Foundations have become one of the most effective tools for asset protection, wealth management, and succession planning in the UAE. A foundation provides a flexible and secure structure for individuals, families, and companies wishing to preserve wealth for future generations.
A foundation in the UAE acts as a separate legal entity that holds and manages assets independent of the founder, unlike many trusts, which are not separate legal persons. It is governed by regulations, including the DIFC Foundations Law No. 3 of 2018, ADGM Foundations Regulations 2017, and RAK ICC Foundations Regulations 2019 (as amended in 2025).
Here are the top seven benefits of establishing a UAE foundation.
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Strong Asset Protection
A foundation is a legal entity separated from its founders and beneficiaries. Once assets are transferred to the foundation, they no longer belong to the founder personally. This separation affords very strong protection against future creditors, personal disputes, or claims against the founder by third parties.
In other words, for a business owner or a high-net-worth individual, the protection of the assets of the foundation is not affected by personal risks. This ensures segregation of wealth irrespective of business or personal challenges.
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Smooth Succession and Family Wealth Planning
The most common reason for families setting up a foundation in the UAE is succession planning. On the death of the founder, the foundation charter and its bylaws clearly set out how the assets are to be managed, shared, or reinvested.
This prevents inheritance disputes and makes sure that family wealth is transferred smoothly from generation to generation. It will survive the founder, thus ensuring continuity of ownership and management without the need for probate procedure.
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Privacy and Confidentiality
Privacy – this is the main advantage of a UAE foundation. Although the charter of the foundation is filed with the registry, the internal by-laws, which specifically include the beneficiaries, governance, and distribution rules of the Foundation, remain confidential.
This means that internal financial arrangements concerning individuals or families are not disclosed to the public. For families and individuals who value discretion, this confidentiality makes a foundation much more attractive than a traditional company structure.
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Full Control and Flexibility
A UAE foundation provides flexibility in regards to its structure and governance. The founder can set the purpose of the foundation, which could include holding family assets, managing investments, or charitable purposes.
A council manages the foundation, and the founder may appoint a guardian to ensure that the council acts in accordance with the founder’s wishes. Additionally, the founder may reserve certain powers to keep some level of control while benefiting from the legal separation of ownership. This is what makes a foundation suitable for personal and corporate wealth structuring.
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Favourable Tax Treatment
The foundations set up in the UAE enjoy a favorable tax environment. Under the UAE Corporate Tax regime, qualified family foundations may apply with the Federal Tax Authority (FTA) to be treated as tax-transparent, meaning that income will be taxed in the hands of the beneficiaries instead of at the entity level.
Furthermore, no personal income tax exists in the UAE. Together with access to double-tax treaties and an investor-friendly environment, this makes UAE foundations very tax-efficient wealth planning vehicles. The Corporate tax and treaty benefits depend on the foundation’s activities and compliance with FTA rules.
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Consolidation of Global Assets
A foundation can have all kinds of assets such as real estate, stocks and shares, intellectual properties, bank accounts, and investment accounts. It can also hold companies or subsidiaries, whether in the UAE or elsewhere.
This enables the individual or family to consolidate their entire global holdings under one legal framework, making ownership easier to manage, comply with, and oversee. It is particularly useful for multinational families or investors who have assets and/or businesses in various jurisdictions.
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Protection Against Forced Heirship Rules
In many countries, including under UAE personal status laws, inheritance may be governed by forced heirship rules granting specific shares of assets to heirs. Therefore, the founder may transfer assets to a foundation and can specify exactly how the wealth should be distributed, without the influence of such rules.
The foundation structure guarantees that assets will remain under the ownership of the foundation and then distributed according to the founder’s wishes. Legal provisions of default cannot undermine the founder’s wishes. Thus, it preserves families from disputes while maintaining control over their legacy.
Why a UAE Foundation Is a Smart Choice?
Setting up a foundation in the UAE provides stability, secrecy, and flexibility over the long term. It is a combination of both a company and a trust, and can be used for wealth preservation, estate planning, charitable giving, and succession planning for businesses.
The advanced legal environment in the UAE, along with its prestigious international reputation and tax benefits, has made foundations perhaps the most reliable entity for generational protection and management of wealth.
Whether you are an entrepreneur, investor, or family office, a UAE foundation will serve to ensure that all the assets may be managed the way you prefer: safely and efficiently.
How HHS Lawyers Can Assist You?
At HHS Lawyers, we have a team of experienced lawyers who help clients in setting up and managing their foundations in the UAE. We:
- Advise on proper jurisdiction (DIFC, ADGM or RAK ICC)
- Draw up the foundation’s charter and bylaws
- Structure the governance, council and guardian roles of the foundation
- Compliance with UAE and FTA regulations on foundations
- Obtain continuous legal advice for management and asset protection
Our comprehensive knowledge of UAE foundation laws ensures a seamless, compliant approach tailored to your needs.
Contact HHS Lawyers today to know how we can assist you in setting up a UAE foundation that protects your hard-earned wealth, secures your family’s future, and fulfills your long-term vision.
