Trusts BY Abu Dhabi Global Market (ADGM)

Every Businessman has to protect his business. He has to save his business, his wealth and business assets. It is all about protecting resources, business in future, and various business objectives in future. Business is not meant to be managed in present only. It has future considerations as well. ADGM or Abu Dhabi Global Market is the jurisdiction, which recognizes trust and its structures. Additionally, the Trust Regulations 2016, which was about ADGM Trust, do regulate the Trust Structures of ADGM for TRUST in ADGM and in other Free Zones in UAE.

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What are Trusts? These are the contractual agreements which are related to common law. These settlors or grantors, transfer the asset legal titles, funds, and property to a third person who is appointed as or called a TRUSTEE by Law. The terms and conditions are to be settled between both parties based on the grounds of UAE Trust Law. This is how the asset or the property is distributed or managed between the owner of the asset and the trustee.

The trust deed is signed between these two parties e.g. settlor and trustee. TRUST deed must be clear, free from any ambiguity, must be acceptable, must be accepted by both parties and must be supported by the latest local law of the country. Through this TRUST, the trustee becomes the custodian or guardian of, the asset. TRUSTEE enjoys the ownership provided by law, he has a right to take the decision, and he has an obligation to manage and protect the asset/property. A very important point has to be discussed and that is about the profit earned from TRUST.

TRUSTEE or any referred third party can’t enjoy profit from the TRUST or its relevant activities. Settlors have the ultimate rights over the profits and benefits. Please check Article No 4(7) ADGM TRUST Law, about this. Lawyers have to make sure that the TRUST DEED does not contradict the law, the trustee is not cheating and the TRUST Deed is designed to protect the rights of the settlor and asset as well.

The Articles 4 and 5 of ADGM Trust Law, are about PROTECTORS AND ENFORCERS. Through this Law, the settlor or guarantor can appoint the Protector to either appoint the trustee or remove the trustee. While Enforcer duty is to implement TRUST duties but for a non-charitable purpose. ADGM recognizes the TRUST establishment in other Free Zones in UAE but the regulation, law defining and its complete management are done through ADGM only.

It is important to understand the difference between Foundations and Trusts here. Let’s discuss the comparison between Foundations and Trusts. TRUSTS are the deeds between settlors and trustees but FOUNDATIONS are managed through a charter. The charter is called as Foundation Charter. Trusts are not legal entities but contractual commitments while Foundations are legal entities. For TRUST, the entire management rules are defined by ADGM, even for any other trust made in any other Free Zone. Foundations have appointed councils. TRUST can be for a private reason but Foundations are always for Non-Charitable reasons. TRUSTS existence can be having one expiry but the Foundation has no expiry.

To understand better, our LAWYERS and LEGAL CONSULTANTS can be hired. We can provide the legal consultation followed by the legal services. A better understanding of ADGM and the Foundation system is possible through hiring our expert lawyers and legal consultants. We are a specialized law company with top advocates for offering such services all over the UAE. Our Law Firm is the best Law Firm in United Arab Emirates with top Lawyers, Legal Consultants, and Debt Collectors.