The DIFC Wills Service Centre (WSC) has announced that it has launched the ‘Business Owners Will’, giving owners and shareholders the option to determine who will own and run their business holdings should they pass away.
The move aims to help companies take advantage of the new rules on foreign ownership that are set to take effect in 2019. Through the Business Owners Will, shareholdings held by Non-Muslims in any on-shore or free zone company can now be transferred to the owner’s chosen beneficiaries, provided the company is established in either Dubai or Ras Al Khaimah.
The new initiative offers reassurance to management teams and surviving shareholders that a succession plan is in place and that the business will be able to continue as normal in the event of the death of a shareholder.
“We have moved quickly to provide this new service in advance of the forthcoming legislation. We expect the new laws will bring significant growth in foreign ownership of companies in the UAE and in light of that, have developed a simple online Will template which offers operational continuity,” said Sean Hird, director of the DIFC Wills Service Centre. “It is critical that businesses can survive the sudden absence of an owner or key shareholder. Due to the certainty it can provide, the Business Owners Will ensures that companies will experience minimal disruption as a result of the owner or a major shareholder passing away.”
Naveen Sharma, chairman of the Institute of Chartered Accountants of India – UAE (Dubai) Chapter, noted that continuity in business operations is an extremely critical issue. “If a clear understanding about the ownership is not there after the passing away of owner, the business might face issues which might slow down or even close the business. Business owners must have succession planning. Addressing it in advance can not only help to ensure a smooth and easy transition, but it will also help in avoiding any potential issues.”
Similarly, Anurag Chaturvedi, managing partner at Chartered House Tax Consultancy, says that a family business can be both rewarding and challenging. It can be challenging, he says, because of the ways in which business ownership, management and family relationships overlap, particularly around succession. “To ensure continuity of business, owners should strategise and plan the ownership structure, responsibility, and control to shape the exit and entry plan at early stage.”
The Business Owners Will is open to both UAE residents and overseas investors owning business in Dubai or Ras Al Khaimah; and can be registered from anywhere in the world using the Virtual Registry service offered by the WSC and its partner, VFS Global. The template is available online through the WSC website. Legislation later this year is expected to transform the country’s business landscape by allowing 100 per cent ownership of any UAE company by non-Emiratis. Currently, only free zone companies can be foreign-owned – onshore companies require 51 per cent ownership by an Emirati national.
