consolidated Accounting, tax & estate Philanthropy

50 The DIFC WPR Set of rules relating to inheritance issues of non-muslims Clear mechanism to pass on Dubai and Ras Al Khaimah (RAK) estate DIFC rules to complement existing UAE laws

51 Facts and Figures Over 2,600 wills have been registered Approximately 30 wills registered each week 70% of registered wills are mirror wills 39.10% of registrants are women & 60.90% are male 31.67% of all wills registered are for Indian passport holders 60% are Europeans Youngest registrant was 23 years old, oldest was 94 8 probate cases 6 granted (Source: DIFC Wills and Probate Registry -

52 The DIFC WPR When? fully operational since 30th April 2015 Who? non-muslims over age of 21; residency is not relevant What Form? standard What Law? DIFC Laws Which Estate? Dubai and RAK located assets What Assets? movable and immovable

53 The DIFC WPR Custodian? DIFC Registry Executor? TBD by Testator Witness? any capable individual Guardians of minor children? TBD by Testator Supporting Documents? per DIFC Practice Directions Authority? DIFC Court to issue grants/orders for assets distribution Fees? USD 2,800 for a Standard Will and USD 4,200 for Mirror Wills

54 If Akshay passes away Abroad Shortcut to devolution of Dubai and RAK assets No involvement of local (civil) courts In the UAE No involvement of local courts No risk of application of Sharia Law Faster & cheaper

55 Consolidated Accounting, tax & estate Philanthropy

56 Up in the air: DIFC Foundation Regime To be released any time Based on the Dutch model Consolidated Accounting, tax & estate Philanthropy

57 UAE new tools in practice Consolidated Accounting, tax & estate Europe 65% North America 52% Family Unity Family Education Philanthropy DEVEC 81%

58 UAE new tools in practice BVI Co. 100% Consolidated Accounting, tax & estate Europe 65% North America 52% 100% Family Unity JAFZA Co. Family Education Philanthropy DEVEC 81%

59 UAE new tools in practice BVI Co. 100% Consolidated Accounting, tax & estate Europe 65% North America 52% DIFC will JAFZA Co. 100% Family Education Philanthropy ASIA Pacific 71% JAFZA Co. 100% DEVEC 81%

60 UAE new tools in practice BVI Co. 100% Consolidated Accounting, tax & estate Europe 65% North America 52% DIFC will JAFZA Co. 100% Family Unity Family Education Philanthropy ASIA Pacific 71% JAFZA Co. 100% DEVEC 81% 100% DIFC will

61 UAE new tools in practice 100% BVI Co. Consolidated Consolidated Accounting, Accounting, tax & estate tax & estate Europe Europe 65% 65% North North America America 52% 52% DIFC will Founder Foundation Beneficiary(ies) 100% Family Unity Family Unity JAFZA Family Co. Education Family Education Philanthropy Philanthropy ASIA ASIA Pacific Pacific 71% 71% JAFZA Co. 100% DEVEC DEVEC 81% 81% JAFZA Co. 100%

62 UAE new tools in practice Foundation DIFC will Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy Domestic Operating Co. Hold Co. ASIA Pacific 71% Foreign Operating Co. Europe 65% North America 52% Domestic Operating Co. DEVEC 81% Hold Co. Bank Bank Bank Bank

63 UAE new tools in practice Founder Beneficiary(ies) Europe 65% Consolidated Accounting, tax & estate Family Unity Hold Co. 100% account Bank Bankaccount OpCos UAE & worldwide. Bank account IP rights etc.

64 UAE new tools in practice Founder Beneficiary(ies) SFO UAE Provision of services by SFO Hold Co. 100% OpCos UAE & worldwide. IP rights etc. Bank

65 UAE new tools in practice Settlor Beneficiary(ies) SFO/Trust Co UAE Provision of services by SFO Hold Co. 100% Bank account Bank OpCos UAE & worldwide. IP rights etc.

66 Consolidated Accounting, tax & estate Family Unity Family Education Philanthropy ASIA Pacific 71% Europe 65% North America 52% DEVEC 81% What will you take home?

67 See you in Dubai! Consolidated Accounting, tax & estate Europe 65% North America 52% Family Unity Family Education Philanthropy ASIA Pacific 71% DEVEC 81%

68 See you in Dubai! Consolidated Accounting, tax & estate Europe 65% North America 52% Family Unity Family Education Philanthropy ASIA Pacific 71% DEVEC 81% 5 th of November 2017

69 See you in Dubai! Europe 65% Aline von Düring Family Unity Family Education Philanthropy DEVEC 81%