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Setting up Trusts and Foundations in UAE

Setting up trusts and foundations in the UAE involves navigating specific regulations and procedures governed by the respective emirate in which you plan to establish these entities. Both trusts and foundations are legal structures used for wealth management, asset protection, and charitable purposes. Here’s an overview of how you can set up trusts and foundations in the UAE:

Setting Up Trusts

1 Choose the Right Jurisdiction

Different emirates in the UAE have varying regulations regarding trusts. Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are common choices for establishing trusts due to their well-established legal frameworks.

Appoint a Trustee

1. A trustee, which can be an individual or a corporate entity, manages the trust assets.
2. The trustee can be a resident or non-resident, depending on the emirate's regulations.

3 Create the Trust Deed

1. Draft a trust deed outlining the terms and conditions of the trust, including the beneficiaries, assets, and the powers and duties of the trustee.
2. Legal assistance is crucial in creating a comprehensive and legally binding trust deed.

4 Register the Trust

1. Register the trust with the relevant regulatory authority in the chosen emirate (e.g., DIFC Courts for DIFC trusts).
2. Provide the necessary documentation, including the trust deed, identity proofs, and background information.

Compliance and Reporting

1. Comply with ongoing reporting requirements as stipulated by the regulatory authority.
2. Keep accurate records of trust activities, including financial transactions and beneficiaries' details.

Setting Up Foundations

1 Choose the Right Jurisdiction

Similar to trusts, foundations can be established in jurisdictions like DIFC and ADGM.

Appoint a Founder and Council Members

1. The founder establishes the foundation and endows it with assets.
2. Council members are appointed to manage the foundation.

3 Create the Foundation Charter

1. Draft a foundation charter, which is a legal document outlining the foundation's objectives, management structure, and rules for asset distribution.
2. Seek legal counsel to ensure the charter complies with UAE regulations.

4 Register the Foundation

1. Register the foundation with the relevant regulatory authority in the chosen emirate.
2. Submit required documents, including the foundation charter, founder's information, and details of council members.

Compliance and Reporting

1. Comply with ongoing reporting requirements, including financial disclosures and activities reports.
2. Maintain transparent records of the foundation's operations.

IMPORTANT CONSIDERATIONS

Legal Assistance

Engage experienced legal advisors or consultants well-versed in UAE laws related to trusts and foundations.

Confidentiality

Consider the level of confidentiality provided by the chosen jurisdiction.

Tax Implications

Understand the tax implications of setting up trusts and foundations for both local and international assets.

Due to the complexity and legal nuances involved, it is crucial to consult with legal and financial professionals specializing in trusts and foundations in the UAE to ensure compliance with all regulations and to protect your interests effectively.

Setting Up Trusts