UAE Foundation

[bio]

In the UAE, there are three foundations:

• ADGM foundation (Abu Dhabi)
• DIFC foundation (Dubai)
• RAK ICC foundation (Ras Al Khaimer)

These foundations are based on English common law.

Foundations are perpetual, and thus are valuable for succession planning. They can also be useful for asset protection, similar to a trust.

The foundation can hold property, investments, businesses, crypto, etc.

I am interested to know if anyone has any experience with UAE foundations. They seem to be quite attractive, and far cheaper than alternatives (i.e., a Cook Island trust). Pros? Cons?

Note: properties/investments held by a foundation do not seem to be eligible for the golden visa, as far as I know.

 

[daniels27]

Most of the time, people chose a jurisdiction for such foundations based on reputation or privacy. I don't think many will want to save 10k per year and then have something in the UAE. But would be interesting to see if anybody sees any long-term benefit for that.

 

[Nicholas Van Orton]

Hi @bio ,

what you posted is correct, but the problem is finding a main-street banking solution for UAE foundations. Since they may engage in commercial activities, banks treat them as "commercial/corporate entities", but then when one tries to explain that they are not a corporation but a foundation, their head explodes and a never-ending loop of paper-tossing, new-agent-calling starts, with no actual result delivered. The only banking options available are through international private banks present in the country (the likes of Mirabaud, for example), who will demand at least a $1 million blocked deposit (active wealth management they call it) to be had with them at all times. If you have that amount, then fine.

As you point out, real estate acquired and owned by a foundation does not account for obtaining a golden visa, but you may accumulate assets and put them in it and get the residence visa through other means, ie, opening a FZE company.

@daniels27 has a valid point in that there are other jurisdictions with longer-standing and better reputation than Dubai. You may also check posts by @Martin Everson regarding Channel Islands options for a similar vehicle, the trust, for example. However, UAE's foundation regime is based, as stated, in the English common law, and the text of the law that enacted them is well thought out. There is, however, a key difference between DIFC and ADGM (forget RAK), in that the former does make the council members and beneficiaries of the foundation public, whereas the ADGM does not.

Hope this helps.

NVO

 

[cryptotree]

Hi @bio ,

what you posted is correct, but the problem is finding a main-street banking solution for UAE foundations. Since they may engage in commercial activities, banks treat them as "commercial/corporate entities", but then when one tries to explain that they are not a corporation but a foundation, their head explodes and a never-ending loop of paper-tossing, new-agent-calling starts, with no actual result delivered. The only banking options available are through international private banks present in the country (the likes of Mirabaud, for example), who will demand at least a $1 million blocked deposit (active wealth management they call it) to be had with them at all times. If you have that amount, then fine.

As you point out, real estate acquired and owned by a foundation does not account for obtaining a golden visa, but you may accumulate assets and put them in it and get the residence visa through other means, ie, opening a FZE company.

@daniels27 has a valid point in that there are other jurisdictions with longer-standing and better reputation than Dubai. You may also check posts by @Martin Everson regarding Channel Islands options for a similar vehicle, the trust, for example. However, UAE's foundation regime is based, as stated, in the English common law, and the text of the law that enacted them is well thought out. There is, however, a key difference between DIFC and ADGM (forget RAK), in that the former does make the council members and beneficiaries of the foundation public, whereas the ADGM does not.

Hope this helps.

NVO

DIFC doesn’t make the it public either. You can go to their website yourself and search the register, you will only see the name of the foundation.

Enbd and Adcb should be able to open an account if you are in their priority tier. This requires a relationship balance of 1M AED.

 

[sknomad]

FTA in UAE treat Foundations as standard taxable entity.F TA do not see Foundation as a separate legal form of enrity.

Even RAKICC (what is offshore) has to register for Corporate tax and file standard Corporate tax return.

Every income of UAE Foundation, even assest transfers from founder to foundation, is considered as taxable income by FTA.

Therefore foundation in UAE does not make any sense.

 

[cryptotree]

FTA in UAE treat Foundations as standard taxable entity.F TA do not see Foundation as a separate legal form of enrity.

Even RAKICC (what is offshore) has to register for Corporate tax and file standard Corporate tax return.

Every income of UAE Foundation, even assest transfers from founder to foundation, is considered as taxable income by FTA.

Therefore foundation in UAE does not make any sense.

This is not entirely correct.

https://www.pwc.com/m1/en/tax/documents/2025/uae-ct-on-MD261-on-partnerships.pdf

 

[Martin Everson]

UAE Corporate Tax Updates: Treatment to Family Foundations​

https://taxconsultantdubai.com/treatment-to-family-foundations-in-uae/

As you can see above requires some structuring to make it viable as a tax efficient structure.

Pros? Cons?

It's UAE. Everything is done by Decree. You could wake up tomorrow morning and a new Decree No. 1234 says all Foundations are void as of midnight. Not even people who live in UAE want to park the bulk of their wealth in the country. I would honestly find a better jurisdiction with a solid track record, robust legal system and reputation. On the Pros side it is a non-western solution which may have benefits for some people from certain countries that would not get easily serviced in certain other financial centres.

 

[sknomad]

This is not entirely correct.

https://www.pwc.com/m1/en/tax/documents/2025/uae-ct-on-MD261-on-partnerships.pdf

I have in a file copy of s decision issued by FTA to RAKICC that all foundations are considered as a standard corporations for tax purposes. It is official decision of the FTA. Whwn FTA will make next decision, they will follow their previous official decision and not privat opinion of PWC.