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Trusts, Foundations, and SPVs Setup in UAE

At Jumaira Consultants, we provide expert Trust Formation Services UAE, assisting businesses and individuals in establishing strong legal structures for effective wealth management and asset protection. Our team ensures a smooth setup process while maintaining full compliance with UAE regulations and aligning solutions with your financial and business goals.

We also specialize in Trusts, Foundations, and SPVs Setup in UAE, helping clients create Trusts, Foundations, and Special Purpose Vehicles (SPVs) to safeguard assets, optimize financial structures, and support long-term succession planning. With our in-depth knowledge of the UAE legal framework, we deliver tailored solutions that enhance asset protection and financial efficiency.

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What is mean by Trust in UAE?

In the UAE, a trust is a legal arrangement involving a settlor who creates the trust, a trustee who manages it, and beneficiaries who receive the benefits. Trusts help protect and manage assets for estate planning or charitable purposes, ensuring the grantor’s intentions are fulfilled.

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Trusts, Foundations, and SPVs Setup in UAE

At Jumaira Consultants, we specialize in assisting companies in establishing Trusts, Foundations, and Special Purpose Vehicles (SPVs) in the UAE, opening doors to numerous opportunities for effective wealth management and asset protection. These sophisticated structures are essential tools that enable businesses to safeguard their assets, optimize financial portfolios, and ensure smooth succession planning. With our in-depth knowledge of the UAE’s robust legal framework and favorable tax environment, we provide tailored services that align with your company’s objectives.

Trust Setup in the UAE

  • Define Your Objectives: Clearly identify your reasons for establishing a trust to guide your decisions.
  • Choose the Appropriate Jurisdiction: Select from options like the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM) based on your needs.
  • Select the Right Trust Structure: Determine the most suitable type of trust for your specific objectives.
  • Draft the Trust Deed: The trust deed is a crucial document that establishes the trust. It outlines the powers of the trustees, the rights of beneficiaries, and the assets involved. The trust is officially created when the settlor prepares a Deed of Trust or Declaration of Trust and transfers assets to the trustee for the benefit of the beneficiaries. It’s important that assets are transferred to the trust immediately for it to be valid.
  • Appoint Trusted Trustees and Beneficiaries: Choose reliable individuals or entities to act as trustees and clearly identify beneficiaries.
  • Transfer Assets into the Trust: Move the desired assets, such as properties or bank accounts, into the trust.
  • Registration Requirements: Complete the necessary registration with relevant authorities to formalize the trust if required.
  • Management and Administration: Ensure the appointed trustees manage and administer the trust according to its terms.
  • Ongoing Compliance: Regularly monitor and ensure adherence to all regulations governing trust operations in the UAE.

What is a Foundation in the UAE?

In the UAE, a Foundation is a distinct legal entity that is separate from its founder, giving it its own legal identity. This means that a Foundation can own assets, enter into contracts, and manage investments independently of the individual who established it. One of the key features of a Foundation is its perpetual existence, allowing it to continue functioning even after the founder has passed away. Foundations are particularly useful for managing family wealth, organizing succession planning, and offering robust asset protection. Overall, they provide a reliable way to safeguard and oversee assets for future generations.

Foundation Regulations in the UAE

Foundations established in the UAE must adhere to specific regulations to ensure proper governance and compliance:

  • Tax Benefits: Foundations set up in UAE free zones enjoy favorable tax regimes, including exemptions from certain taxes such as corporate income tax and value-added tax (VAT).
  • Compliance Requirements: It is essential for foundations to comply with various regulatory and reporting obligations, including anti-money laundering (AML) and know-your-customer (KYC) regulations to prevent financial misconduct.
  • Founder’s Role: A foundation must have one founder, who can either be an individual or a legal entity that initiates the establishment of the foundation.
  • Council Members: At least two council members must be appointed to oversee the foundation’s operations and decision-making processes.
  • Mandatory Guardian: If the foundation has charitable or specified purposes, it must appoint a mandatory guardian to ensure compliance with its objectives and functions.
  • Registered Office: Foundations are required to maintain a registered office within the UAE, which serves as the official address for legal and correspondence purposes.

Foundation setup in UAE

  • Define Your Objectives:
    Start by clearly deciding what your foundation will achieve. Whether it’s for charity, managing family wealth, or protecting assets, having a clear purpose is essential.
  • Choose the Right Location:
    Pick a jurisdiction that suits your needs. Options like the Dubai International Financial Centre (DIFC) or Abu Dhabi Global Market (ADGM) provide great benefits, while RAK ICC offers a more flexible environment.
  • Get a Registered Agent:
    You’ll need a registered agent like Jumaira Consultants to help with the setup process. This expert can guide you through the legal requirements and make things easier.
  • Draft the Foundation Charter:
    This document is key to outlining your foundation’s goals, structure, and the beneficiaries involved. It’s best to get help from legal professionals to ensure everything is accurate and clear.
  • Form the Foundation Council:
    Create a council with at least two members, including the founder. Choose trustworthy people or companies that align with your foundation’s mission.
  • Register and Get Licensed:
    Gather all your documents and submit your registration application to the relevant authority. Once approved, make sure you obtain the necessary licenses to operate.
  • Maintain Ongoing Compliance:
    After your foundation is set up, keep track of compliance requirements. Submit financial statements on time and stay informed about any legal changes to keep your foundation in good standing.

What is a Special Purpose Vehicle (SPV) in the UAE?

A Special Purpose Vehicle (SPV) is an unique legal entity also known as special purpose entity created for a specific business purpose or to conduct limited activities. Often established by a parent company, an SPV is designed to separate financial and legal risks by protecting certain assets and liabilities. This isolation prevents the parent company’s financial issues from affecting the SPV, making it a valuable tool for risk management.

