Succession planning across Hong Kong UAE

A family with assets in Hong Kong and a principal resident in the UAE sits at one of the more demanding intersections in private wealth planning. Two legal systems, two residence regimes, two inheritance traditions, and in many cases a holding structure layered through a third jurisdiction – typically the British Virgin Islands or the Cayman Islands – all arrive at the same table. The question is not whether succession planning is needed. It is which law governs, which will is recognised where, and what happens when a forced-heirship rule in one jurisdiction meets a freely disposable estate in another.

Succession planning across Hong Kong and the UAE requires coordinating at minimum two substantive legal systems: Hong Kong's common-law testamentary regime, under which the Trustee Ordinance (Cap. 29) governs trusts and there is no forced-heirship rule, and the UAE's personal-status framework, under which religion-based inheritance rules apply to Muslim nationals and, in practice, to assets situated in the UAE in the absence of a registered will. The interaction between these two regimes is the core structural problem, and it must be resolved at the planning stage – not at death.

This page sets out what Lockhart & Yip does, how the engagement runs, and what the principal must own. If the outline fits your position, write to us directly.

When does this question come to a head?

The trigger is rarely abstract. It arrives when something changes: a principal relocates from Hong Kong to Dubai or Abu Dhabi; a family completes a liquidity event and the proceeds are held across Hong Kong and UAE accounts; a holding entity above a Greater China operating group is moved to a new jurisdiction; or a spouse or child acquires assets independently in one of the two places. Each of these events resets the succession map.

What makes the Hong Kong – UAE corridor specific is the gap between the two systems' default rules. Hong Kong law imposes no forced-heirship obligation. A principal may dispose of Hong Kong-held assets freely by will. The Trustee Ordinance (Cap. 29), substantially reformed with effect from 1 December 2013, removed the rule against perpetuities for Hong Kong trusts, permitted the settlor to reserve substantial powers, and strengthened the firewall protecting Hong Kong-law trusts against foreign forced-heirship claims. That firewall matters directly when UAE law would otherwise reach Hong Kong-structured assets.

The UAE position is more layered. For non-Muslim expatriates, the UAE now permits registration of wills governed by a chosen law – typically through dedicated non-Muslim will registries in the DIFC (the Dubai International Financial Centre, a common-law free zone with its own courts) or ADGM (the Abu Dhabi Global Market, a second common-law financial centre). For assets held within those free zones, the governing law of a registered will can be applied. For assets outside the free zones – onshore UAE real estate, UAE bank accounts in the conventional banking system – the position is more variable, and legal advice specific to the asset class is required before any structure is finalised.

The structural complexity trigger is real: families who built their Hong Kong position first and their UAE residence second frequently find that the two sides of the estate have never been mapped together. That gap is where exposure sits.

What is the governing framework on each side?

Understanding the governing instruments precisely is the foundation of any cross-border plan. In Hong Kong, the primary instruments are the Trustee Ordinance, the Wills Ordinance, and the Intestates' Estates Ordinance. Hong Kong courts apply common law. There is no forced-heirship regime. A properly drafted Hong Kong will can govern Hong Kong-situated assets. A Hong Kong-law trust, established and administered with appropriate substance in Hong Kong, carries the anti-forced-heirship protections built into the 2013 reform of the Trustee Ordinance.

In the UAE, the position differs by asset location and the nationality and religion of the principal. The UAE federal Personal Status Law applies to Muslim nationals and, by default, to some categories of onshore assets regardless of the owner's nationality. The DIFC Wills and Probate Registry allows non-Muslim individuals to register wills over DIFC-situated assets and UAE moveable and immoveable assets outside the DIFC, where the governing law is chosen by the testator. ADGM has its own succession framework for assets within that free zone. For assets held through a UAE company – particularly assets held through a mainland UAE LLC (limited liability company) or a free-zone company – the succession path runs through the applicable commercial law and company constitution, not the personal will alone.

The interaction between the two sides is governed by conflict-of-laws principles. Hong Kong courts apply the law of the situs (the place where the asset is situated) to moveable property succession and in some cases to immoveable assets. UAE courts apply their own conflict rules, which in practice weight UAE law heavily for UAE-situated assets. That means a will drafted only under Hong Kong law, without attention to UAE-situated assets, is unlikely to operate cleanly in the UAE, and vice versa.

