Building a Legacy – UAE Foundations

Dubai and Abu Dhabi have just been named the world’s best cities for high-net-worth individuals (HNWIs), according to a recent Arabian Business report, an accolade that reflects more than just luxury living and economic opportunity. As global wealth increasingly flows into the UAE, so does the demand for sophisticated wealth structuring and succession planning tools.

At Support Legal, we are seeing increasing interest in foundations, especially those established under the DIFC and ADGM legal frameworks. These structures are not only key to managing and protecting assets for high-net-worth individuals (HNWIs) across generations but are also being utilized for a variety of other purposes, including philanthropic efforts, asset management, investment structuring and corporate governance.

Our foundations team is led by Corporate Principal Alison Hubbard and Private Client Principal Sonya Bhalla who, drawing on their respective areas of expertise, take a solution-driven approach to working with clients to find the optimal structuring approach for their unique circumstances.

In this article, Alison and Sonya explore the role of foundations within the UAE’s wealth ecosystem, examining their legal structures, key benefits, and strategic importance for individuals and families seeking long-term asset protection and legacy planning.

What is a Foundation?

Foundations are becoming an increasingly popular tool for wealth management and asset protection in the UAE. They offer a unique blend of corporate and trust-like features and can be established in two main jurisdictions: the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC).

Although each jurisdiction has its own regulatory framework, both provide strong solutions for wealth structuring, succession planning, and philanthropic giving.

A foundation is a legal entity with its own personality. It has no shareholders and is managed by a governing body. Similar to a trust in purpose but functioning as a separate legal entity, a foundation offers greater control and governance options.

Key Features of a UAE Foundation

• Legal Entity - can own assets, enter contracts, and initiate legal proceedings.

• No Shareholders or Owners - foundations are not "owned" by anyone, which enhances asset protection.

• Governance Structure - foundations are managed by a Foundation Council, with optional oversight by a Guardian.

• Asset Protection - Assets are shielded from the founder’s personal liabilities.

• Succession Planning - enables wealth to be transferred according to the founder’s wishes.

• Confidentiality - beneficiary details can remain private.

• Perpetual Existence - Can operate indefinitely unless dissolved.

  
  

Why Use a Foundation?

1. Wealth & Succession Planning

• Seamlessly transfers assets to future generations without probate.

• Provides governance structures to manage family wealth long-term.

  
  

  2. Asset Protection

• Shields assets from legal claims and personal liabilities.

• Keeps assets separate from the founder’s personal estate.

  
  

  3. Family Business Holding

• Simplifies succession for family-owned businesses.

• Ensures continuity in management and decision-making.

  
  

  4. Charitable & Philanthropic Giving

• Offers a structured approach for long-term charitable impact.

• Enables efficient donation management.

  
  

  5. Corporate Holding & Structuring

• Can hold shares, real estate, or intellectual property.

• Supports long-term planning for business continuity.

  
  

  6. Tax & Estate Planning

• No corporate or income tax in DIFC or ADGM.

• Offers efficient estate planning, especially for international families. ____________________________

Comparison: ADGM vs DIFC Foundations

Legal Considerations When Establishing a Foundation

1. Purpose & Objectives

• Define the foundation’s goals (e.g. wealth structuring, philanthropy).

• Decide if the foundation is private or charitable.

2. Asset Contribution

• Identify assets to be contributed (e.g., real estate, shares, cash).

• Determine how assets will be distributed.

3. Governance

• Appoint a Foundation Council.

• Decide if a Guardian is needed.

• Establish succession rules for council members.

4. Beneficiaries & Distribution

• Define how and when distributions will occur.

• Set any specific conditions (e.g., age milestones).

5. Legal & Compliance

• Comply with ADGM/DIFC regulations.

• Consider tax and reporting obligations.

• Maintain clear records and statements.

UAE foundations are a powerful tool for long-term structuring, whether for HNWIs or corporates. With robust legal frameworks in both ADGM and DIFC, founders are able to find the right fit for them, depending on their objectives.

Want to learn more or set up a foundation?

Contact Alison Hubbard or Sonya Bhalla

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This material is provided for general information only. It should not be relied upon for the provision of or as a substitute for legal or other professional advice.