Jersey’s Relationship with the Gulf Region

• There is a growing need for ethical, transparent and accountable finance in the Gulf region – areas in which we’re experts
• We’re able to work within a range of finance disciplines, sensitive to local dynamics, economies and cultures
• We support inward and outward foreign direct investment (FDI) for infrastructure projects through our integrated business development strategy
• We assist in family wealth management and pre-IPO planning
• We provide a full suite of cross-border, corporate, funds and wealth management services for high-net-worth individuals (HNWIs)
• We continue to support our permanent presence in the Gulf region with regular business seminars, roadshows and receptions to strengthen our relationships and widen our network of contacts.

When Jersey became the first international finance centre (IFC) to have an office within Dubai’s economic zone (DIFC), it put us in a good position to support the increasingly complex needs of investors in the UAE and the wider Middle East region.

Today our team in the Gulf Region are able to engage with stakeholders on the ground, providing a seamless bridge between Jersey and the GCC and the wider Middle East, and benefit from the ever-increasing trade links between Dubai and east and west Africa, and India.

It is Dubai’s development as a gateway jurisdiction between east and west Africa and India that perfectly places our Middle East Regional Hub office to drive our business development strategy for these exciting markets.

Altum have long standing and established relationships throughout the Middle East and in recent years we have seen a growth in demand for the creation of private trust company
(or foundation) ‘PTC’ structures.

The COVID-19 pandemic has in some respects accelerated the focus on succession planning (which has been often overlooked) in the region and shifted focus more towards planning for an effective and robust wealth transfer strategy.

As family businesses dominate the creation of wealth in the region, so it is unsurprising that demand is increasing for an appropriate structure which can cater for both the personal (often foreign held) and business (locally held) assets of the families of the wealth creators.

Recently, Altum worked with a UAE resident family to structure a PTC which afforded a unique ability for the family to retain an element of control and leverage the expertise of the family members through the retention of key executive or board positions on the PTC. We have found this type of structure beneficial to the ongoing stewardship of the business assets and enhancing the working relationship and trust of the wider family members.

The PTC spanned multiple jurisdictions through the control of related underlying structures, so its flexibility coupled with Jersey’s reputation and jurisdictional expertise made it the ideal choice for a sophisticated family.

A prominent Saudi-based family wanted to use BKS Family Office to establish a private trust company (PTC) structure to hold a number of their international assets for succession planning purposes.

The PTC structure included a Jersey Purpose Trust which held the shares of a Jersey registered company to act as trustee of various underlying family trusts for each family member.

Each trust held a proportion of the shares in the European arm of the family trading business. The individual trusts also held the shares of separate Jersey registered investment holding vehicles to hold personal investments, including real estate, land, investment portfolios and works of art.

The use of the PTC provided the family with a greater degree of participation in the decision-making process as the family members and their advisors formed part of the board of the trustee company together with BKS. This was important for the family, especially given that the structure held the shares of the family business, and this involvement allowed for decisions to be made in accordance with the overall family objectives while achieving the family’s succession plan.

Holding meetings in Jersey was not an issue for this family who have been frequent visitors to the Island.

A high-net worth individual, a citizen of the GCC, recently selected Jersey as his preferred jurisdiction for a major new private wealth holding structure. The head of the family had accumulated a diverse range of investments in several different jurisdictions over the course of his lifetime.

He wished to consolidate the ownership of those items under a single family office located in a politically stable, and reputable jurisdiction primarily for the long-term benefit of his children and their descendants, but also as a means to encourage the different generations to work harmoniously in furtherance of the family’s shared values following his death.

The principal was heartened to learn that Jersey had a wide range of property holding entities (trusts, companies, foundations, limited partnerships), each with their own features, that could be used to meet his aims and objectives.

Background: The beneficial owner of a large Saudi Arabian investment management group, and his long-standing Jersey based corporate service provider, sought advice on establishing a vehicle in Jersey to hold and invest in UK-listed stocks as part of a succession plan for his family wealth.

Brief: To find a solution that allows the client to deal with the succession planning issues of forced hiership and any disagreements regarding corporate governance, and to raise finance in a Shari’a compliant way.

Solution: The establishment of a Jersey discretionary trust with underlying company, the ownership and control of the company mirroring the beneficial interests under the trust. This solution meets the client’s underlying investment needs through a secure and private structure in a reputable and regulated jurisdiction, Jersey being a centre of excellence in the field of Islamic finance.

Crestbridge Family Office Services (FOS) assisted, alongside the family’s existing adviser team, a Middle Eastern family with the implementation of a substantial family office structure where succession planning was a vital component.

