I own a property in the UAE and as I have now paid off the mortgage an acquaintance suggested that I should set up an offshore company and move it to that. As I have no debt, I am not clear why this could be a benefit and would be grateful for your explanation. Also, is it legal? F N
F N is married and the property is in his name only. This means that in the event of his death, his assets would be frozen and it would take time for the local courts to confirm who would own the property going forward as it would be subject to Sharia law. This is also the case even if a properly written will is in place. If however, he set up an offshore company and transferred ownership of the villa to that company he could give shares in the nominal company to other parties and have a legal agreement that states on his death his shares are passed on. This means that there would be a straightforward transfer of effective ownership without the intervention of the UAE courts. In some cases there can also be long term tax benefits and protection from liabilities. Naturally there are costs in setting up an offshore company and professional advice must be sought, but it is a legitimate course of action where a property has no mortgage outstanding.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at email@example.com