Trusts and foundations move onshore in the Gulf

Abstract

Abstract Commencing in the 7th-century CE, the notion developed in Islamic jurisprudence that property, although legally owned by a person, might nonetheless be subjected to enforceable obligations that it be utilised for the benefit of specific purposes (usually religious) or, later, for individuals, be they the recipients of charity or family members. Such property was said to be in detention (“waqf”). Later, similar legal concepts developed in the common law world (in the form of trusts) and the civil law world (in the form of foundations). In the Gulf Co-operation Council (GCC) states (the Kingdom of Saudi Arabia, United Arab Emirates, Oman, Qatar, Bahrain and Kuwait), laws of the jurisdictions recognise these concepts to varying degrees—most completely in the United Arab Emirates, where common law trusts in the financial free zones, trusts in the civil law jurisdiction, foundations, a form of statutory waqf (the endowment) and awqaf (the plural of waqf), and the Court of Appeal of the Dubai International Financial Centre (“DIFC”) has recently reviewed the application of the DIFC’s Trust and Foundations Laws with the benefit of an opinion from Shari’a scholars as to the interaction of the DIFC’s legal structures with Shari’a. The article explores the development and interaction of these legal concepts, the role which they can play in the context of the region’s private wealth, and compares the various statutory regimes.