Business Interests in the UAE: Succession Planning
A shareholding in a UAE business is rarely the simplest asset in an estate. Mainland LLCs, free-zone companies, DIFC and ADGM entities each operate under distinct corporate regimes, and each presents its own succession profile.
Mainland LLCs typically require the participation of a UAE national shareholder, and the death of an expatriate shareholder can trigger valuation, transfer and continuation issues that the corporate documents may not adequately address. A well-drafted shareholders' agreement, read together with the Will, is essential.
Free-zone companies offer greater flexibility but still require the express recognition of the testator's wishes by the free-zone authority. The Memorandum of Association and any shareholders' agreement should be reviewed in light of the succession plan, and amended where necessary.
DIFC and ADGM companies, operating under common-law principles, are the most accommodating of orthodox succession planning. Even here, however, the practical mechanics of transferring shares on death benefit from being addressed in advance rather than left to the executor to discover.
Written by the solicitors of LEX Services for the senior expatriate reader.
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