Foundations in UAE are rapidly climbing the ladder to become the choice in regard to asset protection, wealth management, and long-term legacy planning. For charitable purposes or private wealth structuring, the foundation should fit into the broad regulatory picture.
What is a Foundation?
A foundation in the UAE is a legal entity the Founder establishes to hold and manage assets for a certain specified purpose. Unlike a trust that has no legal personality, a foundation has an independent legal personality and can therefore enter into contracts, buy property, and sell things in its own name.
Generally, foundations in UAE are used to:
- Preserve family wealth through generations
- Protect the assets from legal claims or liabilities
- Support philanthropic and charitable measures
- Corporate holding and shareholding structures
Foundations, unlike companies, are not described as ownership rights but the Charter and by-laws direct the objects and activities engaged in.
Where Can a Foundation Be Established in the UAE?
The founding of a foundation is possible in the UAE across several foremost jurisdictions:
- Abu Dhabi Global Market (ADGM)
- Dubai International Financial Centre (DIFC)
- RAK International Corporate Centre (RAK ICC)
Each Jurisdiction offers common law-based legal systems with good privacy and a secure regulatory framework. The DIFC and ADGM are best suited for complex or high-value setups, while RAK ICC would be a cost-effective and streamlined alternative.
Key Steps to Set Up a Foundation in the UAE
1. Choose the Right Jurisdiction
Selecting the appropriate setup largely depends on your objectives; be it private wealth, philanthropy, or perhaps asset protection. You should, therefore, consider the following:
- Setup and annual costs
- Legal framework
- Confidentiality and asset protection
2. Define the Purpose and Beneficiaries
The foundation must have a clearly defined purpose, which may include:
- Charitable objectives
- Non-charitable objectives such as asset preservation
- Or a combination of both
Beneficiaries must also be defined, which can be individuals, family members, or organizations.
3. Appointment of Key Persons
In the UAE, the following key persons must be appointed for a foundation:
- Founder: A person who transfers assets to the foundation
- Foundation Council: Responsible for the day-to-day management of the foundation (at least one member)
- Guardian: Optional but recommended as a form of oversight
- Registered agent: A licensed intermediary that is required in the majority of jurisdictions
4. Prepare Documents
The necessary documents include:
- Charter (sets out the foundation’s constitution)
- By-laws (governance and internal regulations)
- Memorandum of Association (sets out the objectives)
- KYC/AML documents of all parties concerned
- A registered office address in the selected jurisdiction
5. Register with the Authorities
Submit the application via a registered agent or legal consultant with the appropriate registry:
- DIFC Foundation Registry
- ADGM Registration Authority
- RAK ICC Registrar
6. Pay the Setup Fees
Typical foundation setup costs:
- DIFC: USD 5,000 – 10,000
- ADGM: USD 3,000 – 5,000
- RAK ICC: USD 3,000 – 5,000
Depending on the service providers and any add-on services, the fees might fluctuate.
7. Obtain the Foundation Certificate
Upon approval of your foundation, a Certificate of Incorporation will be issued to it, which allows the entity to commence operations, hold assets, and fulfill its objectives.
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Why Set Up Foundations in UAE?
Establishing foundations in the UAE has a good number of compelling reasons:
- 100% Foreign Ownership
- No Corporate or Personal Tax (from 2025—always check for updates)
- No Forced Heirship Rules
- Strong Privacy and Asset Protection Laws
- Flexible and Customizable Legal Structures
- Perfect for Legacy Planning and Philanthropy
Common Use Cases for UAE Foundations
| Use Case | Description |
| Family Wealth Planning | Secure generational wealth and ensure smooth transfer of assets |
| Charity & Philanthropy | Create and manage charitable initiatives in a tax-efficient way |
| Asset Protection | Protect assets from political instability, lawsuits, or personal liabilities |
| Corporate Holding | Use the foundation to hold business shares and streamline corporate control |
Key Questions To Be Considered Before Set-Up
- Purpose Clarity: Be clear on whether the foundation is for family, charity, or business structuring.
- Council Members: Minimum one member; could be either an individual or entity.
- Guardian Role: Recommended for better governance, especially in complex structures.
- Beneficiaries: Clearly identify the individuals or entities who will benefit from the foundation.
- Funding: There must be enough money to cover the costs intended for their purposes and operations.
- Jurisdiction Selection: Every jurisdiction in the UAE has different features, timelines, and pricing.
Is A Consultant Necessary?
Yes, of course. Setting up foundations in the UAE involves legal, financial, and regulatory complexities. A licensed consultant ensures:
– The correct jurisdiction is selected
– Documents have been prepared correctly
– Registration occurs at the proper time and without hiccups
– The establishment adheres completely to all UAE regulations
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About Madmun Consultancy
Madmun Consultancy is a name you can trust in the UAE for business and foundation setup services. With years of experience in DIFC, ADGM, and RAK ICC, we assist you in structuring your foundation efficiently and in full legal compliance.
Why partner with us?
– Customized foundation structuring
– From advisory through to registration, a full-service partner
– Clear pricing with very fast turnaround time
– Expertise in UAE regulatory landscapes
Contact Madmun Consultancy to initiate the process of constructing a legacy that stands forever.
