MoF Highlights the Importance of Decree-Law No. (19) of 2020 Regarding Trusts To Support the Wealth Management Sector in the Country
The Ministry of Finance (MoF) noted that the Decree-Law No. (19) of 2020 regarding Trusts was an important addition to the advanced legislative structure of the UAE. The Decree-Law supports the wealth management sector and provides new mechanisms to manage wealth and funds. It also encourages the allocation of charitable Trusts.
His Excellency Younis Haji Al Khoori, Undersecretary of Ministry of Finance noted that the Federal Decree-Law No. (19) of 2020 regarding Trust, which was issued by President His Highness Sheikh Khalifa bin Zayed Al Nahyan, boosts the UAE’s advanced legislative framework and reiterates its global standing as a leading regional and global financial hub. This came during a virtual media briefing that was held by the ministry today.
His Excellency Al Khoori welcomed media representatives at the beginning of the media briefing, and explained the Decree-Law’s objectives and implementation frameworks, as well as its effects and implications on the country’s economic and financial sphere.
His Excellency Al Khoori noted that the Decree-Law will raise the efficiency of financial legislation and policies in the country, and will offer a competitive environment that keeps pace with the latest economies that are based on both business and technology. It contributes to preserving capital and investing it inside the country, and provides a safe and developed economic sphere. It also diversifies the tools available to profit from and protect wealth and improve the business environment.
During the media briefing, His Excellency Al Khoori reiterated that the UAE – thanks to the directives and vision of the wise leadership – is heading towards a new phase; one where all government entities work to consolidate comprehensive and sustainable economic and social development, to make the UAE the best country in the world by the UAE Centennial 2071.
His Excellency Al Khoori said: “The Ministry of Finance issued the Trust Law to create legal tools that enable companies or people who own various capital and financial rights to hand over these wealth and rights as a financial trust to a Trustee who is entrusted with managing and developing said funds. This is done through a special document called a Trust Deed, and it is recorded electronically to reflect the assets – whether movable or property. After that, the existence of Trust rights is indicated in the official records of those assets.”
His Excellency Al Khoori also noted that all members of society – whether natural or legal persons - will benefit from this Decree-Law, particularly family-owned companies – as they will be able to plan on a long-term basis the continuity of their companies' assets. The Decree-Law provides an integrated system that enables them to manage their wealth as trusts by qualified and experienced persons or institutions, called the ‘Trustee.’ Trustees are knowledgeable about the different investment patterns and risks, and know how to deal with them in the best manner. This is in addition to the traditional trusts that can be used in managing family property.
His Excellency Al Khoori said: “This Decree-Law establishes a section for ‘Private Trusts.’ Private Trusts are Trusts set up for performing different forms of securities trading that are accepted in the financial markets. These include the acquisition and trading of securities and the investment therein. Private Trusts are also trusts set up to establish pension funds or guaranteeing availability of benefits for the Beneficiaries in return for regular contributions paid to the Private Trust.”
His Excellency Al Khoori added: “The Ministry of Finance continues to work and cooperate with all relevant authorities to devise appropriate financial and monetary policies. This is in line with our endeavour to create an advanced and integrated legislative and legal structure and framework to protect investors. This, in turn, will enhance the UAE’s competitiveness and its investment attractiveness.”
At the end of the media briefing, Dr. Hussam Al Talhouni, legal advisor at the Office of the Minister of Finance answered the media representatives’ questions about the law and its implementation procedures.
UAE Ministry of Finance
The UAE Ministry of Finance (MoF) is responsible for implementing all fiscal, monetary and industrial policies related to the UAE’s economic development. Among its core responsibilities are the preparation and allocation of the Federal Budget and the management of the government’s financial position.