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  • Part 5: Part 5: Creation, Validity and Modification of a QFC Trust

    • Article 16 – Creation of a Trust

      (1) A Trust is a legally binding relationship created by a Settlor through which Trust Property is held in the name of the Trustee (or another Person on behalf of the Trustee) who exercises, in relation to the Property, duties and powers in accordance with the Governing Law of the Trust and the Terms of the Trust for either or both of the following:
      (A) the benefit of a Beneficiary whether or not yet ascertained or in existence;
      (B) any valid purpose that is not for the sole benefit of the Trustee.
      (2) Without prejudice to the provisions of Article 16(1) ), a Trust will have the following characteristics:
      (A) the Trust Property constitutes a separate fund and is not a part of the Trustee's own estate;
      (B) title to the Trust Property is held in the name of the Trustee or is held in the name of another Person on behalf of the Trustee; and
      (C) the Trustee has the power and the duty to manage, employ or dispose of the Trust Property in accordance with the Terms of the Trust and the duties imposed upon it by any applicable law.
      (3) A Trust may be created by:
      (A) transfer of Property to another Person as Trustee during the Settlor's lifetime or by will or other disposition taking effect upon the Settlor's death, provided that such disposition is not contrary to applicable Sharia law;
      (B) the transfer of Property from one Trust to another;
      (C) declaration by the owner of Property that the owner holds identifiable Property as Trustee; or
      (D) exercise of a power of appointment in favour of a Trustee.
      (4) A Trust must come into existence by an instrument in writing including a will or codicil.
      (5) A Trustee may sue and be sued in its capacity as Trustee and may appear before any court or any Person acting in an official capacity.
      Amended (as from 24th December 2017).

    • Article 16A – Registration

      (1) No Trust is established, valid and binding under these Regulations unless it is registered with the QFC Authority and details of which are included in the Register.
      (2) A Person must apply for the registration of a Trust by signing and providing the QFC Authority with the Prescribed Form together with such other documents and pay the Prescribed Fees as may be specified by the QFC Authority.
      (3) The application must be made by any Person who will become a Trustee of the Trust on its registration.
      (4) A Trust must at all times have at least one (1) Trustee. Details of the Trustee must be included in the Register and the Trustee must ensure that such details are at all times accurate and up to date.
      (5) A Trustee of any Pre-Existing Trust must ensure that it registers such Trust with the QFC Authority and brings the Trust into compliance with these Regulations within one hundred and eighty (180) days of the commencement date of these Regulations. A failure to register any such Trust within the period stipulated herein will invalidate such Trust and render its terms unenforceable.
      (6) On registration of a Trust, the QFC Authority must:
      (A) issue a certificate confirming that the Trust is registered as a Trust with the name specified in the certificate and with effect from the date of the certificate;
      (B) allocate to the Trust a registration number; and
      (C) enter in the Register:
      (1) the name and registered number of the Trust;
      (2) the objects of the Trust; and
      (3) the names of the Trustees.
      (7) A certificate of registration is conclusive evidence of the registration of the Trust with the name specified in it and that the registration process has been complied with.
      (8) The QFC Authority must maintain a Register of Trusts.
      (9) The QFC Authority must not make available to the public any information in the Register (unless such information is contained in the certificate of registration) except on terms it considers appropriate and pursuant to:
      (A) a statutory obligation; or
      (B) a court order.
      Inserted (as from 24th December 2017).

    • Article 17 – Requirements for creation

      (1) A Trust is created if:
      (A) the Settlor has the capacity to create a Trust;
      (B) the Settlor indicates an intention to create the Trust;
      (C) the Trust either:
      (i) has a definite Beneficiary; or
      (ii) is a purpose Trust, as provided for in Article 22;
      (D) the Trustee holds or has vested in it Property for the benefit of a Beneficiary or for a purpose;
      (E) the Trustee has duties to perform; and
      (F) the same Person is not the sole Trustee and sole Beneficiary.
      (2) A Beneficiary is definite if the Beneficiary can be ascertained now or in the future.
      (3) A Trust may have at the same time a definite Beneficiary and a purpose.
      Amended (as from 24th December 2017).

    • Article 18 – Trust purposes

      (1) A Trust may only be created to the extent its purposes are sufficiently certain to allow the Trust to be carried out, lawful in the QFC and not contrary to public policy.
      (2) A Trust and its terms must be for the benefit of its Beneficiaries or in furtherance and support of its purposes.
      Amended (as from 24th December 2017).

