In this guide
What a family foundation doesHow the three jurisdictions differHow Prime Consulting can help set up a family foundationHow tax transparency worksDiscuss a family foundation with Prime ConsultingIf one person owns the shares in a family business, it helps to decide in advance who will make decisions and how the family will receive income once that person steps away. One option is to transfer shares to a family foundation and set those rules in its governing documents. In the UAE, DIFC, ADGM and RAK ICC all offer foundation structures.
What a family foundation does
A foundation is a separate legal entity. It owns the assets transferred to it, and its council manages them under its governing documents. For example, a foundation can hold shares in an operating company and receive dividends. Its rules can specify which family members receive distributions and under what conditions. The operating company continues to run the business. DIFC foundation FAQs · RAK ICC Foundations Regulations
How the three jurisdictions differ
- DIFC, Dubai A foundation needs a registered office in DIFC. It can lease its own office, share premises with an affiliated entity already in DIFC or appoint a registered agent. It must have at least two council members. DIFC Foundations Law
- ADGM, Abu Dhabi A foundation needs a registered office in ADGM. Unless exempt, its application must be submitted by an ADGM-licensed company service provider (CSP). The CSP can also provide the registered address and handle statutory filings on the foundation’s behalf. ADGM rules for non-exempt foundations · Exemption criteria
- RAK ICC, Ras Al Khaimah A foundation needs a RAK ICC registered agent, a registered office in the UAE and at least two council members. The registration application includes its Charter and By-laws. RAK ICC Foundations Regulations
How Prime Consulting can help set up a family foundation
- Clarify your family’s goals. We’ll discuss which assets the foundation should hold, who should manage them and who should receive distributions.
- Compare DIFC, ADGM and RAK ICC. We’ll consider your assets, governance requirements and restrictions on transferring company shares or property.
- Help prepare the structure and documents. We’ll identify what needs to be resolved before registration and the transfer of assets.
How tax transparency works
A family foundation with its own legal personality that meets the conditions of Article 17 of the UAE Corporate Tax Law can apply to the Federal Tax Authority (FTA) for fiscally transparent treatment. Among the conditions, the foundation must primarily hold, invest or manage assets for identified or identifiable individuals or for a public benefit entity. The foundation first registers for corporate tax. If the FTA approves the application, the tax implications are assessed at the level of the relevant beneficiaries and depend on the type of income and their circumstances. Before transferring assets, review the consequences of the transfer and future distributions, including in countries where the assets are located or beneficiaries reside. FTA guide to taxation of family foundations
Discuss a family foundation with Prime Consulting
Tell us which assets you want to transfer and who should make decisions. We’ll start by comparing jurisdictions and reviewing what needs to be resolved before registration.
Contact Prime Consulting