Valued at more than US$2 billion, the structure required numerous different types of Jersey trusts, private trust companies, property and asset holding vehicles and an operating company. The objective is to provide oversight to the family’s international assets which include large global real estate and private equity portfolios, as well as estate planning.

Crestbridge’s role is to provide a member of the trustee board, directors, registered office, company secretarial services, full administration, bookkeeping and accountancy services. The firm has worked with the family to set up external advisory and supervisory boards to provide investment recommendations and advice for the structure, while it has also collaborated with legal advisers in relation to the drafting of constitutional documents.

The family chose Jersey as the jurisdiction for the structure due to its secure environment and first-class reputation as a centre for excellence in governance and international private
wealth services.

Situation: Three branches of a wealthy family – headed by three brothers – were the founders of a large manufacturing business with activities across the GCC. Each brother has numerous children and grandchildren but sadly two of the brothers are now deceased.

The manufacturing businesses are held via a DIFC-regulated company. For the deceased brothers their shares in the DIFC company are owned by separate companies which are owned equally by their sons and daughter. The third brother owns his shares directly in his own name.

The Challenge: The family wished to distance the family name and the underlying manufacturing business for confidentiality and asset protection reasons and establish a structure for succession planning for the ownership of the business and associated profits.

Solution: The solution was to establish three Jersey law trusts. The shares in the DIFC company were settled into each trust by the existing shareholders, transferring the legal ownership of the DIFC company to the Jersey Trusts.

Each trust owns the shares and any future profits for the benefit of the beneficiaries.

The beauty of the solution is that the trust has no end and can hold the shares and any profits indefinitely for the beneficiaries without the need to transfer the shares on the death of any one member of the family.

Fairway helps families based in the Gulf region to structure family and corporate assets, including the family business.

Since 2011 Fairway has actively managed foundation, trust, company and fund structures which own international wealth across multiple asset classes and jurisdictions. Legislative changes enable us to structure GCC assets including real estate and the family business using DIFC Foundations.

Through our tailored approach we can blend international and Gulf region assets into one overall structure. The structuring of the family business, which has numerous divisions covering financial services, construction, travel, automotive and renewable energy, adds a corporate element to private client wealth structuring, including for example administering End of Service Gratuity schemes and other employee/employer solutions.

As a consciously independent, owner-managed business,Fairway works with families and their advisors to design, build, and implement bespoke solutions to meet the needs of current and future generations and protect legacy.

Fiduchi has had a presence in the Middle East for over two years and has serviced clients in the region for over a decade. As an independent Jersey trust and corporate services provider, Fiduchi is ideally placed to assist families, and family businesses, with their structuring requirements, having done so for more than 30 years.

For one GCC family in particular, Fiduchi has established a new private trust company (PTC) structure in Jersey with two underlying trusts. The result of this exercise was to simplify and rationalise prior holding arrangements: wherever possible (and advantageous from a tax perspective), personal assets were put under the relevant holding company now held via trust, separating business from family assets and consolidating administration in one place. Part of the exercise involved re-domiciling existing offshore holding companies to Jersey in order to incorporate them into the newly established structure.

The trusts that have been put in place will ensure smooth succession planning for the majority of the client’s GCC and non-GCC assets. Furthermore, the PTC enables the client for as much or as little participation in the control of the structure as they wish. Jersey was chosen because of its strong global reputation and regulated environment and the fact that Fiduchi had a presence in the GCC, enabling ease of contact.

Hawksford has a long-standing relationship with the GCC region, having supported Middle Eastern clients and intermediaries with outward investments into the UK, US and Europe for many decades. This includes the administration of trust and company structures for large and multinational businesses, sovereign wealth, multi-generational families, ultra-high net worth individuals, listed companies and SMEs.

Given Jersey’s high repute for corporate structuring, and as a preferred domicile for asset classes such as real estate, Hawksford has seen a number of clients from the GCC region incorporating multi-investor vehicles which do not fall within the typical remit of Jersey’s fund regime. Jersey’s familiarity with Shari’a law requirements, coupled with its tax neutrality and potential future savings on disposal, make the jurisdiction the ideal choice for international investors. This is further bolstered by the signing of the Jersey-UAE Bilateral Investment Treaty in November 2021.

Headquartered in Jersey, Hawksford continues to partner closely with its clients in the GCC region, supporting them with their on-going expansions. Recent examples include the establishment of Jersey public limited liability companies with wide shareholder bases, investing through, for example, Delaware structures that in turn own significant commercial real estate in the US. At the same time, Hawksford has been involved in the formation of similar structures investing into Germany and the UK, among others, with differing asset classes.

