It provides new mechanisms for managing wealth and funds and encourages the allocation of charitable covenants

“Finance”: The “custody” law allows the establishment of retirement funds for employees of large companies

• “Finance”: The law works to raise the efficiency of financial legislation and policies in the country.

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The Ministry of Finance confirmed that the issuance of Federal Law No. (19) of 2020 regarding “custody” constitutes an important addition to the advanced legislative structure of the state, pointing to very large sums of money coming out of the state’s financial base, as there is no legal framework that regulates wealth management.

The ministry explained that the Custody Law allows the creation of a trust for the purposes of establishing pension funds for employees of large companies that have 1000 employees or more.

Custody law

In detail, the Undersecretary of the Ministry of Finance, Yunus Haji Al-Khoury, said that the issuance of Federal Law No. (19) of 2020 regarding “custody” constitutes an important addition to the advanced legislative structure of the state, and contributes to supporting the wealth management sector, and provides new mechanisms for managing wealth and funds, as well as For his role in encouraging the allocation of charitable pledges.

He added, during a media briefing held by the Ministry remotely yesterday, to review the details of the decree-law regarding "custody", that the law works to raise the efficiency of financial legislation and policies in the country, and to establish a competitive environment that keeps pace with the latest economies of an economic and technological nature, which in turn contributes to preserving investments Capital in the state, providing a safe and developed economic environment, diversifying the tools available to exploit and protect wealth, and develop the business environment.

Al Khoury stressed that the UAE is embarking on a new phase, during which all government agencies will continue to work to consolidate the foundations of comprehensive and sustainable economic and social development and push its wheel, so that the UAE is the best in the world with the advent of its first centenary in 2071.

Legal tools

He continued: “The Ministry of Finance aimed to develop the Custody Law to create legal tools that enable companies or persons who own various capital and financial rights, and wish to hand over these wealth and rights as a financial trust in the custody of another person entrusted with the management and development of funds, and this is done through a special document called (Custody bond), to be recorded electronically, to reflect the money it contains, whether movable or real, and then the presence of custody rights is indicated in the official records of those funds.

The biggest beneficiaries

Al-Khoury said: “All members of society, whether natural or legal, benefit from this law, and family-owned companies, which are among the biggest beneficiaries of this decree, as the law will enable the owners of these companies to plan for the long-term future of companies’ assets and their continuity, especially as the law provides for the owners of Capital is an integrated system that enables them to manage their wealth as a trust by qualified and competent persons or institutions with experience and knowledge of different investment patterns and their risks, and how to deal with them in an optimal way, in addition to the traditional covenant that can be used in organizing family property in the usual manner.

"Custody for special purposes"

Al-Khoury pointed out that the law includes a special section establishing "custody for special purposes", which is a modern form of custody types, which are organized in detail to serve investors in the financial markets, to create investment funds that are created for the purposes of dealing in securities in various forms of dealing in the financial markets. Including owning securities, trading them, investing in them, and establishing funds for social security, which provide benefits to beneficiaries in exchange for regular contributions paid for private custody.

Pension funds

In turn, the advisor to the Minister of Finance, Dr. Hussam al-Talhouni, said that the studies that preceded the issuance of the law found that very large sums of money are coming out of the state’s financial base, because there is no legal framework regulating wealth management that was established by non-citizens who came and established large businesses and died, and their money moved to The heirs who then transfer it to other countries.

He stressed during the media briefing, that the law will preserve these wealth and attract more of them from the countries of the region and the world as well.

In response to journalists' questions, Talhouni explained that the law also allows the creation of a trust for the purposes of establishing pension funds for employees of large companies that have 1,000 or more employees, for example, that can, to ensure their psychological and practical existence and stability, establish their own trust as a retirement fund for them.

He explained that this matter is new and advanced, and it is happening for the first time in the UAE, which enables the employees of large companies to deduct a small part of their income, enabling them to obtain continuous benefits for periods when they retire and for generations after them, according to what is agreed upon, not just what They are secured by labor law.

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