A Foundation is an independent legal entity (unlike a Trust which is only a legal arrangement) used to hold assets separately from the Founder's personal wealth. The Foundation is governed by its Charter and By-Laws which sets out the objects (wishes) of the Founder. The objects are most of the time a purpose to serve for the benefit of the beneficiaries. The Foundation is managed by Council Members and may be supervised by a Guardian.
A foundation is a key structure for anyone who is looking for the following:
Guardian
Council Members
Founder → UAE Foundation → Beneficiaries
Wealth structuring and legacy planning
Asset Protection
Long term holding structure of income generating assets
Philanthropic purposes
| Founder | The Founder is the one who funds and creates the Foundation |
|---|---|
| Guardian | The Guardian supervises the Council members and ensures strict compliance with the By-Laws of Foundation at all times |
| Foundation Council | Manages the Foundation, similar to a company's board of Directors. Council's role and obligations are outlined in By-Laws |
| Beneficiary/Qualified Recipient | A natural or legal person who is entitled to receive an amount of the Foundation in accordance with the Charter or the By-Laws |
| Designee/Default Recipient | A Designee is recipient to whom all property of Foundation has not otherwise been made shall pass in the event of termination thereof. In ADGM Foundation, a designee is a natural person or Legal Person who shall become a Beneficiary only in circumstances where a Foundation has no other Beneficiary. |
| Particulars - Foundation | RAK ICC | DIFC | ADGM |
|---|---|---|---|
| Overview | Foundation within RAK ICC, offers a choice of Common Law Jurisdiction between either: The Courts of the Abu Dhabi Global Market (ADGM); or The Courts of the Dubai International Financial Market (DIFC). Possibility to migrate to RAK ICC from overseas. Possibility to morph a RAK ICC Company to a Foundation. No public register | Theme freezone with core focus on Financial Services. Common law regulatory framework, Common law Courts. Possibility to migrate to DIFC from overseas. Possibility to morph a DIFC Company to a Foundation. Public Register - with limited information | Theme freezone with core focus on Financial Services. Common law regulatory framework, Common law Courts. Public Register - with limited information |
| Launched | 2019 | 2018 | 2017 |
| Objects | Objects which are exclusively charitable; or One or more of the following: (i) Objects which are not exclusively charitable; or (ii) Objects to benefit persons by name, category or class. May not carry out any commercial activities, except for those necessary for, and ancillary or incidental to, its objects | Objects which are exclusively charitable; or One or more of the following: (i) Objects which are not exclusively charitable; or (ii) Objects to benefit persons by name, category or class. May not carry out any commercial activities, except for those necessary for, and ancillary or incidental to, its objects | Objects shall include the management and distribution of its assets and income. May not carry out charitable purposes |
| Particulars - Foundation | RAK ICC | DIFC | ADGM |
|---|---|---|---|
| Governing Jurisdiction | Common law (DIFC or ADGM) | DIFC Law | Abu Dhabi Global Market (ADGM) |
| Main Legal Documents | - Charter - By-laws | - Charter - By-laws | - Charter - By-laws |
| Parties | • Founder • Council Members • Guardian • Qualified Recipient • Designee • Registered Agent • Registered office | • Founder • Council Members • Guardian • Qualified Recipient • Default Recipient • DIFC Registered office | • Founder • Council Members • Guardian • Beneficiary • Designee • Registered Agent • ADGM Registered office |
| Founder | - Minimum 1 - May be individual or corporate body - May either be a Guardian or Council member - May be a Qualified Recipient or Designee | - Minimum 1 - May be individual or corporate body - May either be a Guardian or Council member - May be a Qualified Recipient or Default Recipient | - Minimum 1 - May be individual or corporate body - May be one of the Beneficiary or Designee - May not be a Guardian or Council Member |
| Particulars - Foundation | RAK ICC | DIFC | ADGM |
|---|---|---|---|
| Council Members | - Minimum 2 members - May be individual or corporate body - May be a Founder, Qualified Recipient or Designee - May not be a Guardian | - Minimum 2 members - May be individual or corporate body - May be a Founder, Qualified Recipient or Default Recipient - May not be a Guardian | - Minimum 2 members - May be individual or corporate body - May be one of the Beneficiary or Designee - May not be a Guardian or Founder |