How does the cross-border interface actually work?

The cross-border interface in this corridor operates on three levels: testamentary recognition, trust portability, and forced-heirship exposure.

On testamentary recognition: a Hong Kong will, executed in compliance with the Wills Ordinance and properly attested, may be recognised in the UAE for Hong Kong-situated assets. For UAE-situated assets, recognition in a UAE court depends on compliance with UAE requirements and, where applicable, registration in the relevant free-zone registry. A single will is rarely sufficient across both sides. In our cross-border practice, we regularly see principals who hold a Hong Kong will executed years before UAE residence began, with no complementary document for the UAE side.

On trust portability: a Hong Kong-law trust with its governing law clause, trustee, and administration anchored in Hong Kong benefits from the Trustee Ordinance's firewall provisions. It can hold assets globally – including shares of a BVI or Cayman holding entity above UAE real estate or operating interests. The trust structure does not, however, automatically insulate every underlying asset from every claim. UAE-situated immoveable assets held directly by a trust (rather than through an interposed company) may face a different analysis in UAE courts. The cleaner structure interposes a holding company between the trust and the UAE asset, so that the trust holds shares (a moveable asset governed by the trust deed and the company's law of incorporation) rather than the UAE real estate directly.

On forced-heirship exposure: this is the most immediate concern for principals with family members who are beneficiaries or potential claimants under UAE law. The Hong Kong firewall in the Trustee Ordinance protects a Hong Kong-law trust from foreign forced-heirship claims brought in Hong Kong proceedings. It does not bind UAE courts applying UAE law to UAE-situated assets. The practical answer is to ensure that UAE-situated assets are not held in a way that invites a forced-heirship analysis – which usually means holding through a company whose shares are the trust asset, with the company's place of incorporation and the trust's governing law both outside the UAE forced-heirship perimeter.

None of this is achieved by document drafting alone. The sequencing of steps, the choice of trustee, the identification of asset classes and their situs, and the instruction of locally licensed counsel in both Hong Kong and the UAE all require coordination before any document is signed.

The route we run, step by step

An engagement of this type runs in a defined sequence. The sequence matters because each step creates the foundation for the next, and errors introduced early – a will that does not comply with one jurisdiction's formal requirements, a trust deed that does not address the relevant asset classes, a company that has not been properly structured before assets are transferred into it – compound into problems that are difficult to correct after the principal's death.

Step one is mapping. We compile a cross-border asset map covering asset type, jurisdiction of situs, holding entity (if any), and the succession path that currently applies to each asset under the applicable conflict-of-laws rule. This step frequently reveals that the same asset is subject to two competing succession regimes – one under the principal's existing will, and one under the default rules of the situs jurisdiction. The gap between them is the exposure.

Step two is a residence and domicile review. In both Hong Kong and the UAE, the principal's domicile – and in some contexts tax residence – affects which law governs moveable assets on death. A principal who was domiciled in Hong Kong for decades but has been UAE resident for several years is in a different legal position from a principal who arrived in the UAE from a third country. We assess the domicile position under the applicable conflict-of-laws analysis and identify where the risk sits.

Step three is the structural recommendation. Based on the asset map and the domicile review, we advise on the appropriate combination of holding structure, trust, and testamentary instruments. For most families in this corridor, the answer involves a Hong Kong-law trust holding a BVI or Cayman entity, which in turn holds the UAE-situated assets or the shares of a UAE company. This architecture places the moveable asset (shares) at the top of the structure within the trust, and the situs problem is managed at the company level rather than the trust level. We do not draft the trust deed or the UAE-side documents ourselves; those are prepared by the relevant locally licensed counsel under our coordination.

Step four is document coordination. We instruct and brief locally licensed Hong Kong firms, who act on the Hong Kong trust and will. For the UAE side, we coordinate with locally licensed UAE counsel admitted to advise in the relevant emirate and, where applicable, in the DIFC or ADGM. We manage the overall instruction to ensure that the documents are consistent – that the trust deed and the will do not overlap in a way that creates ambiguity, and that the UAE-side documents cover the assets the trust cannot reach cleanly.