Highvern were recently engaged by a member of the Saudi Arabian royal family to assist with refining and streamlining their complex private wealth structures. The client’s wealth structuring took place nearly 20 years ago, with real estate and investment assets added piecemeal as they were acquired.

Highvern and the family office professionals worked together to design a future proofed structure which would be more appropriate for the client’s changing investment and funding profile. This included the introduction of a private trust company (PTC) structure to unify and streamline decision making for various trusts established over the last 20 years. Throughout the process it was essential to understand the changing family and jurisdictional dynamics present in Saudi Arabia, which provided the impetus for change.

The dispersion of family members across different jurisdictions, often for educational needs, is one factor to be considered when managing a structure and determining the needs of the beneficiaries. Other factors are an enhanced desire for Saudi Arabian nationals to travel internationally on a regular basis, to have a diversified jurisdictional approach to asset management as a risk reduction tool, and to protect their personal and familial reputation.

Highvern has very strong business connections in Saudi Arabia and is an expert in assisting clients to adapt their private wealth structures to take account of personal and unique jurisdictional circumstances which apply in this fascinating region.

Highvern were approached by an existing client, resident in Dubai, to take forward the creation of a joint venture partnership. Our client had Gulf Cooperation Council (GCC) connections in the particular commercial space and had been introduced to a UK company that operated in the same area and wanted to establish a greater presence in the region.

The team at Highvern worked with all parties, including lawyers in both Dubai and Jersey, to establish a Dubai free zone company which was jointly beneficially owned by a Jersey special purpose vehicle and the UK company. Operational headquarters were established in Dubai which had to then be equipped and recruited for from local resources.

The joint venture arrangement now operates successfully across both regions, providing a perfect example of how Jersey and GCC structuring can work together for the benefit of all parties involved. Highvern has extensive experience structuring across both jurisdictions, facilitating long term partnerships that will ultimately benefit all stakeholders.

The Brief: IQ-EQ was approached by a GCC family to establish a sophisticated and efficient international operating platform to facilitate a range of international investments, both business and personal. The family was looking to further diversify their investment portfolio internationally to continue growing their wealth and manage risk.

Client Need: The family wished to distance the family name and they wanted to establish a flexible structure that would also allow them to invest in various jurisdictions. Based on this, we agreed that a private trust company private trust company(PTC) structure, held by a purpose trust, would be the most appropriate for the family’s needs and objectives.

Solution: We incorporated the purpose trust and PTC, in addition to various trusts being established by each settlor. We then incorporated special purpose vehicles (SPVs) to facilitate the ownership of four existing venture capital investments in the US and established a further SPV to facilitate an investment into a UK business. We also transferred some Cayman SPVs into the structure.

We then worked closely with the family and their advisers to bring their international business interests into the PTC structure, and finally transferred each family member’s personal investments. They are currently in the process of transferring each family member’s personal investments – including investment portfolios, real estate– into their respective trust structures.

We advised a GCC ultra-high net worth individual on the creation of a bespoke Jersey trust and company  structure to hold and manage valuable personal assets situated in various locations in the UK and Europe. A high degree of client and key advisor involvement was required in the design of the structure.

The governance arrangements enable the client, along with his key advisors, to monitor and give certain directions to the trustee a private trust company (PTC) in relation to transactions in art, bloodstock, financial investments and real estate, with the Jersey administrator retaining certain controls. The management arrangements ensure that the client, the advisors, the PTC and the boards of the underlying holding companies, receive regular management reports from the managers of each of the asset classes.

The result represents a balance of the requirements of succession planning, asset protection, continuing client involvement and day-to-day governance. This meets the requirements of the client and gives the Jersey administrator the comfort that risks are being managed robustly.

This optimal outcome was achieved by having an understanding of the high level motivations of the client and the reality of day-to-day operations and by ensuring that the administrator’s concerns were taken into account. Investing in the design stage was key, as was the ability to refine the arrangements after stress testing.

We are working closely with a UK-based family office to establish a private trust company (PTC) structure  for a significant Middle Eastern family to hold their personal investment assets. They were attracted to the PTC structure as it allows the flexibility to ring-fence assets in separate trusts for separate family interests under a single corporate trustee. Whilst consideration was given to appointing family office representatives to the PTC board instead, we have created a structure with the family office participating in an investment committee alongside Oak’s professional directors.

It was a key element for the family office to continue to be able to direct the investment strategy within a clear governance framework. It is essential that the governance structure for monitoring and reporting the activities of the PTC is robust as the assets are substantial.

