"UAE provides pre-eminent solutions for succession planning and wealth structuring through its different foundation regimes. We at Mayur & Co has been at the forefront of this sea change in the country and proactively guided clients to make use of such estate planning strategies. Our in-house experts have not only set up foundations in UAE, but also been entrusted with the fiduciary duty as foundation council member by the clients world over."
Between the year 2017 and 2019, ADGM (Abu Dhabi Global Markets), DIFC (Dubai International Financial centre) and RAKICC (Ras Al Khaimah International Corporate Center) introduced their respective foundation regimes in the country. Foundations are a form of hybrid entity because it combines characteristics of both a private company and a trust structure that can be established for beneficial purpose determined by the ‘Founder’ yet retains a corporate level of independent legal personality.
DIFC Foundation regime allows a company to be converted into a foundation and it allows all the legitimate purpose for which foundation can be maintained including exclusive charitable purpose which is not allowed in ADGM. However, if you include charitable purpose then a guardian is a mandatory requirement. DIFC also provides with a provision of arbitration as a form of alternative dispute resolution.
ADGM only allows to set up foundation under its regime and does not permit the conversation of an entity structure to foundation and it cannot be established solely for philanthropic or charitable purposes without more tailored structuring. It has no ongoing annual requirement to file or audit accounts unless requested by the Registrar or the Assets under the foundation are valued at AED 30 million or more. Account records must be properly maintained as per the other regimes however are not required to be filed unless requested.
RAK ICC does not maintain a publicly accessible register of information in relation to a Foundation. Information related to the Foundation benefits from the applicable privacy laws in the UAE and will not be disclosed unless required by the relevant authorities. Within RAK ICC however a Registered agent is a mandatory requirement whereas with DIFC and ADGM you need to appoint a registered corporate services provider. Moreover, it allows to include ADGM Courts and DIFC Courts as a jurisdiction for any alternate dispute resolution.
Out of all the tools available for estate planning, a family foundation is considered the most comprehensive solution in today's time. This has various benefits such as preservation of generational wealth in a structured manner, it can hold assets in multiple jurisdiction for a considerable long period, ensures younger generation does not get overwhelmed by the windfall inheritance of wealth, it also provides tax benefits and flexibility to relocate from one jurisdiction to another.
If you are looking to register a DIFC WILL and need professional assistance and advice, please get in touch and we will be happy to schedule a virtual appointment for you