    • Article 19 – Duration of a Trust

      (1) A Trust may continue indefinitely or terminate in accordance with these Regulations or in accordance with the Terms of the Trust.
      (2) No rule against perpetuities or excessive accumulations shall apply to a Trust or to any advancement, appointment, payment or application of assets from a Trust.
      (3) Except where the terms of a Trust provide to the contrary, any advancement, appointment, payment or application of assets from that Trust to another Trust shall be valid even if that other Trust may continue after the date by which the first Trust must terminate.
      Amended (as from 24th December 2017).

    • Article 20 – Validity and invalidity of a Trust

      (1) Subject to Article 20(2) and 20(3), a Trust is valid and enforceable in accordance with its terms.
      (2) A Trust is invalid to the extent that:
      (A) it purports to do anything which is contrary to the laws of the QFC;
      (B)it is created for the predominant purpose of avoiding obligations under any other law or regulations;
      (C) it is created for a purpose in relation to which there is no Beneficiary unless it complies with Article 22;
      (D) its creation was induced by fraud, duress, mistake, undue influence or misrepresentation;
      (E) the Trust is immoral or contrary to public policy; or
      (F) the Terms of the Trust are so uncertain that its performance is rendered impossible.
      (3) Where a Trust is created for two or more purposes of which some are lawful and others are unlawful:
      (A) if those purposes cannot be separated the Trust is invalid; or
      (B) where those purposes can be separated the QFC Court may declare that the Trust is valid as to the purposes which are lawful; or the Property as to which a Trust is wholly or partially invalid will revert to the Person who provided the Property (or its heirs and successors).
      Amended (as from 24th December 2017).

    • Article 21 – [INTENTIONALLY OMITTED]

      Deleted (as from 24th December 2017).

    • Article 22 – Purpose Trusts

      (1) A Trust will not be invalid by reason of Article 20(2)(C) if the Terms of the Trust provide for the appointment of an Enforcer in relation to its purposes and for the appointment of a new Enforcer at any time when there is none.
      (2) Subject to Article 22(1), a Trust may be declared by Trust Instrument for a non-charitable purpose, including the purpose of holding or investing in shares in any Person or any other assets constituting the Trust Property, if:
      (A) the purpose is possible and sufficiently certain to allow the Trust to be carried out;
      (B) the purpose is not contrary to public policy or unlawful under the laws of the QFC; or
      (C) the Trust Instrument specifies the event upon the happening of which the Trust terminates and provides for the disposition of surplus assets of the Trust upon its termination.
      (3) It is the duty of an Enforcer to take reasonable steps to ensure that the Trust is enforced in relation to its purposes.
      (4) The appointment of a Person as Enforcer of a Trust in relation to its purposes will not have effect if it is also a Trustee of the Trust or has a conflict of interest.
      (5) Except as permitted by these Regulations or expressly provided by the Terms of the Trust, or with the approval of the QFC Court an Enforcer must not:
      (A) directly or indirectly profit from its appointment;
      (B) cause or permit any other Person to profit directly or indirectly from such appointment; or
      (C) on its own account, enter into any transaction with the Trustees or relating to the Trust Property which may result in profit to it or the Trustee.
      (6) Subject to Article 22(7), an Enforcer may resign its office by notice in writing delivered to the Trustee. Such resignation will take effect upon delivery of notice.
      (7) A resignation given in order to facilitate a breach of trust will be of no effect.
      (8) An Enforcer will cease to be an Enforcer of the Trust in relation to its purposes immediately upon:
      (A) the Enforcer's removal from office by the QFC Court;
      (B) the Enforcer's resignation becoming effective;
      (C) the coming into effect of a provision in the Terms of the Trust under which the Enforcer is removed from office or otherwise ceases to hold office; or
      (D) the Enforcer's appointment as a Trustee of the Trust.
      (9) Where required, a Trustee must at any time when there is no Enforcer, take such steps as may be necessary to secure the appointment of a new Enforcer.
      (10) Where the Trustee has reason to believe that the Enforcer in relation to such purposes is unwilling or refuses to act, or is unfit to act or incapable of acting, the Trustee must apply to the QFC Court for the removal of the Enforcer and the appointment of a replacement.
      (11) The Trustee must apply to the QFC Court for the appointment of a new Enforcer where such an appointment is not possible under the Trust Instrument or the Enforcer is unwilling or refuses to act within 30 days of becoming aware there is no Person willing and able to act as the Enforcer.
      (12) If the Trustee does not make an application in accordance with Article 22(11), the Trustee will contravene a relevant requirement.
      Amended (as from 24th December 2017).