The family looked at various jurisdictions to set up in but selected Jersey because it met all of the key criteria. The legal framework was in existence and well-tested, it has a leading compliance and regulatory framework, which makes it easier to do business with global financial institutions, and sophisticated local service providers with experience in managing complex structures for international families.

Ogier’s investment funds team, including group partner Emily Haithwaite and managing associate Alexandra O’Grady, advised an Abu Dhabi-based investment group in connection with the establishment of a corporate open-ended investment fund to invest in best-in-class securities (equities, fixed income products, derivatives) primarily across the US, Europe, Japan and China, and in other funds worldwide.

The fund, which was structured as a Jersey private fund, sought to raise US$20m from institutional UAE/GCC investors. The structure also involved the establishment of a Jersey investment adviser to the fund. The team advised on the application of Jersey’s financial services legislation to the investment adviser, and the economic substance legislation in the case of a self-managed fund.

The Client: A Palestinian/British patriarch who established a construction and real estate development company in the UAE in the 1970s.

The Challenge: Develop a structure that would provide asset protection and a bespoke succession planning tool so that assets could accumulate offshore for future generations. The structure should have sufficient flexibility to allow the patriarch to retain a certain level of control and operate in conjunction with a family constitution and investment committee. Several funds would be established and designated for specific purposes, such as private equity investment and philanthropic activities.

Solution: The Praxis Jersey Private Client team designed a Settlor Reserved Powers Jersey Law Trust which included Protector provisions, and in consultation with the family, drafted a bespoke Letter of Wishes ensuring the patriarch retained power over investment decisions.

The Group’s UAE-based relationship director worked with the family to design a family constitution. The family investments have been segregated using Jersey limited companies owned by the trust and each fund has strict parameters around how the capital is invested.

Results: The trust protects the family’s foreign assets and specific provision has been made for female family members to ensure that they are not disadvantaged by Shari’a principles.

As a truly global group with a track record of more than 40 years, Trident Trust is often asked to assist families who wish to plan for secure and successful intergenerational wealth transfer.

We recently acted for a GCC family to help them achieve their succession planning and asset protection objectives. This necessitated close engagement with the family office, and its trusted advisors, to  understand the family and the wishes of the patriarch. Our Dubai office was able to provide on-the-ground regional support, working in close collaboration with our Jersey office, which now acts as family trustee and corporate service provider.

The family were drawn to use Jersey because they trusted the jurisdiction, regarding it as having a reliable and safe regulatory and legislative framework. So, with peace of mind, they could entrust custody of a significant portion of their family wealth with Trident as a trustee, safe in the knowledge that we had taken the time to really understand their needs. Trident’s private ownership and independence, and its focus on long-term relationships, underpinned by personal service, attention to detail, reliability and responsiveness, meant that our values and those of the family were very well aligned.

Case Study 1: Walkers’ Jersey Private Capital & Trusts team – led by partners Robert Dobbyn and Sevyn Kalsi – was instructed by a Jersey trust company to advise on and draft the constitutional documents for a new Jersey foundation for a Middle Eastern royal family member.

The choice of a Jersey foundation for the structure reflects a trend that Walkers has been seeing over the last ten years, in which Jersey foundations are increasingly used for succession planning by clients from the GCC and wider region. This is largely because of their flexibility as a tool that can provide ongoing control during a client’s lifetime while also avoiding probate issues or family disputes on death, and can be tailored in line with requirements of Shari’a law if required.

The objects of the foundation in this case centered around allowing the client to remain actively involved in investment management and facilitating succession planning more generally for after her death. Jersey foundations can work well as vehicles for holding international assets in particular, and will often now go hand-in hand with GCC freezone (especially DIFC and ADGM) foundations, which may be more suitable for GCC real estate and local business assets.

Case Study 2: Walkers’ Jersey Private Capital & Trusts team – led by partner Robert Dobbyn and senior counsel Sevyn Kalsi – has an ongoing retainer with a private trust company structure administered by a Jersey trust company for a GCC-based family.

The family members are active investors in the US and western Europe, particularly in real estate and hospitality. The family therefore requires regular assistance with advice and drafting connected with property acquisitions or financing, as well as pooling funds within the family or with other prominent families.

They have also undertaken a major restructuring of the overlying trusts, to plan ahead for the death of the patriarch, by creating a master trust that would then, on the patriarch’s death, automatically endow existing pilot trusts for the benefit of his siblings, widow and children from different marriages.

This matter reflects the way that Walkers’ lawyers from across different specialisms (trusts, corporate, funds and finance) work together, both in Jersey and the firm’s Dubai office, to help clients from the GCC region, and also how Walkers collaborates with fiduciary and tax advisory businesses in achieving the best result for a client.