<p><strong>What is a Waqf?<br /></strong><br />Waqf is a concept which resembles  closely the Anglo-American trust. It is a form of endowment under which the  ownership of assets is transferred to a juristic body (namely the Waqf), which  manages the assets and the fruits of the assets for named beneficiaries for a  defined period of time. <br /><br />The Emirate of Sharjah (by Law No. 4 of 2011 has  now introduced a special decree facilitating the establishment and operation of  Waqfs.<br /><br /><strong>Why was the Sharjah Law Needed?</strong><br /><br />Islamic  Sharia law has developed the concept of the Waqf and also legal rules on how  Waqfs are to be regulated or governed.&nbsp; However, there is not complete consensus  amongst Sharia scholars on some of the base legal principles concerning Waqfs.&nbsp;  This has created areas of uncertainty in Islamic jurisprudence and led to the  Waqf being rarely used as a vehicle for asset management.&nbsp; Because there was  previously no secular civil law to use as reference source and rely upon in  creating Waqfs, or settling their terms and conditions, most Waqfs were  vulnerable to challenge due to this unsettled and contentious Sharia  jurisprudence.&nbsp;<br /><br />Although Waqfs are not infrequently used to manage small  assets, the use of a Waqf structure previously carried high risks when  administering large and highly significant assets, where challenges to the Waqf  and its administration were more likely.&nbsp; <br /><br /><strong>What are the Key Terms  of the New Sharjah Law?</strong><br /><br />The Sharjah law requires the  settlor/creator of a Waqf to decide and record their wishes on several subjects.  The most important are:</p>
<ul>
<li>the assets to be transferred;</li>
<li>the beneficiaries of the proceeds of the assets; and</li>
<li>the governance/management of the Waqf.</li>
</ul>
<p>A Waqf deed needs to be drafted and certified by the competent judge at the  Sharjah Court. The Waqf, once certified, acquires full and separate artificial  legal personality as provided under Article 16 of the Sharjah Waqfs Law. This  legal personality enables the Waqf to operate autonomously in carrying out the  objectives set by the Waqf&rsquo;s creator.<br /><br />The law mandates that a coherent  management structure must be put in place.&nbsp; Articles 37 to 50 of the Sharjah  Waqfs Law regulate the management of Waqfs. The management of any Waqf is to be  conducted by a trustee or a board of trustees. The trustee or board of trustees  is authorized to act on behalf of the Waqf. The new law contains provisions  designed to ensure that any trustee acts in good faith and in line with the  objectives of the Waqf. It is an option open to a settlor/creator to assign the  management of the Waqf to a new statutory body created by the Sharjah law,  namely the Waqf General Secretariat.<br /><br />Article 8 of the Sharjah Waqfs Law  lists the types of assets which are able to be owned and managed by a Waqf. The  traditional view was that Waqfs could own only immovable assets. However,  Article 8 of the new law now provides explicitly that movable as well as  immovable assets may be transferred to a Waqf. <br /><br />Moreover, the law  provides that interests in movable and immovable assets held in common with  other owners or parties may be validly transferred to a Waqf, even if the assets  concerned are under common ownership, provided that the transfer does not harm  the interests of the other owners or partners. <br />Article 8 further makes it  clear that Waqfs may own all kinds of securities, trade names, moneys and  intellectual property rights.<br /><br /><strong>Conclusion</strong><br /><br />The  Sharjah Waqfs Law means that Waqfs are no longer a risky option to adopt as an  ownership structure. The absence of a secular civil source code to rely upon was  previously the main deterrent against establishing a Waqf. Fortunately, the new  Sharjah Waqfs Law covers most aspects of the Waqf structure and provides answers  to many questions. Accordingly, the risk of a successful challenge to a Waqf  duly established under this new law should be minimal.<br /><br />In light of the  new Sharjah Waqfs Law, there is a possibility that this long dormant form  ownership structure will be revived, particularly as its unique attribute is  that it is a Sharia compliant vehicle for owning and managing assets.</p>