    • Article 23 – Variation and revocation of a Trust

      (1) A Trust may expressly provide that:
      (A) its terms are capable of variation; or
      (B) the Trust itself or a power exercisable under the Trust is revocable either in whole or in part.
      (2) Where a Trust provides that the Terms of the Trust may be varied, such power to vary is without prejudice to the power vested in the QFC Court by these Regulations for the variation of the Terms of the Trust.
      (3) No variation of the Terms of the Trust or revocation of a Trust or a power exercisable under a Trust will prejudice anything lawfully done by a Trustee in relation to a Trust prior to it receiving a notice of such variation or revocation.
      (4) A Trust may only be revoked by an order of the QFC Court. Where a Trust is revoked, either in whole or in part, the Trustee must hold and deal with the Trust Property affected by the revocation in accordance with the direction of the QFC Court. The Trustee must provide details of the order of the QFC Court to the QFC Authority.
      (5) For the purposes of this Article, the “Settlor” is the particular Person who provided the Property which is the subject of revocation.
      (6) The QFC Court may vary the Terms of the Trust:
      (A) even if unambiguous, to conform the terms to the Settlor's intention if it is provided by clear and convincing evidence that both the Settlor's intent and the Terms of the Trust were affected by a mistake of fact or law, whether in expression or inducement;
      (B) if, because of circumstances not anticipated by the Settlor, modification will further the purpose of the Trust; or
      (C) if continuation of the Trust on its existing terms would be impractical or wasteful or impair the Trust's administration.
      (7) An application under this Article may be made by a Settlor, a Trustee, a Beneficiary, or an Interested Person.
      Amended (as from 24th December 2017).

    • Article 24 – Failure or lapse of interest

      (1) Subject to the Terms of the Trust and to any order of the QFC Court, the Trust Property or interest under the Trust must be held by the Trustee for the Settlor absolutely or if the Settlor is dead, for the Settlor's personal representatives or estate where:
      (A) the interest in question lapses;
      (B) the Trust Property is vested in a Person otherwise than for its sole benefit but the Trusts upon which it is to hold the Property are not declared or communicated to it; or
      (C) the Trust terminates otherwise than in accordance with Article 25(1)(D).
      (2) For the purposes of this Article, the “Settlor” is the particular Person who provided the Property affected by the failure or lapse.
      Amended (as from 24th December 2017).

    • Article 25 – Termination of a Trust

      (1) Without prejudice to the powers of the QFC Court under these Regulations, a Trust terminates:
      (A) if the Trust is revoked pursuant to an order of the QFC Court or expires pursuant to its terms;
      (B) if there is no Beneficiary or Person who can become a Beneficiary in accordance with the Terms of the Trust or if no purpose of the Trust remains to be achieved;
      (C) if the purposes of the Trust have become unlawful, or impossible to achieve; or
      (D) notwithstanding the Terms of the Trust, upon consent of all the Beneficiaries in existence who have been ascertained and none of whom is a Minor or a Person under a legal disability.
      (2) The QFC Court may terminate a Trust:
      (A) because of circumstances not anticipated by the Settlor, if termination will further the purposes of the Trust; or
      (B) if the value of the Trust Property is insufficient to justify the cost of administration.
      (3) An application to the QFC Court under this Article may be made by a Settlor, a Trustee, a Beneficiary, or any Interested Person, as the case may be.
      Amended (as from 24th December 2017).

    • Article 26 – Distribution of Property

      (1) Without prejudice to the powers of the QFC Court under Article 26(3), on the termination of the Trust, the Trustee must distribute the Trust Property to the Persons entitled to such Property within a reasonable time and in accordance with the Terms of the Trust.
      (2) The Trustee may retain sufficient assets or obtain satisfactory security to make reasonable provision for liabilities, whether existing, future, contingent or otherwise, before distributing the Trust Property under Article 26(1).
      (3) The QFC Court may, on the termination of a Trust or at any time thereafter, upon an application made by a Trustee, any Beneficiary or any Interested Person:
      (A) require the Trustee to distribute the Trust Property;
      (B) direct the Trustee not to distribute the Trust Property; or
      (C) make such other order as it thinks fit.
      Amended (as from 24th December 2017).