| Beneficiary/Qualified Recipient | - A natural person entitled to receive amount of the Foundation in accordance with the Charter or By-Laws - May be a Founder, Council Member or Guardian - Percentage of shares/entitlement of the beneficiaries are not mandatory to be stated in the Foundation documents, however names of the beneficiaries are required to be stated | - Natural or legal person who may benefit from the Foundation and who is identified in the charter or By-Laws - May be a Founder, Council Member or Guardian - Percentage of shares/entitlement of the beneficiaries are not mandatory to be stated in the Foundation documents, however names of the beneficiaries are required to be stated | - Natural or legal person who may benefit from the Foundation and who is identified in the charter or By-Laws - May be a Founder or Council Member - Percentage of shares/entitlement of the beneficiaries are not mandatory to be stated in the Foundation documents, however names of the beneficiaries are required to be stated |
| Particulars - Foundation | RAK ICC | DIFC | ADGM |
|---|---|---|---|
| Guardian | - Minimum 1 - May be individual or corporate body - May be a Founder or Qualified Recipient - May not be Council Member | - Minimum 1 - May be individual or corporate body - May be a Founder or Beneficiary - May not be Council Member | - Minimum 1 - May be individual or corporate body - May not be a Founder or Council Member or Sole Beneficiary |
| Designee/Default Recipient | - Recipient to whom all property of Foundation has not otherwise been made shall pass in the event of termination thereof. | -Recipient to whom all property of Foundation has not otherwise been made shall pass in the event of termination thereof. | A designee is a natural person or Legal Person who shall become a Beneficiary only in circumstances where a Foundation has no other Beneficiary |
| UAE Registered Address | Registered Agent with RAK ICC | Must be based in DIFC | Must be based in ADGM |
| Minimum Initial Capital | USD 100 (or equivalent in any other currency) | Not required - it must hold at least 1 asset | USD 100 (or equivalent in any other currency) |
| UAE Holding Assets | -Real estate: yes -Shares: yes -Listed stocks: yes -Portfolios: yes | -Real estate: yes -Shares: yes -Listed stocks: yes -Portfolios: yes | -Real estate: yes -Shares: yes -Listed stocks: yes -Portfolios: yes |
| Authorised Signatory | - | - | At least one (1) authorized signatory should hold a UAE residence visa |
| Particulars - Foundation | RAK ICC | DIFC | ADGM |
|---|---|---|---|
| Timeline for Registration | Approx 2-3 weeks | Approx 4-5 weeks | Approx 4-5 weeks |
| On-going obligations | Annual accounts: shall be maintained by the Registered Agent at the Registered Office and are not subject to public disclosure. Annual return: it must be filed with the Registrar. | Annual accounts: shall be maintained at the Registered Office and are not subject to public disclosure. Annual return: it must be filed with the Registrar. | Annual accounts: Audited financial statements mandatory if turnover > 13.5m Annual return: it must be filed with the Registrar. |
| UAE Corporate Tax | All the companies which are registered in UAE shall compulsorily register for Corporate Tax. The company must complete the registration 3 months from date of incorporation. | All the companies which are registered in UAE shall compulsorily register for Corporate Tax. The company must complete the registration 3 months from date of incorporation. | All the companies which are registered in UAE shall compulsorily register for Corporate Tax. The company must complete the registration 3 months from date of incorporation. |
| Particulars | RAK ICC | DIFC | ADGM |
|---|---|---|---|
| Registration and First Yr Fees | USD 4,500 | USD 12,400 | USD 11,100 |
| Year 2 onwards (on going renewal) | USD 2,900 | USD 9,250 | USD 8,250 |
Optional Services
Notes| Individual | Corporate Entity |
|---|---|
| a. Certified Valid Passport, visa & emirates ID copy of founder(s)/ foundation council member(s)/ guardian/ beneficiaries | a. Certificate of Incorporation/Trade License duly legalized |
| b. Certified Proof of physical address i.e. Utility Bill for each founder(s)/ foundation council member(s)/ guardian/ beneficiaries | b. Memorandum & Articles, Certificate of Good Standing, Incumbency duly legalized |
| c. Bank reference letter for the founder(s) | c. Certified Valid Passport, visa & emirates ID, Proof of physical address copy of beneficial owners, directors, shareholders of corporate entity |
| d. NOC from current sponsor for founder(s)/ foundation council member(s)/ guardian (applicable if holding UAE residence visa) | d. Certified Proof of physical address i.e. Utility Bill for each shareholder(s)/ directors(s)/ manager |
| e. CV's of founder(s)/ foundation council member(s)/ guardian/ beneficiaries | e. Supporting docs for source of wealth: i.e. 2 yrs Audit Report, bank statements etc. |
| f. Source of wealth documents and details (personal bank statements, financial portfolio etc) | f. Resolution |
| g. Business Plan & Structure Chart | g. Business Plan & Structure Chart |
Note: The list of required documents is for illustrative purpose. Upon confirmation to proceed, a comprehensive list of documents that the authority will require will be shared.
