How to set up a foundation in the UAE

Globally mobile individuals and families often end up with complicated financial lives – even more so if they’re successful. Without the right strategy in place, holding assets in different jurisdictions – or moving funds between them – can be legally complex and potentially burdensome from a tax perspective. 

Foundations, trusts and other legal wealth-management structures can make life easier for successful families. In this article, we’ll explore one particularly powerful way to safeguard and pass on assets: the UAE foundation. We’ll explain what they are, why they’re popular and how to set up a foundation in the UAE. 

Important: The information in this guide is general in nature, not legally binding, and should not be considered financial or investment advice.    

Key takeaways: 

• UAE foundations offer a robust legal structure for asset protection, succession planning, and family governance – without the complexities of trusts or traditional companies. 

• Choosing the right jurisdiction – DIFC, ADGM or RAK ICC – depends on your goals, budget, and preference for regulatory environment, governance flexibility, and professional ecosystem. 

• Setting up a foundation involves careful planning, legal documentation and ongoing compliance, but with the right partners, it becomes a powerful tool for managing wealth across borders. 

  
  

What is a UAE foundation? 

A foundation is a legal entity established to hold and manage assets for a specific purpose. Unlike companies, foundations have no shareholders. Unlike trusts, they are not legal relationships – they are independent legal persons in their own right. 

Foundations are often used for succession planning, philanthropic giving, family governance, and asset protection. They’re governed by a council (rather than directors or trustees) and act according to a clearly defined charter or set of by-laws. 

As the name suggests, UAE foundations are foundations based in the United Arab Emirates, mainly in the DIFC (Dubai International Financial Centre) or ADGM (Abu Dhabi Global Market financial free zones. It’s also possible to establish a foundation in the northernmost emirate, Ras Al Khaimah (RAK), via the Ras Al Khaimah International Corporate Centre (RAK ICC). 

DIFC vs ADGM vs RAK ICC – choosing your jurisdiction 

Both DIFC and ADGM offer attractive, long-established and internationally recognised foundation structures. In contrast, RAK is a newcomer to the foundation scene. All three Here’s a quick comparison: 

• DIFC foundations are often favoured by families and businesses with links to Dubai or the wider MENA region. The regime offers strong privacy protections, flexible governance, and straightforward administration. 

• ADGM foundations are known for their innovation in family governance and structuring. ADGM is particularly popular among advisors focused on long-term wealth planning. 

• RAK ICC foundations offer a cost-effective and flexible solution for asset protection, succession and estate planning. The RAK ICC regime is especially attractive to founders seeking confidentiality, international compatibility and lower establishment costs. 

  
  

All jurisdictions provide: 

• Legal certainty under English common law principles. 

• Confidential registers of foundation councils and beneficiaries. 

• The ability to hold various asset classes, including shares, property and investments. 

  
  

While RAK offers a cost-effective and efficient solution for setting up foundations with strong asset protection and privacy features, the DIFC and ADGM benefit from their status as dedicated international financial centres with more mature and specialised regulatory frameworks, a deeper ecosystem of wealth management professionals, greater international recognition and specific advantages like direct real estate ownership in key UAE locations. This makes them the preferred choice for many high-net-worth individuals seeking sophisticated and prestigious wealth-structuring solutions. 

Your choice may depend on where your advisors are based, which ecosystem you prefer and the nature of your assets or succession goals. Most founders consider these factors before settling on a jurisdiction: 

• Fees: Registration and ongoing administrative fees can vary between the two jurisdictions. It’s essential to obtain up-to-date fee schedules from both authorities. 

• Setup time: While both aim for efficiency, the specific timelines for application processing and registration might differ slightly. 

• Governance differences: The specific requirements and flexibility around the composition and powers of the foundation council, as well as the roles of founders and any appointed guardians or supervisors, can vary. 

• Specific legal needs: Depending on the precise objectives of your foundation and the nature of your assets, one jurisdiction's legal framework might offer a more tailored fit. 

  
  

Again, we strongly advise seeking legal advice from an expert familiar with the UAE while weighing your options. 

How to set up a foundation in the UAE 

Foundation set-up in the UAE is broadly similar no matter which jurisdiction you choose – although, as we mentioned above, fees, governance structures and setup times can vary. Below, we’ve broken the process into a high-level overview in five steps.  

