UAE Foundations: A Complete Guide to Wills and Succession Planning for Expats

If you have built a life in the UAE, protecting your assets should be just as important as building them. Whether you own property, run a business, or have investments, a UAE Foundation can help you create a clear plan for how your wealth will be managed and passed on, providing greater certainty for your loved ones.

While Wills in the UAE remain an essential part of estate planning, many expatriates are now looking beyond a Will alone. A UAE Foundation can offer an additional layer of asset protection and succession planning, particularly if you have a growing estate, family members in different countries, or long-term wealth preservation goals.

In this guide, you will learn how foundations in the UAE work, who should consider setting one up, the different types available, and whether combining a foundation with your Will could be the right solution for your family.

What Is a UAE Foundation?

A UAE Foundation is an independent legal entity established to hold, manage, and protect assets on behalf of an individual, family, or beneficiaries. Unlike a company, it is not created to carry out commercial activities or generate profits. Instead, it is primarily used for estate planning, succession planning, asset protection, and long-term wealth preservation.

When you transfer assets into a foundation, they become owned by the foundation rather than by you personally. This allows the assets to be managed under a separate legal structure, helping ensure they are preserved and transferred according to your wishes.

Every foundation operates under a charter and by-laws, which set out its purpose, identify its beneficiaries, and establish how it should be managed. Together, these governing documents help provide clarity and continuity, even when you are no longer able to oversee your affairs.

Who Should Consider Setting Up a UAE Foundation?

A UAE Foundation is not only for wealthy families. It can also be a practical option if you want greater control over how your assets are managed and transferred in the future.

You may benefit from setting up a foundation if you:

• Own one or more properties in the UAE or abroad.
• Have investments or other high-value assets.
• Own a business or shares in a company.
• Have children or other dependents you want to provide for.
• Have family members living in different countries.
• Want to strengthen your estate and succession planning.

If any of these situations apply to you, a foundation could complement your Wills in the UAE and form part of a more comprehensive long-term plan.

Benefits of a UAE Foundation for Expats

A UAE Foundation offers more than a way to transfer assets after your lifetime. It can also help you manage your wealth during your lifetime while creating a clear framework for the future. Some of the key benefits include:

Better Asset Protection

Holding assets through a foundation can help separate them from your personal ownership, providing an additional layer of asset protection.

Simpler Succession Planning

A foundation creates a structured way to transfer wealth, helping ensure your assets are managed according to your wishes.

Long-Term Wealth Preservation

Many family foundations in the UAE are designed to preserve family wealth across generations rather than simply transferring assets once.

Greater Control

You can establish rules for how assets should be managed and distributed, giving you more control over your long-term legacy.

Centralised Asset Management

Instead of managing different assets individually, a foundation allows you to hold them under one legal structure, making administration more straightforward.

What Assets Can a UAE Foundation Hold?

Depending on the jurisdiction, a UAE Foundation can hold a wide range of assets, making it a flexible tool for both asset protection and estate planning.

These may include:

• Residential and commercial property
• Shares in private companies
• Investment portfolios
• Bank accounts
• Intellectual property
• Family businesses
• Other valuable UAE and overseas assets

The types of assets that can be transferred may vary between jurisdictions, so it is important to choose the right foundation structure based on your personal and family circumstances.

How a UAE Foundation Supports Wills and Succession Planning

A UAE Foundation can strengthen your estate planning by providing a structured way to hold, manage, and transfer your assets. Here are some of the main ways it supports succession planning.

1. Greater Control Over Your Assets

Unlike a Will, which generally takes effect after your death, a foundation can manage your assets during your lifetime and beyond. You can also decide how and when beneficiaries receive assets through the foundation’s governing documents.

2. Bypass Default Inheritance Rules

By transferring eligible assets into a foundation during your lifetime, those assets become owned by the foundation rather than by you personally. Depending on the foundation structure and your circumstances, this can help reduce the likelihood of Sharia inheritance law applying to those assets, while also helping minimise probate delays and court involvement. A registered Will can also help achieve this for eligible assets, but a foundation provides a lifetime ownership structure rather than taking effect only after death.

3. Supports Asset Protection

A UAE foundation creates a separate legal structure to hold your assets, helping strengthen asset protection as part of your wider estate planning strategy. It may also help protect family wealth from certain personal risks, such as creditor claims, bankruptcy, or divorce proceedings.

4. Promotes Family Governance

A foundation operates under a charter and by-laws, with oversight from a Foundation Council and, where required, a Guardian. This helps ensure your wishes continue to be followed while reducing the risk of future disputes.

5. Complements Your UAE Will

A foundation and a Will often work best together rather than replacing one another. While the foundation can hold and manage your core wealth, your Will can deal with personal assets outside the foundation and address matters such as guardianship for minor children.

UAE Foundation vs UAE Will: What Is the Difference?

A UAE Foundation and a UAE Will are both valuable estate planning tools, but they serve different purposes. Here is how they compare.

Do You Need Both a UAE Foundation and a Will?

