Declaration Of Bare Trust Template for the United Arab Emirates

A Declaration of Bare Trust is a legal document that formalizes an arrangement where you, as the trustee, hold legal title to property or assets for the absolute benefit of another party, the beneficiary. Under UAE law, this creates a transparent ownership structure where the beneficiary retains all rights to the property's income and capital, while you hold only the legal title as a nominee.

When do you need this document?

You need a Declaration of Bare Trust when establishing property ownership structures for UAE real estate investments, particularly when foreign investors require local nominees to hold title. This document is essential when setting up family wealth management arrangements where parents transfer assets to children while maintaining control through trusted intermediaries. Corporate structures also utilize bare trusts when holding assets through subsidiary entities or when establishing employee benefit schemes. If you're involved in DIFC or ADGM investment arrangements, this declaration ensures compliance with free zone trust regulations while maintaining beneficial ownership transparency.

Key legal considerations

The trustee's role is strictly limited under UAE law - you cannot exercise any discretion over the trust property and must follow the beneficiary's instructions regarding its management and disposal. The declaration must clearly define the trust property, whether real estate, bank accounts, or investment portfolios, with precise descriptions meeting UAE property registration requirements. Anti-money laundering compliance is critical, requiring full disclosure of beneficial ownership, source of funds, and ongoing reporting obligations. The document should address trustee liability limitations, indemnification provisions, and termination procedures. Consider succession planning provisions and ensure the arrangement complies with Sharia inheritance principles if applicable to the parties involved.

Legal requirements in United Arab Emirates

Under the UAE Civil Code, the declaration must be executed in writing with clear identification of all parties, including full legal names, Emirates ID numbers, and addresses. Notarization by a UAE notary public is required, with Arabic translations necessary for non-Arabic speakers. If real estate is involved, registration with the relevant property authority is mandatory - Dubai Land Department for Dubai properties or Abu Dhabi Municipality for Abu Dhabi assets. DIFC and ADGM have specific trust law requirements under their respective legislation that may require additional compliance measures. The arrangement must comply with UAE Anti-Money Laundering Law, including beneficial ownership disclosure and ongoing monitoring obligations. For corporate trustees, additional licensing and regulatory approvals may be required under UAE commercial law.