A Foundation in the UAE is a legal structure that helps manage money, protect property, and plan for heirs. It is similar to a corporation but without members or shareholders. An entity separates the founder’s personal wealth from assets, providing long-term control. Established by the UAE’s laws, such as DIFC Law No. 3 of 2018, entities offer founders more freedom in inheritance arrangements through charters and optional by-laws. There is no personal income tax, a lower corporate tax, and treaties that stop double taxation, which helps save money on taxes.
Entities keep beneficiaries’ information confidential and protect them from lawsuits or inheritance rules. Typically used for private wealth or charity work, entities are particularly appealing to wealthy individuals and families seeking a stable financial center for their legacy planning.
Find out which UAE free zones and jurisdictions offer the most suitable environment for your entity.
Setting up an entity in the UAE involves a structured process to ensure compliance and alignment with the founder’s objectives. The steps are easy to follow, but you need to plan carefully and follow the rules of the jurisdiction. Follow these steps
Setting up an entity in the UAE requires specific documentation to meet regulatory standards. These are essential documents:
Each natural person involved (founder, council member, guardian) must have a valid passport copy.
a utility bill from the last three months or a certificate of residence for each person.
For people who want to start a legal business, give them the articles of association, a list of directors, and partners (translated and certified if necessary).
A long document that lists the foundation’s name, goals, starting capital (at least $100), and length of time it will last.
Rules that how to run the business or specifying asset distribution, if they apply
Name and business address of the licensed agent.
The full names, addresses, and nationalities of two or more council members who run the foundation.
Details about the person in charge of the council’s work.
A foundation is a legal entity with its own personality, whereas a trust is a legal arrangement between a settlor and a trustee. In a foundation, the founder retains some control, while in a trust, assets are managed entirely by trustees for beneficiaries.
Yes. A foundation must comply with the specific laws and regulations of the UAE jurisdiction where it is established, such as the DIFC or ADGM. This includes submitting required documents, appointing a registered agent, and ensuring ongoing compliance with governance standards.
There is no fixed minimum net worth requirement, but the founder must contribute sufficient initial capital to meet the foundation’s purpose and operational needs. Different jurisdictions may have varying capital expectations or administrative fees.
No. A physical office is not typically required. However, most jurisdictions require a registered address or agent within the UAE to handle official correspondence and ensure compliance with local regulations.
Yes. A foundation can receive external or third-party funds if permitted under its charter and local laws. These contributions must align with the foundation’s stated objectives and comply with relevant financial and anti-money laundering regulations.
Assets can be transferred at the time of establishment or any time thereafter. The transfer must follow legal and procedural requirements, ensuring the assets are lawfully owned and properly documented under the foundation’s name.
Yes. It can own and manage assets both within and outside the UAE, provided it adheres to the applicable laws of the relevant jurisdictions and maintains transparent records of ownership.
If the founder passes away, it continues to exist as an independent legal entity. Management and asset distribution are governed by its charter and by-laws, ensuring continuity according to the founder’s wishes.
BYB (Build Your Business) is a specialized firm focused on building the foundation for businesses to operate globally. We provide clear guidance and practical support to individuals and companies on how to properly establish their business, follow all rules, and design its structure to begin work in different countries. Our deep knowledge includes how to stay compliant in various nations, selecting the best legal setup, and making smart choices about local business environments. We help get registrations, explain tax requirements, and put in place the basic systems for running an office. BYB is an essential partner for those starting international businesses, making sure they have a solid and rule-abiding base from the very beginning.
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