Setting Up a Foundation in the UAE: DIFC and RAK ICC Compared

A foundation is a legal entity — separate from its founder — established to hold assets for defined beneficiaries or a specific purpose. Unlike a trust, it has full legal personality but no shareholders or members. Two UAE jurisdictions offer world-class foundation regimes: DIFC and RAK ICC. WHY USE A UAE FOUNDATION? • Succession and estate planning — bypass forced heirship rules for internationally mobile individuals • Asset protection — isolate assets from personal creditor claims • Multi-generational family wealth — structured governance with clear transfer mechanisms • Purpose or philanthropic holding • Holding structure for shares, real estate, or financial portfolios THE DIFC FOUNDATION Established under DIFC Law No. 3 of 2018, the DIFC Foundation is one of the most sophisticated common law foundation structures globally. Key features: • Separate legal personality — owns assets, enters contracts, and can sue in its own name • Founder's Charter: defines objects, governance, beneficiaries, and distribution rules • Foundation Council: governs the foundation, equivalent of a board of directors • Protector: independent oversight of the Council, protecting beneficiary interests • No minimum capital requirement — 0% tax on income from non-UAE sources • Registered by the DIFC Registrar; requires a licensed DIFC CSP as Registered Agent DIFC foundations suit structures connected to DIFC-regulated entities, funds, or family offices — and cases where English common law recognition matters to counterparties. THE RAK ICC FOUNDATION Established under RAK ICC Foundations Regulations 2019, RAK ICC offers comparable protection at significantly lower cost. Key features: • Same legal personality and asset protection principles as DIFC • Flexible governance: Founder, Foundation Board, optional Protector • No public beneficial ownership register; no minimum capital • 0% tax on income from non-UAE sources • Faster and lower-cost than DIFC RAK ICC suits pure wealth holding and succession structures without complex multi-jurisdictional requirements. DIFC VS RAK ICC — WHICH TO CHOOSE? For most wealth structuring purposes, RAK ICC delivers equivalent legal protection at a lower cost. DIFC is preferable when the foundation connects to a DIFC fund, regulated entity, or family office — or when counterparties require recognition under a well-established common law court system. HOW MARENSA ASSISTS Marensa manages the full UAE Foundation lifecycle: structural design, incorporation, governance documentation, banking, and ongoing secretarial and compliance. Contact our team to discuss your specific succession or wealth protection objectives.