Update: succession planning across Hong Kong and the UAE

Family structures spanning Hong Kong and the UAE face a specific legal tension that does not resolve itself. The two systems handle succession, forced heirship and asset-protection trusts through entirely different mechanisms – and when a principal holds assets in both jurisdictions, those mechanisms pull in opposing directions.

For principals with assets and family members in both Hong Kong and the UAE, the interaction between Hong Kong's trust-law protections under the Trustee Ordinance (Cap. 29) and the UAE's personal-status rules – which can apply religious or civil succession law depending on the family's profile and the emirate – creates a structuring gap that planning must close before an estate event forces the question.

This briefing addresses what the gap is, who it affects along the corridor, and the immediate steps that follow.

What the structural gap looks like across this corridor

Hong Kong law has no forced-heirship (mandatory minimum inheritance entitlement) regime. Under reforms to the Trustee Ordinance that took effect on 1 December 2013, a Hong Kong-law trust is also protected against foreign forced-heirship claims: a foreign court's application of its own forced-heirship rules to a Hong Kong-law trust has no effect on the trust's validity in Hong Kong. The rule against perpetuities was abolished at the same time, giving Hong Kong trusts considerable longevity.

The UAE position is different. For Muslim nationals, the default succession rules derive from Sharia law (Islamic succession principles), which prescribe fixed shares for defined heirs. Non-Muslim expatriates may elect to have the law of their home country apply to their UAE assets – but that election must be registered, and its interaction with offshore holding structures is not automatic. The UAE's various free-zone regimes, including those in the DIFC (Dubai International Financial Centre) and ADGM (Abu Dhabi Global Market), operate under English common-law systems with their own wills and succession rules for assets held within those jurisdictions.

When a principal holds Hong Kong-listed securities, a BVI holding entity, and UAE property or a DIFC-held portfolio simultaneously, the succession analysis requires mapping each asset class to the applicable succession law – which may be Hong Kong law, UAE personal-status law, DIFC law, BVI law, or the law of the principal's domicile of origin. No single instrument governs all four. That is the gap.

Who this affects along the Hong Kong–UAE corridor

The structural tension affects three categories of principal most directly.

First, UAE-resident principals – whether GCC nationals or long-term expatriates – who hold assets in Hong Kong or through Hong Kong-connected offshore structures. Their Hong Kong assets are outside the UAE succession perimeter in strict terms, but the interaction of domicile, habitual residence and the forced-heirship firewall still needs to be mapped and documented.

Second, Hong Kong-based principals with UAE property or DIFC investment accounts. A DIFC will or a registered non-Muslim election may resolve the UAE side; it does not, by itself, address how the BVI or Cayman holding entity above the Hong Kong opco is treated in the same estate.

Third, multi-generation family offices with principals in both cities. Where beneficial ownership spans two generations resident in different jurisdictions, the trust structure must be reviewed for the interaction between Hong Kong-law trustee powers and the succession expectations – and in some cases the legal entitlements – of heirs in the UAE.

In our cross-border practice, we see this corridor frequently among South Asian, Arab and CIS family groups who moved capital through Hong Kong into the Gulf or in the reverse direction over the past decade. The question is usually not theoretical: it arises when a principal is diagnosed with a serious illness, when a marriage occurs, or when a family shareholder agreement is being renegotiated.

What to do now

The immediate action is an asset-and-succession map: a structured review that identifies each material asset, the jurisdiction in which it sits or is governed, and the succession law that would apply to it today. For many families operating across this corridor, that map has never been drawn in its current form.

Where the map reveals a gap – an asset outside any trust or will structure, a forced-heirship exposure that the Hong Kong trust firewall does not resolve because the asset is UAE-sited, or a holding entity whose ownership would pass under the law of a jurisdiction the principal did not choose – the correction requires coordinated advice across both systems.

Hong Kong's trust law offers durable protection for assets properly settled into a Hong Kong-law trust. The Trustee Ordinance's anti-forced-heirship provisions are a material advantage for principals whose estate would otherwise be vulnerable to claims under a foreign mandatory-succession regime. But that protection applies to the trust assets. Assets outside the trust, and the trust's own validity in the UAE, are separate questions that need separate answers.

If a DIFC will or a UAE non-Muslim succession election has not been registered, or if it was registered before a material change in the family's asset map, this is the moment to review it. Parties should verify the current position in both jurisdictions with locally licensed counsel before acting.

The sequence above describes the standard position. Your matter turns on the specific asset jurisdictions, the family members' residences, and the order of documents – which is where the route is won or lost. To discuss how the Hong Kong–UAE succession interface applies to your cross-border position, contact info@lockhartyip.com.

For further context on our private wealth practice, and on related cross-border structures, see our analysis of asset protection and BVI holding exposure and our succession planning analysis across Hong Kong and Cyprus.

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This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.