Business

Wife not liable for husband’s debt in the UAE unless she was co-borrower or guarantor

Husband absconded from Dubai at the end of last year, leaving debts of around Dh100,000.

Keren Bobker

May 14, 2016

  • English
  • Arabic

My husband, from whom I have been separated for a year, absconded from Dubai at the end of last year, leaving debts of around Dh100,000. It is mostly owed to his landlord, who I believe has filed a police case against him. I have been living in Ireland for the past three years and we have lived apart for all this time, although we have a child. I have now been offered a really good job in Dubai and I would love to take it. My problem is if I take the job would I be arrested and held liable for my husband's debt? None of the debt was in my name. I understand to sponsor my children I need to provide his passport documentation and a no-objection letter from him. I just worry that I will get to Dubai and the authorities will refuse my request to sponsor my children because of his debt. I would add that I have since visited Dubai on holiday last month and everything was fine. GH, Ireland

Unless the debt was in joint names, or GH was a guarantor, she is not legally responsible for her husband’s bad debts and there should not be an issue with her returning to Dubai to work, as her recent visit shows. She can check this by getting a friend who is in Dubai to go to a main police station with a copy of her passport to confirm that no police cases are registered against her. Although the husband’s permission is required to sponsor the child, the issue of a debt is separate and I would not expect this to cause any issues regarding sponsorship, as the permission is really just a formality.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.

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Chelsea: Alonso (45' 3), Batshuayi (85')

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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