Foundations for wealth structuring and succession

A separate legal entity that holds and manages assets for a purpose or for beneficiaries, governed by its own charter and council. Unlike a trust, it has its own legal personality, which some clients and civil-law jurisdictions prefer.

Common choices are RAK ICC, the DIFC and ADGM. We advise on which suits your succession, governance and protection goals.

In principle most asset classes, but the foundation should not be operational in relation to the assets themselves. The structure we recommend is a foundation sitting above one or more underlying holding companies, with the companies holding the real estate, shares, portfolios, bank accounts and intellectual property, and the foundation holding the shares in those companies.

That separation matters. It keeps the foundation out of day-to-day dealings, contracts and liabilities, leaves the operating risk in the company where it belongs, and makes banking, financing and any future sale far simpler, since a company can be transferred or refinanced without touching the foundation above it.

Owning a family business works the same way. The shares in the holding company are endowed to the foundation, which becomes the permanent shareholder, so ownership does not fragment on a death, a divorce or a disagreement between the next generation. The charter and by-laws separate ownership from management: who sits on the company board, who may sell, what needs family consent. UAE real estate must be checked against the rules of the relevant land department before any transfer, and shares in an operating company usually require a review of the articles and any shareholders' agreement first.

The council manages the foundation, in the same way a board manages a company, and is bound by the charter and by-laws you settle at the outset. You can sit on the council, and many founders do. You can also reserve powers to yourself as founder, appoint a guardian to supervise the council, and set out matters that cannot be decided without specified consent.

The balance to strike is the same as with a trust. Reserve too much and the separation between you and the foundation becomes questionable, which weakens the asset protection and can attract unwelcome attention from tax authorities. Reserve too little and the structure may drift from your intentions once you are no longer there. We draft to that line deliberately, and we plan for succession on the council itself so control passes as you intend rather than by default.

It can, and that is one of the main reasons families use one. Once assets are properly endowed, they belong to the foundation and not to the founder or the beneficiaries, so a claim against an individual does not reach directly into the structure. Beneficiaries hold no ownership interest that a creditor can attach.

The protection is real but not unlimited, and it is important to be clear about why. Assets situated abroad remain subject to the law of the place they sit, and some jurisdictions apply forced heirship to local real estate regardless of the structure. Timing is decisive: endowments made when a claim is already in prospect are far more vulnerable than long-standing arrangements. We map your assets against the jurisdictions that can reach them, say where the structure is strong and where it is not, and combine it with Wills or a trust where a foundation cannot do the whole job.

The foundation does not die, so its assets do not pass on death and do not go through probate. Nothing needs to be transferred, revalued or re-registered: the shares, property and accounts stay exactly where they are, and the by-laws determine who benefits from that point and on what terms.

That is the practical advantage over relying on a Will alone. There is no period during which accounts are frozen or a business cannot act while an estate is administered. Benefit can be released at ages or on conditions you set rather than in one lump, provision can be made for beneficiaries not yet born, and interests can be adjusted over time without the assets ever moving. We usually recommend a foundation alongside a UAE Will rather than instead of one, so that anything held personally is also covered.

The foundation itself is on a public register, so its name, registration number, registered address and date of establishment are matters of record. That registration is what gives it legal personality and is part of why banks and registries deal with it readily.

The by-laws, which name the beneficiaries and set out how they benefit, are not a public document. Details of the founder, council members and beneficiaries are filed with the registry and, as applicable, with the UAE beneficial ownership regime, and are available to regulators, the registry and financial institutions conducting due diligence, but not to the general public. We will tell you precisely what is disclosable in each of the three jurisdictions before you choose between them.

Costs fall into two parts: establishment, covering advice, drafting the charter and by-laws, and registry fees; and annual costs, covering the registry renewal, registered agent or office, council administration, accounts and filings. RAK ICC is materially cheaper than the DIFC and ADGM on both. We quote on your facts rather than publishing one figure that would be wrong for most clients.

Registration itself is usually completed within two to four weeks. What governs the real timetable is everything around it: endowing the assets, bank account opening, and any land-registry or regulatory consents. We tell you at the outset which steps sit outside our control and what they typically take, so the timeline you are given is the one that happens.

Yes, and a well-drafted charter anticipates it. Beneficiaries can be added or removed, benefit provisions varied, council members replaced, and in some cases the foundation continued into another jurisdiction. Those powers have to be written in at the outset, and who may exercise them is a decision to make deliberately rather than leave to the default position.

A foundation can also be wound up, with assets distributed as the charter permits. What cannot be done is to unwind it retrospectively to defeat a claim that has already arisen. We recommend a review every few years, and always after a marriage, divorce, birth, death, business sale or change of residence.