In the dynamic business environment in the United Arab Emirates, foundations have emerged as a powerful tool for safeguarding wealth and ensuring seamless succession planning. Foundations were introduced in 2017 in the UAE and have gained prominence quickly. Currently, they find their place in three of the free zones in the UAE, including RAKICC, ADGM, and DIFC.
A foundation in the UAE is an independent legal entity allowing individuals to consolidate their wealth while keeping their personal assets distinct from their business interests. This separation takes place by endowing assets to the foundation, which holds them in its name. During your company formation in Dubai, you may decide to establish a foundation and take advantage of its benefits.
A foundation is free from shareholders and works as an ‘orphan’ entity. These foundations are managed according to their charter and help beneficiaries, who often belong to the same family. This striking feature of foundations makes them suitable for succession planning.
Advantages of Establishing a Foundation in the UAE
1. Protecting Assets
2. Privacy
Since foundation beneficiaries remain confidential, they ensure discreet family wealth management. It reduces the potential for claims or judicial actions from third parties trying to exploit the wealth of the founder. This significantly secures the financial interests of the family.
A confidential foundation structure enhances the bargaining power of the founder in business acquisitions and negotiations. It mitigates the risk of the founder or heirs being targeted by individuals with malicious motives to access their wealth.
3. Flexibility
4. Effective Succession Planning
5. Better Family Governance
6. Philanthropic Opportunities
Foundations in the UAE also provide philanthropic opportunities. Founders have the scope to align their foundations with humanitarian and ethical values. This enables them to support causes and initiatives holding personal significance.
This is an ongoing support and can involve making regular donations to charitable organizations, education, medical research, etc. Therefore, the legacy of the founder extends beyond preserving wealth and contributes to the society.
7. Legacy in Perpetuity
The IMC is a trusted and experienced business setup consultant in Dubai, providing expert guidance to entrepreneurs and corporations establishing a new company in the UAE’s thriving economy. Our dedicated team offers customized solutions to ensure that your venture in Dubai is set up with professionalism and a deep understanding of the local market. Let us help you establish your business with precision and expertise.
