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Foundation Services in the UAE

There are various options for managing your estate in the UAE, but one of the most successful way is establishing a foundation. High-net-worth individuals, families, and corporations in the UAE (including locals and ex-pats) may use foundations to create a structure that helps with wealth management and preservation, family succession planning, tax planning, asset protection, corporate structuring, and other issues. It provides more assurance and comfort that the assets will be allocated according to the Founder’s desires, with the Foundation’s lifetime lasting indefinitely after the Founder’s death. The UAE’s Sharia Law does not contain any provision for the formation of Trust or Foundation. However, creating a foundation is a tax-advantaged way to safeguard your assets.
A foundation is a different legal body that retains assets separate from the Founder’s personal property. Unlike a trust, a common-law term, the Foundation was developed in civil law states. In the sense that it has its own legal identity, it is akin to a corporation. On the other hand, a foundation is an “orphan” entity that does not issue shares or other legal titles. A foundation must engage in at least one commercial activity that benefits one or more beneficiaries (named or not). A foundation’s charter and by-laws, which combined embody the Founder’s desires, regulate it. It is run by Council Members and can be overseen by a Guardian who guarantees that the Foundation is run according to the Founder’s wishes. The Foundation, in its own right, owns a foundation’s assets.

WHAT IS A FOUNDATION?

A foundation is a separate legal entity from the rest of the organization. In contrast to trust, a common-law notion, it originated from civil law states. The Foundation’s creator bestows assets to the Foundation, which will keep those assets in its name, apart from the Founder’s fortune as a distinct legal body.
The Foundation is self-owned and has no members or stockholders. The foundation council manages the assets in conformity with the Foundation’s charter and by-laws for the benefit of beneficiaries or in support of a cause or purpose.

WHY USE FOUNDATIONS IN THE UAE?

A Foundation may offer Asset Protection by holding shares in subsidiary firms, separating legal ownership from usufruct rights. It may also be used for Estate Planning, where the Founder transfers title to his assets to the Foundation, and the Foundation distributes his money following his desires. Foundation Formation is especially advantageous if you have assets in many locations, such as real estate in Dubai or a holding company in Singapore.

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CREATION OF A FOUNDATION IN THE UAE

Creation of a Foundation in the UAE

A Foundation in the UAE consists of the following parties and necessary legal papers.
Founder: A minimum of one (1) founder is required, a natural person or a legal organization. A Founder usually has no further rights to the Foundation once it is established, although these might be incorporated into the By-Laws if necessary.
Council: The Founder must form the Council, which must have at least two (2) members, including the Founder. The Council’s function is to manage the Foundation’s business in the same way a board of directors would, in line with the Foundation’s Charter, By-Laws, and relevant laws.
Guardian: The Founder appoints a Guardian (which can be a human or a legal body) to monitor the Council and must take reasonable efforts to ensure that the Council performs its tasks properly. In the By-Laws, the Guardian may be given the authority to accept or reject decisions enacted by the Council.
Registered Agent: A foundation will frequently employ a Registered Agent (although this is not required except in RAK ICC),

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FOUNDATION REGIME IN THE UAE, REGISTRATION COST AND FEES

Foundation regime in the UAE, registration cost and fees

Foundations are currently available in the United Arab Emirates (the “UAE”) in the following categories:
1 The Dubai International Financial Center (the “DIFC”) is governed by the Foundations Law DIFC Law No. 3 of 2018,
2 The Abu Dhabi Global Market (the “ADGM”) by the Foundations Regulations 2017; and
3 The RAK International Corporate Centre (the “RAK ICC”) by the RAK ICC Foundations Regulations 2019.

  1. 1. The DIFC

The DIFC regime is the only one that enables a corporation to become a foundation. A DIFC Foundation can hold a charitable or non-charitable asset. The Foundation may only engage in commercial operations required for, auxiliary to, or incidental to its goals.

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foundation professionals Services In UAE

What can HHS Lawyers and legal consultants do for you?

Our team includes trust, company, and foundation professionals, as well as administrators, attorneys, and accountants, whose talents and expertise contribute value throughout the structure’s life cycle and can assist you in developing and implementing solutions that meet all legal and regulatory requirements. Individuals and families based in one or many jurisdictions can benefit from our comprehensive Foundation services, which include:

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