Nominee Agreement UAE: Everything You Need to Know
In the United Arab Emirates (UAE), a nominee agreement is a legal agreement between two parties where one party (the nominee) holds assets or shares on behalf of the other party (the beneficiary). The aim of this agreement is to provide a level of privacy and confidentiality for the beneficiary.
A nominee agreement is commonly used for various purposes such as investment holding, tax planning, and asset protection. The agreement is usually done between two companies, but it can also be between an individual and a company.
Benefits of a Nominee Agreement UAE
One of the key benefits of a nominee agreement in the UAE is the protection of assets. By holding assets through a nominee, the beneficiary is able to keep their assets private and protected against legal action. This is because the nominee is the legal owner of the asset, not the beneficiary.
Another benefit of a nominee agreement is tax savings. The nominee may be tax resident in a jurisdiction that offers lower tax rates than the beneficiary`s jurisdiction. This can help to minimize tax liability, which is especially beneficial for multinational companies with operations in different countries.
Additionally, a nominee agreement may be used to facilitate mergers and acquisitions. Shareholders may use a nominee to hold shares in the target company, allowing for a smoother transition of ownership.
Key Elements of a Nominee Agreement UAE
A nominee agreement must contain certain key elements to be legally binding. These include:
1. Details of the parties involved: The agreement must clearly state the names and addresses of both the nominee and beneficiary.
2. Details of the asset: The agreement must provide specific details of the asset being held by the nominee.
3. Duties of the nominee: The nominee must agree to hold the asset on behalf of the beneficiary and not to use the asset for their own gain.
4. Confidentiality: The nominee must maintain confidentiality regarding the ownership of the asset.
5. Termination: The agreement must provide for the termination of the agreement and the transfer of ownership back to the beneficiary.
Conclusion
If you`re doing business in the UAE, a nominee agreement can be a valuable tool for protecting your assets and minimizing tax liability. However, it`s important to ensure that the agreement is legally binding and contains all the necessary elements. If you need assistance in creating a nominee agreement, it`s important to consult with a legal professional experienced in UAE law.