What is Trust in UAE ?

Trust in UAE: Definition

A trust in UAE (أمانة in Arabic) is a legal arrangement where one party (the trustee) holds and manages assets for the benefit of others (the beneficiaries). In UAE law, it’s a formal structure recognized primarily through the DIFC and ADGM financial centers, where property, money, or investments are legally held and managed according to specific terms.

Types of Trusts in UAE

A trust can take several forms:

Private Trusts:

Family trusts for wealth protection
Investment trusts for asset management
Property trusts for real estate holdings

Commercial Trusts:

Business succession trusts
Real Estate Investment Trusts (REITs)
Employee benefit trusts

Key Elements of a Trust

Essential Parties:

Settlor – Creates the trust
Trustee – Manages the trust
Beneficiaries – Receive trust benefits

Legal Requirements:

Clear intention to create trust
Specific trust assets
Identified beneficiaries
Valid trust deed

How Trusts Work in UAE

Trust Formation:

Established under DIFC or ADGM laws
Requires formal documentation
Must follow specific regulations
Needs proper registration

Trust Operation:

Asset management by trustees
Regular reporting requirements
Benefit distribution
Compliance monitoring

Legal Framework

Governing Laws:

DIFC Trust Law No. 4 of 2018
ADGM Trust Regulations
UAE Civil Code provisions
Relevant financial regulations

Common Uses of Trusts

Primary Applications:

Asset Protection
Succession Planning
Business Continuation
Wealth Management
Charitable Purposes

Example of a Trust

“Mr. Ahmed creates a family trust through DIFC, transferring his business assets worth AED 10 million. The trust is managed by a professional trustee for the benefit of his children’s education and future business ventures.”