Shari’ah Compliant Trusts In The Offshore Domain

Originally published in Moneyworks, May 2007.

In the offshore domain, trusts have their origin in the common law of England and have, for many years, been used by wealthy families in the Middle East to create long-term structures to address tax and succession planning. Trusts can be crafted so as to comply with the specific family requirements of Islamic law. Indeed, the concept of Waqf is the nearest equivalent to a trust in Islamic law and its components can with careful drafting be reflected in the terms of an English common law trust. Often trustees are chosen from one of the convenient offshore trust centres, such as one of the Channel Islands, but equally there are a number of Islamic states which recognise and enforce the principles underlying trusts. British Commonwealth countries such as Malaysia and Pakistan have had trust laws in place for years. However, the introduction of reforms to the law of Waqf and new legislation in jurisdictions such as Bahrain and Dubai,