UAE Law and Practice Contributed by: Ildar Yuvakaev, Ruslan Akhmetov, Olga Serova and Daiana Ubushaeva, Consigliere Group
6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries In the UAE, professional fiduciaries – trust companies, council members, CSPs and registered agents – are central to DIFC, ADGM and RAK ICC trusts and foun - dations, most administered by licensed providers. In the ADGM, anyone acting as a CSP must be licensed and comply with prudential, conduct and AML/CFT standards; the DIFC applies similar expectations, with DFSA-regulated trustees and codified duties. Trust services are regulated: the DIFC requires a Cat - egory 3B DFSA licence to act as trustee, with FSRA equivalents in the ADGM. Trident, Sovereign, JTC, Hawksford and Ocorian operate alongside regional firms. Every foundation needs a registered agent, and CSPs supply council members, supervised as designated non-financial businesses and professions (DNFBPs) for AML purposes. Families can use a pri - vate trust company (PTC), exempt from licensing if it serves one family. The DIFC Family Wealth Centre and ADGM equivalents have made single-family offic - es mainstream; however, multi-family offices require licensing. Onshore trusteeship remains embryonic, and waqf administration runs through emirate awqaf authorities. These professional fiduciaries are held to a higher standard than lay trustees or council members, on three levels: • First, the duty of care scales with professional status: under ADGM’s Trustee Act 2000, and similarly in the DIFC, professional trustees are judged against professional competence, while lay trustees are judged against reasonable-person prudence. • Second, exoneration clauses are construed strictly against professional trustees, and the statutory floor – no exclusion of fraud, wilful misconduct or gross negligence – bites hardest on professional conduct. • Third, licensed fiduciaries face a regulatory over - lay lay fiduciaries never see: fitness-and-propriety requirements, minimum capital, client-asset and conflicts rules, AML/CFT obligations, audits, and
DFSA/FSRA enforcement (fines, licence action, public censure) independent of any beneficiary claim. While a family trustee faces a lawsuit, a licensed fiduciary faces a lawsuit and a regulator. Across RAK ICC foundations, council members, guardians and registered agents are expected to meet fiduciary-style governance standards, even where not prudentially regulated. 6.2 Fiduciary Liabilities In the DIFC and ADGM, trusts and foundations have separate legal personality or separate trust property, so fiduciaries are not generally liable for the entity’s liabilities – though a trustee contracts personally with third parties, subject to indemnity from trust assets and any recourse-limitation clause. Personal liabil - ity or veil-piercing is exceptional, requiring bad faith, wilful default, gross negligence, misappropriation, or fraud/evasion of obligations; genuine structures with real governance are rarely pierced, while late, pres - sured or founder-controlled “pocket” structures typi - cally fail via claw-back or sham findings rather than classic piercing. The most important doctrine is sham/alter ego: where a founder retains de facto control and never genu - inely relinquishes the assets, the DIFC/ADGM courts can look through the structure – as in Jamaru Group Holding v Jasmine , where the DIFC court pierced a company’s veil used to claw-back marital gifts. Both regimes also void fraudulent transfers to defraud creditors; onshore, actio pauliana-type rules and bankruptcy claw-back do similar work, and Sharia rules on terminal-illness gifts ( marad al - mawt ) and forced heirship can unwind onshore planning. Free zone firewalls protect the structure within the zone, but onshore assets (mainland real estate, bank accounts) remain exposed – which is the real enforcement gap. Exoneration and indemnity clauses plus D&O-style insurance are permitted but never excuse fraud or reckless breaches; in the DIFC, gross negligence is non-excludable. Risk is further managed by delegat - ing investment and custody to licensed professionals under Trustee Act-style delegation, anti-Bartlett claus - es relieving oversight of underlying operating compa - nies, reserved founder powers, protectors, Beddoe- type court directions, and beneficiary consent.
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