Running a business is hard work. The daily work needed to make a business successful leaves little or no time to plan for the ownership and management changes that will inevitably occur. None of us likes to think about or discuss our own mortality, but the process of succession planning, like good financial or estate planning, is all about what will happen after we are retired or gone for good. The longer owners wait to design and implement a succession plan, the greater the risk that the plan will not meet their goals. The risks also increase that the business will fail along the health of the owner. When a business owner does not implement a succession plan before he or she is disabled or dies, the value of the business often drops rapidly. In fact, it is not uncommon that both the business and the business owner die on the same day. This means that the owner’s intended beneficiaries will not receive the full value of the business.
If you own a family business, retirement is more than a matter of deciding when to go. Business succession planning ensures a smooth transition and avoids ownership and control issues.
In order to put a plan in place for the succession of your business, you may choose to use one of several methods such as a buy-sell agreement, an offshore trust or foundation, a private annuity, a family limited partnership, management buy-out or a direct gift or sale. This is a complex area and a major decision involving, for many, their most valuable asset.
As a business owner, it is quite likely that a significant portion of your personal wealth is tied up in your business, and at some stage, every family owned business must be transferred. While an unplanned transfer, especially if caused by death, could be disastrous for your business, it could also be a potential nightmare for your family.
Business succession planning seeks to manage these issues, setting up a smooth transition between you and the future owners of your business. With family businesses, succession planning can be especially complicated because of the relationships and emotions involved. If you have partners, it is particularly important decision to make.
We advise on all aspects related to inheritance and business succession. We address inheritance issues for Muslims and non-Muslim nationals ensuring you know all facts and can make optimal decisions. There are many planning strategies business owners can use to transfer a business, and selecting the right one is key to ensure continuing success for your company and security for your family. Backed up by decades-long experience and expertise in this field from our head office in Cyprus our Business Succession and Asset Protection Team advises you on all aspects related to inheritance and business succession. We provide practical advice to those with assets in the Middle East that will integrate your family estate planning and retirement planning needs to maximize the value of your business and enable it to meet future needs. We can assist in the following areas:
We advise on the use of complex succession planning options such as the setup of international asset holding structures, International Trusts and Foundations. We assist in setting up Trusts and Foundations in several jurisdictions - such as in Cyprus, in ADGM and in DIFC.
For those that have assets in the UAE there is a simple reason to make a will. The Government of Dubai official website states that ‘The UAE courts will adhere to Sharia law in any situation where there is no will in place’. A Will is a legal document that declares your intentions as to what should happen to the distribution of your assets, on death. These assets typically include real estate, money, investments, jewellery, vehicles and personal or household belongings that you own, and they can be bequeathed to individuals, families or institutions, either in part or as a whole. A will can also be used to specify other wishes including the appointment of temporary and permanent long-term guardians for children, contributions to charitable causes and specifying funeral arrangements. We can draft a will for you which declares your intentions as to what should happen to the distribution of your assets UAE assets upon death. After you have agreed with the text of the will we will assist you with its registration with the UAE courts. Our office will take care of every step of the process.
For non-Muslims with Dubai assets, the best way to ensure that these assets are transferred in accordance with your will is to register it with The DIFC Wills Service Centre. Drawing on our long experience in succession planning we can help draft your well and take care of the registration formalities.
For any further information regarding UAE wills, DIFC Wills and UAE succession planning please contact our office for a free consultation.