What is a foundation?
A foundation is a unique legal entity. It holds assets separately from the Founder’s personal property. They are different from trusts. It is based on common law. The main foundations basically originated from civil law.Foundations are quite similar to corporations. A foundation has its own separate and distinct legal identity. It doesn’t issue shares or other legal titles. The foundation normally operates based on its charter along with by-laws. Dubai Lawyers are most preferred in UAE for business setups, and business activities. These attorneys are from the Top Law Firms indeed.
The Council Members of the foundations manage and organize it. A Guardian makes sure that the founder’s wishes are followed. The foundation founder owns its assets.The Foundation holds assets in its own name. It is separate from the Founder’s personal fortune. Besides, it also serves as a unique legal entity. The Foundation is a self-owned entity.
Furthermore, it lacks the presence of members or stockholders. The foundation council is the one who is responsible for assets in full independence.It will ultimately benefit the beneficiaries or those supporting a cause, ambition, or purpose.
Benefits of Establishing Foundations in the UAE:
Establishing a foundation in the UAE is associated with many benefits. If foundations are created it assists in managing the wealth more effectively.Besides, it also helps in succession planning. It became easier to plan out for the future while the wealth was in secure hands.
Besides, it aids in tax planning which is quite favorable for the beneficiaries. Foundation offers a greater degree of protection to the assets. Furthermore, the legal entity provides assurance in terms of assets. The assets are properly distributed as per the wishes of the Founder. Even after their death, the foundations are beneficial.
It does include certain clauses and provisions for trusts or foundations. Moreover, it creates a foundation as a tax-advantage method to safeguard the assets.
Key reasons for the creation of Foundations:
A foundation also supports estate planning. It also strengthens the long-term holding structures. They can easily hold shares in subsidiary firms or even in a separate legal ownership or entity.
Nonetheless, it aids in estate planning by distributing the assets in a desirable manner. The foundation formation is especially beneficial for those who have assets in different locations. It provides a versatile and lucrative solution for a different kind of needs.
There are some of the key reasons that are available for establishing the foundations in the UAE. We can list down the basic reasons including asset management, succession planning, estate planning, and the list goes on.
It can result in asset protection against the forced inheritance rules. It also prevents aggressive creditors and takeover offers. It also assists in structuring for long-term holding along with supporting charity or philanthropic causes.
Family-owned businesses often face challenges. They often face difficulties in transitioning a single family member from managing the business. It resulted in a more organized and professional leadership structure. It resulted in potential growth.
Why utilize foundations in the UAE?
There is a process for creating a Foundation in the UAE. The entire procedure of creating a foundation involves key parties and some important legal documents as well.
In some cases, a Guardian is involved in the creation of a foundation. The guardian can be an individual, a person, or a legal entity.The guardian will monitor the Council’s activities as assigned to him. He will make sure that everything proceeds according to the aspirations of the founder. He also ensures adherence to the laws and policies while aligning with the Founder’s wishes.
A Registered Agent may be employed. The agent is hired which is optional. It is not compulsory except in the case of RAK ICC. In the UAE, the Foundation Regime differs from state to state. Besides, the cost of registration and fees of the foundations varies from regime to regime. Some of the different regimes include the DIFC, ADGM, and RAK ICC.
The DIFC regime permits a corporation to become a foundation that is holding charitable or even non-charitable assets. Under this, the foundation may engage in commercial operations as well. Still, the commercial activities should be aligned with the goals.Establishing a foundation in the UAE can facilitate this transition, allowing the family to transfer management while maintaining ownership control.
Foundation Professional Services in the UAE:
Foundation Professionals Services are readily available in the UAE. There are professional and prolific attorneys, lawyers, paralegals, and legal consultants who offer comprehensive foundation services to clients.There is a full-fledged team that may include trust, company, and foundation professionals. It may also include specialist administrators, well-versed attorneys, and highly competent accountants. The experts are invaluable resources who are capable of assisting in the creation of foundations. Moreover, they also provide other useful services to ensure compliance with the regulatory services.
There are many different ways to manage the estate. Thus, Professional help will guide you in choosing the best way that can greatly benefit you. They can assist in selecting the most effective method to establish a Foundation in the UAE.Foundation Professional Services are equally handy and useful for locals and expatriates and both can benefit from it in a similar manner. Additionally, families, individuals, corporations, and others in the UAE can create structures to assist in wealth management.It is an assurance to the beneficiaries that the assets are distributed in a just and fair manner according to the desires of the founders. Therefore, set up a foundation in the UAE to protect your assets even after the demise.