Succession Planning Using Islamic Finance

A Saudi Arabian family wished to invest into UK commercial property in order to diversify their investments. They wanted to achieve long term stable investment performance and ultimately for the asset to be passed on to their children and grandchildren for succession purposes.

Importantly, the family required Islamic financing by way of a bank facility as their investments must conform to Shari’a Law. The bank facility takes the form of ‘cost-plus’ financing known as a Murabaha.

Once financing was approved with a highly-regarded UAE Bank and relevant tax and legal advice had been taken, the next step was to establish a bespoke Jersey company. The Jersey company was established with multiple share classes enabling different voting rights for individual members of the family, in order to be compliant with Shari’a Law.

By establishing the company with multiple share classes, this enabled succession planning for the family’s children to be implemented while taking into account their minor age.  This coupled with financing using a Murabaha agreement provided an efficient vehicle for the investment.

Our expertise and experience in developing and managing this kind of wealth protection solution enables Equiom to supply Shari’a-compliant structures which meet the specific needs of
the family.