SPVs operate independently, maintaining their own financial statements and legal status, which allows them to engage in activities such as securing financing, facilitating transactions, or serving as collateral for loans. This structure helps businesses manage and minimize potential risks while enabling strategic financial planning

SPV Regulations in the UAE

When establishing a Special Purpose Vehicle (SPV) in the UAE, businesses must select a preferred jurisdiction, each with its own set of regulations. The main jurisdictions for forming an SPV include:
  1. Abu Dhabi Global Market (ADGM): This jurisdiction offers a robust legal framework, making it an attractive location for SPVs seeking to operate in a transparent and supportive environment.
  2. Dubai International Financial Centre (DIFC): Known for its sophisticated financial ecosystem, DIFC provides SPVs with access to significant resources and a strong regulatory framework that caters to international standards.
  3. RAK International Corporate Centre (RAK ICC): RAK ICC allows for the easy establishment of SPVs with flexible regulatory requirements, making it an appealing choice for businesses looking to set up in a more accommodating environment.
Regardless of the chosen jurisdiction, SPVs must comply with specific regulations, taxation policies, and reporting obligations. This includes adhering to anti-money laundering (AML) and know-your-customer (KYC) regulations to prevent financial misconduct. By following these guidelines, SPVs can operate effectively while maintaining legal compliance and safeguarding against potential risks.

SPV Setup in the UAE

Setting up a Special Purpose Vehicle (SPV) in the UAE involves a straightforward process. Here are the key steps to establish your SPV:
  1. Collect All Necessary Documents: Begin by gathering all required documentation for setting up your SPV. This may include identification, proof of address, and any additional legal documents necessary for the registration process.
  2. Choose Your Preferred Jurisdiction: Decide on the most suitable jurisdiction for your SPV, such as Abu Dhabi Global Market (ADGM), Dubai International Financial Centre (DIFC), or RAK International Corporate Centre (RAK ICC). Each offers unique benefits and regulatory environments.
  3. Submit the Application Form: Fill out the application form specific to your chosen jurisdiction and submit it along with the required documents.
  4. Receive Confirmation Notification: After submitting your application, you will receive a confirmation notification from the relevant authority, acknowledging that your application is being processed.
  5. Issuance of SPV License: Once your application is approved, the SPV license will be issued, allowing you to commence operations in accordance with the regulations of the chosen jurisdiction.
Even though each entity has a different legal structure, their sole purpose of asset management, holding, protecting assets, and legacy planning remains the same. Additionally, free zones in the UAE offer many utilities for establishing these entities.

Why Choose Jumaira Consultants for Setting Up Trusts, Foundations, and SPVs in UAE?

  • Trusted Authority: Jumaira ConsultantsT is approved by all government departments in the UAE and recognized by the Chamber of Commerce, ensuring that we are a reliable partner in your establishment process.
  • Expertise in Free Trade Zones: We are also approved by all free trade zones in the UAE, giving us insight into the specific processes and regulations of each zone, making the setup of your trusts, foundations, and SPVs smooth and efficient.
  • Extensive Experience: With over 26 years in the industry, we have a proven track record of successfully assisting clients in establishing trusts, foundations, and SPVs.
  • Skilled Professionals: Our team comprises highly skilled professionals dedicated to providing high-quality service and guidance throughout the setup process.
  • Faster Company Formation: We focus on efficiency in company formation while maintaining quality, ensuring a streamlined and prompt experience.
  • Local Expertise with Global Exposure: We combine local insights with international best practices, allowing us to effectively meet your needs

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Frequently Asked Questions

Need more answers? Don’t hesitate to reach out for further clarification or assistance regarding your queries through this FAQ.

Foundations in the UAE serve multiple purposes, including wealth structuring and succession planning. They allow for the centralized ownership of assets and provide asset protection, ensuring that the founder’s assets are safeguarded from creditors and legal issues while facilitating smoother inheritance without the need for probate.

The three popular regimes for foundation setup in the UAE are:

  • Dubai International Financial Centre (DIFC)
  • Abu Dhabi Global Market (ADGM)
  • RAK International Corporate Centre (RAK ICC)

DIFC is the only regime in the UAE that allows a company to be converted into a foundation and enables charitable purposes while also permitting the ownership of real estate.

In the UAE, there are several types of foundations:

  • Charitable Foundations: Dedicated to philanthropic efforts, such as social welfare and education initiatives.
  • Non-Charitable (Private Interest) Foundations: Designed for private interests like asset protection and wealth management.
  • Family Foundations: Established to manage and transfer wealth within a specific family across generations.
  • Purpose Foundations: Created for specific objectives, such as holding shares, managing intellectual property, or acting as special purpose vehicles (SPVs) for investments.
  • Risk Sharing: SPVs allocate high-risk projects and isolate financial risks.
  • Financing: Raise funds without impacting the parent company’s debt.
  • Securitization: Use SPVs to securitize loans, reducing funding costs.
  • Asset Transfer: Hold difficult-to-transfer assets as standalone entities.
  • Raising Capital: SPVs can secure favorable borrowing rates.
  • Intellectual Property Protection: Safeguard intellectual property rights, minimizing liabilities.

Yes, non-residents can establish a trust in the UAE, especially in jurisdictions like the DIFC and ADGM that cater to international investors.

The UAE does not impose income or capital gains taxes on trusts, making it a tax-efficient jurisdiction. However, tax obligations may arise in the settlor’s home country, particularly for those in taxable jurisdictions.