| Feature 特征 | Trust 信托 | Foundation 基金会 |
|---|---|---|
| Control 控制 | Trust: Limited unless powers reserved 信托：除非保留权力，否则控制有限 | Foundation: Founder can retain formal roles 基金会：创始人可以保留正式角色 |
| Privacy 隐私 | Trust: High privacy; not publicly registered 信托：高度隐私；不公开注册 | Foundation: Varies; some public registration 基金会：变化不定；部分公开注册 |
| Asset Protection 资产保护 | Trust: Strong in offshore jurisdictions 信托：在离岸管辖区强度高 | Foundation: Effective but less tested 基金会：有效但测试较少 |
| Cultural Fit 文化契合 | Trust: Abstract for civil law clients 信托：对大陆法系客户抽象 | Foundation: Familiar structure; resembles company 基金会：熟悉结构；类似于公司 |
| Succession Planning 继任规划 | Trust: Excellent for multi-generational transfer 信托：适合多代传承 | Foundation: Effective for family governance 基金会：适合家族治理 |
There several types of residency visas that are available in UAE, each one tailored to a specific purpose such as Employment Visa, Partner or Investor Visa, Family Visa or Long term visa (Golden Visa).
| Types of visa | Validity | Details |
|---|---|---|
| Employment visa | 2 years renweable | Applicant must have received employment under a UAE based employer or though his own company in UAE that he has established. The title can range from any post from officer to Director, CEO, etc.. |
| Partner / Investor visa | 2 years renewable | Applicant's name must feature on the register of shares owning at least AED 50,000 worth of stated capital of the company in UAE. |
| Family visa | 2 years renewable | Once the main applicant has received his or her visa under Employment or Partner/Investor, he or she can sponsor the spouse, the children and parents to take a family visa to reside in UAE. This visa allows the family to reside in UAE but not work. If the family wishes to work, they will need to seek an NOC and the relevant approval from the Ministry of Human Resources Emiratization. For the family visa, the main applicant is required to earn at least AED 5,000 per month plus show ejiari (lease agreement) in his or her name. |
| Golden visa | 10 years renewable | For the golden visa, anyone can apply under any of the 3 main categories: 1. Applicant has acquired property in UAE worth at least AED 2 million and has paid at least 20% 2. Applicant being an employee is earning AED 30,000 per month 3. Applicant has a fixed deposit / investment of AED 2 million in a financial institution in UAE Once main applicant has received golden visa, he or she can sponsor family visa. |
| Green visa | 5 years renewable | For the green visa, anyone can apply under anyone of the following categories: 1. Freelancers (must show proof of work and income of AED 360,000 over 2 years) 2. Skilled employees (must show salary of AED 15,000 + bachelor's degree) |
The timeline for the application of the residency visa takes between 2 to 5 workings days on fast track basis and between 7 to 12 working days on normal track. The process for the application of the residency visa includes:
Documents required for each applicant:
Background information
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any errors or omissions.
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