Foundations at RAK ICC
A foundation is a legal person that owns itself. No shareholders, no members, nobody to inherit it — which is precisely why families use one to hold wealth across generations.
What a foundation actually is
A RAK ICC Foundation is established under Ras Al Khaimah International Corporate Centre's foundations regime. It has its own legal personality, its own name and its own registration certificate. It can contract, sue, hold bank accounts, own shares and own property in its own name.
What makes it different from a company is that nobody owns it. A company has shareholders, and shares pass on death. A foundation has none — once assets are endowed into it, they belong to the foundation itself. It does not die, so there is nothing to probate.
What makes it different from a trust is that it is a legal person rather than a relationship. A trustee holds trust assets on behalf of someone else; a foundation holds its own assets directly. For families from civil-law countries, where trusts are poorly understood and sometimes not recognised at all, that distinction matters commercially as well as legally.
It governs, it does not trade
A foundation is not a trading vehicle. It can hold shares in trading companies and do what is incidental to its objects, but it is not a substitute for a licence. It issues no residence visas and takes no office. Most clients end up with a foundation at the top and operating companies underneath it.
Who is involved
Four roles, set out in the charter at the point of registration. Getting the balance between them right is the whole job — too much reserved power to the founder and the structure looks like a nominee arrangement; too little and the family loses the ability to steer it.
The founder
The person or company that establishes the foundation and endows it with its initial assets. The endowment is typically nominal — a figure such as USD 100 is common — with real assets transferred in afterwards. Founder's rights can be reserved, passed to someone else, or allowed to lapse on death. How much the founder keeps is a deliberate decision with real consequences, and we talk it through before anything is drafted.
The council
The governing body, broadly equivalent to a board. A minimum of two council members is mandatory, and the founder cannot be one of them. That separation is the point: the council administers the foundation according to the charter and by-laws, and owes its duties to the objects and the beneficiaries rather than to the founder personally. Families commonly appoint a mix of trusted relatives and independent professionals.
The guardian
A supervisory role that watches the council. Optional for most private family foundations, required where the foundation has charitable or purpose objects, and frequently sensible regardless. The charter can give the guardian consent rights over specified decisions — distributions, amendments to the by-laws, the appointment or removal of council members.
The beneficiaries
The people or classes of people who benefit, named in the charter or in a separate by-law. They can be named individually, defined as a class such as the founder's descendants, or added later. The founder can be a beneficiary. By-laws are private documents and are not filed publicly.
The registered agent
RAK ICC requires a licensed registered agent to be appointed and maintained for the life of the foundation. The One Accountant, our sister company, acts as registered agent and manages the foundation on an ongoing basis. That covers the registration filing, the statutory records and registers, the annual requirements, and every dealing with the registry — so the obligations are held by a licensed firm rather than by the family.
Ultimate beneficial ownership
A foundation has no shareholders, so the usual ownership test does not apply to it. UAE beneficial ownership rules still do. The foundation has to identify and record the natural persons behind it, and in practice that means the founder, the council members, the guardian where one is appointed, and beneficiaries with a material entitlement to benefit. Where no such person can be identified, the test falls back to whoever actually exercises control.
The register is prepared at registration, maintained by the registered agent alongside the registry filing, and updated when the people change. It is not a public document — it is not searchable the way a UK company register is — but it is available to the UAE authorities on request, and any bank opening an account for the foundation will ask for the same information and verify it independently.
- Register of founder, council members, guardian and beneficiaries
- Supporting identity and address verification for each
- Source of wealth and source of funds documentation for the endowment
- Updates filed when any of those people change
Do not treat confidentiality as anonymity
A foundation keeps your arrangements out of public view. It does not hide them from a regulator, a bank, a tax authority or a court. Anyone selling you a structure on the basis that nobody will ever know is selling you a problem. We will not set one up on that basis.
What people use them for
Asset protection
Assets endowed into a foundation stop being the founder's property. Provided the transfer was not made to defeat a creditor the founder already knew about, and the applicable limitation period has run, those assets sit outside personal claims against the founder. The regime also carries firewall provisions designed to resist foreign forced-heirship and matrimonial claims against the foundation's assets. Timing is everything here: a foundation set up before a problem exists works, and one set up after it exists generally does not.
Family wealth and succession
The charter and by-laws say who benefits, how much and when — a staged release at certain ages, a reserved share for a spouse, a protected allocation for a dependent child. The foundation does not die with the founder, so there is no probate, no freeze on the assets and no court process in each country where the family holds something. For a family holding assets in three or four jurisdictions, this is usually the deciding argument.
Capital gains and tax
The UAE charges no personal income tax and no capital gains tax on individuals, so investment gains accruing in a UAE structure are not taxed here. For corporate tax, a RAK ICC foundation can apply to the FTA to be treated as a tax-transparent unincorporated partnership, so income is attributed to the beneficiaries rather than charged at 9% in the foundation. Whether that is the right election depends on who the beneficiaries are and where they live.
Holding operating companies
The foundation sits at the top and holds the shares in the trading companies below it. Changes of control then happen inside the foundation, under its own rules, rather than through share transfers and probate in each company's jurisdiction. Banks and counterparties deal with the same entity throughout.
Property and intellectual property
A RAK ICC foundation can hold shares in UAE companies and, through the established route, interests in designated Dubai property. It is also a clean home for intellectual property held centrally and licensed down to the operating businesses.
