Owning a business in Dubai has many challenges and responsibilities. One of those is the continuity of your business in the event of your death or serious illness. Your family, business partners, employees, investors, suppliers and customers all rely on you to meet their needs.
By going through the process of preparing a succession or business continuity plan, your business is able to consider its response to the situation. Making carefully thought through decisions without being under pressure will result in better decisions should you come to need to enact the plan. It will provide all parties with a clear understanding of what to expect and what is expected of them.
One important aspect of succession planning ensures your family receive the value of your share of the business and not the shares themselves. This separates their financial security from your business. It also enables your business partners to continue the business without the involvement of your family who may not wish to be directly involved.
If you do not have a will, and you die before your child reaches the age of majority, the courts can intervene and appoint a guardian on your behalf. In these circumstances, it is very unlikely that their decision will reflect your wishes.
The problem can escalate if you own property in more than one country, and your family can be subjected to prolonged legal battles. In the UAE, the consequences can be far more serious, and your assets may be distributed in a way that is contradictory to your wishes.
In the UAE, inheritance for Muslim nationals is guided by Sharia laws, while the law of the deceased’s home country could be applied for non-Muslim expatriates. However, there are many uncertainties regarding real estate inheritance issues, and expatriate property owners are recommended to make wills to overcome these. Unlike other jurisdictions, the UAE does not practice ‘right of survivorship’ (property passing on to surviving joint owner upon death of the other), and the local courts will make final decisions.
The bank accounts of a deceased will be frozen until all liabilities such as car, property and personal loans, credit cards, and business debts are cleared. Sometimes, an account gets frozen within hours of a fatality but the procedures for reactivating it are lengthy and complex. These can be avoided or expedited by having a suitable will in place.
Upon a sponsor’s death, the family’s visas will be cancelled within 30 days and they will have to leave the country. The future of the company also remains uncertain. We offer various contingency plans for those wishing to stay in the UAE and/or ensure smooth business transition.
If you would like to know more about business continuity or succession planning for expat business owners in UAE, Servcrest can assist you in putting together a comprehensive plan.
Get in touch with us to know more about our services.