Step five is review. Succession documents are not set-and-forget instruments. A principal whose asset position changes materially – new UAE real estate, an exit from a Hong Kong operating business, a new family member, a change in UAE residence category – needs the plan reviewed. We build a review trigger into every engagement.

The sequence above describes the standard position. Your matter turns on the assets actually held, the jurisdictions engaged, and the family composition – which is where the route is won or lost.

For a structured assessment of your succession position across Hong Kong and the UAE, write to us at info@lockhartyip.com.

What the client must own: the decisions that cannot be delegated

Counsel can design a structure, coordinate documents, and manage the instruction of allied counsel across jurisdictions. What counsel cannot do is make the substantive decisions that belong to the principal. These are the decisions that shape the structure, and they must be made before the documents are drafted.

First: who are the intended beneficiaries, and in what shares? A decision that seems straightforward within the family becomes a legal and structural question when it interacts with forced-heirship rules, with different asset classes across jurisdictions, and with a trust whose terms must be consistent with the principal's overall plan. The principal must state, clearly and in writing, what the intended distribution is. Where that distribution differs from what the default rules would produce, the structure must be designed to achieve the intended outcome – and the gap must be acknowledged.

Second: what are the lifetime governance arrangements? A trust that transfers assets away from the principal requires the principal to understand what powers they retain. The Trustee Ordinance reform permits the settlor to reserve substantial powers – including investment direction, the power to change trustee, and powers over distributions. But the scope of reserved powers affects the trust's effectiveness in some jurisdictions. The principal must decide how much control they wish to retain and accept the structural consequences of that decision.

Third: what is the succession position for the business as distinct from the investment assets? A family that holds a Hong Kong operating company or a stake in a Greater China business through a holding entity needs to address business succession separately from investment succession. The question is whether the business passes as an asset into the trust, is transferred to an operating successor, or is wound up. That decision drives the structure. It also has tax implications under Hong Kong's profits tax regime and, depending on the holding structure, under the FSIE regime (the foreign-sourced income exemption regime, in force from 1 January 2023) or the Pillar Two minimum top-up tax effective for fiscal years beginning on or after 1 January 2025 for in-scope groups.

If an earlier filing, structure or planning attempt produced an outcome that no longer reflects the family's position, a fresh review can identify the structural error and the routes still open.

To discuss how the current structure applies to your cross-border succession position, contact info@lockhartyip.com.

Common mistakes foreign principals make in this corridor

The most common error is treating the two sides of the estate as independent. A principal who instructs a Hong Kong solicitor to draft a Hong Kong will, and separately instructs a UAE adviser to register a DIFC will, without any coordination between the two, frequently ends up with documents that are formally valid in isolation but structurally inconsistent. The Hong Kong will may purport to govern assets that the UAE-side structure already controls, or vice versa. The mismatch is not discovered until death, when it is too late to correct.

The second error is underestimating the UAE real estate question. UAE real estate held directly by a non-UAE company is an asset whose succession path is unclear in many UAE courts. The cleaner position, in our desk's experience, is to hold UAE real estate through a UAE company whose shares sit in the trust structure. That step is often omitted because it is seen as adding complexity. It removes a significantly larger risk.

The third error is failing to update. A will and trust structure designed for a principal who held a single Hong Kong property and a UAE bank account does not automatically cover a subsequent acquisition of UAE real estate in a different emirate, a new BVI entity above a Mainland Chinese joint venture, or a child who has become a beneficiary with their own jurisdictional connections. Review is not optional.

What foreign counsel sometimes miss – and what we see when instructions arrive after an initial structure has been put in place – is that the firewall protections in Hong Kong law are powerful but jurisdictionally limited. They operate in Hong Kong proceedings. A UAE court applying UAE law to a UAE-situated asset is not bound by the Hong Kong Trustee Ordinance. The structure must be designed so that the asset the UAE court sees is a moveable asset (shares, an account balance) governed by a law the UAE court will respect – not a direct interest in UAE-situated property over which forced-heirship rules might apply.

Decision framework: matching situation to structure

Not every family in this corridor needs the same answer. The appropriate structure depends on the asset map, the family composition, and the residency and domicile position of the principal and the beneficiaries.

