The real estate opportunities in the UAE are mounting very fast and a lot of foreign investors are interested in buying properties in the country. There are several reasons why UAE has become a dream destination for foreign investors. One in particular is Dubai and its booming economy through tourism and trade. It also boasts some man made marvels like Burj Khalifa which hold the record as one of the tallest buildings in the world. Dubai is also known for its luxurious hotels and breathtaking nightspots. Not to mention, the economic and architectural progress of other emirates within the country. These factors have catapulted UAE as one of the most privileged real estate hubs in the world.
However, before you decide to invest in the UAE, it’s essential for you to know and understand Islamic Law or better known as “Sharia Law.”
So What Exactly Is Sharia?
Sharia is the religious law or moral code of Islam and it deals with many topics including politics, crime, personal matters and economics. For this particular purpose, we are going to tackle on the most pressing issue that most foreign investors are concerned about – inheritance under Sharia Law. Investing in the UAE can be a lucrative venture, but most investors should be thinking on how they can protect their assets, especially if the owner/s of a particular property dies.
In Islamic Law, there are four important duties that need to be performed when the owner/s of a property dies and these are the following:
- Pay the debts of the deceased.
- Funeral and burial expenses must also be paid in full.
- Execute the will of the deceased, which usually gives the testator (owner/s of the will) the right to dispose one third of the estate they own according to their wishes.
- Distribute the remaining estate to immediate family and relatives as per rules of priority (Quota).
Therefore, Muslim property owners in the UAE who follows the Sharia Law can only dispose 1/3 of their overall estate under their testamentary will. That’s the maximum share that they can delegate to their chosen heir/s, because the remaining portion of their estate will be lawfully given to other family members and relatives.
Actually, there are different types of heirs and these are the following:
- Primary Heirs – this group will consist of the spouse, son or daughter, and both parents of the deceased.
- Quota-Heirs – this can be grandparents, wife/wives and husband, daughters, brothers, sisters and others. Usually, this group has a designated share or quota on the estate or property.
- Residuaries or Members of the Asaba – this can be a combination of both male and female relatives who will inherit a share after the Quota-heirs inheritance have been distributed.
So, if an owner of an estate leaves no direct relative, then his/her property will directly go the state treasury. But Sharia Law only applies to Muslims in the UAE, however for non-Muslim expats and foreign investors living in the country are allowed under “Personal Affairs Law” to use the laws of their own countries in settling and distributing their properties that are situated in the UAE.
How Can You Protect Your Real Property or Estate In The UAE?
In order for you to protect your property in the UAE, you need to have a legal and valid will and it should be notarized by a UAE court. Expatriates and foreign investors who have several properties throughout the UAE must create their own will as soon as possible. This will exempt them from Sharia Law. Also, it would be wise to appoint a specialist or a credible lawyer who is qualified to draft your will in accordance to the laws of your home country. This will give you and your family the peace of mind that Sharia Law does not come into effect, in case something happens to you in the UAE.
It’s also important for you to distinguish between federal (UAE law) and local law. So, if you’re residing in Dubai and something happens to you, then the law in Dubai will take effect. However, if someone contests you will, then federal law takes over. You need to understand that federal law trumps local law in Dubai. So, you might be asking – how can I truly protect my property and the welfare of my family? Well, the only remedy available to you is to setup trusts or you can also engage in various off-shore solutions. However, this is a complex area and it’s essential for you to hire professional lawyers who are capable of advising you expertly.