Step 1. Define your purpose 

Begin by clearly articulating the overarching purpose of your foundation. For example, what specific goals do you want to achieve? This could include smooth succession planning for your family’s assets, supporting specific charitable causes, or providing a robust structure for long-term asset holding. Also, determine whether the foundation will operate in perpetuity or for a specific timeframe. 

Step 2. Choose your structure 

First, decide on the composition of your foundation council – the body responsible for its governance. Then, define the role of the founder and consider whether to appoint a guardian or supervisor to provide additional oversight. Finally, clarify the decision-making powers within the foundation and establish clear mechanisms for succession planning within the council itself. 

Step 3. Draft legal documents 

The cornerstone of your foundation is its legal documentation – primarily the charter and by-laws. The charter outlines the foundation's core objectives, its name and its initial endowment. Meanwhile, the by-laws detail the foundation’s operational procedures, governance structure and rules about the use and distribution of assets.  

To ensure your charter and by-laws are legally sound and properly reflect your intentions, it’s vital to work with legal advisors who know about foundation law in your chosen UAE jurisdiction (DIFC, ADGM or RAK ICC). 

Step 4. Submit your application 

Once your legal documents are drafted, you will need to register your foundation with the relevant authority: the Registrar of Foundations in the DIFC, the Registration Authority in ADGM or the RAK ICC Registrar. This involves submitting specific documents, including due diligence on the founder and council members, and paying the applicable registration fees. 

5. Fund the foundation 

Once your application is approved, you can formally transfer assets into the ownership of the foundation. In the runup to this step, it’s important to establish a proper accounting and financial infrastructure for the foundation to manage its assets effectively. Some traditional banks may be hesitant to work with overseas foundations; in that case, alternative providers like Interpolitan Money may be able to help. 

Ongoing governance and compliance 

Foundations are not “set and forget” structures – instead, they require active governance and regular oversight to meet ongoing legal, regulatory and compliance obligations. Here are some factors to consider: 

• Maintaining clear records: Accurate and up-to-date records of all foundation activities, financial transactions, and council decisions are essential. 

• Financial statements and reporting: Regular preparation of financial statements and adherence to the reporting requirements of your chosen jurisdiction (DIFC, ADGM or RAK ICC) are mandatory. 

• Role of the council: The foundation council plays a vital role in the day-to-day decision-making, strategic direction, and oversight of the foundation's activities. 

• Annual renewal and regulatory requirements: Foundations in all UAE jurisdictions are typically subject to annual renewal processes and ongoing regulatory obligations that must be met to maintain their legal standing. 

  
  

How Interpolitan supports UAE foundations 

At Interpolitan Money, we understand the unique financial needs of UAE foundations and provide alternative banking solutions tailored to complex wealth structures. Our services help you manage and move capital securely, wherever your assets or beneficiaries are located.  

Here’s how we support you: 

• Multi-currency accounts: Securely hold and manage assets in over 55 currencies, simplifying your foundation’s international transactions and reducing currency conversion costs. 

• Cross-border payments: We offer secure, swift cross-border payment solutions, so your foundation can efficiently move funds across jurisdictions for its various activities. 

• Support for complex structures: Our expertise extends to working with foundations that have diverse asset types and a global network of beneficiaries or philanthropic partners. 

• White-glove service: We provide a dedicated relationship manager and a tailored onboarding process to ensure a smooth and efficient setup followed by ongoing support. 

• Integration with legal and advisory partners: We actively collaborate with your legal counsel, family office or trustees to ensure seamless integration of our financial services with your overall wealth management strategy. 

  
  

Choosing the right financial partner 

Setting up a UAE foundation is a significant undertaking that benefits from careful legal, financial and strategic alignment. Selecting experienced partners who understand the nuances of both UAE foundation law and international financial management can make the setup and ongoing governance process much easier.  

With the right structure and comprehensive support, your foundation can serve as a powerful vehicle for protecting your wealth, building your family’s legacy and simplifying global asset management. 

Speak to us today to explore how our tailored alternative banking solutions can support your UAE foundation’s global operations.