The United Arab Emirates (UAE) is increasingly becoming a hub for philanthropic initiatives and foundations. For individuals and organizations looking to engage in charitable activities or manage wealth, establishing a foundation can be a strategic move. A foundation is a non-profit organization created to provide funding or support for specific causes, charitable activities, or social initiatives. In the UAE, foundations can be established under various regulatory bodies, including the DIFC, ADGM, and RAK ICC.
Benefits of Setting Up a Foundation in the UAE
– Tax Advantages: The UAE offers a favourable tax regime, and foundations can benefit from specific exemptions. Donations made to registered foundations may be tax-deductible for donors, making it attractive for individuals and corporations to contribute.
– Support for Philanthropic Goals: Establishing a foundation allows you to pursue your philanthropic objectives systematically. A foundation provides a structured framework for charitable giving, enabling founders to focus on causes that align with their values and interests.
– Access to Funding Opportunities: Foundations in the UAE can access various funding sources, including government grants, corporate sponsorships, and partnerships with other non-profits. This access can enhance the foundation’s ability to implement impactful programs and initiatives.
– Enhanced Credibility: Having a registered foundation enhances the credibility of your philanthropic efforts. It signals to customers, suppliers, and partners that you are committed to social responsibility, which can attract more support from the community and potential donors.
– Community Engagement: Foundations can play a vital role in community development by addressing local issues and fostering social cohesion. Establishing a foundation allows founders to engage directly with the community and make a tangible impact.
– Long-term Legacy: A foundation provides a platform for individuals or families to create a lasting legacy. By establishing a foundation, founders can ensure their philanthropic vision continues to thrive beyond their lifetime.
– Flexible Regulatory Frameworks: Both ADGM and RAK ICC offer flexible regulatory frameworks that facilitate the establishment and operation of foundations. They provide a conducive environment for governance, compliance, and operational efficiency.
Steps to Set Up a Foundation in the UAE
– Define Your Mission and Objectives: Clearly outline the purpose of your foundation and the causes you wish to support.
– Choose a Legal Structure: Determine whether you want to establish a private foundation, public foundation, or charitable trust, based on your goals and resources.
– Register Your Foundation: Contact the relevant regulatory authority, such as the DIFC, ADGM or RAK ICC, to begin the registration process. Prepare all necessary documents, including the foundation’s constitution, board member details, and financial plans.
– Obtain Necessary Approvals: Depending on your foundation’s activities, you may need additional approvals from various government entities.
– Set Up Governance Structures: Establish a board of trustees or directors to govern the foundation and ensure compliance with legal and ethical standards.
– Develop Operational Plans: Create a strategic plan detailing how your foundation will operate, including fundraising strategies, program implementation, and community engagement
initiatives.
– Launch and Promote Your Foundation: Once established, promote your foundation to raise awareness and attract support from potential donors and partners.
Establishing Foundations in Abu Dhabi Global Market (ADGM)
ADGM provides a robust legal framework for the establishment of foundations. Key features include:
– Regulatory Framework: ADGM has its own regulatory authority that governs foundations, ensuring compliance with international standards.
– Flexibility: The ADGM allows for a wide range of activities and provides flexibility in governance structures.
– Asset Protection: Foundations established in ADGM benefit from strong asset protection laws, making it a safe environment for managing philanthropic funds.
Establishing Foundations in the Dubai International Financial Centre (DIFC)
– DIFC is the only regime in the UAE that allows a company to be converted into a foundation.
– DIFC foundations can have exclusively have charitable purposes.
– DIFC foundations can own real estate.
– In DIFC foundations English law is the main reference – although the legal system and courts
follow a common law framework, there are specific and commercial laws that are applicable.
Establishing Foundations in Ras Al Khaimah International Corporate Centre (RAK ICC)
RAK ICC offers an attractive environment for establishing foundations with several advantages:
– Ease of Setup: RAK ICC is known for its streamlined setup process, making it easier for founders to establish foundations quickly.
– Cost-Effective: The cost of establishing and maintaining a foundation in RAK ICC is generally lower compared to other jurisdictions.
– Confidentiality: RAK ICC offers privacy and confidentiality for founders. Limited information related to the management of the Foundation is available to “Person(s) with Sufficient Interest”
upon request to the Registrar. All other information is treated as private and shall not be disclosed unless so required by relevant authorities.
– Migrating a foundation from overseas is possible and there is a perpetual concept. This allows arrangements to remain in place after a founder’s death.
– The RAK ICC legal system follows common law.
For those looking to navigate the complexities of foundation setup, United Advocates offers expert guidance and support to help you thrive in this exciting new era. Together, we can unlock the potential of the digital economy in the UAE.