Bahrain: Recommended Structures for Middle Eastern Clients
Last Updated: 6 January 2011

INTRODUCTION

Appleby is the leading provider of offshore legal and fiduciary services to individuals, families and businesses in the Middle East. In 2010 The Lawyer named Appleby as Offshore Law Firm of the year. Our clients range from ruling families, to multinational companies, to wealthy individuals seeking to structure their personal and business assets with a view to the future.

With offices in eight major offshore jurisdictions including Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Mauritius and the Seychelles as well as offices in London, Hong Kong, Zurich and Bahrain, we offer our Middle East clients an unequalled choice of offshore jurisdictions and a full range of legal, fiduciary and administration services.

Over 800 lawyers and professional specialists deliver sophisticated, specialised services, primarily in the areas of Corporate and Commercial; Litigation and Insolvency; Private Client and Trusts; and Property. We advise global public and private companies, financial institutions, and high net worth individuals, working with them and their advisers to achieve practical solutions, whether in a single location or across multiple jurisdictions.

PRIVATE, FAMILY AND BUSINESS STRUCTURES

With the use of offshore structures, families and individuals can ensure that:

  • Personal wealth is held in a safe and discreet manner
  • Wealth is preserved for the benefit of future generations
  • Businesses are run in an efficient and secure manner
  • Assets are protected from claims by future creditors or against local rules which apply to asset distribution upon death
  • Family members can play an active role in relation to the management of family trusts

Appleby has been advising clients on family business holding structures and succession planning with the use of family offices, private trust companies, conventional trusts and foundations, and asset holding vehicles for more than a century and can adapt any such structures to work within Shari’a principles whenever required.

In this brochure, we explore some of the structures which may bring significant benefits to you and your clients.

STRUCTURES

1. Asset Protection Trust

The purpose of the asset protection trust ("APT") is to allow the settlor to protect and preserve his assets from future creditors by placing the property and/or cash into a trust so that the settlor no longer has ownership of the settled property and such property is therefore not available for creditors. Creditors cannot successfully attack the APT unless the APT is established with the intention to defraud creditors.

2. Private Trust Companies

Private trust companies ("PTCs") have become very popular structures over the last decade due to the many benefits they offer. A PTC is a company which acts as trustee of family trusts, allowing the settlor and his family to take part in the active management of the trusts. PTCs are particularly useful in cases where there is a wide range of assets held in the structure for the benefit of a large number of extended family members of different generations. Trusted advisors and family members can all serve on the board of the PTC ensuring that the trustee will always be aware of the situation of the beneficiaries, responsive to their needs and the information on the dealings of the trusts will be kept confidential.

3. Asset Holding and Succession Planning

This structure works well both as a basic asset holding vehicle and as a succession planning structure. A trust holds a number of underlying companies which in turn own diverse assets. Ownership of these assets is no longer vested in the client, providing a good degree of asset protection and simultaneously preserving the assets for future generations. As a trust structure is used, the trustee would be obliged to distribute assets to family members or other beneficiaries according to the wishes of the creator of the trust. This structure can last in perpetuity should the creator of the trust so wish.

4. Investment Structure

This investment structure again divorces the ownership of assets by using a trust, but allows a degree of control to be retained by the settlor. There is an enforcer whose duty is to oversee the actions of the trustee. There is also an investment committee which the settlor or his family can sit on which sets and reviews the investment policy for the structure. The investment committee has powers reserved to it in the trust deed that they can exercise for the duration of the trust and they are free to set their own investment parameters and employ investment advisors of their choice.

5. Family Bank

This structure works well in situations where families wish to provide a mechanism to give low cost or interest-free loans to family members. This would avoid the need for family members to seek loans from commercial banks. The investment committee can also act as investment advisor with responsibility for managing the investment of the family money and assets.

6. Shari’a Compliant Investment Structure

This structure allows investors to acquire shares in a protected cell company (similar to a unit trust or corporate fund) owned by a trust. The protected cell company would enable the investments to be segregated according to investor and type of asset, ring-fencing their potential distributions and liabilities. The type of investments held in the protected cell company would be vetted and/or controlled by an investment advisor who would only invest in Shari’a compliant investments.

7. Foundations

A foundation is a good asset holding or succession planning vehicle which divorces ownership of its assets from its founder and its beneficiaries. The foundation itself is a legal entity separate from the founder, the guardian or the council and it has a charter and rules that set out how it is to function. The guardian’s duty is to monitor the correct running of the foundation to ensure that the aims of the foundation are carried out and that any beneficiaries receive their correct benefits. The council carries on the administration of the foundation and is its decision-making body and is usually made up of family members and trusted advisors. Through the offices of both guardian and council, a foundation offers the benefits of good client control and confidentiality of information. Foundations may also continue in perpetuity.

OFFICE AND CONTACT DETAILS

Our office in Bahrain operates as a regional base from which we promote and deliver Appleby’s global services to the entire Middle Eastern region.

Our office in Zurich works regularly with Swiss banks and advisors in both Zurich and Geneva in order to provide the full range of offshore services to their Middle Eastern clients. Representatives from our Zurich office are also happy to meet with clients or their advisors anywhere in Switzerland in connection with client business. We will also happily arrange for meetings to be held at a client’s home or office in the Middle East.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Press Releases from this Firm
Recent Content from this Firm
By Andrew Weaver
By Camilla Hobbs
By Peter McMaster QC, Sally Peedom
By Richard Sheldon
By Samuel Banks, Peter Colegate
By Melissa Virahsawmy
By Alex Brainis
By David Pytches
By Bryan Hunter, Simon Raftopoulos
By Jeremy Walton, Anna Snead
Tools
Print
Font Size:
Translation
Channels
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.