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WHY ESTABLISH A UAE FOUNDATION - BENEFITS OF A FOUNDATION

March 31, 2021by Mohammed Rahali

WHY ESTABLISH A UAE FOUNDATION – BENEFITS OF A UAE FOUNDATION

In Brief

Available locally since 2017, The UAE Foundation – within a common law free zone environment- is the best option for international, regional & local wealth planning, governance and inter-generational legacy structuring for Muslims and non-Muslims alike, unlike a Will.

“Foundation is to be the go to structure to fulfill needs of HNWI & Business Owners to mitigate uncertainty & protect Wealth”

1. ABOUT FOUNDATION

A Foundation combines also features of a company – by holding a legal personality different from its founder allowing it to enter into contracts or hold assets in its own name unlike a Trust, being managed by a Council and registered with a Registrar- and a trust – by having beneficiaries instead of shareholders unlike a company and being supervised by a guardian.

It is governed by its publicly available Charter and private By-laws.

The scope of objects could be charitable or non-charitable but not commercial. The foundation may enter into contracts or hold assets in its own name. ADGM and DIFC foundations are allowed to directly own real estate properties within the Emirate of Dubai.

A Foreign Foundation can migrate into an ADGM or DIFC Foundation.

Founder person or a corporation that forms the foundation and then transfers assets to the foundation can be a beneficiary or a council/board member. Assets normally called the endowment and are the assets/property endowed (put into/donated/gifted) to a foundation. The endowment does not have to be cash and can include real and intangible assets such as real estate, copyright, patents, jewellery, art, insurance policies, or shares in a company. It is possible to increase the endowment at any time, and by persons other than the founder. There is a minimum value of the endowment. By-laws is an optional and private document that specifies how the foundation is to be managed. The By-Laws of a foundation may include instructions for the management board that pertains to the management, distribution or application of assets. Guardian or Protector or Supervisory Board.

If you are currently looking for robust asset protection (safeguarding wealth from creditors, forced heirship rights, divorce financial consequences…), enhanced foreign shareholder control over GCC mainland LLC businesses , efficient and resilient  Group governance planning through generations, and reliant succession planning (freedom of disposal, obedience to Sharia law or protection of specific persons from adverse succession laws consequences…) a Foundation is likely to be the most suitable option, if properly established, used and administered.

 

2. THE MAIN BENEFITS OF A UAE FOUNDATION?

  • Intergenerational Patriarch and Family’ Control over businesses: resilient and efficient corporate governance planning through generations.
  • Safe Heaven: A distinct legal entity with separation of assets and liabilities from your operative businesses.
  • A perpetual mechanism beyond your lifetime.
  • Flexibility in beneficiary appointments.
  • Robust and reliant succession planning.
  • Protection of your estate.
  • Protection of privacy and confidentiality
  • Save estate duty.
  • Avoiding probate.
  • Asset protection (forced heirship rules, creditors, divorce, hostile takeovers)
  • Protection from creditors
  • Tax Mitigation
  • Charitable purposes
  • Charitable and non-charitable purposes
  • Reflects your wishes ad literam.

To read more on the subject, please visit our webpages at  https://wincoreadvisory.com/succession-planning-asset-protection-family-governance/

 

3. HOW CAN WE ASSIST YOU WITH ESTABLISHING A FOUNDATION?

If you wish to discuss the many benefits of UAE Foundation, or any other legal entity, feel free to contact us.

Wincore specializes in Tax, Corporate and Fiduciary matters. We provide pragmatic, flexible and efficient solutions to individual entrepreneurs, startup businesses, foreign and local SMEs, multinationals, wealthy international families, HNWIs and UHNWIs.

Wincore Advisory Group’s full range of services on : CRS (AEOI) – OECD exchange of information ; Economic Substance Regulations; Trust & Foundation; Asset protectionEstate & Tax Planning; Corporate Services; Sophisticated UAE Sponsorship PlanningDebt Collection Services in UAE; Residency & Citizenship Services ( Foreign second passports).

 

 

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Mohammed Rahali

Managing Partner | E: m.rahali@wincoreadvisory.com | M: +971 (0) 55 138 9591

*Wincore Advisory Group DMCC is not providing any Legal and Financial Services.

© 2020 Wincore Advisory Group – Tax | Corporate | Fiduciary | Residency 

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