As global families and Ultra High Net Worth Individuals (UHNWIs) seek secure, tax-efficient structures to manage and preserve wealth, UAE foundations continue to stand out as a premier solution. With recent updates to the UAE Corporate Tax Law, these structures have become even more attractive for those looking to protect assets, plan succession and optimise cross-border tax exposure.
At Zetland Fiduciary Group, we specialise in helping clients navigate the evolving regulatory landscape. Our Dubai office offers tailored support for establishing and managing UAE foundations, ensuring compliance and strategic alignment with your
long-term goals.
Understanding UAE Foundations in Context
UAE foundations serve as a sophisticated vehicle for wealth structuring, offering a unique blend of trust-like asset protection and corporate-style governance. Designed to hold and manage assets for the benefit of individuals or specific purposes, these entities operate without shareholders, ensuring privacy and control.
They can be established in three leading jurisdictions:
- Dubai International Financial Centre (DIFC)
- Abu Dhabi Global Market (ADGM)
- Ras Al Khaimah International Corporate Centre (RAK ICC)
Each jurisdiction provides a distinct regulatory environment, but all share a commitment to international best practices, legal certainty and investor-friendly frameworks—making UAE foundations a preferred choice for succession planning, asset protection and cross-border wealth management.
🔍 Recent Legal and Tax Highlights
The UAE has introduced several key updates that enhance the appeal of foundations for wealth planning:
1. Tax Transparency for Family Foundations
Under Ministerial Decision No. 261 of 2024, qualifying foundations can apply to be treated as Unincorporated Partnerships, allowing them to be tax-transparent:
- The foundation itself is not taxed.
- Income is taxed directly at the beneficiary level, promoting efficient wealth management.
2. Eligibility Criteria
To qualify for tax-transparent treatment:
- The foundation must primarily manage, hold and invest assets—not conduct business activities.
- It must maintain an uninterrupted ownership chain through compliant vehicles.
- It must not be used solely for tax avoidance.
3. Retroactive Application
These provisions apply retroactively from 1 June 2023, allowing previously established foundations to benefit if they meet the criteria.
4. Annual Confirmation Requirement
Approved foundations must submit an annual confirmation within 9 months of the tax period’s end, verifying continued compliance with Article 17 of the Corporate Tax Law.
5. Key Deadlines
- 31 December 2025: Deadline for retroactive applications and annual confirmations for tax periods ending before 31 March 2025.
- 31 August 2025: Deadline for tax registration for partnerships with financial years ending before 1 July 2025.
6. Simplified Reporting
The requirement to notify the FTA within 20 days of partner changes has been replaced with a single annual submission as part of the tax return.
7. Foreign Partnerships
Foreign partnerships with UAE-based partners must now:
- File annual declarations.
- Clarify profit-sharing agreements to avoid default equal allocation.
8. Tax Deregistration
Foundations or partnerships that cease operations must apply for tax deregistration within 3 months.
Strategic Advantages of UAE Foundations
UAE foundations offer a range of benefits that make them ideal for wealth structuring:
✅ Asset Protection
Assets held in a foundation are legally separated from the founder’s personal estate, shielding them from personal liabilities and claims.
✅ Succession Planning
Foundations allow for clear, enforceable inheritance structures without probate, ensuring smooth generational wealth transfer.
✅ Privacy
Beneficiaries are not publicly listed, offering a high degree of confidentiality.
✅ Tax Efficiency
With the new tax transparency rules, foundations can avoid entity-level taxation, reducing overall tax exposure.
✅ Global Recognition
Jurisdictions like DIFC and ADGM offer international credibility, making UAE foundations suitable for cross-border holdings.
Zetland’s Expertise in UAE Foundations
With over three decades of experience in fiduciary services, Zetland Fiduciary Group provides comprehensive support for clients establishing UAE foundations:
- Jurisdiction Selection
We help you choose between DIFC, ADGM, and RAK ICC based on your strategic needs. - Foundation Setup
From drafting charters and by-laws to securing tax transparency status, we manage the entire incorporation process. - Ongoing Administration
Our team provides continuous support with governance, compliance, and reporting. - Cross-Border Structuring
We ensure your foundation integrates seamlessly with global holdings and family offices.
Real-World Application: A Family Office Case Study
A European family office recently restructured its UAE real estate holdings using an ADGM Foundation. By applying for Unincorporated Partnership status, the foundation achieved tax transparency, allowing income to flow directly to heirs without entity-level taxation. This move simplified succession, reduced international tax exposure, and ensured long-term compliance with UAE regulations.
Getting Started with Zetland
Establishing a UAE foundation is a strategic decision that requires expert guidance. At Zetland, we make the process seamless:
- Initial Consultation – Understand your goals and assess jurisdictional fit.
- Structuring Advice – Design the foundation’s governance, beneficiaries, and asset strategy.
- Incorporation – Handle all legal documentation and regulatory filings.
- Tax Optimisation – Apply for pass-through status and align with global tax planning.
- Ongoing Support – Provide administration, compliance and reporting services.
