With the advent of residency being granted via property purchases in Oman, we have witnessed an increase in enquiries regarding non-Muslim expatriate succession planning and administration of estates. This note sets out a brief overview of the intricacies around succession planning in Oman and the key considerations for Oman-based non-Muslim expats, whether property owners or not.
Where a will exists
We recommend that any non-Muslim expat residing in Oman should ensure that they have a valid will in place to protect their cash and other assets in Oman. Generally, the courts in Oman will honour wills that are made in accordance with the laws of a non-Muslim expat's home jurisdiction. By way of example, an English Non-Muslim expat could rely on a will drafted in accordance with the laws of England and Wales to govern the distribution of his/her Oman estate, subject to our comments in respect of Real Estate, below. Wills also need to be executed subject to certain formalities, such as witnessing, a certified Arabic translation and they may also need to be legalised (for example in relation to English Law wills, by the FCO, where not executed in Oman).
Real Estate
Expats are only able to own real estate in limited circumstances; by owning property in an Integrated Tourism Complex (ITC) or more recently through a Real Estate Investment Trust (REIT). With regard to ITC property, there is no automatic right of inheritance, even if specified in a will. Regardless of the ITC rules governing inheritance of property on death, the law states that an application to the Ministry of Tourism and the Ministry of Foreign Affairs must be made. A valid will detailing how the owner wishes to dispose of real estate assets, can support this application.
Perhaps of greatest concern for ITC property owners is that the law makes provision, in certain circumstances, for the property of the deceased to be transferred to the ITC management company and the Ministry of Finance. Care must be taken since any provisions contrary to the law, which could be included within wills or the ITCs governing rules, are invalid according to the law.
In relation to REITs, where private investors buy shares or units in property portfolios, we anticipate that the courts will follow the deceased's will in terms of the passing of the shares or units, as they are not direct real estate assets. However, as the REIT Regulations in Oman only came into force in 2018, a consistent practice has not yet developed.
Where a will does not exist
If a non-Muslim expat does not have a will in place at the time of death, (i.e. dies intestate), the courts may use their discretion to apply the rules of intestacy from the expat's home country. The judge will need to see documentary evidence persuading him that he should distribute the assets to the people claiming that they have a right to the estate of the deceased, in accordance with the laws of the relevant jurisdiction. It is not usual practice to apply Shari'ah law principles to non-Muslims. Clearly, this leaves wide powers with the courts of Oman and may result in the deceased's estate being distributed in a way which is contrary to his/her wishes. An appropriate will should avoid such issues.
Upon the death of an expat, one consequence (with or without a will) is that bank accounts will be frozen, even where accounts are jointly held, until the deceased's assets are distributed. This can be time-consuming where there is no will, due to the need to gather documentary evidence of would-be heirs and present this to a judge. We would always advise non-Muslim expats to have a will in place to govern the distribution of their Oman situated assets when they die. This can be in the form of a worldwide will or an Oman-specific will which works together with other jurisdiction-specific wills. Trowers & Hamlins is well placed to advise on succession planning and can prepare wills and mirror wills to assist in ensuring that a deceased's estate is distributed in accordance with his/her wishes. We also work with notaries and translators in Oman and can assist you with the execution formalities.
