A Look Into Asset Protection in the UAE

Asset protection is becoming increasingly important in all investment platforms around the world due to the current competition in the global markets, altering economic conditions, and ongoing market volatility. Through this, investors, whether individuals or institutions, will be able to protect their assets from confiscation and other losses.

If you are looking for a safe investment in the UAE take a look into the asset protection systems of the country.

Asset Protection Trust

An asset protection trust is a mechanism that holds a person or a company’s assets for the purpose of protecting them from losses, seizures, and even creditors. This works by appointing another person or institution as a trustee to own and possess the properties of the grantor for the latter’s beneficial interest. By transferring the ownership of properties to the trustee’s name, creditors, and even the court, cannot go after the same to satisfy the obligations of the grantor. These assets are even exempt from local income taxes in the UAE, making it one of the most profitable asset protection strategies.

To further enhance the grantor’s rights to the properties, the UAE Trust Law even mandates the trustee to act in utmost good faith by not using the property to profit from their position and refrain from acts that will unduly enrich them.

Diversification

Diversification of assets allows individuals and companies to protect their properties by dividing them into different classes. This allows investors to manage their risks better by allocating their invested assets across various industries and financial instruments that would each react differently to the same market activity. Although it does not guarantee complete protection from losses, it nevertheless minimizes risks.

In the UAE, even the government itself has used this mechanism to neutralize the impacts of market volatility, such as the decline in oil prices in mid-2014, making it one of the major trading centers in the world due to its choice for multinational operations.

Offshore Company Formation

This asset protection strategy is ideal for small businesses planning to maximize their profits while minimizing their tax liabilities, investors looking into international investment opportunities, and individuals just wanting to protect their properties. This mechanism works by incorporating a company or business outside its country of establishment, in a jurisdiction with laws that are more favorable to its operations.

Being a business-friendly environment, the UAE has become one of the biggest offshore jurisdictions in the world where even foreign businesses can be established. It requires no capital shares and grants 0% corporate and income tax rates while leaving 100% of the ownership to the original owner. UAE residents can even transfer their companies offshore by registering them in the free zones of Dubai, which operate under different rules and regulations. Through this, both foreign and citizen business owners and investors can engage in safer transactions, away from unfavorable factors and laws in their own jurisdictions.

Make A Safe Investment In The UAE

If you are looking to make a safe investment while also protecting your assets, it is always best to engage the services of financial advisors to help you determine the best protection strategy. Reach out to the financial advisors of one of the leading investment companies in the UAE, AIX Investment, for more information.