In many cases, yes. A UAE Foundation and a Will can work together to create a more comprehensive estate planning strategy.

A foundation can hold and manage assets that you transfer into it, such as property, company shares, or investments. However, you may still need a Will to deal with assets that remain in your personal name, appoint guardians for minor children, or cover assets that are not owned by the foundation.

Using both can also help ensure there are no gaps in your planning. While the foundation provides a long-term structure for managing certain assets, your Wills in the UAE continue to record your personal wishes regarding the rest of your estate.

If you are unsure whether you need a Will, a Foundation, or both, our qualified lawyers at Legal Inz can help you choose the right solution for your circumstances.

Types of Foundations in the UAE

There are three main jurisdictions for setting up a foundation in the UAE, and each has its own legal framework and suitability depending on your assets, family structure, and long-term objectives.

1. DIFC Foundation

A DIFC foundation is set up under the Dubai International Financial Centre law and runs on a common law framework. It suits families who want strong governance, access to Dubai real estate through the DIFC’s arrangement with the Dubai Land Department, and an established court system behind it.

2. ADGM Foundations

ADGM Foundations are established under the Abu Dhabi Global Market’s legal framework. They are often used for wealth preservation, family governance, and cross-border estate planning, making them suitable for families with assets in multiple jurisdictions.

3. RAK ICC Foundation

A RAK ICC foundation is set up under the Ras Al Khaimah International Corporate Centre framework and tends to be the most cost-effective of the three. It suits founders who want a low minimum capital requirement, lighter ongoing compliance, and a flexible structure for asset protection, estate planning, and long-term wealth preservation.

How to Set Up a UAE Foundation

Setting up a UAE foundation is typically done through a licensed Registered Agent, who will guide you through the process, prepare the required documentation, and handle the registration on your behalf. Here are the typical steps involved.

Step 1: Define the Purpose of the Foundation

The first step is deciding why you want to establish the foundation. Your objectives will influence the jurisdiction you choose, how the foundation is structured, and how its assets will be managed over the long term.

A UAE foundation is commonly established to:

• Protect family wealth
• Support estate and succession planning
• Hold investments or business shares
• Protect valuable assets
• Support charitable or philanthropic objectives
• Strengthen family governance across generations

You should clearly define your objectives from the outset, as this makes it easier to draft the foundation’s governing documents and create a structure that supports your long-term goals.

Step 2: Choose the Right Jurisdiction

Once you have identified your objectives, the next step is selecting the most suitable jurisdiction. As discussed above, the UAE offers three main foundation regimes: DIFC Foundation, ADGM Foundation, and RAK ICC Foundation.

While they all provide a legal structure for holding and managing assets, they differ in terms of legal framework, governance, costs, and ongoing compliance requirements. Your Registered Agent can help you determine which jurisdiction best suits your assets, family circumstances, and succession planning goals.

Step 3: Determine the Foundation Structure

After choosing a jurisdiction, you will need to decide how the foundation will be governed. This typically involves appointing the key parties responsible for managing and overseeing the foundation, including:

• Founder: The individual or entity establishing the foundation and contributing the initial assets.
• Council members: Responsible for managing the foundation and carrying out its objectives.
• Registered Agent: Assists with incorporation, compliance, and communication with the relevant authority.
• Guardian (where required): Oversees the Foundation Council and helps ensure it acts in accordance with the founder’s wishes.
• Beneficiaries: The individuals or organisations who will benefit from the foundation’s assets.

At this stage, you should also decide how the foundation will be governed, including how decisions will be made and how assets will be managed and distributed over time.

Step 4: Prepare the Foundation Documents

Once the foundation structure has been agreed upon, your Registered Agent will prepare the legal documents required for registration.

This typically includes the Foundation Charter, By-Laws, application forms, KYC documentation, and other due diligence documents required by the chosen jurisdiction. It is important that these documents accurately reflect your objectives, governance arrangements, and succession plans.

Step 5: Submit the Registration Application

After reviewing the documents, your Registered Agent will submit the application to the relevant foundation registry together with the applicable registration fees.

The authority will carry out its due diligence checks and may request additional information before approving the application. Once approved, the foundation is incorporated and issued its Certificate of Registration.

Step 6: Transfer Assets to the Foundation

After the foundation has been established, you can begin transferring eligible assets into its ownership. Depending on your circumstances, this may include company shares, real estate, investment portfolios, bank accounts, intellectual property, or other valuable assets.

Once transferred, these assets become owned by the foundation and are managed according to the rules set out in its Charter and By-Laws.

Step 7: Maintain Ongoing Compliance

After incorporation, the foundation must continue meeting the compliance requirements of its chosen jurisdiction to maintain its legal standing. This may include:

• Maintaining statutory records
• Updating governance documents when required
• Renewing registrations where applicable
• Recording Foundation Council decisions
• Meeting any ongoing reporting or regulatory obligations

Although foundations in the UAE generally have lighter compliance requirements than companies, proper administration remains essential to ensure the foundation continues to operate effectively and in accordance with its governing documents.

