Foundations are a useful way to ringfence assets, manage wealth across generations, or hold structures like holding companies and family businesses. But clients often want to know exactly how they work in the UAE, who’s in control and how much flexibility they have in practice.
Here are the questions that come up most often.
Does a foundation have to serve a specific purpose?
No. Foundations in the UAE can be set up for many reasons. Some are used to hold shares or real estate, others to protect family assets or manage inheritance planning. The law doesn’t limit the purpose, but it does need to be clearly stated in the charter.
How are the charter and bylaws created?
These are drafted at the time of setup. The charter sets out the foundation’s purpose, its structure and how decisions are made. The bylaws cover internal rules, such as how often meetings happen or how to appoint council members. You can customise both, as long as they meet the requirements of the chosen jurisdiction.
What exactly does the Council do?
The Council runs the foundation. It acts like a board of directors and makes decisions about how assets are managed or distributed. You can include yourself, a partner, or a trusted advisor. If a council member dies or steps down, a new one can be appointed under the terms set out in the charter or bylaws.
What happens if I want to keep control but not be named?
You can do that. Many founders choose to stay in control through reserved powers or by setting clear terms in the bylaws. This lets you shape decisions without being named publicly.
Can the foundation open bank accounts?
Yes. UAE foundations can hold local or international bank accounts. The process depends on the bank’s internal requirements. You’ll usually need the foundation charter, bylaws, proof of address and IDs for the founder and council members. Setup timelines vary but often take two to four weeks.
Are there tax or reporting requirements?
Foundations may need to file annual returns, depending on where they’re registered and what assets they hold. In general, they’re treated as separate legal persons and may be exempt from corporate tax if they’re not conducting commercial activities. That said, reporting obligations can apply, especially under CRS or FATCA if the foundation holds overseas assets.
Can the foundation hold assets abroad?
Yes. Many clients use UAE foundations to hold shares, property, or investments in other countries. But local laws in those countries may require extra steps, such as notarised documents, legal opinions, or local tax registration. A cross-border plan should account for both ends.
If I move UAE property into the foundation, does that affect my Golden Visa?
Possibly. If the property is owned by the foundation, it may no longer meet the requirements for a property-linked Golden Visa under your personal name. There are ways to work around this, but it needs to be planned carefully with both immigration and structuring advisors.
What if I want to add holding companies under the foundation later?
You can. A foundation can own holding companies in the UAE or elsewhere. You’ll need to budget for registration fees and any costs tied to restructuring or transfer of shares. This is often done as part of a phased setup, with the foundation at the top and entities layered underneath.
How long does the setup take?
Most foundation structures can be up and running in two to three weeks, assuming documents are ready and no third-party approvals are needed. Adding assets or setting up subsidiaries may take longer, depending on what’s involved.
Can a foundation hold shares in a business?
Yes. It’s common for foundations to own company shares, whether in a free zone or mainland setup. This works well for family businesses or for keeping ownership separate from your personal name.
Do I need to live in the UAE to set one up?
No. You don’t have to be based here. Many founders set up UAE foundations while living abroad. You will need a registered agent and a local address, but you can handle most of the setup remotely.
Can I use a foundation instead of a will?
You can. Some families use a foundation to pass on wealth, especially when there are businesses or long-term assets involved. It can be used on its own or alongside a will, depending on how you want control and benefits to pass down.
What’s the difference between a trust and a foundation?
A trust is a legal relationship, while a foundation is a legal body with its own status. In the UAE, foundations tend to be easier to manage and better suited to owning property or companies. They’re also more widely recognised by local authorities.
