Solid Foundations for your Legacy
UAE Foundation:
- Overview: A UAE foundation serves as an independent legal entity, blending features of corporations and trusts, offering robust asset protection and streamlined estate planning solutions.
- Establishment: Founded by registering the foundation charter at the public registry. Unlike trusts, immediate asset transfer is not required for validity.
- Types:
- Charitable foundation: Dedicated to approved charitable causes outlined in the foundation charter.
- Private foundation: Known as Private Interest Foundations, utilized for personal asset safeguarding and succession planning rather than wills.
- Corporate foundation: Employed by corporations to administer employee-based schemes like pension and retirement plans.
- Legal Status and Powers: Possesses legal entity status enabling it to engage in contracts, operate bank accounts, and participate in various investments and commercial activities. The foundation holds legal titles to all assets it manages.
- Management: Governed by a Council comprising one or more individuals. Foundations must appoint a registered agent and maintain a registered office in the UAE.
UAE Trust:
- Overview: A UAE trust establishes a legal relationship among the settlor, trustee, and beneficiary, primarily for the management and distribution of assets.
- Establishment: Initiated through the preparation of a trust deed—either a Deed of Trust or Declaration of Trust—where assets are immediately transferred to the trustee for the beneficiary’s benefit.
- Types:
- Charitable Trust: Devoted solely to charitable purposes such as education advancement or public health promotion.
- Discretionary Trust: Grants the trustee full discretion in determining beneficiary distributions, whether income or capital.
- Legal Status and Powers: Unlike foundations, trusts do not possess legal entity status. Trustees hold legal ownership of assets while beneficiaries maintain beneficial ownership.