Unlocking the Power of UAE Foundations: A Strategic Wealth Planning Tool

As global families and ultra-high-net-worth individuals (UHNWIs) seek secure, tax-efficient structures to manage and preserve wealth, UAE foundations have emerged as a compelling solution. At Zetland Fiduciary Group, we specialise in helping clients navigate the complexities of international structuring and the UAE's foundation regime offers a unique blend of flexibility, privacy and legal robustness.

Whether you are planning for succession, protecting assets or optimising cross-border tax exposure, a UAE foundation can be a cornerstone of your wealth strategy.

What Is a UAE Foundation?

A UAE foundation is a legal entity that blends the features of a trust and a company. It is established by a founder, governed by a charter and by-laws and managed by a council. Unlike companies, foundations have no shareholders—assets are held for the benefit of specified beneficiaries or purposes.

Foundations are available in three key jurisdictions:

  • DIFC (Dubai International Financial Centre)
  • ADGM (Abu Dhabi Global Market)
  • RAK ICC (Ras Al Khaimah International Corporate Centre)

Each jurisdiction offers distinct advantages, but all are backed by progressive legal frameworks, international recognition and robust regulatory oversight.

Key Structural Features

FeatureUAE Foundation
Legal StatusSeparate legal entity
OwnershipNo shareholders; governed by charter/by-laws
ControlFounder or guardian controls via by-laws
Asset ProtectionHigh - assets are legally separated from personal estate
Succession PlanningStrong - avoids probate through defined inheritance rules
PrivacyHigh - beneficiaries are not publicly listed
Tax TreatmentEligible for pass-through status (0% corporate tax)

This hybrid structure makes UAE foundations ideal for wealth management, succession planning, philanthropy and holding investments.

Legal and Regulatory Advantages

The UAE's foundation laws are designed to accommodate international families and investors. Key legal benefits include:

Asset Protection Icon Asset Protection

Assets transferred to the foundation are legally separated from the founder's personal estate, shielding them from personal liabilities and claims.

Succession Planning Icon Succession Planning

Foundations allow for clear, enforceable inheritance structures without the need for probate, ensuring seamless generational wealth transfer.

Control and Governance Icon Control and Governance

Founders retain control through customised by-laws, with the option to appoint guardians or councils to oversee operations.

Jurisdictional Flexibility Icon Jurisdictional Flexibility

DIFC and ADGM offer prestige and global recognition, while RAK ICC provides a cost-effective and streamlined setup.

Tax Efficiency Under UAE Law

Recent updates to the UAE's corporate tax regime have significantly enhanced the appeal of foundations. Under new guidance, family foundations can elect to be treated as Unincorporated Partnerships, unlocking powerful tax advantages:

  1. No Corporate Tax at the Foundation Level: Foundations are not taxed as entities, preserving capital for long-term goals.
  2. Tax Responsibility Transfers to Beneficiaries: Income is taxed at the individual level, allowing for tailored tax planning based on residency and jurisdiction.
  3. Simple Compliance via EmaraTax: Applications for tax transparency can be submitted digitally, streamlining the process.

This structure is particularly beneficial for families with international assets, enabling them to minimise global tax exposure while remaining compliant with UAE regulations.

Use Cases for UAE Foundations

UAE foundations are versatile and can be tailored to a wide range of needs:

At Zetland, we work closely with clients to align foundation structures with their personal, financial and jurisdictional goals.

Family Wealth Preservation Icon Family Wealth Preservation

Define inheritance rules, protect assets, and ensure continuity across generations.

Investment Holding Icon Investment Holding

Hold shares, real estate, or other assets in a secure, tax-efficient structure.

Philanthropy Icon Philanthropy

Establish charitable foundations with clear governance and purpose.

Business Succession Icon Business Succession

Plan for leadership transitions and ownership continuity in family enterprises.

Why Choose Zetland Fiduciary Group?

With over three decades of experience in fiduciary services, Zetland Fiduciary Group offers a full suite of solutions for clients establishing UAE foundations:

Our Dubai office is fully equipped to assist clients with UAE foundation services, backed by our global network and personalized approach.

Jurisdiction Selection Icon Jurisdiction Selection

We help you choose between DIFC, ADGM and RAK ICC based on your strategic needs.

Foundation Setup Icon Foundation Setup

From drafting charters and by-laws to securing tax transparency status, we manage the entire incorporation process.

Ongoing Administration Icon Ongoing Administration

Our team provides continuous support with governance, compliance and reporting.

Cross-Border Expertise Icon Cross-Border Expertise

We specialise in international structuring, ensuring your foundation integrates seamlessly with global holdings.

Real-World Example: Strategic Restructuring with ADGM Foundation

A European investor holding residential property in Dubai recently restructured his assets using an ADGM Foundation. With expert advisory support, he secured Unincorporated Partnership status, allowing income to flow directly to his heirs without entity-level taxation. This move simplified succession, reduced international tax exposure and ensured long-term compliance.

Getting Started

Establishing a UAE foundation is a strategic decision that requires careful planning and expert guidance. At Zetland, we make the process seamless:

  1. Initial Consultation - Understand your goals and assess jurisdictional fit.
  2. Structuring Advice - Design the foundation's governance, beneficiaries and asset strategy.
  3. Incorporation - Handle all legal documentation and regulatory filings.
  4. Tax Optimisation - Apply for pass-through status and align with global tax planning.
  5. Ongoing Support - Provide administration, compliance, and reporting services.

In today's dynamic global landscape, UAE foundations offer a future-proof solution for wealth protection, succession planning and tax efficiency. Whether you're an entrepreneur, investor or family office, Zetland Fiduciary Group is your trusted partner in building resilient, compliant and strategic structures.