A principal who is UAE-resident and holds all assets outside the UAE – Hong Kong equities, a BVI holding entity, a Cayman fund interest – faces a primarily testamentary question: are the wills valid and consistent across the relevant jurisdictions, and is the domicile position clear? A trust may or may not be needed. The first step is the asset map and domicile review.

A principal who holds UAE-situated assets – real estate, a UAE company, a UAE bank account outside the free zones – faces both a testamentary and a structural question. The UAE-situated assets need to be held in a way that places the relevant legal interest outside the forced-heirship perimeter, where the family's intentions allow it. The Hong Kong trust becomes the primary holding vehicle, with the UAE assets held through an interposed company.

A principal whose beneficiaries include children or a spouse who are Muslim nationals faces the most complex position. UAE forced-heirship rules under the personal-status law may apply to those beneficiaries regardless of the governing law of the trust or the will. In this situation, the plan must either accommodate the forced-heirship entitlement or, where the family's intentions and the applicable law permit, structure the assets so that the UAE personal-status rules do not reach them. This requires careful legal analysis and, in most cases, formal legal advice in both the UAE and Hong Kong before any structure is adopted.

A principal who operates a family business through a Hong Kong holding entity needs to address business succession as a distinct question. The trust can own the holding entity. Whether it should depends on the governance and control requirements of the business, the plans for the next generation, and the interaction with the profits tax position.

In each scenario, the route is: asset map first, domicile and residency review second, structure recommendation third, document coordination fourth. The sequence does not change. The documents do.

How this connects to related practices

Succession planning in this corridor rarely sits in isolation. The holding structure above the operating assets is a matter of private wealth planning – but it is also a tax question, a corporate governance question, and in some cases a sanctions or AML question depending on the group's counterparty profile.

For families with Cayman Islands or BVI assets within the holding structure, the interaction with the trust and the succession plan requires attention to the economic-substance rules and the trust terms as they relate to offshore-held assets. Our briefing on estate planning covering assets in the Cayman Islands addresses the specific questions that arise when offshore fund interests or BVI-held shares are inside the estate.

For families where the business interest is held in a family trust structure, the guide to holding a family business interest in trust addresses the governance and succession mechanics that apply when a trading or investment business is inside a trust structure.

Related practices

Private Wealth – trust, succession, asset protection and cross-border wealth structuring
Holding Structures – BVI, Cayman and Hong Kong holding entity design and review
Tax Positions – FSIE, Pillar Two and cross-border tax structuring across the principal's map

Frequently asked questions

How does the cross-border element affect succession planning across Hong Kong and the UAE?

The cross-border element is the central structural problem, not a secondary complication. Hong Kong law imposes no forced-heirship obligation and its Trustee Ordinance provides a statutory firewall against foreign forced-heirship claims brought in Hong Kong. The UAE applies different rules to UAE-situated assets, particularly where the principal or a beneficiary is a Muslim national. A plan that addresses only one side leaves the other exposed. The solution requires coordinated instruments across both jurisdictions, with the holding structure designed so that the assets the UAE courts see are moveable assets governed by a law outside the UAE forced-heirship perimeter, wherever the family's intentions and the applicable law permit that outcome.

What does the route look like for succession planning across Hong Kong and the UAE?

The engagement runs in five steps: an asset map across both jurisdictions, a domicile and residence review, a structural recommendation covering trust and holding entity design, document coordination with locally licensed counsel in Hong Kong and the UAE, and a built-in review mechanism. We manage the overall instruction and ensure that the documents on each side are consistent. We do not hold ourselves out as practising Hong Kong law; Hong Kong-law documents are prepared by locally licensed firms working alongside us. UAE-side documents are handled by locally licensed UAE counsel whom we instruct and brief. The sequencing is the critical variable: getting the structure right before the documents are drafted avoids compounding errors that are very difficult to correct later.

How long does succession planning across Hong Kong and the UAE usually take?

The timeline depends on the complexity of the asset map and the decisions the principal needs to make. An engagement covering a straightforward asset position with clear domicile and a defined family structure can move from asset map to executed documents in a matter of months. A position involving UAE real estate across multiple emirates, an offshore holding structure, a Greater China operating business, and beneficiaries with their own jurisdictional connections takes longer – primarily because the structural decisions, not the document drafting, drive the timeline. Parties should verify the current position before acting, as regulatory requirements in both jurisdictions continue to develop.

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