Philanthropy
A foundation can be established for charitable or other purposes rather than for named beneficiaries, with a guardian appointed to supervise. This is also the route for a family that wants a defined share of its wealth committed to giving and kept separate from the rest.
On the tax point specifically
The UAE side of this is usually the simple half. The complicated half is wherever the founder and the beneficiaries are resident or domiciled, because many countries have anti-avoidance rules that look straight through a foreign structure and attribute its income or gains to the person who settled it or to whoever benefits.
A foundation is not a way to stop being taxed somewhere you still live. What it genuinely does is give you a single, stable, well-governed holding structure in a jurisdiction that does not add tax of its own.
We are not your tax adviser
We set the foundation up, draft it properly and keep it compliant in the UAE. On how it is treated in your home country, you need advice from someone qualified there, and we would rather you got it before registration than after. We work alongside that adviser routinely and will say so plainly if the structure you have been told to ask for does not do what you think it does.
How we set it up
- Objects and structure. What the foundation is for, what goes into it, who benefits and on what terms. This conversation determines everything that follows, and it is the part worth spending time on.
- Name reservation. Checked and reserved with RAK ICC.
- Charter and by-laws drafted. The charter is the constitutional document filed with the registry. The by-laws deal with beneficiaries and distributions and stay private. Both are drafted for your family rather than pulled off a shelf.
- Appointments. At least two council members, none of them the founder, a guardian where one is being used, and The One Accountant as registered agent. Identity and verification documents collected for everyone involved.
- Registration. Filed with RAK ICC, with the initial endowment made. The certificate of registration and the foundation's charter follow.
- Beneficial ownership register. Prepared and filed, with source of wealth documentation for the endowment.
- Bank account. We prepare the file and make the introduction. Banks scrutinise foundations more closely than ordinary companies, so the structure and the source of funds story need to be coherent before we approach anyone.
- Asset transfer. Shares, property interests and investments moved in, with the transfers documented properly rather than noted after the fact.
Running it afterwards
A foundation is a long-lived thing and it needs maintaining. The One Accountant holds the registered agent role and manages it from there — keeping the registers current, filing the annual requirements, handling council and beneficiary changes as the family changes, and reviewing the charter against the rules as they move. Most of the foundations that cause trouble are the ones nobody touched for six years.
- Registered agent appointed and maintained for the life of the foundation
- Statutory registers and beneficial ownership updates
- Council, guardian and beneficiary amendments
- Charter and by-law amendments where the family's position changes
- Corporate tax registration and the transparency election where it applies
- Accounting and record-keeping through The One Accountant where the foundation holds investments
What it costs
Registration, drafting and the first year of registered agent services are quoted as one figure once we know how complex the charter needs to be. Annual maintenance is quoted separately and is modest compared with a trust in most common-law jurisdictions. We confirm RAK ICC's current fees on the day we quote rather than publishing numbers that go out of date.
Talk to us about a foundation
Tell us roughly what you are holding and where the family is based. We will come back with whether a foundation is the right answer, and what it takes to put one in place.
Questions We Get Asked
Is a foundation the same as a trust?
No. A trust is a relationship in which a trustee holds assets for someone else. A foundation is a legal person in its own right, with its own name and registration, that owns its assets directly. For families from civil-law countries the distinction matters both legally and commercially.
Can a foundation trade?
Not as a trading vehicle. It can hold shares in trading companies and do what is incidental to its objects, but it is not a substitute for a licence and it issues no residence visas.
Can the founder also be a beneficiary?
Yes. The founder can be named among the beneficiaries, and frequently is. How much control the founder reserves alongside that is a deliberate drafting decision with real consequences.
Who can sit on the council?
A minimum of two council members is mandatory, and the founder cannot be one of them. Beyond that the choice is yours — family members, trusted advisers, independent professionals, or a corporate member. The founder being excluded is not a technicality: it is the separation that makes the foundation a genuine owner of its assets rather than the founder under another name. The founder can still be a beneficiary.
Who acts as registered agent?
The One Accountant, our sister company, is the licensed registered agent and manages the foundation on an ongoing basis — the registration filing, the statutory registers, the annual requirements and every dealing with the RAK ICC registry. A registered agent has to be appointed and maintained for the life of the foundation, so this is a long-term relationship rather than a one-off filing.
Who controls it after the founder dies?
The council, under the charter and by-laws. Founder's rights can be reserved for life, passed to a named successor, or allowed to lapse — you decide which at the point of drafting, and that is the decision worth spending time on.
Is the ownership register public?
No. The beneficial ownership register is held by the registered agent and filed with the registry; it is not publicly searchable. It is available to the UAE authorities on request, and any bank will ask for the same information independently.
Can a foundation own property and company shares?
Yes. A RAK ICC foundation can hold shares in UAE companies and, through the established route, interests in designated Dubai property, as well as intellectual property and investments.
Does it save tax?
The UAE charges no personal income tax and no capital gains tax, and a foundation can apply to be treated as tax-transparent for corporate tax. What it cannot do is override the rules of the country where you are resident or domiciled. Take advice there before registering, not after.
How long does registration take?
Usually one to two weeks once the charter and by-laws are agreed. The drafting conversation is the part that takes time, and it should.
Not Covered Above? Ask Us.
Send the question as you would ask it on the phone. One of the team answers it properly — not a template, and not a sales call dressed up as an answer.