Foundation Setup
Intelligent Asset Protection Begins with the Establishment of a Foundation
Establishing a foundation in the UAE offers numerous opportunities for asset structuring, protection and the execution of charitable and social initiatives.
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One significant advantage is the ability to maintain a high level of confidentiality regarding the founders and beneficiaries, as well as the asset structure.
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Foundations can be formed within three free zones in the UAE: DIFC, RAK ICC, and ADGM. It is important to note that foundations established in ADGM are restricted to specific purposes, such as funding education and providing medical care for family members.
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Depending on the specific objectives of the foundation and the asset structure, one of the three free zones is selected for its establishment, and the most efficient corporate governance system for the foundation is developed on a case-by-case basis.
Share Capital and Asset Ownership
The minimum share capital necessary to establish a foundation is USD 100.
A foundation cannot own the UAE real estate outside the emirate in which it is established. For instance, a foundation from ADGM can own real estate in Abu Dhabi and abroad but cannot own real estate in Dubai.
Corporate Governance
The corporate governance of any foundation is carried out by its council and in cases where the foundation is established solely for charitable purposes, governance is also managed by the foundation’s trustees.
Confidentiality
Information on the management bodies and beneficiaries of the foundation is disclosed to the relevant free zone authorities. However, the ADGM and DIFC public registers only disclose limited information such as the name of the foundation, the date of establishment, the address, and status (active/liquidated). They do not disclose details about the founder, beneficiaries, composition of the foundation’s council, or who is the foundation’s trustee. RAK ICC does not have a public register.
Roles in a Foundation
Founder
The statutes and internal documents of the foundation may outline the rights of the founder to make amendments, change the foundation’s objectives, change the beneficiaries, alter the composition of the foundation’s governing bodies, or terminate the foundation’s activities.
Foundation’s Council
A foundation council serves as the executive body responsible for managing the foundation’s assets in the interest of its beneficiaries. Typically comprised of a minimum of two members, the council is appointed by the foundation’s founder upon its establishment, with the founder often being one of its members.
Guardian
A foundation established solely for charitable purposes must have a guardian appointed to oversee the activities of the foundation’s council. The guardian is appointed by the founder of the foundation, and the founder may act as a guardian themselves, provided that they are not simultaneously a member of the foundation’s council.
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