Documents Required to Register a UAE Foundation

The exact documents required to register a UAE foundation depend on the jurisdiction you choose and the nature of your foundation. However, you will generally need:

• Completed foundation application form
• Certified copy of the founder’s passport
• Emirates ID (for UAE residents)
• Proof of residential address
• Foundation Charter
• Foundation By-Laws
• Details of the Foundation Council members
• Guardian details (where required)
• Information about the beneficiaries
• Details of the initial assets or endowment
• Source of funds or other due diligence documents, where required

If the founder is a corporate entity rather than an individual, additional corporate documents, such as incorporation certificates or board resolutions, may also be required.

How Much Does a UAE Foundation Cost?

A UAE foundation typically costs between AED 15,000 and AED 50,000 to set up, depending on the jurisdiction, structure, and professional services involved. The final cost may vary based on registration fees, registered agent fees, legal documentation, and ongoing administration requirements.

How Long Does It Take to Set Up a UAE Foundation?

A UAE foundation takes between 2 to 6 weeks to set up from start to finish. However, once your documents have been prepared and the required due diligence checks are completed, the actual registration with jurisdictions such as DIFC or ADGM is usually completed within 3 to 7 business days.

Tax Benefits of a UAE Foundation

A UAE foundation can provide tax planning advantages for families looking to preserve wealth and manage assets across generations. The exact treatment depends on the foundation structure, beneficiaries, and applicable tax rules.

Key benefits may include:

• Fiscal Transparency: Qualifying family foundations may apply for fiscally transparent treatment, meaning the foundation itself may not be subject to UAE Corporate Tax, with income attributed to beneficiaries based on their circumstances.
• Tax-Efficient Wealth Management: Foundations can provide a structured way to hold and manage family assets, including investments, real estate, and business interests.
• No UAE Inheritance Tax: The UAE does not impose inheritance tax, allowing foundations to support smoother intergenerational wealth transfers.
• Cross-Border Planning: For families with international assets, a foundation can support broader estate planning strategies while considering the tax rules of other jurisdictions.

Set Up Your UAE Foundation with Legal Inz

Setting up a UAE foundation involves more than just picking a jurisdiction. It requires drafting a solid charter, structuring the right council, and creating a framework that ensures your assets are managed and transferred according to your wishes.

Legal Inz supports expats and business owners across the UAE with foundation structuring, charter drafting, registration, and ongoing governance support, backed by over 12 years of experience in the field.

Whether you are setting up your first foundation or restructuring an existing estate plan, our experienced legal team will guide you through every step, from initial consultation to final registration.

Ready to protect your family and assets? Speak to a qualified Legal Inz lawyer today.

Frequently Asked Questions

Can expats set up a UAE Foundation?

Yes, expats can set up a UAE Foundation regardless of their residency status. The UAE allows individuals and families from different nationalities to establish foundations for purposes such as succession planning, asset protection, and wealth preservation. This accessibility is one reason UAE foundations have become a popular succession planning tool among expats here.

Does a UAE Foundation replace a Will?

No, a UAE Foundation does not replace a Will. A foundation manages assets transferred into its structure, while a Will can cover personal assets that remain outside the foundation, appoint guardians for minor children, and address other personal wishes. If you are unsure whether you need a Will, a UAE Foundation, or both, the legal team at Legal Inz can help you choose the right solution for your circumstances.

What happens to assets held in a UAE Foundation after the founder passes away?

Assets held in a UAE Foundation continue to be managed according to the foundation’s governing documents. Since the foundation owns the assets, they do not form part of the founder’s personal estate. Instead, the Foundation Council manages the assets and distributions based on the founder’s instructions set out in the Charter and By-Laws.

How does a UAE Foundation eliminate the probate process?

A UAE Foundation can help avoid probate for assets transferred into the foundation. Once assets are legally transferred, they are owned by the foundation rather than by you personally. As a result, those assets generally do not form part of your personal estate, and can be distributed according to the foundation’s Charter and By-Laws without going through probate.

Can the Founder also be a Beneficiary or Council Member?

Yes, the Founder can often also be a Beneficiary or Council Member, depending on the chosen jurisdiction and structure. This allows founders to maintain involvement and oversight while ensuring the foundation continues to operate according to their long-term wealth management and succession planning objectives.

Can Muslims establish a Sharia-compliant Foundation in the UAE?

Yes, Muslims can establish a UAE Foundation that aligns with Sharia laws. A foundation can be structured to reflect Islamic succession and wealth management objectives while following the requirements of the chosen jurisdiction. Legal Inz can advise you on the most appropriate structure based on your religious and family requirements.

What happens to minor children if the assets are held in a Foundation?

Minor children can be included as beneficiaries of a UAE Foundation. The foundation’s governing documents can set out how and when assets are distributed, including conditions based on age, education, or other requirements. This helps ensure wealth is managed responsibly until beneficiaries are ready to receive it.