UAE Foundations: DIFC, ADGM & RAK ICC
Momentum is a registered agent for UAE foundation setup across DIFC, ADGM and RAK ICC. We have established 100+ foundations for family offices, entrepreneurs and private clients.
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What is a UAE Foundation?
A UAE foundation is a legal entity that owns assets in its own name. It has no shareholders and no owner. A founder transfers assets into it, a council manages them under a charter and by-laws the founder writes, and beneficiaries receive the benefit on the terms set out in those documents.
Foundations were introduced to the UAE in 2017 by DIFC, followed by ADGM and RAK ICC. Families use them to keep property, company shares and investment portfolios together across generations and outside UAE forced-heirship rules. Entrepreneurs use them to hold group companies and ring-fence assets from personal liability. They can also be set up for charitable or employee-benefit purposes.
Three registries offer foundations: DIFC and ADGM inside the two financial free zones, and RAK ICC as an offshore registry. Momentum is a registered agent with all three. The table below compares them on law, confidentiality, cost and timeline, and the rest of this page walks through governance, tax treatment and the setup process.
Why Set Up a Foundation in UAE?
Foundation Types Available in the UAE
The UAE offers three foundation regimes: RAK ICC, DIFC, and ADGM. RAK ICC provides a cost-effective and straightforward civil law framework, making it suitable for individuals seeking simple asset holding with fewer reporting requirements. DIFC and ADGM follow common law and offer globally recognized legal frameworks. DIFC suits international asset holders, while ADGM is often preferred by high-net-worth individuals seeking stronger oversight for more complex structures.
RAK ICC Foundation
RAK ICC offers a lower-cost regime modelled on English law principles, with the option to use DIFC or ADGM Courts for disputes.
DIFC Foundation
Dubai International Financial Centre foundations operate under common law principles. DIFC offers a globally recognized legal framework, ideal for clients with international assets or who value the familiarity of English common law.
ADGM Foundation
Benefits of UAE Foundation
A UAE foundation helps with wealth preservation, succession planning, asset protection, and charitable activities while giving founders long-term control over how assets are managed and transferred.
Wealth Structuring and Succession Planning
Define how assets are managed and distributed across generations, reducing uncertainty and helping avoid disputes among heirs.
Asset Protection
A foundation works as a separate legal entity, adding protection against personal liabilities, creditor claims, and financial risks.
Employee Benefit and Shareholding Structures
Foundations can hold company shares and support employee incentive programs, pension arrangements, and ownership schemes.
Efficient Wealth Holding Vehicle
Hold shares, investments, real estate, and intellectual property under one centralized structure with clear governance.
Philanthropic and Charitable Purposes
Manage donations, support community projects, and preserve a philanthropic legacy based on the founderтАЩs long-term vision.
How to Set Up a Foundation in UAE
To set up a foundation in the UAE, choose a jurisdiction such as RAK ICC, DIFC, or ADGM, define the foundationтАЩs purpose, appoint the founder and council, prepare the charter and bylaws, submit the application, and transfer the assets after registration.
| Mandatory | |
|---|---|
| Completed foundation application form |  |
| Copy of the foundation charter (outlining purpose and governance) | |
| By-laws document (detailing operational procedures) | |
| Identification documents for the founder, guardians, and beneficiaries | |
| Proof of address for key parties | |
| Payment of registration and government fees | |
| Bank account opening documents (as required by chosen bank) | |
Define Roles and Structure
Decide on the founder (typically you), guardians (who oversee the foundation's activities), and beneficiaries (who ultimately benefit from its assets).
Draft Foundation Documents
Prepare the foundation charter and by-laws. These documents outline the foundation's purpose, asset management rules, and beneficiary rights.
Submit Application
File your application with the chosen jurisdiction's registrar (RAK ICC, DIFC, or ADGM). Include necessary documentation and pay the required fees.
Obtain Registrar Approval
The registrar reviews your submission. If everything is in order, you receive formal approval and the foundation is registered.
Open Bank Accounts
Establish bank accounts in the foundation's name to hold and manage assets securely. Our banking partners facilitate smooth account opening.
Maintain Records and Compliance
Keep required records (like guardian meeting minutes) and ensure annual renewals. Our ongoing support ensures your foundation stays compliant.
Calculate Your Business Setup Cost
Answer a few quick questions and get a tailored package
Frequently Asked Questions
Get answers to common questions about foundation setup in the UAE
What is a foundation in the UAE?
A UAE foundation is a separate legal entity that owns assets in its own name. It has no shareholders. A founder sets it up, a council manages it under a charter and by-laws, and beneficiaries receive the benefit. It is used for succession planning, asset protection and holding family wealth.
How long does it take to set up a foundation in the UAE?
RAK ICC foundations are typically registered in one to two weeks. DIFC and ADGM foundations take three to four weeks because of fuller due diligence on the founder, council and source of wealth. Bank account opening adds two to four weeks.
What is the difference between DIFC, ADGM and RAK ICC foundations?
All three are based on English-law principles. DIFC lists council members on a public register and integrates with DIFC Courts and DIFC Wills. ADGM keeps council and beneficiary details confidential and is favoured by family offices. RAK ICC is the lowest-cost option with no public register.
How much does a UAE foundation cost?
Professional fees start from AED 15,999 for RAK ICC, AED 25,999 for DIFC and AED 35,999 for ADGM. Registry fees, bank charges and asset-transfer costs are extra. Annual costs are limited to registry renewal and registered-agent fees.
Can I be the founder, a council member and a beneficiary?
Yes. A founder can sit on the council and be named as a beneficiary. Most registries require at least two council members, and a guardian is only mandatory in specific cases, such as a charitable purpose in DIFC. Momentum can provide professional council or guardian services where needed.
What assets can a UAE foundation hold?
Company shares, investment portfolios, bank accounts, intellectual property, art and Dubai freehold real estate (DIFC and RAK ICC foundations are recognised by the Dubai Land Department). Overseas property is usually held through an underlying company owned by the foundation.
Does a UAE foundation pay corporate tax?
By default it is a taxable person, but a foundation set up for identifiable family members or public benefit can apply to the FTA for Family Foundation status and be treated as transparent. Its income is then attributed to the beneficiaries, who pay no UAE tax on personal investment income.
Is a foundation better than a will?
They do different jobs. A will distributes what you own at death through probate; a foundation owns the assets now, so nothing passes through probate. Most families use both: the foundation for major assets, a DIFC or ADJD will for everything else and for guardianship of children.
