02 Jan Establish a UAE Foundation
Understand the concept of the UAE Foundation
A foundation is an autonomous legal entity that is separate from its founder. The foundation consists of council members and the founder. The foundation’s founder allocates assets to the foundation, which are treated as separate from those belonging solely to the founder. Those assets are then managed by the foundation council, which acts like a company board of directors following the foundation’s charter to benefit the beneficiaries.
Foundations are versatile and used for various purposes, such as protecting your estate, privacy, wealth planning, tax mitigation, inheritance planning, and charitable giving.
Which jurisdictions in the UAE offer Foundation solutions
Dubai, Abu Dhabi, and Ras Al Khaimah offer easy foundation options via free zones. Please see below the free zones where foundation solutions are currently available:
- Dubai International Financial Center (DIFC)
- Abu Dhabi Global Market (ADGM)
- RAK International Corporate Centre (RAK ICC)
While mostly similar, each free zone has slightly different rules and regulations. Your best option for a foundation in the UAE may depend on the location of the asset to be protected. Typically, the location of your property can play a significant factor.
The startup and ongoing fees and service levels also differ between the three. However, all the locations benefit from the UAE’s comprehensive network of tax treaties and political stability.
Dubai International Financial Center (DIFC) Foundation
The DIFC free zone allows DIFC companies to be converted into a foundation which makes it different than the other two jurisdictions. DIFC foundations can also have solely charitable purposes and own real estate within the Emirate of Dubai.
The requirements to start a DIFC foundation are:
- one or more founders (either individuals or legal entities)
- a minimum of two council members
- a guardian if the foundation has charitable purposes
- beneficiaries who must be individuals
You are not required to go through a registered agent to start your foundation and can approach DIFC directly. However, foundations must always maintain a registered office within DIFC.
Abu Dhabi Global Market (ADGM) Foundation
Abu Dhabi Global Market free zone foundations can own real estate in the Emirate of Abu Dhabi and benefit from private arbitration of disputes in English based on the laws of England and Wales.
All applications to launch a foundation must be submitted by an ADGM company service provider, whose role includes ongoing statutory filing requirements. You can find a list of officially licensed ADGM company service providers via this link.
The requirements to start an ADGM foundation are:
- one or more founders (either individuals or legal entities)
- a minimum of two council members
- a guardian if no surviving founder
- beneficiaries who can be individuals or legal entities
Foundations must always maintain a registered office within ADGM.
RAK International Corporate Centre (RAK ICC) Foundation
RAK ICC stands apart from the other two jurisdictions because its registry is not available to the public; therefore, it is the primary choice for those valuing privacy and confidentiality.
Currently, there is no requirement to audit accounts or file tax returns for RAK foundations with RAK ICC. Foundations can access ADGM and DIFC courts where laws are structured on those of England and Wales.
The requirements to start a RAK ICC foundation are:
- one founder (either individuals or legal entities)
- a minimum of two council members
- a guardian if the foundation has charitable purposes
All RAK ICC foundations must appoint a registered agent and maintain a registered office in the UAE.
You’ve got questions about UAE Foundation; we’ve got answers!
Would you like to know more about UAE foundations and how they can benefit your circumstances? Then, don’t hesitate to contact one of our business setup consultants for a free consultation so we can give you our best professional advice.
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